Saturday, 26 May 2012

Here's The REAL Reason The Euro Has Been Plunging

The euro has been plunging lately against the dollar, and it's down to levels not seen in over two years.
This chart from FRED gives the gist of what's been going on, but it's a couple days behind, and now the euro has fallen to about 1.25 against the dollar.
So naturally, people are screaming about how the Eurozone is in turmoil and that people are fleeing the currency as some kind market vote on the likelihood of a collapse.
But there is an annoying thing that happens in media discussions of the Euro...
The Euro (currency) is seen as though it is a proxy for the stability and future of the Eurozone. And it is assumed that when it's going down, it means the Eurozone is closer to blowing up, and then when it's going up, it means the Eurozone is more likely to hold together.