Gartman Says EUR Doomed as Germany vs France Will Battle Politics

October 10, 2014 Share Print 0

On one side there are the “GAFs,” or Germany, Austria and Finland, who oppose U.S.-style quantitative easing, or asset purchases aimed at goosing financial markets. On the other side are the “FIGs,” or France, Italy and Greece, whose economies are struggling and need liquidity measures.

So far, he said, the GAFs have won, and this is what is roiling markets that have come to depend on central bank largess since the financial crisis.

The (euro), we fear, is doomed to failure at this point. The political anger that has been evidenced in the battles over (European Commission president-elect) Mr. (Jean-Claude) Juncker’s proposed Cabinet … shall erupt in full flower in the days ahead. The FIG countries cannot abide further austerity; austerity in the face of 20+percent unemployment is economic nonsense. On the other hand the GAFs, with sub 6 percent unemployment, really don’t need an expansionary monetary policy, can abide fiscal conservatism and will fight for both.

via CNBC

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Alfonso Esparza

Senior Currency Analyst at Market Pulse

Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.