15-05-2003 22:48									#61
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quote: Originally posted by Paul Hanson I've never quite figured this argument about interest rates. Can someone explain to me why America is able to cope with a single interest rate but Europe apparently can't? That was a genuine question, by the way, and not a snide attempt at argument.

We have the same negative consequences as a result of one currency that you may have. There is a 17% unemployment rate where I live compared to 6% national.

I don't think there is any reason to worry that the ECB will not be independent. They are concerned with price stability and they should remain so. Of course whatever action they take will be critisized, and the central bankers will be accused of favoring one country at the expense of others.

The thing about a common currency is that growth tends more to happen in isolated regions even at the expense of other regions. Some countries are bound to come out winners and some are bound to come out losers. Whether you come out a winner or not has to do with your geography and other things.

	15-05-2003 23:26									#62
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17%? Where on Earth do you live?

	15-05-2003 23:27									#63
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It must be outer Mongolia or something.

	15-05-2003 23:59									#64
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quote: Originally posted by DanS 17%? Where on Earth do you live?

Fresno, CA. Tulare Co. is right next to us. It has the highest unemployment rate in the nation, 19.5%.

	16-05-2003 00:58									#65
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Well, more like 15.7%. 14.1% in the city proper. But still, I get the picture.

Mendota must be the pits. 38.3% unemployment.

Anyway, California's is 6.7% -- hardly much off the national average.

	16-05-2003 01:03									#66
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quote: Originally posted by *End Is Forever* I don't see any great rush to tie our success to the economies of Germany and France. Er, no thanks.

Still haven't changed your demagogic ways?

Why don't you got and check some economic tables? You'll find that France's performance has only been slightly worse then UK's. Before and after it introduced the euro.
Except of employment of course but I don't have the slightest clue how you can link that record and the pension-reforms related strikes to the EMU. Labour policy and regulations are national matters and the different employment rates throughout the EU are mostly due domestic origins. You know just as well as I do that France had high unemployment before it switched to the euro, that empirical fact alone pretty much rules out ECB involvement. (besides, if anything French unemployment has fallen since it joined the euro, but again that has been due domestic reforms)

If you insist on connecting the inconnectable, we might just as well attribute UK's rapidly deteriorating fiscal situation and its continuing abismal productivity performance to its attachement to the pound.

And BTW, what happened to your schadenfreude about the weak euro proving the failure of the whole shebang? Aren't we vindicated now?

	16-05-2003 01:06									#67
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quote: Originally posted by Kidicious Fresno, CA. Tulare Co. is right next to us. It has the highest unemployment rate in the nation, 19.5%.

Ewe, I knew Fres-hole sucked but I never knew it sucked so bad. Why not move if there's no jobs there?

	16-05-2003 02:32									#68
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quote: And BTW, what happened to your schadenfreude about the weak euro proving the failure of the whole shebang? Aren't we vindicated now?

Yes, I remember having that debate at the time.

The Economist pikced on this story a couple of weeks ago: http://www.economist.com/displaySto...tory_id=1748919 . It's worth reading, if only for this summary:

quote: The chancellor has framed his tests so vaguely that he can announce that the economy has passed or failed any or all of them more or less on demand. The government, as a matter of political calculation, is not yet ready to put the issue to the British electorate.

After reminding people that Gordon Brown's advice comes from the both the Treasury and Bank of England (i.e. the two losers of UK participation) it then picks up on three more important issues: the growth and stability pact, an inflation target for the ECB set by the Council of Ministers (rather than told to achieve "price stability" and left to itself to work out the details), and the sensitivity of the economy to interest rate changes. The latter is vitally important for UK home-owners because of the preponderance of floating–rate mortgage debt.

OTOH these are all short-term issues, and should be treated as such. My own personal views haven't changed: I'm still pro and would vote as such, despite agreeing with the article, all of these issues can be resolved. Euro entry 2004!

	16-05-2003 02:54									#69
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Um, what economic independence? The endless advice and suggestions from the IMF, World Bank, and OEDC that affect policy decision? The dozens of sectors dependent on whether the Americans/Japanese/Chinese/German/whatever are going to play nicely with us? The traders breathing down Gordy's neck? Or the Bank of England, so closely following the ECB's moves that it makes the cult-like adherence given to the Bundesbank look like an occassional agreement between like minds?

The BoE and the ECB are dancing together for all but a few occassions:

http://www.observer.co.uk/europe/st...,836805,00.html
"In fact, the ECB and the Bank of England have been speaking with one voice for most of the past year. Both have made exactly the same decision in respect of base interest rates in each of the 13 meetings over the past 12 months. For two years monetary policy has been almost indistinguishable, with 21 rate-setting meetings yielding exactly the same decision. Significantly, since May last year, when the ECB instituted quiet changes to its communications policies, 17 of the 19 meetings have had the same result.

The only exceptions were the two meetings immediately after the 11 September 2001 attacks on New York. Then the ECB cut 0.5 per cent at an emergency meeting in October. The Bank of England cut 0.25 per cent at each meeting - the same decision, spread over two months. Strip out that and Frankfurt and Threadneedle Street have been running the same policy for a year and a half."

It would seem that the decisions are already being made in Frankfurt.

	16-05-2003 03:05									#70
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Oh, another fun thing is eurocreep. There's a steadily growing row of coins on the till at my work of eurocoins that we've found in the till after a transaction. The two eurocent can be confused with the one penny coin pretty easily. In Canada, Canadian and American pennies mixed pretty fluidly. I can see the euro slipping in the same way.

	16-05-2003 03:28									#71
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Canadian and American nickels, dimes and quarters mix as well as pennies.

Just as long as you don't try and use them in a vending machine!