Break up of the euro planning???
 

Time for another debate by all you financial type people and the rest of the scoobynet NSR massive.

http://news.sky.com/home/business/article/16121121

As the £ has completely failed to break away from the €, remaining steadily around £1 = €1.16, does it mean that if/when the € devalues, the £ must too?

They'd be even larger incompetents if they hadn't been preparing! The whole world is doing the same as the Euro was never going to work. See ... http://www.usatoday.com/money/indust...nks/51170252/1 ...

Shame the MSM doesn't actually do any investigative journalism these days, apart from trying to figure out who shagged who on BB ...

Dave

A quote from the telegraph

Italy’s new government will have to sell more than EURO 30 billion of new bonds by the end of January to refinance its debts. Analysts say there is no guarantee that investors will buy all of those bonds, which could force Italy to default.

We all know its going down fast.
This from the Telegraph. Gives me the hunch that end of Jan will be when it all ends.

French banks have massive exposure to Italy. If Italy goes France goes and then the rest.

Although Euro world is standing united for the media and in their public meetings. Behind the scenes in Frankfurt and the like you can bet there are guys buring the midnight oil trying to work out how they can extract their countries/banking sector from the mess and limit the damage.

The Euro is dead.
What remains to be seen is, will it be more managed planned defaults and break up. Or chaotic.

All the european politicians are tied to the European idea and can´t pull themselves away from it.

Merkel wants to keep the plates spinning untill the elections in Germany next spring. I personaly dont think she will manage it and the plates will fall early next year.

Think of the Euro like the a big ocean ship that is heavily listing with countries like Greece and Italy pouring water in at an alarming rate. The Germans are in control of the pumps and lifeboats. If they turn the pumps on (print more money and fund the bale outs) they will pospone the sinking. But the ship will eventually sink.

Or they can take to lifeboats and pick up the Dutch and few other out of the water. It will be tough on the high sea. But they know with some difficulty they have the money/industrial base to build another big ship.

The French are the big corpulant chap on bridge that helped finance alot of the big liner. Too slow and fat to get on a life boat, contstantly pleading with the Germans to turn on the pumps. The Germans so far are saying no, the french are ****ting themselves.

Hints at a major french bank almost went under yesterday.

The outcome of all this. Economic flat line or an absoulte mess that results in a depression. No one knows 2012 will be interesting.

What we should be doing is considering the ambitions of the Eu. and whether we want to go along with them.

We have to ask ourselves whether we eventually want them to assume full control of our country, politically and financially, should they achieve federalisation of all the countries in Europe.

We see most of our politicians as europhiles now, apparently happy to go along with all that. I think it is worth thinking about the reasons behind that. Why are they so keen? They are even prepared to break solemn promises made before the last election in order to further those ambitions.

Do we really want to lose our country under the yoke of those people?

Les

I think this is watershed time Les

As many of these unelected characters wanted a european superstate.
They knew they could do it through referendums or political union.
So they introduced the Euro as the first major step.
What the ****wits didn´t realise. That in effect giving 17 radically different people living in the same block off flats one current account wasnt going to work longterm.
They are now desperately trying to use the Euro crisis to gain more politcal control, more unification ´´their mantra being it is the only way to solve the Euro currency crisis´´

However the markets aren´t buying it, the euro zone is set to disintergrate. By taking a step too far, the creation of the euro currency, they have probably destroyed what they started with the European Union.

On the bright side Labour have been kicked into touch - so at least the UK wont be buying it either !

This will roll on for another 2-3 months then the $hit will hit !

Alternatively they may see the turmoil caused by fact they have one currency and many different countries/economies trying to manage it as the perfect excuse to say they need a more federal Europe.

Now that would be interesting ;)

Its come from Hector Sants of the FSA?

In that case expect a complete turn around of the Euro by christmas and EU growth to outstrip China by 2013.

:)

But didn't Alastair Darling, in one of his final lunatic acts as chancellor, tie us to trying to protect, support etc the Euro?

If not, what have we been messing about at for the last 12 months?

Oh - we absolutely have to do that.

it's when it fails - Gogsie would have signed us up to having the Germans as our masters. The problem is the spineless tw@t Cameron may just do the same.

But at least with Cameron there's a chance we'll tell them to fcuk off !

Sorry to disappoint folks but despite your wishfull thinking the markets just don't see it the same way you europhobes do.

Despite the very serious Eurozone crisis the euro has lost barely a 2 cents against the £GBP or $USD in the past 6 months. And that's mostly in anticipation of a Euro base rate cut.

When the Euro's finished the money markets will be the first to let us know.

Meantime I'm keeping my Euro account open.


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"The reports of my death are greatly exaggerated", Mark Twain

This is my thought: IF it is all going as badly as some folk say, WHY isn't the £ leaping up in value?

It isn't, and it hasn't.

Because we're in the sh*t too if/when there is serious trouble in Europe.

Markets very nervous into the close today. Just feels like a bank is in deep trouble, or something bigger is afoot, perhaps a co-ordinated rate cut.

As far as games of chess go, we're now in the end-game and the stakes are higher than ever. My money is still on the markets to crush the Euro, but it depends how much money Merkel is prepared to throw at it. I think the time for some even bigger headlines is close at hand.

Absolutely not. He's even more of a Europhile than most. He's already caving in as I thought he would .... http://www.telegraph.co.uk/news/poli...ork-rules.html ...

What b*llux!

Dave

if any financial meltdowns follows

for all/any european countries, what will this actually mean to the man on the street?

people keep saying meltdown/total disaster ect, but buinesses will still run ect?

i understand finacing will obv have massive changes - but how bad is it actually going to be? are people goi g to be walking the streets with the homes on there backs, no society, law ect - im thinking not?

Well think about all the demand coming from 'credit'. People are borrowing to buy stuff from other people. Imagine what will happen if all that credit is even partially cut off? All the stuff you mentioned is possible of course - anything is. But the most likely outcome would be massively high unemployment, poverty, businesses closing everywhere, etc. It would be like starting again.

you think?

i just think a lot of things would just go black market tbh.

defend your property with a gun? the banks arent going to send round killers to reposses, the baliffs wont be interested anyway.
people still want things, will trade ect.
i think thats a real long shot of an scenario tbh.

i just think there will be a new lending system will be devised, and it will be carry on as normal tbh - am i just being stupid or are the doomsday preechers actually near being accusate?

Its on channel 4 now saying the UK has around £191bn loaned out to Europe in various ways so when the Euro goes to the wall they are hoping they only have to worry about £19bn not being repaid.

So I have a 5 euro note down the back of the sofa, should I exchange it for sterling or Reals to protect its value or just cling on and hope my currency holdings don't become worthless.

Is the fact that Sterling remains weak against the Euro not simply an indictment of our weak financial position, rather than a sign of the Euros stability?

They mentioned that as well, its a fact of globalisation the same way American sub prime mortgates affected the whole world and how a country as strong as China is even being hit.

Of course it is. It was always going to happen. They rely on selling cheap goods to everyone else. When noone else can afford them they're f"cked!

Dave

Not sure about this. I think there is a balancing act because investors don't know which way the euro will break up. If the indebted states are the ones to leave then euro assets held outside those states could appreciate significantly (assuming the banks in the remaining states survive). If Germany, Holland and the other strong economies leave, the euro will tank by 20%+ almost immediately. Ultimately this will be a political rather than economic decision, so the markets have no way of predicting which way it will go, hence the euro not depreciating significantly. I suspect planning is happening behind the scenes, and when it happens it will happen immediately.

One thing is for certain, I wouldn't like to be holding significant euro assets in any of the PIIGS right now. Unfortunately my parents now live in Spain, so bang goes the inheritance.

Don't know. But either way, the markets think an unstable Euro is a better short term bet than an overspent, financial services dependant, low growth prospect, want out of its biggest market UK pound.

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"There is no way in which one can buck the market.", Margaret Thatcher. It always tells you what it thinks.

The UK will suffer significant pain if the Euro collapses.

In an earlier post Steve Whitehorn used the analogy earlier of the Euro as a block of flats (with a single bank account, incorrectly). To stretch the metaphor; a few of the flats are on fire. The fire brigade is in attendance (arguing over which pump to use and whether water or foam).

The Little Englanders, euro-deniers, flat-earthers, Mail & Telegraph readers can see the smoke and they’re jumping up and down and cheering. They never did like the pushy foreign bunch in the flats next door!

What they’ve failed to grasp is that, if the fire's not put out, when the tower block collapses it’s going to land slap bang on their corner shop next door.

Well it's not as if the world is going to end. All you talk about could/should happen - it's likely that something else would be established fairly quickly to ensure trade could go on. But I think you underestimate, firstly, the disruption in the mean time and the level at which we'd be starting from, and secondly, the political ramifications.

The politics of it all is the only reason this has been dragged out in the first place. Look at the strikes and protests you see from even the smallest drop in entitlements, pay, etc.

What should happen, in terms of pure market economics, is that people, businesses, and countries are all allowed to go bankrupt and the people doing stuff they don't need to be doing find something else to do. If only it was that simple.

But each successive business and country that goes bankrupt takes down more business and country's. So that most definitely shouldn't be allowed to happen.

This is why we have governments and institutions so that 'pure' market economics cannot destroy societies

You're obviously having trouble reading these days, Martin!

It's a political point you're making. Whatever you deem to be 'society' would no doubt be destroyed by the market; I'm not disputing that.

These businesses that would be taken down: why would they be taken down? Because, in terms of demand, they are not sustainable when the house of cards (created by politicians) falls. There are a lot of businesses operating right now that shouldn't exist - because, unfortunately, the demand currently providing them with profit is not sustainable. We're out on a ledge we've been extending for years. Every time governments and institutions try to put off the inevitable effects of the nasty 'pure' market, its burden becomes greater. You can only kid reality for so long.

A significant part of the service/consumer part of the economy isn't sustainable without borrowed money. That's a fact. What we do about it, I don't know, I'm not a politician.

What you'd no doubt advocate would be just milking every ounce of capital from private hands to keep this house of cards up (thereby holding back the effects of the market and making things as comfortable as possible)? I've got no better ideas, by the way, but if you could clarify that would be great.