The Globalist’s Ten Theses on the Euro

Will a weak euro burn holes in most people’s pockets?

May 5, 2000

Will a weak euro burn holes in most people's pockets?

The root cause of much of the current debate is that Europe’s citizens were mis-sold on the euro at the time of its introduction. They should have been sold on a stable euro. Instead, they were sold on a strong euro. And they were told that the euro would become a symbol of Europe’s power. That put more meaning into what is simply a currency than was necessary or desirable.

Europe’s citizens should be most interested in a stable euro, not a strong one. A stable currency is marked by a high exchange rate, but by low inflation — which the Europeans are achieving. Under these circumstances, the external value of the euro is simply not of any importance to the average European.

Europeans hear the euro is weak — and they have been told that the euro is their currency now. Therefore, their currency must be weak. But, believe it or not, fewer Europeans than ever before actually get to see the impact of their “weaker” currency in their pockets.

A key reason Europeans are so sensitive to currency fluctuations is because they frequently travel between countries. At each national border, they have to change currencies. Even when they travel this summer, most of it will occur within the euro zone’s boundaries — where exchange rates are already fixed. Only by traveling to an “extra-euro” destination such as the United States or the Far East would a European come into contact with the externally weaker currencies.

Central bankers are not supposed to focus on the exchange rate. Yet, with their constant chattering, Europe’s politicians politicians are forcing them to do so. The European economy does not call for interest rate hikes — but the need to defend the euro’s dollar value has taken on a symbolic importance far beyond its economic meaning. And so Europe must suffer through unnecessary interest rate hikes.

If Europeans really wish to establish the euro as a reserve currency,