Is the end nigh for the Euro? [vol. 2]
Discussion
anonymous said:
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anonymous said:
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Worst for whom? The person who has a holiday cancelled after the outbreak of civil war or the people who have to fight in it?That, obviously, isn't the worst that can happen.
The worst that could happen is that they make you fight wearing the traditional battle pom-poms on the end of your shoes.
coyft said:
How long before plan B is announced? Deficit reduction, whilst allowing economies to grow.
Plan B. Strong commitment to a long term deficit reduction plan, cut less in the short term and push back austerity to later years.
See that can? Give it a good kick.
I do not understand how you can cut deficit, debt and stimluate growth at the same time. You can say it or write it, but it just doesn't add up given the yawning gaps involved.Plan B. Strong commitment to a long term deficit reduction plan, cut less in the short term and push back austerity to later years.
See that can? Give it a good kick.
Take Ireland for instance. There's already quite a lot of moaning about austerity from the political left, who now perhaps represent both the unemployed builders and the public sector, both of whom want to avoid cuts to welfare/public sector pay. Despite all this moaning, and four years of crisis to date, the deficit correction is only part done. There are still another two or three years of savage budgets to come according to the original plan, and that original plan envisioned growth which hasn't appeared yet. Each of these future budgets will depress the domestic economy and push the fantasy projections of balanced budgets further into the future.
And then you have to move past govt deficit to govt debt, and beyond govt debt to private sector debt and those tens/hundreds of thousands in mortgage arrears.
And that's just Ireland, which has been Mr Goody Two Shoes amongst the PIIGS, and is fortunate enough to have "only" 14% unemployment.
In the context of all this, what effect is a little "stimulus plan" going to have on the likes of Spain? It'll just be state support to the construction sector to build stuff that is already built. Straight down the toilet.
The only way this is going to end is by widespread destruction of the paper wealth that has accumulated in the last decade. It was never worth anything in the first place.
I saw the BBC travel correspondent Simon Calder on breakfast telly talking about how the change over to Drachma will happen. The euros will be stamped with a drachma symbol to differentiate them, and he recommended taking small note euros if you are going on holiday there as they will be in demand should the worst happen.
lost in espace said:
I saw the BBC travel correspondent Simon Calder on breakfast telly talking about how the change over to Drachma will happen. The euros will be stamped with a drachma symbol to differentiate them, and he recommended taking small note euros if you are going on holiday there as they will be in demand should the worst happen.
A very similar article in the Evening Standard tonight, think I will take Sterling and change as much as I need per day 
I will probably lose out slightly with commission fees but think it will be worth it Mermaid said:
cal216610 said:
It's starting to hit local news that Greece maybe out of the EURO with local businesses having drachma contingencies.
Will it be panic in world markets when it finally happens, or relief and a rally?Mermaid said:
cal216610 said:
It's starting to hit local news that Greece maybe out of the EURO with local businesses having drachma contingencies.
Will it be panic in world markets when it finally happens, or relief and a rally?Robert Peston has posted a comment in the Beeb at : http://www.bbc.co.uk/news/business-18058270
Which asks " Could the Euro survive the Greek Exit"
In his post Mr Peston reminds us that just the collapse of Greece will expose the Banks to unfundable losses which will require the ECB to fund these loses using QE to bridge the gap. Mr Peston believes this will undermine the solvency of the ECB.
But this completely ignores the Spanish and Portuguese insolvency and the domino effect that collapsing Sovereign debt will have on their ability to raise funds. They will be total pariahs overnight.
In reality there will only be one lender who will be forced to even attempt to sort this out. The ECB.
And the concerns that Mr Peston is pronouncing over the Greek collapse, in a country with 11 Million people will be magnified dramatically when two countries with a combined population of 60 Million people, fall down the same hole. In short order. Which they will.
Sovereign debt in Europe will fall from the safest form of Bank investment, to an absolute Pariah level and the consequences will be horrendous. Overnight. Investors will realise that at any time, the Sovereign countries to which, they have been lending, can repudiate their debt, totally and still continue to exist and continue as they were before.
This will be much worse than a business going bust. There will literally be no return for anybody, not even a liquidators fee. All that happens is that the investors lose 100% of their investment and only the investors lose out.
The countries can continue to remain in possession of the goods and chattels, bought with the loans, and the infrastructure created within the country, with the loans and create a new currency and soldier on. Using the communications, transport and every other benefit they received from the loans without any interference.
Equally all the Trillions of Euro's printed by the ECB and thrown away on this will be gone totally. Nothing the EU can do about it. either.
This does require deep and serious consideration.
HundredthIdiot said:
I do not understand how you can cut deficit, debt and stimluate growth at the same time. You can say it or write it, but it just doesn't add up given the yawning gaps involved.
Wave goodbye to statism.This gives the private sector room to breathe and the merchant adventurers who serve the consumer the most efficiently get to keep their pieces of eight.
Tighter monetary policy (
The cost of debt can be as low as zero in the crazy world of future money.
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