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Comment by TacticalCoder

6 hours ago

> The euro is in a much better position to be adopted as an alternative, but its share of global reserves has been flat at around 20% for years.

The Euro is only 25 years old: it would be pure folly to make the "reserve currency" something that recent.

Then... One country of the eurozone already partially defaulted on its public debt (Greece, in 2015). And France is running an insane deficit: so bad that there are now talks of the International Monetary Fund taking control of France's public finances. France had to raise the yield on its debt to its highest level since nearly 20 years. France cannot reach the "only 5% of GDP" in yearly public deficit, on top of an already insane public debt: it is snowballing and the only outcomes are going to be miserable for the people (and for the EUR).

An economist, before the EUR began circulating, explained by which mechanisms the EUR would lead to Spain, Greece and then France default on their public debts. That economist explained how the EUR would lead to "too many secondary houses in Spain" and "too many public servants in France". When Greece did default on its debt, that economist said: "I was only wrong on the order on which these countries would default".

One would be crazy to make a reserve currency a currency that's a mix up of countries that have different productivity and different fiscal laws.

The EUR is one of the worst currency ever conceived and it could turn out to also be one of the shortest lived currency.

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TacticalCoder

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RandomLensman  6 hours ago

There is no serious talk on the IMF taking control of French public finances.

The spread between France OAT and German Bunds is less than 100bps.

The French annual budget deficit is lower than the projected US one.

the_gipsy  2 hours ago

So someone predicted Greece will default, because they had an abnormal amount of debt, and they did default (albeit in a controlled manner) after the 2008 crisis. And because of that you think Spain and Portugal will default?

No, and with absolute certainty not because of the second houses or public servants. That's armchair economy talk from someone that got one predictable thing right once.

Look at Michael Burry (the 2008 bubbly guy, whatever his name is). He keeps screaming "bubble" every once in a while, never got anything right again.

Let go.

mschuster91  6 hours ago

> That economist explained how the EUR would lead to "too many secondary houses in Spain" and "too many public servants in France".

The part relating to France is the usual small-state BS that has thoroughly corrupted modern "economics". France's problem more is its power generation, they rely on nuclear power, a lot of their fleet is noticeably aged and desperately needs replacement, but such replacement is incredibly expensive. On top of that, French military expenditure is ridiculous, they still dream of being an empire, maintain nuclear weapons and aircraft carriers, that make sharing vessels or aircraft with other European countries a pain - as evidenced by FCAS collapsing, the French wanted to use us Germans as paypigs for their pet project suited to carrier deployments.