By James McKee
Now that change has come to Portugal with regard to the latest bailout in the EU many are considering changes ahead for the Euro. Lately the Euro has been climbing against other majors (especially the USD) on the online forex exchange. This comes as a result of news of the bailout and a continuingly low interest rate coming from the European Central Bank. Such news has continued to fuel the Euro in an upward fashion and this trend should continue into next week. With the bailout now in place many Portuguese citizens have said they have had enough with the socialist government that was in place before. More conservative government figureheads have been selected in an effort to recover the Portuguese budget and get them on the right track.
The proposed austerity measures (some of the deepest in Europe) are already beginning to lead many citizens to revolt. Massive demonstrations and even isolated incidents of violence have been seen throughout the nation. The Portuguese people have said enough with the austerity measures in place; however, there is no way to simply wish them away. In fact, as time goes on it is more and likely that austerity measures will only worsen as the government struggles to cover the now truly mountainous debt they are covered in. While government officials claim a recovery in the next couple years it is highly unlikely, and many believe the collapse of the European Union is imminent. The wealthier countries such as Germany have simply had enough and want countries to stand on their own.
This latest round of bailouts might seem like a fix but it is not, the money being loaned to Portugal was in fact made out of thin air. In lending money to Portugal there are some temporary hopes for stability and reform; however, the truth is that since this money was created from nothing it is contributing to inflation. The Euro is facing a bubble of massive proportions, and the only reason it is doing well against the USD on the online forex exchange is that the USD is hurting so badly. Compared to the USD the Euro is doing well; although, the United States is starting to become a lot more serious about its own austerity measures and is beginning to implement massive reforms. The future remains highly uncertain for Portugal and the rest of the EU, and change is coming one way or another.
About the Author
Author is a Forex trader and financial analyst residing in Denver, Colorado. To stay up to date on all the latest developments in the financial world and beyond be sure to check out the online forex trading regularly.
