About the real reason why the Euro cannot work

According to the [IFO]study, prices of goods produced in Greece went up by an average of 67 percent between 1995 and 2008, a record increase for the euro zone. The average price of domestically produced goods went up by 56 percent in Spain, 47 percent in Portugal and 41 percent in Italy. By contrast, prices went up in Germany by only 9 percent in the same period. (Source: Der Spiegel)

I have always said that the Euro could not work. Currencies reflect the inflation (or productivity) differential between two countries.

The Euro could work only if inflation differentials between all European countries was the same. Which has not been. Which is not. Which will never be.

More details in my The Peter Dag Portfolio and my free educational videos on www.peterdag.com.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

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