Shalom Life | August 05, 2015

Euro: Speculation or Opportunity?

The Euro dilemma.

By: Yosef Tastassa

Published: November 24th, 2010 in Business » World

Euro: Speculation or Opportunity?

European History in brief

Let's go back to the history lessons in high school. Europe is probably the origin of many North Americans they crossed the Atlantic Ocean looking for a better life and better opportunities. Many left the continent for political reasons, others for religious reasons.

The Thirty Years' War, Hundred Years' War, the continuous struggle between France, England and Spain, World War I, World War II and other smaller conflicts are a part of the continent's violent history.

After World War II ended on May 8, 1945, the leaders of the continent said that the nations have suffered enough and it is time for a long and sustainable peace.

The European Union

Peace did come and yesterday's enemies became today's partners. 50 years after the war ended Europe was ready to unite. A parliament was established, laws and regulations were agreed upon, and finally the monetary system started to use the same currency – The Euro. It became official on December 31 1998, and bills and coins entered the market three years later in January of 2002.

All for one and one for all

The German Mark, the French Frank, the Spanish Peseta, the Italian Lira and a total of 19 currencies disappeared from the market. You can now use the same currency all the way from Portugal in the west to Cyprus in the east – amazing.

Cracks in the system

All European countries found themselves under a mutual guarantee in the financial markets. The European Treaty defines exactly how countries in the EU should manage their budget and how they report to the European Central Bank.

As we all know, regulations and theory are one thing but reality is another. It started with concerns about fiscal and monetary policies in some of the EU countries. Then we heard of Portugal, Ireland, Italy, Greece and Spain who got the notorious nickname PIIGS.

The huge deficits and fiscal failures in the weak countries are a burden to the stronger ones (Germany, France). Instead of enjoying their profits, the strong countries find themselves subsidizing the weak countries under the soft name of "assistance package"

The small citizen is less politically correct than its leaders. No German understands why the money they earned is sponsoring the lazy Greeks or the irresponsible Irish.

The future

The future is very uncertain. Unless governments in the EU find effective ways to put the continent back into stability, it is possible that the monetary union will not exist that long then the German Mark and its colleagues will be back from their graves. In this case the continent will go through a monetary storm with the Euro in the middle of it.

Speculations and Opportunities

In the short term, it seems that the monetary crisis in Europe will worsen. Spain and Portugal are the next countries on the bad list. If and when they call for help, the Euro will probably lose value by a large percentage.

If an investor believes that the EU will overcome its problems than the Euro may be an interesting investment. However, if Europe decides to split its monetary system, then the Euro will dive deep down. Choose your steps wisely.

This article does not recommend investing in the European currency.

Israeli Device Lets You Make 3D Artistic Designs on Your Cappuccinos Israeli Device Lets You Make 3D Artistic Designs on Your Cappuccinos TrendingWomen Banned from Owning Smartphones at Hasidic School Women Banned from Owning Smartphones at Hasidic School TrendingEXCLUSIVE: JSwipe Founder Opens Up About JDate Lawsuit EXCLUSIVE: JSwipe Founder Opens Up About JDate Lawsuit Trending
 

Jews Still Face Anti-Semitism at Maccabi Games in Berlin

August 04, 2015 | By B. Shane Morganstein
Jews Still Face Anti-Semitism at Maccabi Games in Berlin

Though many feel vindicated at Jewish Olympics being held in Germany, many athletes still face anti-Semitism

Read More

Anti-Semitic Twitter Troll Ordered to Pay Compensation

August 04, 2015 | By B. Shane Morganstein
Anti-Semitic Twitter Troll Ordered to Pay Compensation

Court orders 17-year-old to pay British-Jewish businessman Lord Alan Sugar

Read More

Israeli Device Lets You Make 3D Artistic Designs on Your Cappuccinos

August 04, 2015 | By Roseanne Tabachnik, NoCamels
Israeli Device Lets You Make 3D Artistic Designs on Your Cappuccinos

The Ripple Maker is bringing latte art to a whole new level

Read More

Women Banned from Owning Smartphones at Hasidic School

August 04, 2015 | By B. Shane Morganstein
Women Banned from Owning Smartphones at Hasidic School

Mothers and daughters alike will be expected to abide by the school's new policy

Read More

Pharrell Williams to be Protested by BDS Activists in South Africa

August 04, 2015 | By B. Shane Morganstein
Pharrell Williams to be Protested by BDS Activists in South Africa

Activists targeting the superstar over promotional deal with retailer Woolworths, which has trade ties with Israel

Read More

Everything You Need to Know About Drake's OVO Festival

August 04, 2015 | By Daina Goldfinger
Everything You Need to Know About Drake's OVO Festival

The Toronto rapper has been making non-stop media headlines as of late

Read More

WATCH: Amy Schumer Talks Jennifer Lawrence, Trainwreck with Jon Stewart

August 04, 2015 | By Daina Goldfinger
WATCH: Amy Schumer Talks Jennifer Lawrence, Trainwreck with Jon Stewart

Schumer appears in the final days of The Daily Show with Stewart as host

Read More

Israel Wins 61 Medals in Special Olympics

August 03, 2015 | By Avraham Teshuva, Lea Schneider
Israel Wins 61 Medals in Special Olympics

Of the medals won in Los Angeles, 25 are gold, 18 silver and 18 bronze

Read More

More Headlines