Is the end nigh for the Euro? [vol. 3]
Discussion
Now €677.5bn that the Bundesbank is owed.
To put this into context, if the Bundesbank called this debt, the countries who owe them would have to print that amount of Euros, which compares to a total ECB Quantitative Easing on Public Bonds to date of €995bn.
In terms of calculating the relative value of the amount owed to Germany, a discount reflecting the credit risk of each country, taking into account the additional QE each would have to do to pay, would seem appropriate.
loafer123 said:
In terms of calculating the relative value of the amount owed to Germany, a discount reflecting the credit risk of each country, taking into account the additional QE each would have to do to pay, would seem appropriate.
Presumably, the subsequent reduction in the value of the Euro, due to the requisite additional QE would also need to be factored?Digga said:
loafer123 said:
In terms of calculating the relative value of the amount owed to Germany, a discount reflecting the credit risk of each country, taking into account the additional QE each would have to do to pay, would seem appropriate.
Presumably, the subsequent reduction in the value of the Euro, due to the requisite additional QE would also need to be factored?Mind you, it does make you wonder why the GBP is so weak against EUR. I suppose the reasoning is that it won't happen...
loafer123 said:
Digga said:
loafer123 said:
In terms of calculating the relative value of the amount owed to Germany, a discount reflecting the credit risk of each country, taking into account the additional QE each would have to do to pay, would seem appropriate.
Presumably, the subsequent reduction in the value of the Euro, due to the requisite additional QE would also need to be factored?Mind you, it does make you wonder why the GBP is so weak against EUR. I suppose the reasoning is that it won't happen...
Digga said:
loafer123 said:
Digga said:
loafer123 said:
In terms of calculating the relative value of the amount owed to Germany, a discount reflecting the credit risk of each country, taking into account the additional QE each would have to do to pay, would seem appropriate.
Presumably, the subsequent reduction in the value of the Euro, due to the requisite additional QE would also need to be factored?Mind you, it does make you wonder why the GBP is so weak against EUR. I suppose the reasoning is that it won't happen...
loafer123 said:
Now €677.5bn that the Bundesbank is owed.
To put this into context, if the Bundesbank called this debt, the countries who owe them would have to print that amount of Euros, which compares to a total ECB Quantitative Easing on Public Bonds to date of €995bn.
In terms of calculating the relative value of the amount owed to Germany, a discount reflecting the credit risk of each country, taking into account the additional QE each would have to do to pay, would seem appropriate.
Of course the figure is a technical matter, so it is pretty irrelvant provided the Euro endures. It's only if the music stops that the game of pass the parcel turns nasty. No wonder they want to do "whatever it takes"... To put this into context, if the Bundesbank called this debt, the countries who owe them would have to print that amount of Euros, which compares to a total ECB Quantitative Easing on Public Bonds to date of €995bn.
In terms of calculating the relative value of the amount owed to Germany, a discount reflecting the credit risk of each country, taking into account the additional QE each would have to do to pay, would seem appropriate.
Andy Zarse said:
loafer123 said:
Now €677.5bn that the Bundesbank is owed.
To put this into context, if the Bundesbank called this debt, the countries who owe them would have to print that amount of Euros, which compares to a total ECB Quantitative Easing on Public Bonds to date of €995bn.
In terms of calculating the relative value of the amount owed to Germany, a discount reflecting the credit risk of each country, taking into account the additional QE each would have to do to pay, would seem appropriate.
Of course the figure is a technical matter, so it is pretty irrelvant provided the Euro endures. It's only if the music stops that the game of pass the parcel turns nasty. No wonder they want to do "whatever it takes"... To put this into context, if the Bundesbank called this debt, the countries who owe them would have to print that amount of Euros, which compares to a total ECB Quantitative Easing on Public Bonds to date of €995bn.
In terms of calculating the relative value of the amount owed to Germany, a discount reflecting the credit risk of each country, taking into account the additional QE each would have to do to pay, would seem appropriate.
loafer123 said:
Andy Zarse said:
loafer123 said:
Now €677.5bn that the Bundesbank is owed.
To put this into context, if the Bundesbank called this debt, the countries who owe them would have to print that amount of Euros, which compares to a total ECB Quantitative Easing on Public Bonds to date of €995bn.
In terms of calculating the relative value of the amount owed to Germany, a discount reflecting the credit risk of each country, taking into account the additional QE each would have to do to pay, would seem appropriate.
Of course the figure is a technical matter, so it is pretty irrelvant provided the Euro endures. It's only if the music stops that the game of pass the parcel turns nasty. No wonder they want to do "whatever it takes"... To put this into context, if the Bundesbank called this debt, the countries who owe them would have to print that amount of Euros, which compares to a total ECB Quantitative Easing on Public Bonds to date of €995bn.
In terms of calculating the relative value of the amount owed to Germany, a discount reflecting the credit risk of each country, taking into account the additional QE each would have to do to pay, would seem appropriate.
Deutsche Bank in in the headlines again with another 1000 jobs axed on top of the earlier 3000 job cuts announced recently. See: http://www.bbc.co.uk/news/business-37574210
All in all I really do think some method of enabling the failing of Sovereign states and total insolvency to be admitted and addressed by the EU, has to be found. The EU clearly thinks that throwing QE money at hiding the problems is the answer. I do not think it can be any answer, longer term, and in consequence a major bust up and various collapses will be the inevitable result, unless some other way of actually admitting and addressing the problem can be found. We live in economically challenging times which are worsening steadily because of the delibertely deceit at international level.
The crunch will come, the question is by what means and at what time. But constantly pretending everything s asolutely fine, within the EU, when sovereign states within the EU are being crippled by the consequences of year upon year upon year of steady economic decline and reduction of economic output with unsustainable consequences to youth unemployment et al, can never address or solve these economic downsides. Quite when and how that could be acheved I am bound to admit that I cannot predict, but the alternative of an almighty collapse of several EU economes is surely unthinkable?
What do others on here, think??
Edited by Steffan on Thursday 6th October 20:34
Edited by Steffan on Thursday 6th October 20:36
I thought that, historically, the most common solution for impassable problems like these was a "good war".
A war induces a natural affinity to some sort of austerity amongst the more malleable masses, requires Government spending whether the "money" exists or not, usually results in enormous waste of goods produced "for the war effort", very likely offers opportunities for infrastructure spending post conflict and can, in some way, reverse (or at least slow) population increases for a few years. There is however a subsequent risk of a breeding explosion after the war and the resulting problem of a lot of non-taxpayers to be supported for a couple of generations by an "adult" population that may have been somewhat reduced in numbers.
Naturally such a course of action will likely come with a few negative effects and will tend to do no more than blast the can a few years further down the road.
On the positive side the employment figures would probably look good for a decade or so.
Clearly there would be some unique business opportunities available over the period and afterwards thus allowing "revaluation" of the world - a potential answer to the problematic economics of our times.
A war induces a natural affinity to some sort of austerity amongst the more malleable masses, requires Government spending whether the "money" exists or not, usually results in enormous waste of goods produced "for the war effort", very likely offers opportunities for infrastructure spending post conflict and can, in some way, reverse (or at least slow) population increases for a few years. There is however a subsequent risk of a breeding explosion after the war and the resulting problem of a lot of non-taxpayers to be supported for a couple of generations by an "adult" population that may have been somewhat reduced in numbers.
Naturally such a course of action will likely come with a few negative effects and will tend to do no more than blast the can a few years further down the road.
On the positive side the employment figures would probably look good for a decade or so.
Clearly there would be some unique business opportunities available over the period and afterwards thus allowing "revaluation" of the world - a potential answer to the problematic economics of our times.
Steffan said:
What do others on here, think??
LongQ said:
I thought that, historically, the most common solution for impassable problems like these was a "good war".
A war induces a natural affinity to some sort of austerity amongst the more malleable masses, requires Government spending whether the "money" exists or not, usually results in enormous waste of goods produced "for the war effort", very likely offers opportunities for infrastructure spending post conflict and can, in some way, reverse (or at least slow) population increases for a few years. There is however a subsequent risk of a breeding explosion after the war and the resulting problem of a lot of non-taxpayers to be supported for a couple of generations by an "adult" population that may have been somewhat reduced in numbers.
Naturally such a course of action will likely come with a few negative effects and will tend to do no more than blast the can a few years further down the road.
On the positive side the employment figures would probably look good for a decade or so.
Clearly there would be some unique business opportunities available over the period and afterwards thus allowing "revaluation" of the world - a potential answer to the problematic economics of our times.
Well to reduce the risk of war wasn't that one of the reasons the EU was founded???A war induces a natural affinity to some sort of austerity amongst the more malleable masses, requires Government spending whether the "money" exists or not, usually results in enormous waste of goods produced "for the war effort", very likely offers opportunities for infrastructure spending post conflict and can, in some way, reverse (or at least slow) population increases for a few years. There is however a subsequent risk of a breeding explosion after the war and the resulting problem of a lot of non-taxpayers to be supported for a couple of generations by an "adult" population that may have been somewhat reduced in numbers.
Naturally such a course of action will likely come with a few negative effects and will tend to do no more than blast the can a few years further down the road.
On the positive side the employment figures would probably look good for a decade or so.
Clearly there would be some unique business opportunities available over the period and afterwards thus allowing "revaluation" of the world - a potential answer to the problematic economics of our times.
Bit ironic if the only salvation for the EU is a war.......
Hang on - now didn't they want their own army??? Perhaps they are thinking ahead - pretty obvious if history teaches us anything - they'd want to be the winning side
PS thanks to the contributors on this thread - it's one I keep up with but don't often comment as clearly there are some great thinkers/thought provokers on here...
Edited by B'stard Child on Thursday 6th October 23:41
coyft said:
Wonder if we should change the title. "Is the end nigh for Sterling?" :-)
Sterling is doing what it should do, and float to take account of economic circumstances. If the EU ends up imposing tariffs at 10% on cars made in the U.K., for example, then that tariff is already more than compensated for by a lower Fx rate.Many Southern European countries are watching the fall in the pound with envy.
loafer123 said:
coyft said:
Wonder if we should change the title. "Is the end nigh for Sterling?" :-)
Sterling is doing what it should do, and float to take account of economic circumstances. If the EU ends up imposing tariffs at 10% on cars made in the U.K., for example, then that tariff is already more than compensated for by a lower Fx rate.Many Southern European countries are watching the fall in the pound with envy.
There's. Some very good comment on the 'flash trading' aspect of this week's GBP spike by PHer CarlManchester (on the Brexit thread IIRC). From the trading side, it is the inability to devalue which is crippling the majority of PIIGS economies.
Then there's the magnitude of the balance of payments issue between Germany and the rest of the Eurozone, which in itself is a key vulenerability.
Not really sure what else there is to say. Sterling is not in the same vulnerability as the Euro; they need to keep a whole bunch of disparate economies within the currency in order to maintain stability and keepmthenproject rolling. The U.K. And sterling are autonomous - there is no conflict of interest.
Not sure what to say really. We are discussing apples and oranges here.
Then there's the magnitude of the balance of payments issue between Germany and the rest of the Eurozone, which in itself is a key vulenerability.
Not really sure what else there is to say. Sterling is not in the same vulnerability as the Euro; they need to keep a whole bunch of disparate economies within the currency in order to maintain stability and keepmthenproject rolling. The U.K. And sterling are autonomous - there is no conflict of interest.
Not sure what to say really. We are discussing apples and oranges here.
Driller said:
You guys are incredible.
When the Euro weakens "it's doomed", when the pound weakens it's " doing what it's supposed to do".
It's like the BBC article saying the recent fall in the pound was due to a "stray algorithm"
The Euro isn't doomed because of its relative strength or weakness in the market now. It is doomed because it is designed for fiscal integration and a federal superstate structure like the US, but is made up of a disparate collection of countries, cultures, languages, fiscal approaches and economies.When the Euro weakens "it's doomed", when the pound weakens it's " doing what it's supposed to do".
It's like the BBC article saying the recent fall in the pound was due to a "stray algorithm"
The Euro will survive if they follow the path of political and economic integration, but I don't think the people of Europe will let them.
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