'Allo, John, wot's my motor worf?'

That was a question posed to me many a time and oft' back in the day and to which my answer was always the same - whatever anyone's prepared to write a cheque for!  Marxists, members of the 'Austrian School', Keynesians, etc, will produce volumes of turgid prose in an attempt to explain value theory but when you strip it all down to the essentials,value is what anyone is prepared to pay.

I meander on, thus, because the question posed in my title can now be rephrased in a different context by asking - what are my euros worth?  You see, you probably think euros are worth whatever the exchange rate tells you.  Ah, but that is because you have been listening to the likes of 'Merkozy & Co', a very fine, old partnership otherwise known as 'Spivs 'r' Us'.  Back in the real world, according to this snippet overheard (or perhaps 'over-read', is more accurate)  in The Coffee House, those wily, sly fellows, the bankers, have already begun to value 'national euros' differently.  So a German euro is worth, I guess, a great deal more than a Portuguese euro, and don't even ask what a Greek euro would fetch!  The originator of this story, Faisal Islam (who is, I think, the economics editor of Channel 4 news), explains:

A leading European bank has begun to account for euros differentially, by nation state. That is to say, they are differentiating a risk to euros that originate in a potentially defaulting country from that of a euro-cert. They, in effect, have invented the concept of a German, Greek and Irish euro.

Now we accept that government debts from these nations are different. The idea that a bank treats cash differentially, is an incredible development. I understand that this would allow this bank to account for an “internal exchange rate”, within the euro, between a strong country and a weak one. And the bank in question suspects they are not the only one.’

I fear 'The Colleagues' will not be amused!

 

Comments

[Whyaxye]

Brilliant! They could call them Marks, Drachmas, and Punts, and after a time we can forget that the whole sorry episode ever happened...

[dearieme]

This yarn has been around before, and thoroughly demolished before.