We have to devalue, says David McWilliams

[dermo88]

A more appropriate word for the Punt Nua.....the Paddy Peso.

Thats how credible the notion is in my eyes.

[youngdan]

Your eyes work best when they are open

[ballot stuffer]

Youngdan:
I fear you have this slighty wrong. Devaluation relates to currency pegs or bands. The euro aint pegged to anything. It floats dictated by the market. There is no stated valuation. Other smaller currencies are pegged to the euro. Apart from the uk example(the uks ERM band) Depreciation is the process you are describing. They are two seperate things.

[Robo]

Ireland could always drop the Euro of the Pound.

[youngdan]

I am explaining to Brendan what was meant in regards to devalueing the euro and what actually happens when a big currency is devalued either by the market(which determines it's value) going against the wishs of the government as happened with the British pound or going in the direction the government wishs as sometimes happens.

The pound had a band. This was only in the politician's heads and I think it were 2% either way. As the market pushed the pound down to the limit the government spent billions propping it. On a Friday night they accepted defeat and said that they were widening the band to 15%, more spin. The pound dropped 5 or 6 per cent on the money. This actually cost me a lot of monet as as the dollar rose, gold droped and options I held got wiped out.

The only difference between devaluation and depreciation is the speed and the perception that the government has any control.

I am not talking about small currencies that would be pegged to the euro.

They may not even have a market.

However Argentina pegged it's currency to the dollar so that it mirrored the dollar using a currency board. different situation