Single currency and bought-up land

"The single currency has, by definition, an internal value for the most powerful economies and for the weakest economies. The single currency is weak for strong economies and therefore encourages growth and is strong for weak economies, which hampers growth. The best experts from Harvard also explain this: the tendency of the demolition of the euro area is objective and can not hold it anywhere within the politically acceptable except for the willingness of the weaker countries to subordinate themselves as a hangover to powerful hegemons (as happened to Greece)."

(by Alberto Bagnai)

Euro and USD

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Advantages & disadvantages of single currencies

"One size fits all policy" - a single currency requires a single monetary policy. This means interest rates being set centrally for all Euro countries. Say an individual country is suffering a downturn in economic activity, but the rest are booming. The European Central Bank may want to increase interest rates, but that would simply worsen the recession for that country.

Differing policy effects - even when countries are closely in line, it may be possible that a single policy will have different effects on different countries. For example, a much larger proportion of people own their own house in the UK than many other European countries. This makes the UK much more reliant on mortgage lending. A change in interest rates then, may have a different effect on the UK from other countries.

Shocks - external economic shocks may have an adverse impact. An example could be a rapid rise in oil prices (as happened in the 1970s and 80s). This may affect different countries in different ways, depending on how reliant they are on oil. The UK produces its own North Sea Oil and so may be affected differently to Luxembourg, which does not!

Transition costs - moving into a single currency economic union involves short term transition costs (which would disappear once the new currency was fully established). For example, new money has to be issued and the old withdrawn, vending machines have to be adapted to take the new coins,and foreign exchange departments may shrink in size in some financial institutions.

source: Advantages & disadvantages of single currencies

The example of Greece and countries in Africa have a lot in common.

What is happening in Africa right now, is unbelievable. Everything is being sold. Everything. Houses, villages, pastures, water if there is. The cost? From two to ten dollars per hectare, as much as three kilos of grapes. Who is buying? Different countries, but mostly Great Britain, USA, France, Italy, India, China. Everything is being bought up. Even the bodies (livers can be pretty expensive)....

earthlymission.com

The phenomenon is called land grabbing and means precisely hoarding the land. Rich countries are demanding food and bio-fuels from poor countries. In return for a tip they buy everything. Mountains and hills, plains, lakes and cities. There are about fifty merchant countries, a dozen buyer countries, a thousand private capital (investment, retirement and risk funds) that do business. It is easier to transport a ton of cereals from the Sudan than the one thousand tons of water needed to grow them.

More about that problem in my next article.