Breaking News: Foreign Exchange Market Confirmed As Irrational

Dateline: Athens

Amidst reports that Greek Prime Minister George Papandreou has struck a deal with the so-called ‘troika’ – the EU, ECB and the IMF – to extend the maturities of Greek sovereign debt through 2014 and to throw more money into the ailing country against a promise of increased fiscal austerity, the currency markets today confirmed their irrationality. The Eurozone’s single currency, the euro, moved against the dollar in a rare technical pattern which chartists call an ‘insane yoyo’, before hitting recent highs against the US currency. In late trading, the euro broke through 1.4523 against the dollar.

Currency strategists predict that market exuberance, over what many are calling the ‘kicking of the can’ further down the road on Greece’s debt woes, is a temporary overreaction that cannot sustain a longer term euro rally. Economists have also warned that the Mediterranean country’s economic problems are unlikely to be solved by a new bailout.

In a troubling sign of the likelihood Greece’s national sovereignty will be further eroded, European Central Bank President Jean-Claude Trichet yesterday called for a greater role of EU authorities in the fiscal decision-making of Eurozone countries which do not deliver on their promised spending cuts.

Meanwhile, on the streets of Athens, thousands of protesters prepared for another night of demonstrations in the capital, vowing to end the external interference in the country’s economy and to resist further austerity measures. One protester, who declined to give his name, said of the government:

“They’ve been stealing for years with the help of the Europeans, and now they want us to pay for it. But we won’t keep paying for their mistakes.”