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Eurozone has "10 days at the most"

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Yep, apathy is finally setting in. I'm now convinced the Fed will bailout the Eurozone. Or something.

None of the near constant feel of global meltdown is not making much of a ripple in my mind at all...

 

http://www.businessinsider.com/wolfganc-munchau-the-eurozone-has-10-days-at-most-2011-11#ixzz1ezx3WL4R

 

Wolfgang Münchau: THE EUROZONE HAS 10 DAYS AT MOST

Joe Weisenthal | Nov. 27, 2011, 4:02 PM

 

If you're looking for some good Euro-scare meat, look no further than this column from the FT's Wolfgang Münchau. The basic gist: No really, now we're getting into endgame.

 

Why now? Because the increase in core yields, the failure of that German bund auction, and the increase in Spanish and Italian short-term yields, as well as the tightening of money for the banks, means it's all almost over unless Europe immediately cooks up some kind of ECB-backed/Eurobond/fiscal union concoction.

 

I am hearing that there are exploratory talks about a compromise package comprising those three elements. If the European summit could reach a deal on December 9, its next scheduled meeting, the eurozone will survive. If not, it risks a violent collapse. Even then, there is still a risk of a long recession, possibly a depression. So even if the European Council was able to agree on such an improbably ambitious agenda, its leaders would have to continue to outdo themselves for months and years to come.

 

Ultimately, Münchau reckons...

 

Italy’s disastrous bond auction on Friday tells us time is running out. The eurozone has 10 days at most.

 

Read more: http://www.businessinsider.com/wolfganc-munchau-the-eurozone-has-10-days-at-most-2011-11#ixzz1f46Ex8Hc

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It's also not disturbing the vast European majority BTW. People are very oblivious, and as long as it stays like this, all the major currencies can be exchanged for gold, which is why the `early' birds are doing it.

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BTW, all the suggestions the writer makes point either to hyper-inflation or to Germany bleeding out. So, why does he expect support for this?

 

Merkel is right to refuse any of this bullcr@p. Either the PIIGS have to properly crash & burn, or they will be turned `German' the hard way (fiscally, I mean). But they want neither.

 

My suspicion is that they will pretend willingness to turn `German' for a year or two, and then decide to opt out and hyper-inflate after they drained the most money they could out of the `German' block. I hope Merkel does not fall for this crudo and opts for crash & burn instead.

 

We all know that 15% interest is nothing new to Spain and Italy, so they should not complain.

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And this here is why only crash & burn will work:

 

From the comments:

Pepijn | November 27 9:32pm

..

@ European: I believe the whole idea of German officials meddling in the internal affairs of Greece, Italy, Spain, and soon to come... France in return for financial support is in the long run much more dangerous then a collapse of the Euro now. Already now German flags are being burnt in the streets of Athens. Do you really want to see German technocrats deciding on the mass lay-offs of French civil servants? All for the sake of "European unity"? Sounds more like a one-way ticket to european war if you ask me... Maybe we should simply (and arbitrarily) decide we can have European unity without a single currency?

It looks more and more as if the Euro was leading to war, rather than to lasting peace.

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Merkel is right to refuse any of this bullcr@p. Either the PIIGS have to properly crash & burn, or they will be turned `German' the hard way (fiscally, I mean). But they want neither.

 

My suspicion is that they will pretend willingness to turn `German' for a year or two, and then decide to opt out and hyper-inflate after they drained the most money they could out of the `German' block. I hope Merkel does not fall for this crudo and opts for crash & burn instead.

Wasn't that the plan behind them joining the Euro all along?

 

PRETEND to meet the criteria to get access to cheap money?

 

Surely, many could see that a brief period of deception was bound to be followed by disappointment.

Now it seems, all those fat government pensions will be turned to dust.

 

Funnily enough, many corporations are very healthy now. And whatever new system is created will have to find a way to have their cooperation

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I really wish people would stop making up these ridiculous predictions. The Euro will still be around in 10 days. Not because the problem has been fixed, but because another band-aid has been put on the wound.

 

What's really ridiculous about this crisis is that people still haven't got to the nub of the issue. The problem isn't the debt per se; the problem is uncontrollable government spending that still hasn't been reigned in. By just writing off debt, printing money, or whatever, you're merely allowing the bad behavior of government to take us back to where we were.

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I really wish people would stop making up these ridiculous predictions. The Euro will still be around in 10 days. Not because the problem has been fixed, but because another band-aid has been put on the wound.

 

What's really ridiculous about this crisis is that people still haven't got to the nub of the issue. The problem isn't the debt per se; the problem is uncontrollable government spending that still hasn't been reigned in. By just writing off debt, printing money, or whatever, you're merely allowing the bad behavior of government to take us back to where we were.

You are right about the root of the problem.

Unfortunately, the debt is already there (from overspending) and waiting to be paid

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BTW, all the suggestions the writer makes point either to hyper-inflation or to Germany bleeding out. So, why does he expect support for this?

 

Merkel is right to refuse any of this bullcr@p. Either the PIIGS have to properly crash & burn, or they will be turned `German' the hard way (fiscally, I mean). But they want neither.

 

My suspicion is that they will pretend willingness to turn `German' for a year or two, and then decide to opt out and hyper-inflate after they drained the most money they could out of the `German' block. I hope Merkel does not fall for this crudo and opts for crash & burn instead.

 

We all know that 15% interest is nothing new to Spain and Italy, so they should not complain.

 

so you think Merkel is going to put the interests of the rest of the 'german people' above her own interests?

 

surely the fact that she currently heads the PR dept of an extortion racket pillaging said 82 million people says otherwise?

 

printy printy.

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DEATH STRUGGLE - has created a "persistant buyer": shrinking European banks repatriating capital into Euros

 

VIDEO : http://www.zerohedge.com/news/john-taylor-euro-death-struggle

 

Taylor on the outlook for the euro:

 

“It is absolutely incredible. It’s a death struggle for this currency. It is really worse than I could have dreamed it being. And unfortunately it has a bleak outlook ahead.”

 

On whether there will be a breakup of the euro:

 

“Probably. Some parts of the euro will have to be out. There is no way Greece or Portugal can stand it.”

 

On why the euro is not back down to $1.20 given its bleak outlook:

 

“What’s stupid is that the ECB is holding it up. Why are they holding up the euro? One of the problems, besides the ECB, is the banks are shrinking, and the banks are selling all of their offshore assets and bringing them back to Europe. That means in fact there is a persistent buyer of euros and it’s their own financial institutions.”

 

On why the euro spiked in October and went back down in November:

 

“It is really hard. For me the outlook is bleak, but there is always the hope that the bleaker it gets the more the governments are going to wake up and do something. It gets to be this bipolar situation. The worse it is, then by God something will happen. That is what happened yesterday. We had articles coming out over the weekend saying that Europe had 10 days to live. The next thing you know, boom, the euro is way up. If it is that bad, [Angela] Merkel has to wake up and do something.”

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DEATH STRUGGLE - has created a "persistant buyer": shrinking European banks repatriating capital into Euros

 

VIDEO : http://www.zerohedge.com/news/john-taylor-euro-death-struggle

 

Taylor on the outlook for the euro:

 

“It is absolutely incredible. It’s a death struggle for this currency. It is really worse than I could have dreamed it being. And unfortunately it has a bleak outlook ahead.”

 

On whether there will be a breakup of the euro:

 

“Probably. Some parts of the euro will have to be out. There is no way Greece or Portugal can stand it.”

 

On why the euro is not back down to $1.20 given its bleak outlook:

 

“What’s stupid is that the ECB is holding it up. Why are they holding up the euro? One of the problems, besides the ECB, is the banks are shrinking, and the banks are selling all of their offshore assets and bringing them back to Europe. That means in fact there is a persistent buyer of euros and it’s their own financial institutions.”

 

On why the euro spiked in October and went back down in November:

 

“It is really hard. For me the outlook is bleak, but there is always the hope that the bleaker it gets the more the governments are going to wake up and do something. It gets to be this bipolar situation. The worse it is, then by God something will happen. That is what happened yesterday. We had articles coming out over the weekend saying that Europe had 10 days to live. The next thing you know, boom, the euro is way up. If it is that bad, [Angela] Merkel has to wake up and do something.”

 

I'm curious to know what your answer / position is?

 

As I see it we're borrowing about 150 billion a year at the moment. Which, using the very rough calculation that it costs 25k a year to pay a public sector worker (salary, pension, NI, desk, chair, computer, office etc.), and there are about 6 million of them - means we are borrowing the entire wage bill of the public sector.

 

What is your answer? How do we get from where we are now to where we need to be - with a budget surplus. The state needs another 150 billion in tax - or it needs the economy to grow to produce, say, another 75 billion in tax and, at the same time, needs to lose 75 billion in costs.

 

What would you do if you were in No. 11 Downing Street this morning?

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BTW, all the suggestions the writer makes point either to hyper-inflation or to Germany bleeding out. So, why does he expect support for this?

 

Merkel is right to refuse any of this bullcr@p. Either the PIIGS have to properly crash & burn, or they will be turned `German' the hard way (fiscally, I mean). But they want neither.

 

My suspicion is that they will pretend willingness to turn `German' for a year or two, and then decide to opt out and hyper-inflate after they drained the most money they could out of the `German' block. I hope Merkel does not fall for this crudo and opts for crash & burn instead.

 

We all know that 15% interest is nothing new to Spain and Italy, so they should not complain.

 

 

Iv been thinking the same, The other euroland countrys will suck all they can out of Germany. In a few years when they have had all that they can get out of germany and any other countys that are willing to bank roll them, and when livving under the hard new rules of how much a euroland country can borrow they say we have had enough of livving under German rule! (Germany will get the blame for all sorts of stuff that is not down to them) They will then leave the euro and Inflate there debt away.

 

I do think that Germany and france know this and has known all a long that the Pigs only wonted to join the euro to take what they could get and not offer anything themslefs to the union.

 

Ever since the end of the 2nd world war Germany has wonted above anything else for Europe to live together in peace. they have always wonted (along with france) fOR the EU and the Euro to bring them all together to protect that peace and to build wealth for all of Europe. They wont more than anything for it to work out, and for them all to live together as one. (With The U.K. too) Germany i belive will do allmost anything for teh euro to work. She might talk a hard talk somtimes but when it comes down to it. In the end They will give in. It will be sold as whats good for the other Euro countrys is good for Germany. Whats good for Germany is good for all of Europe.

 

I would like to know what other peoples take on thsi post is??????

 

And dont say ypour spelling is shit!!! i know this!!! :D :D

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I really wish people would stop making up these ridiculous predictions. The Euro will still be around in 10 days. Not because the problem has been fixed, but because another band-aid has been put on the wound.

 

What's really ridiculous about this crisis is that people still haven't got to the nub of the issue. The problem isn't the debt per se; the problem is uncontrollable government spending that still hasn't been reigned in. By just writing off debt, printing money, or whatever, you're merely allowing the bad behavior of government to take us back to where we were.

 

 

Govements are not willying to get there spending under control. They all wont to give the people what they wont, not just what they need. They wont to be voted back into power.

 

They will only do the right thing once they have tryed everthing else they can think of.

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Wasn't that the plan behind them joining the Euro all along?

 

PRETEND to meet the criteria to get access to cheap money?

 

Surely, many could see that a brief period of deception was bound to be followed by disappointment.

Now it seems, all those fat government pensions will be turned to dust.

 

Funnily enough, many corporations are very healthy now. And whatever new system is created will have to find a way to have their cooperation

 

GF and Bubb, you are both wrong. Ireland, Portugal and other PIIGS were running a budget surplus until 2008. The problem is the private sector in these countries got drunk on cheap credit and built up massive debt, which then threatened the financial stability of these countries and was nationalised by Governments.

 

why was the credit so cheap? ah yes, we had to keep the ECB rate ultra low to assist a sluggish german economy post reunification. Never mind the fact that ireland's growth was hitting 10 per cent and desperately needed higher rates to rein in inflation. And where did all the credit come from? Germany and France of course, countries which are now facing a massive loss on their forays into the Irish and Spanish property bubbles and this in turn threatens the financial stability of the german and French banking system.

 

Let's not pretend that the german/French domination f the ECB over the past 10 years has not had a big influence on everything that is unfolding in the eurozone.

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Let's not pretend that the german/French domination f the ECB over the past 10 years has not had a big influence on everything that is unfolding in the eurozone.

I agree with you, a g big part of the problem was exactly the mono-interest that was way too low except for Germany. One way or the other, it is going to be bad for Germany too. Only sometimes I think letting the thing fall apart now, with proper defaults, might avert bigger catastrophes in the not too distant future.

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I agree with you, a g big part of the problem was exactly the mono-interest that was way too low except for Germany. One way or the other, it is going to be bad for Germany too. Only sometimes I think letting the thing fall apart now, with proper defaults, might avert bigger catastrophes in the not too distant future.

 

That's the thing about very low interest rates during a period of global growth, everyone thinks they are on a winner. Greenspan was hailed as a genius for years for also pursuing the low interest rate, high growth policy.

 

I would love to think that Germany would have the cojones to let the thing fall now. Dealing with the debt we have now by creating even more debt will just create a bigger problem in the future. But do politicians ever think beyond the next election? As banks start crashing like dominos, I think they will do what politicians have always done and only focus on the short term.

 

When you strip it down it comes down to this~ can the PIIGS pay back their debt? The answer is, not based on current growth projections. So only two things can happen - printing or defaulting. Once you start printing there can be no going back until we have hyperinflation. Defaulting will result in the break up of the eurozone, and contagion will spread to the core. Which we will end up with is anybody's guess. Gold is great hedge against printing, not so sure how to hedge against the default scenario - dollars?

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GF and Bubb, you are both wrong. Ireland, Portugal and other PIIGS were running a budget surplus until 2008. The problem is the private sector in these countries got drunk on cheap credit and built up massive debt...

It wasnt only the Private sector that got "drunk on cheap credit", the public sector took huge benefits well beyond what the citizens could afford.

 

Meantime, Greece and some other countries were manipulating their figures to make them look better.

 

The eventual "over-reach" fueled by cheap credit was predictable, it would seem to me.

 

If someone wanted to see this crisis emerge (using the Action > Reaction technique), then we must be approaching the End game. Let's see what it is !

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