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poskat
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I read this article in Bloomberg and was startled to see the double digit unemployment in Germany, France and Spain (12%!!). If these large Euro economies are doing so poorly, how does the Euro stay strong? The ramaining 9 countries economies can't be enough to make up this, can they??
European Economies: German Jobless Rise to Record (Update3)
Feb. 2 (Bloomberg) -- German unemployment jumped to the highest since World War II as new rules added welfare recipients to the jobless register, clouding the outlook for Chancellor Gerhard Schroeder in elections this month.
The number of people out of work in January rose by 227,000 to 4.71 million in seasonally adjusted terms, including 230,000 new jobless claimants, the Nuremberg-based Federal Labor Agency said today. The adjusted unemployment rate rose to 11.4 percent, a seven-year high, while the unadjusted jobless total passed 5 million for the first time since the war.
Schroeder's government had cut jobless benefits and forced claimants to take low-paid jobs in an attempt to get more people into work in Europe's largest economy. The chancellor was campaigning today in Schleswig-Holstein, where his Social Democratic Party is trying to hold on to power in the Feb. 20 state elections.
Economy and Labor Minister Wolfgang Clement told a news conference in Berlin the unemployment report provided ``5 million reasons for labor-market reform.'' He said he expects a further rise in unemployment in February, though experience from other countries suggests the new policies may eventually cut the jobless total by as much as 20 percent.
Even before the labor-market changes, German unemployment had risen for 11 straight months, as companies moved jobs to countries with lower labor costs and stagnant domestic demand deterred hiring. Retail sales fell for a third month in four in December, the Federal Statistics Office said today.
``Overall, the labor market remains fundamentally weak,'' said Dario Perkins, an economist at ABN Amro Holding NV in London. Even though the changes may push those now on the jobless register to take low-paid jobs, that won't improve Germany's ``severe consumer depression and hopeless domestic demand growth.''
Germany's rising unemployment contrasts with the U.S., where the jobless rate probably remained unchanged at 5.4 percent in January as 200,000 jobs were created outside farming, a Bloomberg survey of 70 economists showed. The Labor Department releases the report Friday.
Elsewhere in Europe
In December, Germany had the second highest unemployment rate after Spain among the 12 countries that share the euro, at 10 percent on a comparable basis. The rate in France was 9.7 percent. In the U.K., the latest available comparable rate is 4.6 percent for October.
The German jobless statistics now include all recipients of what is known as unemployment benefit II, paid to those without a job for more than a year as well as people such as single mothers and low wage-earners who used to receive social-welfare payments and did not have to register at job centers. All those on the new benefit who can work at least three hours a day are counted as jobseekers and face benefit cuts if they reject job offers.
`Not the End'
Disregarding the effects of the new labor law, seasonally adjusted unemployment was ``stable,'' Labor Agency Vice-President Heinrich Alt told a news conference in Nuremberg. Still, another 70,000 social-welfare recipients have yet to be included in the statistics, he said, adding ``this is not yet the end of the development'' and that the jobless total has not yet peaked.
Economists had expected the unadjusted jobless total to increase 150,000, the median of 23 forecasts in a Bloomberg survey showed. The adjusted unemployment rate is higher than it has been since March 1998, when it was 11.5 percent. The record rate was set in October 1997 at 11.8 percent.
`Hidden' Jobless
Bert Ruerup, the designated head of Schroeder's council of economic advisers, said an additional 1.5 million unemployed are ``hidden'' in early retirement programs, training measures and subsidized work.
``Unemployment has grown steadily over the last three decades and then reunification came on top of that,'' Ruerup told Deutschlandradio today. ``There is no silver bullet for the reduction of unemployment and if anybody claims this can be done quickly then that's simply false.''
While the German economy resumed expansion in 2004 after three years, there's been no corresponding growth in job numbers.
Growth Forecast
The government last week pared its forecast for economic growth in 2005 to 1.6 percent from 1.7 percent. That's too little to boost the hiring of full-time workers who also contribute to the social-security system.
Germany is losing 1,200 full-time jobs a day, Juergen Thumann, head of the BDI industry federation, said last week. Unemployment won't decline unless taxes and labor costs are cut, he said.
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Thai Girls : Meet Sexy Thai Girls
Posted on: 2:15 pm on Feb. 2, 2005
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Mr Alan
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Often (not always) there is an inverse relationship between the value of a currency and the number of jobs. The higher the currency, the fewer exports (because goods are now too expensive for people with less valuable currencies), and the fewer the jobs.
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Bangkok Women : Meet Sensual Bangkok Women
Posted on: 2:23 pm on Feb. 2, 2005
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Broken Leg
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The Euro is strong against the US dollar, the chinese renimbi is tied to the US dollar and for competitive reasons the asian currencies are tied to the chinese renimbi.
In this case the Euro strength against the US dollar is caused by weakness of the US dollar in the form of the current account deficit, and also the Euro has increased as it gains status as a reserve currency (central banks, high net worth indivuduals, companies etc diversifying their cash / holdings into Euros.)
Completely right though all this in the face of very weak economic fundamentals
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Thai Girls : Meet Sexy Thai Girls
Posted on: 2:37 pm on Feb. 2, 2005
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poskat
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Thanks Mr Alan and BL- Does weakened exports and job loss fortell a weakened Euro in the future? Or is it more a matter of in comparision to the US $ situation as a reserve currency?
So it is the Euro's strength against the dollar that puts it high against, say, the Baht even as the dollar falls against the Baht?
I'm looking at a job in Strasbourg France to start in Jan for a couple years versus in the US or UK, so am interested in the currency values (I'm in the US now).
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Bangkok Girls : Meet Sexy Bangkok Girls
Posted on: 2:55 pm on Feb. 2, 2005
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buxeda
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the eur will go on strong because of the foreign reserves of asian countries. the usd will remain week because of the trade dificit and the budget deficit, which the great commander will be unable to diminish IMHO.
just sit back and watch.
eurthb is traded over the cross, eg the usd.
bux
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Thai Women : Meet Matured Thai Women
Posted on: 3:16 pm on Feb. 2, 2005
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Ballsburstin
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There was an interesting interview on U.S. TV a few weeks ago out of Boston by some rather conservative U.S. economists who predicted a U.S. dollar crisis within 5 years, if the deficit is not brought under control. The guys being interviewed are not normally alarmists, so it got my attention. The strength of the Euro as a reserve, and the growing concern by the Asian countries for the U.S. deficit model were part of their discussion.
Last thing I need is a U.S. dollar crisis. Will make BKK exchange rate "mai dee" for me, and there goes all those s/ts' lol! No money, no honey!
- Balls
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Bangkok Women : Meet Beautiful Thai Girls
Posted on: 5:06 pm on Feb. 2, 2005
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Mr Alan
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Quote: from buxeda on 2:10 pm on Feb. 2, 2005
the eur will go on strong because of the foreign reserves of asian countries. the usd will remain week because of the trade dificit and the budget deficit, which the great commander will be unable to diminish IMHO.
just sit back and watch.
eurthb is traded over the cross, eg the usd.
bux
Yes, absolutely. The US economy will be destroyed and the US will become a third world country.
Meanwhile, French President Chirac will declare himself Emperor of the EU and will conquer the rest of the world in order to save it. All English words (such as internet, email, etc) will be banned on the Continent and in other non-English speaking countries. Bangkok Tonight will be forced to convert to Thai or French only.
So things look very good for people in the EU. However, if you happen to be one of 10% who are unemployed and collecting unemployment payments, you will be forced to take a job in prostitution or have your benefits stopped (just like happens in Germany today).
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Bangkok Girls : Meet Attractive Thai Girls
Posted on: 5:44 pm on Feb. 2, 2005
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Broken Leg
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Quote: from poskat on 2:49 am on Feb. 3, 2005
Thanks Mr Alan and BL- Does weakened exports and job loss fortell a weakened Euro in the future? Or is it more a matter of in comparision to the US $ situation as a reserve currency?
So it is the Euro's strength against the dollar that puts it high against, say, the Baht even as the dollar falls against the Baht?
I'm looking at a job in Strasbourg France to start in Jan for a couple years versus in the US or UK, so am interested in the currency values (I'm in the US now).
The German economy has been pretty sluggish for a number of years. The unemployment rate in 2002 when the Euro first became legal tender was 8.4%. At that time one euro was worth about 90 us cents now one euro is worth over 130 cents despite an increase in the unemployment rate of about 1% (The latest figues would appear to have incresed due to a change in administation changes). At the moment euro zone economic fundamentals don't seem to drive the Euro /US dollar rate.
When it comes to future prediction it is a very difficult job indeed, Alan Greenspan compared the success of currency forcasting /Prediction to the toss of a coin. Mervyn King the govenor of the Bank of England was quoted as saying that currency prediction was "a mugs game". The fundamentals can change very quickly (next month the US could announce big reductions of the deficit for example, and germany has just announced plans to revolutionise their labour markets which they hope will dramatically improve unemployment) and also the focus of the markets - what the markets consider to be important- can change very quickly too. So using future predictions of currency values as a factor in choosing a job could be precarious.
However if all things were to stay equal in the US and Euro zone and China were to allow their currency to freely float on the market, I think there is a good chance you would see the baht getting stronger against the Euro as Buxeda pointed out. I don't think it would be a great deal, but thats just my guess. The appreciation of the baht against the dollar over the last few months seems to have been due to speculation from investors on China announcing a revaluation/ floating of their renimbi.
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Thai Girls : Meet Active Thai Girls
Posted on: 6:04 pm on Feb. 2, 2005
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griffin
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^
not only that, but the governor of the bank of thailand openly admitted in an interview two days ago that the bank of thailand is aggressively shifting their dollar holdings into euros. 'concerned about the US foreign policy and the rising US deficit the BOT started to shift their currency holdings from dollars into euros'
as far as I am aware of only 3-5% of the total reserves of asian central banks are in euros at the moment. with the bulk being in usd.
the problem is those central banks can't convert into euros at a faster rate as the markets wouldn't bare those amounts to be shifted. another problem is that most of the export receivables from the US are in usd and due to the high numbers can't be all converted into other currencies. so those asian countries end up in forced buying of usd bonds against their export revenues even if they don't want to, simply for the fact that fully converting them would even more ruin the value of the usd.
looking at china, hk and taiwan we are talking about the 3 central banks with the highest currency reserves in the world. just imagine those central banks would only go to a neutral GDP weighted allocation of the euro, this alone will take them several years!!!
so from that point alone more weakness for the usd!!! the US deficit and the US foreign policy do add other nails into the cuffin!!!
by the way just heard that dubya is nominated for the guiness book of records being the first president ever turning a booming country with an usd 190 bln budget surplus (inhereted from bill c.) into a mess with a deficit of usd 413 bln within only 3 years!
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Thai Women : Meet Matured Thai Women
Posted on: 11:56 pm on Feb. 2, 2005
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DickDastardly
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Slightly off-topic here: Thailand is the only country that has paid back their World Bank debt ahead of schedule.
Might be time to start putting your baht under the mattress, instead of blowing it all over the headboard of the bed...
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Bangkok Girls : Meet Attractive Thai Girls
Posted on: 7:56 am on Feb. 3, 2005
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