The signs are clear that the Euro is failing it was a great Utopian concept but in practice it is devastating the continent, the benefits have been few and the costs literally and figuratively have been tremendous. After bailout that seems inevitable the exodus is sure to be on the table.
Ashish,
Having Germany (together with the other AAA-rated debt countries) leave the EU may be a beautiful endpoint, but how to get from here to there?
I see no way. The EU is a committee of committees. It never chooses optimal solutions because there are too many opposing viewpoints to balance. No way France would support a solution that leaves them out in the cold, lumped with the 'bad debt' countries. Not possible.
Image source - Despair.com
Re: Bankia Needs a Bailout worth 19 Billion Euros..Where is the Money Gonna come from???
back2basicz
5/28/2012 3:09:07 PM
Scott,
I get that rationale.
But think about it,at what point should the Central Banks Ideally Step in[To get Maximum Bang for Buck,so to speak?]
After all,you don't want them intervening all the time,otherwise the effect of the Interventions get neutralized and reduced over time.
Do you feel they will Step in when WTI Crude Hits USD 70/Barrel??Or Will they Target Brent Crude??? When it Hits USD 90-95/Barrel???
I know it sounds funny but this just like a Game of Target Practice.
Its frightening to see how much Control Central Bankers have over Global Financial Markets today.
Are there any realistic Roadblocks today to Stop them from Printing???
The Last Real opponent to Money printing was Ron Paul and hes no longer involved in the Republican Presidential Process.Although,what I hear is that he is still capable of making Romney's Coronation quite Messy.
Lets see how that works out.
Anyways Back to Greece.
The Guy who looks most likely to become the New President is already blaming Angela Merkel for the problems in Greece.Typical.
http://www.spiegel.de/international/europe/greek-leftist-leader-tsipras-decries-austerity-diktat-a-835369.html
I for one would love to play the Bluff of Lagarde and rest of the Team.I know they have'nt done enough to safeguard the rest of the Eurozone Banking system today so its most definitely going to get very messy before the Cavalry steps in to Save the Day.
Meanwhile,Ordinary Greeks are doing things there own way
http://www.bbc.co.uk/news/world-europe-18228577
WIll be interesting to watch from the outside.Just don't know if I have the Courage to tackle it as a Trader.
Regards
Ashish.
Re: Bankia Needs a Bailout worth 19 Billion Euros..Where is the Money Gonna come from???
Scott Raynovich
5/28/2012 2:47:48 PM
I don't think it matters anymore. The markets are becoming immune to the bad news because they know a gigantic bailout is coming. The G8 agreed to it at Camp David. The Feds will print, Europe will print, the IMF will lend. Virtually most of the big European banks will be nationalized.
This is how most financial crises end. It's how it ended in the U.S. -- the nationalization of AIG, Fannie Mae, e.t.c. and then the printing press. We should should get on with it everybody knows where this is heading.
Bankia Needs a Bailout worth 19 Billion Euros..Where is the Money Gonna come from???
back2basicz
5/28/2012 10:52:51 AM
Scott,
I have been following the special Case of Bankia(The Spanish Bank) very,very closely.
It gets worse and worse with each and every Passing Day.The Spanish state has already poured 4.5 Billion Euros(which it does'nt have) into this Bank.
Now its asking more,19 Billion More!!!
The only practical solution that exists is for Spain to Exit the Eurozone and Inflate away their Debts.But then this that would destroy the Banking Masters who Control the EU and hence has to be avoided at any cost.Even if the Long-term Cost to Human Capital(More than 50% Youth Unemployment and more and More citizens leaving Spain for other Countries) is much worse.
http://www.reuters.com/article/2012/05/27/us-spain-bankia-idUSBRE84Q0FB20120527
http://www.abc.net.au/news/2012-05-27/spain27s-bankia-set-for-massive-bailout/4035522
Regards
Ashish.
Re: Medicine and Europe Scare Me
back2basicz
5/28/2012 10:40:51 AM
PC,
Your looking at it in the Wrong Way.
Problem is lets say you let Greece out;Then slowly,slowly over the next year or so you will need to Let Spain,Ireland,Italy and Portugal all Exit the Eurozone.
The Banking Liabilities and Contagion would Kill even a Semblance of Global Economic Recovery .
What's a Better solution?
Let Germany(alongwith the AAA rated countries)-Holland,Luxembourg and Finland exit the Euro to form a New Currency -The Deutschemark/New Euro.
What will be the result of this?
The Old Euro,will crash in Value(maybe by 100% or more);effectively letting the rest of the indebted Nations Devalue their currently insurmountable Debts(which are clearly unviable & Germany is unwilling to fund them either).
Its a Great Practical solution and would work well.
Only thing is the French would not take this slight very lightly.
But who cares about the French right?
Regards
Ashish.
Greece is already prepared for the Worst...
back2basicz
5/28/2012 10:35:05 AM
Guys,
Dixons,Diageo ,Vodafone and BMW(all Global Brands) are all prepared for the absolute worst case sceanario(Where Greece moves back to the Drachma ) and the resultant Civil Unrest it would trigger.
http://www.reuters.com/article/2012/05/28/europe-greece-contingency-idUSL5E8GP3IG20120528
The Company De La Rue(BankNote Printers) says their fastest growing Business was in Greece last year.
How much do you wanna Bet we are Heading for a Currency Crisis very,very soon???
ITS SHOWTIME!!!!
Ashish.
Re: Financial Destiny
back2basicz
5/28/2012 10:24:39 AM
Street Smart,
Don't worry about Berlin.
If the situation gets that bad in Rome and Madrid then we are really in Big-Big trouble!!!
Germany will exit at that stage rather than bother with bailing anyone else out.
We are fast reaching that stage where its Every Man for themselves.
Regards
Ashish.
Ron Paul is the only Dude who makes any Sense on this Issue.
back2basicz
5/28/2012 10:18:26 AM
Scott,
Ron Paul is the only Guy I know in DC who makes any sense on this issue.
It amounts to nothing more than a Backdoor Bailout of the insolvent EU Banking System.
Effectively American Taxpayers(and anyone who holds most of their Savings in US Dollars) is paying for these Bailouts today.
Any chance this will stop soon?
Not unless Ron Paul becomes the Next President.
The chances-SLIM but not non-existent.
After all,he is rapidly moving to take control of all Republican Delegates for the Main convention in June!!!
Here's Hoping for some Sanity on the Global Financial System(& A Ron Paul Win)
Regards
Ashish.
"I'll just have another macaroon and a glass of wine, thank you."
Probably a good approach. But isn't that what Nicolas Sarkozy said?
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