Prior to the euro, you had currency row at the Chicago Mercantile Exchange. There, during a daily walk down the floor at the CME you could walk past the octagon trading pits, which were side by side.
They were positioned this way, so it was easy for those who were trading one against the other to jump from one frenzy of activity to the next without too many steps. This benefited growth and volume, since the local market makers were able to make deeper markets on the bid or offer because they had something to lay it off against.
I don’t recall the exact order of the pits themselves, and it probably has changed since I was there in the 90s, but I can tell you not one market maker would flock to the Greek drachma, or wake up in the morning and start thinking about Greece as a huge currency influence. Most currency guys were experts in the Swiss franc, British pound, German mark, Canadian dollar or the yen. Greece did not matter – and it doesn’t matter today.
It will only matter for a moment, because Greece may unwind the euro, which I believe will happen, and is best for world markets and the current state of fiat currency. I think all the political hubbub and focus we put on it as market watchers is unessesary - so what if the drachma is not part of the euro? It is the Four Horseman that matter anyway – the yen, mark, franc and pound. Even the Canadian dollar, the peso and Chinese yuan are much more important to global balance than anything that happens in Greece. I am not biased, and I have no Greek axe to grind, I just think global leaders should get them out as soon as possible. Anyway, it is inevitable, and just as the birds return to Capistrano, you will have European currency back to it’s pre-euro usefulness. Right now it is nothing more than a distraction.
Blame the Leadership, Not the Greek People
To be fair, its not the Greek working man who is at fault anyway, and I make no slight to the Greek every man. Greek workers work as hard and are as productive as any worker on the globe, it is the wealthy Greeks who refuse to pay taxes sending local governments into disarray and threaten the system. I don’t see this changing any time soon, or at least until the Greek economy gets some leadership from women, they seem to be living in the past and the general old boy way of running the country will come to a noisy halt as they are tossed from the euro, and as I said earlier, I think it is the first step in the undoing of the euro as we know it.
But you don’t need to panic, and I don’t think markets need to panic. It really is just a short walk from currency to currency, and the 4 Horseman remain firmly atop their steeds.
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