We Study Billionaires - The Investor’s Podcast Network TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast)
Jan 5, 2020
In this engaging discussion, Thomas Mayer, a seasoned European economist and founder of the Flossbach von Storch Research Institute, dives into the intricate world of the Euro. He examines its historical roots and its impact on European banking. The conversation touches on the disparities in banking deposits across Europe, the cultural divides affecting monetary policy, and the challenges posed by transitioning to a digital euro. Mayer also predicts how the Euro might fare against the US dollar in future recessions, offering thought-provoking insights into the future of currency.
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The Treaty of Versailles
- The Treaty of Versailles after WWI, while understandable, fostered resentment and nationalism, contributing to WWII.
- The post-WWII approach prioritized European integration through economic and political ties to prevent future wars.
Euro's Political Goal
- The original goal of the Euro was primarily political, aiming to unify Europe and prevent future wars.
- Economic benefits, like reduced exchange costs, were secondary considerations.
Euro vs. Dollar
- The US dollar and euro differ significantly in their structure and backing.
- The dollar enjoys unified backing from the US government and Federal Reserve, while the euro lacks a common deposit insurance scheme, creating varying levels of risk.