Is the end nigh for the Euro? [vol. 3]
Discussion
Gargamel said:
carspath said:
I have followed this thread through 3 volumes, and (as a complete novice) am surprised that no one has brought up the single question , that will be most relevant, and of most interest to the average reader :
if you had an amount of liquid cash in sterling , what would be the safest way to secure its capital value (and as a secondary issue , try and get an income from it that at least matches inflation )in these very volatile times?
?gold--can you even buy physical gold in the uk
?shares--- how do you identify when the REAL upturn in prices begins
?property---aren't prices bound to be hit by the current poor sentiment
?bonds---with the very low current rates of return
I would be genuinely interested in people's views and opinions on this very real world question(s)
Well you wrote the word "safest" - and of course in any investment advice, your attitude to risk is absolutely critical. As perhaps is your age and the time frame of your investment. if you had an amount of liquid cash in sterling , what would be the safest way to secure its capital value (and as a secondary issue , try and get an income from it that at least matches inflation )in these very volatile times?
?gold--can you even buy physical gold in the uk
?shares--- how do you identify when the REAL upturn in prices begins
?property---aren't prices bound to be hit by the current poor sentiment
?bonds---with the very low current rates of return
I would be genuinely interested in people's views and opinions on this very real world question(s)
Obviously many investments rely on a rising tide of pricing, shares for certain, unless you are big sufficiently large amounts that finding regular dividends is going to provide your income.
Property can provide both income and capital security, in the UK prices may fluctuate, buy a decent diverse portfolio I would think is still a good place to be.
I wouldn't touch gold with a barge pole, it has an emotional investment layer that I don't understand, and I suspect many investors find it quite hard to part with "their" gold, even when logic says it is time to get out of the market. Gold is like roulette, in the end you will lose, but getting in and out at the right times is the key.
Shares, long term bets on blue chips, Rolls, Glaxo, Apple and some cyclical plays on construction etc can work, but can be capital destructive if you get it wrong.
Currently if you want "safe" then bonds are a strong choice, but the income from them is poor. Although stick around, in a couple of months France and Italy will be buying them at 8% coupon rates
In the end - a fully mixed portfolio is the best defence against risk. Having 15 or so different pots of money spread into a mix of risk profiles, geographies and investment types is the only long term strategy that really diversifies your risks.
I suspect accurately predicting the future of relevant countries within the EU is a thankkless task. As Turbobloke says the EU leaders have the powers to change the games for all. Personally I cannot see how the obvious dishonesty of the EU position whereby wholly insolvent failing states can be supported by wholly improper money printng by the EU can possibly be sustained. Once it ceases to be sustained the crumbling states will implode financially. The whole thing is a monumental Ponzi scheme which must collapse in the end.
No EU country is prepared to underwrite the actual losses that are being incurred daily by the EU. The whole edifice is therefore unsupportable. The real question is how long can this fraud last. It cannot be a permanent solution because no EU member state is actually prepared to accept any liability for these losses. I do believe that the extent of this fraud and the consequences of this fraud will become all too clear when the crunch comes. Predicting when that will be is the real challenge. But what is certain is that nothing that the EU is doing actually addresses the fundamental problem that more and more EU states are sliding into insolvency with France currently leading the list. Time will tell. But the crunch will come.
Steffan said:
The whole thing is a monumental Ponzi scheme which must collapse in the end.
Just to remand any of our younger readers that Steffan's been saying the same thing for over five years. I mean, exactly the same thing.They say that a broken clock is right twice a day, and I'm sure that Steffan's right - at some point the Euro will collapse. I mean, the Roman Empire did, as did the British Empire, so eventually it'll fail. Everything does.
But the original thread had the premise that the end of the Euro was imminent. Clearly, the answer is that it is not.
Can we have a different thread title please?
longblackcoat said:
Steffan said:
The whole thing is a monumental Ponzi scheme which must collapse in the end.
Just to remand any of our younger readers that Steffan's been saying the same thing for over five years. I mean, exactly the same thing.They say that a broken clock is right twice a day, and I'm sure that Steffan's right - at some point the Euro will collapse. I mean, the Roman Empire did, as did the British Empire, so eventually it'll fail. Everything does.
But the original thread had the premise that the end of the Euro was imminent. Clearly, the answer is that it is not.
Can we have a different thread title please?
Mermaid said:
longblackcoat said:
Steffan said:
The whole thing is a monumental Ponzi scheme which must collapse in the end.
Just to remand any of our younger readers that Steffan's been saying the same thing for over five years. I mean, exactly the same thing.They say that a broken clock is right twice a day, and I'm sure that Steffan's right - at some point the Euro will collapse. I mean, the Roman Empire did, as did the British Empire, so eventually it'll fail. Everything does.
But the original thread had the premise that the end of the Euro was imminent. Clearly, the answer is that it is not.
Can we have a different thread title please?
I think the fact that they've done this, and have demonstrated the political will to continue to do this, means that the Euro will continue for a good while longer. It may not make any real sense, but that doesn't mean it's not happening!
longblackcoat said:
Yes, I'd say we are. If it was going to crash spectacularly, I think it would have happened by now. And please don't think I'm unaware of the immense efforts being made to prop it up by the concerned parties.
I think the fact that they've done this, and have demonstrated the political will to continue to do this, means that the Euro will continue for a good while longer. It may not make any real sense, but that doesn't mean it's not happening!
As I think Steffan and many others have pointed out, that the financials and economic case for the Euro has not been delivered, indeed it is perpetuating financial misery on the fringe economies. I think the fact that they've done this, and have demonstrated the political will to continue to do this, means that the Euro will continue for a good while longer. It may not make any real sense, but that doesn't mean it's not happening!
However we accept that it has always been a political decision not economic(you know the bit where democratically elected country leaders have been removed by the EU and "placemen" have been installed is indeed the sole reason for its continuance)
However in three key EU players, anti EU parties stand a very good chance of unsettling the status quo, in France, Italy and potentially the Conservatives in the UK via referendum, may give the politics of the EU a new twist.
Indeed the fact that the future of the Euro and the possibility of failure remains a question and has done since the 2008 crash only serves to underline the problems of a financial union without a political union.
Whilst EU Economies fail to grow, debts continue to climb and more importantly political parties of dissent grow in numbers and influence, no-one can say that the future of the Euro is assured
Walford said:
Do you not think the booooom from the very start of the euro years, in the PIGS was the beginning of the end
.
I was opposed to currency union from the start, and I would have been mortified if the UK had joined. It was presented to the populations as a one way bet. But fundamental questions were raised by economists, but dissenting voices were shouted down. Indeed one can recall several prominent Europeans saying that any future crises would be a good thing as jeopardy would naturally lead to closer unions (political) .
But yes the idea that the Greek economy can trade at parity with the German economy was/is and always shall be nuts.
It should be the end nigh for the Euro but it won't be.
To many multinationals and some financial institutions have done ok with the Euro.The majority of the Dutch have never been happy with the Euro.In Holland foodbanks never excisted one of the richest country in Europe.
Country's like Greece and Italy should have never joined.Italy with it's monopoly money was a crazy idea.
Germany could go into a recession.Cheerfull times ahead.>;)
To many multinationals and some financial institutions have done ok with the Euro.The majority of the Dutch have never been happy with the Euro.In Holland foodbanks never excisted one of the richest country in Europe.
Country's like Greece and Italy should have never joined.Italy with it's monopoly money was a crazy idea.
Germany could go into a recession.Cheerfull times ahead.>;)
Foppo said:
Germany could go into a recession.Cheerfull times ahead.>;)
Interesting piece on C4 news tonight.http://blogs.channel4.com/paul-mason-blog/germanys...
Gargamel said:
But yes the idea that the Greek economy can trade at parity with the German economy was/is and always shall be nuts.
For the record Greece now has higher productivity than Germany or so it was reported the other day - because wages etc have been driven down so far. I am sure there is a degree of artificiality in that but I thought it worth mentioning.FWIW I was always against the Euro and am glad we didn't join it
Tuesday 11:20 BST. Stocks are moving higher, and the euro and Bund prices are falling, as traders welcome a report suggesting the European Central Bank will step up its efforts to revitalise the eurozone economy.
The news is overshadowing data that recorded China’s slowest growth in more than five years – a report that earlier had rattled Asian bourses and industrial commodities.
According to Reuters, the ECB is considering buying corporate bonds on the secondary market – perhaps as soon as next year – as it attempts to encourage lending and tackle deflationary pressures in the currency bloc.
The ECB, which denied it has made any such decision, yesterday started buying covered bonds – ultra safe bank debt backed by underlying assets like mortgages – but expanding its asset purchase programme to encompass riskier corporate bonds would be a big move by the central bank.
The news is overshadowing data that recorded China’s slowest growth in more than five years – a report that earlier had rattled Asian bourses and industrial commodities.
According to Reuters, the ECB is considering buying corporate bonds on the secondary market – perhaps as soon as next year – as it attempts to encourage lending and tackle deflationary pressures in the currency bloc.
The ECB, which denied it has made any such decision, yesterday started buying covered bonds – ultra safe bank debt backed by underlying assets like mortgages – but expanding its asset purchase programme to encompass riskier corporate bonds would be a big move by the central bank.
Foppo said:
It should be the end nigh for the Euro but it won't be.
Country's like Greece and Italy should have never joined.Italy with it's monopoly money was a crazy idea.
Italy suffers from a culture of ignoring it's own problems for years, it's still going on at the worst levels.Country's like Greece and Italy should have never joined.Italy with it's monopoly money was a crazy idea.
http://www.telegraph.co.uk/news/worldnews/europe/i...
Mermaid said:
Tuesday 11:20 BST. Stocks are moving higher, and the euro and Bund prices are falling, as traders welcome a report suggesting the European Central Bank will step up its efforts to revitalise the eurozone economy.
The news is overshadowing data that recorded China’s slowest growth in more than five years – a report that earlier had rattled Asian bourses and industrial commodities.
According to Reuters, the ECB is considering buying corporate bonds on the secondary market – perhaps as soon as next year – as it attempts to encourage lending and tackle deflationary pressures in the currency bloc.
The ECB, which denied it has made any such decision, yesterday started buying covered bonds – ultra safe bank debt backed by underlying assets like mortgages – but expanding its asset purchase programme to encompass riskier corporate bonds would be a big move by the central bank.
On the basis that Draghi and the ECB cannot allow this nonsense to fail I presume that all sorts of covert behind the scenes activity aimed at massive bolstering of the eight or so wholly insolvent sovereign states now locked within the Euro will be necessary for these failing states to continue to survive at all. I do wonder how the ECB is going to manage massive behind the scenes support without this ruse becoming apparent to the markets? Is this actually possible with so many states obviously failing and when even the mighty Germany is not looking as good as she once did?The news is overshadowing data that recorded China’s slowest growth in more than five years – a report that earlier had rattled Asian bourses and industrial commodities.
According to Reuters, the ECB is considering buying corporate bonds on the secondary market – perhaps as soon as next year – as it attempts to encourage lending and tackle deflationary pressures in the currency bloc.
The ECB, which denied it has made any such decision, yesterday started buying covered bonds – ultra safe bank debt backed by underlying assets like mortgages – but expanding its asset purchase programme to encompass riskier corporate bonds would be a big move by the central bank.
These are very interesting times for all observers. Draghi is a very astute Banker but he cannot sustain the impossible for very long. Really a question now of what event(s) will precipitate realisation in the markets that the Ponzi scheme at the core of the hidden EU support is is fact an unsustainable nonsense. Or will it be the Catelonia independence drive or the UK actually changing its position on Europe as a result of the pressures in UK politics to recognise that many of the UK electors are looking for a fundamental change in politics into a political system where the recognition of consequences of policies and reality politics begins to make its mark on Politicians within the UK, makes the difference that causes the realisation of what a nonsense this EU business has become?
Or coud it be that one of the desperately depressed states such as Greece decides to precipitate an end to the impossible austerity they are undergoing which is not in fact improving the economy of Greece in any way nor addressing the fundamental problems of being locked into an unsustainable currency? Interesting times indeed.
Mermaid said:
Steffan said:
Draghi is a very astute Banker but he cannot sustain the impossible for very long. .
I suspect he will not make it past Volume 4.Since the Euro is a political invention based on political rather than fiscal needs at inception it seems likely that a political disruption would be required to start a collapse. So what is in the pipeline?
I suppose there are 2 things in the "known" camp that could affect the ability to maintain any aura of collective agreement.
Energy Security Issues
"De-carbonisation" targets
To a great extent the interrelate but each could be catalysts for fracturing in their own right.
Simmer away more broadly in the background but with some potential to boil over if left unwatched could be the apparently increasing anti-EU feelings that may not be majority views but are widespread. As we have discovered in recent times you don;t need to be a majority or even major group opinion in order to have significant influence. You do, however, need to be organised and well funded.
What else (political) is floating around out there that could suddenly become the focal point of a mass panic in political circles and status quo extinction?
I suppose there are 2 things in the "known" camp that could affect the ability to maintain any aura of collective agreement.
Energy Security Issues
"De-carbonisation" targets
To a great extent the interrelate but each could be catalysts for fracturing in their own right.
Simmer away more broadly in the background but with some potential to boil over if left unwatched could be the apparently increasing anti-EU feelings that may not be majority views but are widespread. As we have discovered in recent times you don;t need to be a majority or even major group opinion in order to have significant influence. You do, however, need to be organised and well funded.
What else (political) is floating around out there that could suddenly become the focal point of a mass panic in political circles and status quo extinction?
LongQ said:
Since the Euro is a political invention based on political rather than fiscal needs at inception it seems likely that a political disruption would be required to start a collapse. So what is in the pipeline?
I suppose there are 2 things in the "known" camp that could affect the ability to maintain any aura of collective agreement.
Energy Security Issues
"De-carbonisation" targets
....
What else (political) is floating around out there that could suddenly become the focal point of a mass panic in political circles and status quo extinction?
I think you're right that the Euro is first and foremost a political construct - certainly from a financial viewpoint, it has always been a failed concept.I suppose there are 2 things in the "known" camp that could affect the ability to maintain any aura of collective agreement.
Energy Security Issues
"De-carbonisation" targets
....
What else (political) is floating around out there that could suddenly become the focal point of a mass panic in political circles and status quo extinction?
For this reason, I think the tensions between economies - those that 'need' to run a budget deficit and are pro-QE and those who stick doggedly to a balanced economic model and have very strong, historic aversion to inflation - which may prove to be strongest at both public and government levels.
LongQ said:
What else (political) is floating around out there that could suddenly become the focal point of a mass panic in political circles and status quo extinction?
I would think it's whenever the next round of country elections are that will see anti-EU parties gaining ever more votes. France and Italy being the most likely (I think). London424 said:
LongQ said:
What else (political) is floating around out there that could suddenly become the focal point of a mass panic in political circles and status quo extinction?
I would think it's whenever the next round of country elections are that will see anti-EU parties gaining ever more votes. France and Italy being the most likely (I think). Of course the other things that is a background change is the departure of Barosso and Van Rompuy and therefore whatever changes in action and attitude Juncker and Donald Tusk brings with them.
But it is more likely to be some specific event that could cause the largest damage to the project as a whole and Euro as part of that.
IMO.
LongQ said:
London424 said:
LongQ said:
What else (political) is floating around out there that could suddenly become the focal point of a mass panic in political circles and status quo extinction?
I would think it's whenever the next round of country elections are that will see anti-EU parties gaining ever more votes. France and Italy being the most likely (I think). Of course the other things that is a background change is the departure of Barosso and Van Rompuy...
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