If everyone is thinking alike, then somebody isn’t thinking.
George S. Patton
DER SPIEGEL: April 1, 2013 Developing countries are reducing their holdings of euros.
Countries in the developing world are drastically reducing their euro holdings as economic instability in Europe leads them elsewhere to stock their currency reserves. Euro holdings are at their lowest level in a decade, according to the International Monetary Fund.
When the euro was first launched on Jan. 1, 1999, there were hopes in Europe that it might soon rival the US dollar as the world’s premier reserve currency. And initially, it seemed that dream was not unrealistic, as countries around the world began filling their coffers with the European common currency.
Now it looks as though that trend is beginning to reverse, though. Following years of crisis, developing countries are beginning to look elsewhere for their reserve currency needs — and have spent the last year and a half shedding euros.
That is the message to be gleaned from the latest installment of the regular International Monetary Fundreport on currency reservesheld by countries around the world. According to the report, developing economies shed some $45 billion worth of euros in 2012 and have sold close to $90 billion worth of euros since the second quarter of 2011.
The numbers seem to indicate that the ongoing euro crisis, fueled by high sovereign debt loads in several countries belonging to the common currency union, has eroded global confidence in the euro. During the same period, US dollar holdings among developing economies have continued to rise.
“It’ll be the number two international currency but I wouldn’t say there are any prospects of it challenging the dollar,” Jeffrey Frankel, a professor of economics at the Kennedy School of Government at Harvard, told theFinancial Times when asked about the report.
Lowest Level in a Decade
The IMF report indicates that the recent downturn in euro holdings marks a break following more than a decade of growth among developing nations. They now hold just a quarter of their foreign currency reserves in euros, a drop from 31 percent in 2009 and the lowest level in a decade, according to the Financial Times.
The euro’s diminishing attraction as a reserve currency is almost certainly a function of the bloc’s recent instability. Holdings in US dollars among developing nations likewise dropped in the third quarter of 2011 following the crisis over the debt ceiling and the subsequent Standard & Poor’s downgrade of US debt, though the dollar quickly recovered.
Of particular concern for the euro zone is its stagnant economy, a situation that isn’t likely to improve soon, with several countries struggling due to tight austerity programs. Furthermore, there is little appetite among northern European countries — particularly in Germany — for the introduction of expensive economic stimulus programs. That stance was underlined on Monday in an interview given by German Economy Minister Philipp Rösler to the German news agency DPA.
“Debt-financed stimulus programs don’t make sense,” he said. “What we need are structural reforms and responsible budgets.” He added that: “I think we Germans have shown that it can work. You can have both with a successful belt-tightening program: solid budgets while making growth possible.”
cgh — with wire reports
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Walter Unger CCIM, CCSS, CCLS
I am a successful Commercial Investment Real Estate Broker in Arizona now for 15 years and I worked with banks and their commercial REO properties for 3 years. I am also a commercial and Landspecialist in Phoenix and a Landspecialist in Arizona.
1.
WHETHER YOU LEASE OR OWN
NOW IS THE TIME FOR YOU TO EXPAND, UPGRADE OR INVEST.
In my opinion we are at bottom of the cycle in Commercial Real Estate in Phoenix, so there is only one way and it’s called we are going up again and now is the time for you to expand, upgrade or invest in Commercial Properties in Phoenix. The prices on deals I may get you will not be around forever.
2.
IF YOU OR ANYBODY YOU KNOW IS IN TROUBLE WITH YOUR BUSINESS, AS MANY AMERICANS ARE IN THE MOMENT, AND ARE ABOUT TO LOSE YOUR COMMERCIAL PROPERTY, PLEASE CONTACT ME. IF YOUR BANK IS BEHAVING BADLY I MAY BE ABLE TO HELP YOU GET OUT OF SOME OR MAYBE A LOT OF FUTURE HEADACHES.
3.
WAITING TO SELL YOUR LAND ? TIMES CHANGE / IT’S TIME
We barely could give land away the last few years, but times are changing. Even in those meager years, I sold more land across the state than most other brokers. Before the real estate crash I was a land specialist in Arizona with millions of dollars of transactions, but then I had to change and also sell other commercial investment properties, which was fun, but I am a Commercial Landspecialist in Arizonal, a Commercial Land Specialist in Phoenix and love to sell land, one acre to thousands of acres.
Since I was a Land Specialist in Arizona and a Land Speciaost in Phoenix many of my clients, Sellers and Buyers remember me and now they are calling me again, so this is the time to get back into land and none of my clients, including future clients, will miss out on getting their best deal.
Also, if you are up-side down on your land, like many Americans, and the lender is giving you a hard time, now is the time to put your land on the market. Lenders are making deals now with short sales. I have been working with banks for many years – I learned how to work with them.
If you have any questions about the 1 to 3 above, about Commercial Investment Properties in Phoenix or Commercial Investment Properties in Arizona, I will gladly sit down with you and share my expertise and my professional opinion in Commercial Properties in Phoenix or Commercial Properties in Arizona with you.Obviously I am also in this to make money, but it could be a win-win situation for all of us.
Please reply by e-mail walterunger@ccim.net or call me 520-975-5207 (cell) 602-778-5110 (office direct).
Thank You
Walter
Walter Unger CCIM
Associate Broker
Kasten Long Commercial
2821 E. Camelback Road, Suite 600
Phoenix,AZ85016
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