Is the end nigh for the Euro? [vol. 3]

[B'stard Child]

bigweb said:

Guybrush said:

How it's not at least 3 euros to the pound I don't know. I'd be interested in the explanation.

I don't know if this is a joke but I honestly do think this!

My logic

The UK is taken steps to break away from the EU

It's not been done before so markets are understandably shakey



The EU is continuing to kick cans down the road (not resolve the issues)

The markets are used to that and so no issue


Now if the EU stopped kicking the cans down the road (or couldn't kick them any more) due to a catastrophic event - like no more Greek Bailouts

Then I think the markets would revalue accordingly

I am simple however!!!

[rdjohn]

Guybrush said:

How it's not at least 3 euros to the pound I don't know. I'd be interested in the explanation.

I think that, a bit like RBS, it is just too big to fail. 500 million consumers carry a lot of clout.

Punters have quit Sterling while there are too many unknowns, the Nissan announcement yesterday with more to follow after March 2017, might just encourage them back.

£1:12 per € is a reflection of what might be, rather a reflection of the long term median value of Sterling as a reserve currency. I doubt that capital has been switched into €, more likely $US. But even that sentiment could change next month.

[LongQ]

maffski said:

Digga said:

loafer123 said:

The EU may be irrational, but the pragmatism of the politicians will prevail.

I think we've seen that with the Wallonian veto of the EU-Canada trade deal.

Clearly someone 'helped' the Walloons to see sense. I'd love to know how, but we'll never find out.

My understanding is the Walloons have been told they can write a 'clarification' to the trade agreement. And that the Canadians have been told this 'clarification' has no legal standing and will be put in the back of a filing cabinet and ignored.

Are the Walloons Belgium's equivalent of the Scottish Nationalists?

Surely just about every country has them in one form or another?

Edited by LongQ on Friday 28th October 20:36

[Digga]

LongQ said:

maffski said:

Digga said:

loafer123 said:

The EU may be irrational, but the pragmatism of the politicians will prevail.

I think we've seen that with the Wallonian veto of the EU-Canada trade deal.

Clearly someone 'helped' the Walloons to see sense. I'd love to know how, but we'll never find out.

My understanding is the Walloons have been told they can write a 'clarification' to the trade agreement. And that the Canadians have been told this 'clarification' has no legal standing and will be put in the back of a filing cabinet and ignored.

Are the Walloons Belgium's equivalent of the Scottish Nationalists?

Surely just about every country has them in one form or another?

Surely just

That's the hazard. The myopic perspective of vetoing something as a way of differentiating oneself and getting one over on your local rival(s) can trump logic and reason.

[steveT350C]

Otmar Issing on the fate of the Euro...

http://www.alt-m.org/2016/10/27/otmar-issing-fate-...

[Carl_Manchester]

Guybrush said:

How it's not at least 3 euros to the pound I don't know. I'd be interested in the explanation.

In terms of Euro generally:

a) Strength of the German economy
b) inward capital flows from outside the EU remain steady (450Bn EUR per year and climbing)
c) central bank can-kicking (nothing to see here folks its all O.K).

Germany is the one holding everything together although if problems in the P.I.G.S start to affect b) then the currency will start to drop as the central bank intervenes with capital injections to fill the gap in the external capital flows which have gone elsewhere in the world rather than the EU as it becomes more risky. The increase in money printing by the EU central bank to fill the gap caused by the capital flows going elsewhere weakens the currency further and so its easy to get into a deflationary currency death spiral.

This is why, closer to home, the UK is keen to push this 'open for business' message to the outside world but that's another thread.

[Borghetto]

I'm currently in the US and just had a Grande Capucino $4.55 (Pounds 3.72) ouch. I'm in Madeira next month, wonder how their prices will look in Sterling terms.

[stevemiller]

There are many on here with a better grasp of the details than me, having said that I will pass comment. The EU is dependant on the German nation's willingness to sustain it. This in turn is dependent on the German elite's ability to guide the German electorate in delivering the elites desired wishes. If the likes of Merkel fail to manage this the end will come like a hook from the blind side. It will be over before we even know it's started
Now I do not pretend to grasp the Germans populaces reading of all that is going on however the desision will be before them soon. My prediction is the balance for sustaining both the Euro and the EU will evaporate next year and whether article 50 is enacted or not will make little difference as the EU as it stand will not be there to bargin with.

[Guybrush]

Carl_Manchester said:

Guybrush said:

How it's not at least 3 euros to the pound I don't know. I'd be interested in the explanation.

In terms of Euro generally:

a) Strength of the German economy
b) inward capital flows from outside the EU remain steady (450Bn EUR per year and climbing)
c) central bank can-kicking (nothing to see here folks its all O.K).

Germany is the one holding everything together although if problems in the P.I.G.S start to affect b) then the currency will start to drop as the central bank intervenes with capital injections to fill the gap in the external capital flows which have gone elsewhere in the world rather than the EU as it becomes more risky. The increase in money printing by the EU central bank to fill the gap caused by the capital flows going elsewhere weakens the currency further and so its easy to get into a deflationary currency death spiral.

This is why, closer to home, the UK is keen to push this 'open for business' message to the outside world but that's another thread.

I'm sure the EU is in a death spiral, I guess it's still in the upper atmosphere and reality hasn't hit home yet.

[Digga]

stevemiller said:

There are many on here with a better grasp of the details than me, having said that I will pass comment. The EU is dependant on the German nation's willingness to sustain it. This in turn is dependent on the German elite's ability to guide the German electorate in delivering the elites desired wishes. If the likes of Merkel fail to manage this the end will come like a hook from the blind side. It will be over before we even know it's started
Now I do not pretend to grasp the Germans populaces reading of all that is going on however the desision will be before them soon. My prediction is the balance for sustaining both the Euro and the EU will evaporate next year and whether article 50 is enacted or not will make little difference as the EU as it stand will not be there to bargin with.

Bang on. There is also an outside chance of a 'hard Euro' scenario, where the miscreants are forcibly ejected. It's the opposite of the previous 'club' approach, but might be dictated by economics.

[jshell]

QuantumTokoloshi said:

maffski said:

Digga said:

loafer123 said:

The EU may be irrational, but the pragmatism of the politicians will prevail.

I think we've seen that with the Wallonian veto of the EU-Canada trade deal.

Clearly someone 'helped' the Walloons to see sense. I'd love to know how, but we'll never find out.

My understanding is the Walloons have been told they can write a 'clarification' to the trade agreement. And that the Canadians have been told this 'clarification' has no legal standing and will be put in the back of a filing cabinet and ignored.

Reminds me of the Cameron "deal of the century" with the EU, file under "recycling".

Would they be the same people who persuaded the never-to-give-up Greek Finance Minister, to, well, give up? ..for personal reasons...

[Digga]

Don't forget the Italian referendum on 4th December...

zerohedge said:

Italy seen more likely to exit Eurozone than Greece.

http://www.zerohedge.com/news/2016-11-01/italy-seen-more-likely-exit-eurozone-greece-italian-bond-yields-surge

[superlightr]

Digga said:

Don't forget the Italian referendum on 4th December...

zerohedge said:

Italy seen more likely to exit Eurozone than Greece.

http://www.zerohedge.com/news/2016-11-01/italy-seen-more-likely-exit-eurozone-greece-italian-bond-yields-surge

I think Italy will want to quit the EU as they know their country is feked by debt, they can see that the Eu if just kicking the can and soon Italy will be like Greece and have austerity imposed on it with a lot of pain. I think they will swap sides and jump ship to regain control of their currency, they can then re-adjust their own debts and they can get in their first (well 2nd after the UK) before the whole EU falls on its face, stay ahead of the game with Tourist money coming in and perhaps consider gently reforming its own tax collection affairs - ie they can kick that can down the line a bit longer whereas at the moment the EU can is clearly at the end of being kicked and cant be kicked much more.

Its a way forward and with some hope for Italy. If they stay with the EU they know its just pain with no hope.

[anonymous-user]

I don't agree. It's far too frightening a prospect for the average Italian to leave the Euro.

[Digga]

jsf said:

I don't agree. It's far too frightening a prospect for the average Italian to leave the Euro.

I can definitely see the Euro elite being even more persuasive than they were with Varoufakis.

[alfie2244]

Italians being coerced is an interesting twist.

[Driller]

[Huntsman]

Guybrush said:

How it's not at least 3 euros to the pound I don't know. I'd be interested in the explanation.

One day, there will be a turning point, I wonder when it will be.

[Driller]

This Autumn maybe?

[Andy Zarse]

France, by the by. Her economy is really continuing to struggle to keep its head above la mer, despite all the QE.

https://notayesmanseconomics.wordpress.com/2016/11...

This bit grabbed me; "...while France’s equivalent (total) debt is around 280% of GDP, up 66% (since 2007). This tally ignores unfunded pension and health-care obligations, as well as contingent commitments to euro zone bailouts.