Europe bets on weathering a US downturn

Europe bets on weathering a US downturn

By Chris Giles and Ralph Atkins,
33 minutes ago

Currency traders have become convinced over the past two weeks that something big is afoot in the global economy. They are not convinced by the sanguine noises coming from the Federal Reserve and think the risks of a "hard landing" in the US economy have risen. But, in a departure from the old wisdom, they do not seem worried about the effects of a US downturn on European economies - rejecting the old adage that "when the US sneezes the rest of the world catches a cold".

They appear to be trading on the belief that, while US interest rates will fall in an effort to counter a slowdown, European rates will continue to rise - and, by implication, that Europe's economic upswing has some way to go. This has led to steep declines in the dollar, which tumbled to a 20-month low against the euro and to a 14-year trough against sterling.

Asraf Laidi, chief foreign exchange analyst at US-based CMC Markets, reflected the optimism in Europe last week as the dollar continued to plunge: a five-year high in Germany's consumer confidence, combined with renewed readiness at the European Central Bank to raise interest rates, "further cements the fundamental backdrop of the euro rally", he said.
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http://news.yahoo.com/s/ft/20061204/bs_ft/fto120420061412406960

The world's one "indispensible nation" is a little less indispensible these days. Another bang-up job by BushCo.

core ability to build wealth on the solid foundation of making valuable things and taking care of our worker-cititizens.

which supports your post fully.

that's the very definition of a consumable economy. How many tax dollars worth of stingers and MOABs were consumed for Smirk's light show in May 03?

Read Michael Parenti's "Sword and the Dollar" or "Against Empire". He lays out an impenetrable case that war is the easiest and most salable way of moving money from the working class to the owning class. We give our young people and our tax dollars so that Cheney's pals at Halliburton can get rich.

Elegantly simple and so basic.

China is ready to pick up the slack as the US Empire collaspes and Bush fiddles with Iraq.

after the examples set by the last couple thousand years.