Revisiting Europe and the Euro: Will Atlas Shrug?
In the Eurozone, Germany may be feeling like Atlas, the Titan from Greek mythology, bearing the burden of the peripheral nations. While many countries outside "core" Europe continue to struggle with weak economies and exploding sovereign debt, conditions in Germany could not be more different.
Take unemployment rates as an example, where wide divergences can be seen among individual countries. November's numbers for Ireland and Spain stand at an alarming 13.9% and 20.6% (respectively), while Germany's figures hit a post-reunification low of 6.7%.
The euro wasn't supposed to function like this. Rather, the monetary union and common currency was expected to promote balanced and mutually beneficial growth.
To date, the ECB and EU (with assistance from the IMF) have attempted to protect peripheral country bondholders -- including programs ranging from the gigantic USD 750 billion European Financial Stability Facility (EFSF) to the Securities Markets Programme (SMP). Yet these approaches are simply short-term patches targeting liquidity and not the longer-term solvency of troubled nations.
Where to from here for Euroland and the euro?
To read more: please click the following safe link to this month's ETFocus written by Tyler Mordy.
http://www.safehaven.com/pdf/mordy_2011_01_24.pdf
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Author: Tyler Mordy
Tyler Mordy
Hahn Investment Stewards & Company
Inc.
Hahn Investment Stewards & Company Inc.
Global Fund Management & Investment Counsel
Ontario: The Exchange Tower, 1800-130 King St. W., Toronto, ON M5X 1E3
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Phone: (888)-957-0602 e-mail:information@hahninvest.com
Tyler is regarded as a leading expert in the burgeoning field of exchange-traded funds (ETFs) and writes an influential, bi-monthly publication called ETFocus. He is a recognized innovator in the design and application of actively-managed ETF portfolios. Tyler's expertise is widely acknowledged, and he has been interviewed by several notable publications including The Wall Street Journal's - Smart Money and City Wire - Guide To Exchange Traded Funds.
Tyler Mordy is a portfolio manager and Director of Research at HAHN Investment. Since joining the firm in February 2003, he has made key contributions in the development of the firm's proprietary portfolio systems. A member of the HAHN Investment Committee, he is engaged in top-down strategy, investment policy and securities selection.
Previously, Tyler began his career at Deutsche Asset Management in London, UK. He earned his bachelor's degree in both Mathematics and English Literature at the University of British Columbia. Mr. Mordy is a CFA charterholder.
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