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2.20.2015 Will Dane's Unpeg? Bookmark

Not too long ago, the Swiss shocked the world by removing the peg to the Euro, which caused some wicked currency fluctuations for over a week. Along the way, many nations has slashed their interest rates to 0, and some have gone as far as "negative rates".  Now we see the Dane's talking about how they might see the need for  "capital controls" as they too have a harder and harder time keeping their currency stable in relation to the Euro.  Their currency is in free fall this morning, despite the denials that they would actually have to go that route.
Not too long ago, the Swiss shocked the world by removing the peg to the Euro, which caused some wicked currency fluctuations for over a week. Along the way, many nations has slashed their interest rates to 0, and some have gone as far as "negative rates".  Now we see the Dane's talking about how they might see the need for  "capital controls" as they too have a harder and harder time keeping their currency stable in relation to the Euro.  Their currency is in free fall this morning, despite the denials that they would actually have to go that route.

One doesn't have to think too hard to figure out that zero and negative interest rates are NOT suggestive of a vibrant economic situation. No matter where we look, we see the "experiment" that we call the Euro, finding itself in ever more hot water. Not a day goes by where we don't know if Greece is going to stay or exit the zone. Not a week goes by without some member country slashing rates or talking about possible contingencies. Yet just like here in the States, the European markets continue to act brave in the face of all this. One might think that one day, everyone's going to lose faith in the Central planners ability to keep this all together.  I'm in that camp.

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