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Saturday, February 13, 2010

Euro

With a single currency like the Euro shared among many nations, the countries with production above the median are contributing more to the value of the Euro than the countries in the euro bloc with production below the median. The inverse is true for deficits- countries with deficits above the median are causing a greater drag on the Euro.

It's like if you have twelve people rowing one boat. Germany and France are the strongest rowers, but all those in the boat get to the destination at the same time.

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