Monday, June 7, 2010

Trichet: "Euro Is Stronger Than Deutsche Mark"

Hilarity of the day so far.

According to Bloomberg, Jean-Claude Trichet, the ECB President and a Frenchman, says euro is stronger than Deutche Mark because:

1. Euro to USD is still higher than $1.1837, the close of the first trading day of Euro on January 4, 1999; and

2. It is still higher than the average Euro/USD since the introduction, which is $1.1842.

He also said that because euro is stronger than Deutsche Mark, it is healthy and sound, and it is here to stay.

From the end of 1988 to last week, according to Bloomberg, the basket of currencies that make up euro, which is dominated by Deutsche Mark, averaged $1.1945.

Mr. Trichet seems to have run out of good things to say about euro, so he is resorting to elementary school arithmetic.

I don't know exactly when Trichet said what he said, but euro was below $1.190 overnight. Since then it has trimmed the loss and at one point was as high as $1.19910. Right now, it's back down at $1.1951, barely above the Deutsche Mark benchmark.

Now what, Mr. Trichet?


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