The Rag Reel


Thursday, May 13, 2010

Euro to a Zero.

All of the recent Stock Market chaos is very easy to explain. It all has to do with the de-value of the "Euro". For instance, most companies do a lot of global business and have delt with the euro as the base currency in those dealings. For the longest time the euro was worth more than the U.S dollar; which meant that when companies made profits over seas; the transfer from euro's to American dollars was almost 2 to 1. the profits were recieved here in the U.S as blow out earnings just on the fact that the conversion of the Euro to the U.S dollar.

Now the Euro is declining in value which hurts global businesses that have relied on the strength of the euro to further their businesses. It's very hard in the U.S to make a huge profit as a corporation because of all the taxes and what not. Thats why companies rely so heavaly on the Euro as a way to pair there U.S losses.

All the talk about Greece is not the issue, the issue is the Euro being down graded and thus hurting everybody in sight. The next real shoe to drop will be Ireland and their Huge banking sector. When that shoe drops so does the Euro, an thus causing businesses all over the world to fail; Get Ready!!!

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