Will the euro crash in 2011

[Quillan]

[quote user="Rabbie"][quote user="Quillan"]Never mind, the experts say it will be 1.25 by Christmas or was that last year, so many experts it's difficult to remember which one said what. Don't forget that the Euro was supposed to be dead by now. Excellent news if your looking to buy a property in the UK with Euros. Perhaps the French will go on a spending spree buying second homes for their holidays in the UK.[/quote]Is that 1.25 euros to the pound or 1.25 pounds to the euro?[/quote]

Yes sorry I meant Euros to the pound although the way things are going you never know, perhaps that's what they really meant. [;-)] I often wonder if Cameron knew something we didn't which is why he closed the 'office' responsible for taking the UK in to the Euro. I just wondered that if, as alleged, there was a magical point like when they get to parity the UK would have automatically joined the Euro and he was worried we might get there.

John - Good point about the shops, my French neighbours are visiting the UK on average once a month just to go shopping, mainly for cloths and electrical goods. Mr Barrancos even trusted Ryan Air with a new 47" TV in the hold, reckons he saved a fortune and his wife loves M&S and a well known cheap cloths shop (not Matalan) who's name escapes me for the moment.

[cooperlola]

[quote user="Quillan"]

 I just wondered that if, as alleged, there was a magical point like when they get to parity the UK would have automatically joined the Euro and he was worried we might get there.

[/quote]I've heard this discussed before.  Am I being really dim, or wouldn't this be a dreadful scenario for Europe as surely it would make British goods incredibly cheap compared to the rest of the community?  I would imagine that Britain would only be wanted in the common currency when it suited everybody.  Would the rest of Europe have no say in this?  I realise it's academic at present but any new government in Britain might feel differently from Mr C and his chums and I have always wondered how this would in fact be done.

[Quillan]

Had we joined on the day it started I think we had negotiated a rate of 1.38 Euros to the pound although these days it's difficult to find anything on Google that supports this or any other 'joining' rate. Therefore effectively had it reached parity and we joined the rate would jump to 1.38 Euros, that would have been rather nice for many and I doubt we won't see that rate for about another ten years or so.

[Jako]

[quote user="cooperlola"]  Am I being really dim, or wouldn't this be a dreadful scenario for Europe as surely it would make British goods incredibly cheap compared to the rest of the community?  [/quote] No, inflation is correcting this.

[Renaud]

I don't think the euro in its present form will survive the year, mind you I wrote that last year.

The PIGS will start defaulting as they cannot pay the loans forced on them.

[idun]

[quote user="Quillan"]Had we joined on the day it started I think we had negotiated a rate of 1.38 Euros to the pound although these days it's difficult to find anything on Google that supports this or any other 'joining' rate. Therefore effectively had it reached parity and we joined the rate would jump to 1.38 Euros, that would have been rather nice for many and I doubt we won't see that rate for about another ten years or so.[/quote]

 

I remember something along those lines, mainly because I always thought that it should have been around 1.50 or so as that would have been approx 10ff to the £ which always seemed fair to me. I'm sure that many on here would love a rate of 1.5. For the time being it is as it is.

[bubbles]

I think tomorrow and/or the next day is when they decide whether to raise the bank rate (in England).

Maybe that will have some effect on the exchange rate (she hopes!)

[Quillan]

[quote user="Renaud"]I don't think the euro in its present form will survive the year, mind you I wrote that last year. The PIGS will start defaulting as they cannot pay the loans forced on them.[/quote]

That's exactly what the Americans want and why they have been trying to manipulate the markets, their paranoia of the Euro is massive.

[Quillan]

[quote user="bubbles"]I think tomorrow and/or the next day is when they decide whether to raise the bank rate (in England). Maybe that will have some effect on the exchange rate (she hopes!)[/quote]

After the last load of quarterly figures I don't think you will see any rise in interest rates for some time based on the economic model the BOE uses (which is stupid). This in turn keeps the exchange rate low. Keeping it low means inflation rising because the UK imports so much, especially food. As I said last year we source a lot of food inside the EU and as fixed price contracts for it runs out and new ones negotiated the prices will start to rise at an alarming rate especially as, due to the excellent weather the UK has been having, it is predicted that the lack of rain will damage crops in the UK leading to further price increases. The other issue is what happened in Japan. The UK's biggest export to the EU is cars, namely Toyota and Nisan. Both these companies (and I was reading again about this but in a French journal in the bank whilst waiting to see somebody) have about a 20% Japanese content and due to the factories being damaged in Japan there is a lack of parts. Toyota UK has big problems apparently and has cut it working week by 1.5 days and is strugling to meet demand.

The biggest problem for the UK and that will affect the Tory plans to create new business's is the interest rate. Think of the EU and the UK as two banks. If you have some money to invest do you put it in a bank that offers 0.5% or one that offers 2.5% and has a stable currency, bit of a no brainer really. The EU is set to raise interest rates again (in June or July, I can't remember which) by the way. This means nobody wants to buy Stirling. However if you want to believe what the 'experts' tell us then if you have any money floating around put it in the UK, naff interest but they believe the exchange rate will go up in leaps and bounds later this this year because they have been brainwashed by the Yanks in to believing the Euro will fail and the Euros will move significantly in a downwards direction. Personally I wouldn't, but its these type of comments that might scare people in to doing so and with low interest rates it's the only tactic the financial sector has to try and get some money in.

[andyh4]

[quote user="bubbles"]I think tomorrow and/or the next day is when they decide whether to raise the bank rate (in England). Maybe that will have some effect on the exchange rate (she hopes!)[/quote]

 

Only if the decision they make is differenet to the market expectation.  Essentially the markets have already factored in (that is made a bet) what will happen.

[andyh4]

[quote user="cooperlola"][quote user="Quillan"]

 I just wondered that if, as alleged, there was a magical point like when they get to parity the UK would have automatically joined the Euro and he was worried we might get there.

[/quote]I've heard this discussed before.  Am I being really dim, or wouldn't this be a dreadful scenario for Europe as surely it would make British goods incredibly cheap compared to the rest of the community?  I would imagine that Britain would only be wanted in the common currency when it suited everybody.  Would the rest of Europe have no say in this?  I realise it's academic at present but any new government in Britain might feel differently from Mr C and his chums and I have always wondered how this would in fact be done.[/quote]

 

I think a more cogent point would be would the Eurozone want to accept a country that is so debt ridden and that does not have a manufucturing base to export its way out of the mire.

[Quillan]

[quote user="andyh4"][quote user="cooperlola"][quote user="Quillan"]

 I just wondered that if, as alleged, there was a magical point like when they get to parity the UK would have automatically joined the Euro and he was worried we might get there.

[/quote]I've heard this discussed before.  Am I being really dim, or wouldn't this be a dreadful scenario for Europe as surely it would make British goods incredibly cheap compared to the rest of the community?  I would imagine that Britain would only be wanted in the common currency when it suited everybody.  Would the rest of Europe have no say in this?  I realise it's academic at present but any new government in Britain might feel differently from Mr C and his chums and I have always wondered how this would in fact be done.[/quote]

 

I think a more cogent point would be would the Eurozone want to accept a country that is so debt ridden and that does not have a manufacturing base to export its way out of the mire.

[/quote]

Absolutely spot on. I don't think people in the UK realise or understand just how bleak the outlook for the UK is. I bet France and Germany were ecstatic when Cameron dismantled the entire mechanism for joining the Euro. Logic tells me that the UK should really exit the EU which would be a shame in some ways (thinking just about myself for a minute) and I am sure the EU would not miss it. The effect on the UK economy however would be staggering (in a negative way).

[Jako]

[quote user="Quillan"] I bet France and Germany were ecstatic when Cameron dismantled the entire mechanism for joining the Euro[/quote]

No, they would have liked the UK to apply for euro membership and then say "NO!"[:D]

There is no way the UK will be able to comply to the basic membership rules:

-Inflation below but close to 2% for several years ( UK: almost never)

-Deficit below 3% (UK:10%, Eurostat)

-Debt below 60% (UK:80% , Eurostat)

It will take at least 10 years until the UK economy will be able to comply.

So it was easy for 'a politician' to state that the UK will not pursue membership during his period.

[just john]

[quote user="Jako"] comply to the basic membership rules:

-Inflation below but close to 2% for several years ( UK: almost never)
-Deficit below 3% (UK:10%, Eurostat)
-Debt below 60% (UK:80% , Eurostat)
[/quote]

Thanks for the info Jako . . . errr . . .  how many of the other members/potential members have met/meet these rules . . .?[8-)]

[Renaud]

Quillan wrote: "That's exactly what the Americans want and why they have been trying to manipulate the markets, their paranoia of the Euro is massive."

The PIGS badly need to devalue then start to rebuild their economies. They cannot do this under the Euro. Once elections start in those countries then defaults will happen and the Euro will devolve into something else. In Portugal, as in Greece, debt is growing faster than GDP, making a default more-or-less inevitable.

What the USA might or might not want is irrelevant.

[Jako]

[quote user="Renaud"]

The PIGS badly need to devalue then start to rebuild their economies. They cannot do this under the Euro. Once elections start in those countries then defaults will happen and the Euro will devolve into something else. In Portugal, as in Greece, debt is growing faster than GDP, making a default more-or-less inevitable.

What the USA might or might not want is irrelevant.[/quote]

Creating this self-fulfilling prophecy is exactly what the (UK and USA

driven) markets are trying to do for their own profit.  The USA and the UK

control the media and are still using smoke and mirrors to hide their

own huge problems behind the relatively small eurozone flaws. Currently

UK media are trying to divert attention to the massive money printing by

the US (doubling the amount) while  the UK has actually even tripled the amount of

pounds.

When you add Portugal, Ireland and Greece together

they are only 6% of the Eurozone. The other 94% are in much better shape

and can offer financial aid. But when you live in an economy without

bright spots (UK, USA) you just print more money. The downside to this money

printing will hit hard.(inflation and lack of confidence)

@Just John: On entry into the EMU all members complied but Greece (and Italy)  cheated. Estonia entered in January and complies ( 0 debt).

Debt

in the UK was low due to selling of gold at the 'Brown moment" (lowest gold price

in history) , oil and banking. You can only sell gold once, the banks

are bankrupt and the UK is now an oil importing country. (but Scotland is not, so Scottish independence would solve all problems there...)

Don't forget that each years deficit will add to next years debt. Debt

in the UK will reach 90% next year and 100% in 2013. What is called

"austerity" in the UK is only just enough to offset the rising costs of

servicing the debt. Markets give the UK the benefit of the doubt but as

more and more real data reveals that the UK is not recovering they will

loose confidence.

Brits that are so afraid that it is all just a scheme to get the UK into the euro can relax. There is no way France and Germany would allow this weak economy to enter the EMU. Cameron knows this, and uses it to make bold statements at home about "never adopting the euro"

[breizh]

[quote user="Jako"]
The USA and the UK control the media and are still using smoke and mirrors to hide their own huge problems behind the relatively small eurozone flaws.
[/quote]

Have you tried reading, watching or listening to the German or French media? (Genuine question, no sarcasm intended). I'd recommend Die Siegel, they have an English addition, or Le Parisen. It helps with getting a more balanced view. It also will bring to your attention problems the US/UK media will not. The bankrupt regional banks in Germany, the unaccounted debt in the commercial banks, SNCF paying more in interest on it's debts than it's entire revenue, their pension bill being more than their entire renvue, EdF making no provision whatsoever for the EUR trillion needed for their nuclear decommissioning, all the bankrupt Cajas/Caixas in Spain, the unaccounted bad property loans, little things that may help question other things.

I doubt the German, and French media would appreciate the suggestion they are controlled by UK/US.

http://www.spiegel.de/international/

http://www.leparisien.fr/faits-divers/actualites-informations-videos-faits-divers

[Devon]

[quote user="breizh"]

[quote user="Jako"]
The USA and the UK control the media and are still using smoke and mirrors to hide their own huge problems behind the relatively small eurozone flaws.
[/quote]

Have you tried reading, watching or listening to the German or French media? (Genuine question, no sarcasm intended). I'd recommend Die Siegel, they have an English addition, or Le Parisen. It helps with getting a more balanced view. It also will bring to your attention problems the US/UK media will not. The bankrupt regional banks in Germany, the unaccounted debt in the commercial banks, SNCF paying more in interest on it's debts than it's entire revenue, their pension bill being more than their entire renvue, EdF making no provision whatsoever for the EUR trillion needed for their nuclear decommissioning, all the bankrupt Cajas/Caixas in Spain, the unaccounted bad property loans, little things that may help question other things.

I doubt the German, and French media would appreciate the suggestion they are controlled by UK/US.

http://www.spiegel.de/international/

http://www.leparisien.fr/faits-divers/actualites-informations-videos-faits-divers

[/quote]

 

It appears to be dawning on the Greeks and Irish that drastic actions are required to find a way out of the trouble they are in. Here are two very informative articles, this one on Greece planning to leave the euro: http://www.spiegel.de/international/europe/0,1518,761201,00.html 

and this article from the Irish Times pushes back the present smoke and mirrors  approach of the politicians and financial sector who will not welcome such clarity on their incompetence :  http://www.irishtimes.com/newspaper/opinion/2011/0507/1224296372123.html

[Quillan]

The US are not involved then, from the Irish Times article link below...

"At a conference call with the G7 finance ministers, the haircut was vetoed by US treasury secretary Timothy Geithner who, as his payment of $13 billion from government-owned AIG to Goldman Sachs showed, believes that bankers take priority over taxpayers. The only one to speak up for the Irish was UK chancellor George Osborne, but Geithner, as always, got his way. An instructive, if painful, lesson in the extent of US soft power, and in who our friends really are."

As to Greece leaving the Euro well the article quoted the obvious which is Greece would become a totally bankrupt country, banks would collapse and the whole country would be in turmoil, not the brightest of moves. It would be hard for the Eurozone if they left but with so many other countries involved the Eurozone can somewhat absorb the effects where as Greece can't. Imagine what it would be like if according to the article they start with their new currency and within weeks it is devalued by around 500%, it would be a nightmare for the Greeks and take them centuries to recover if at all. What it is really about is Greece restructuring its loans.

[just john]

Whether Greece leaves the euro, or approaches civil war through swinging cutbacks the truth is unknown and is of little importance compared to its effect in stopping the downward spiral of the pound against the euro last week.[:)]

 http://www.dw-world.de/dw/article/0,,15058930,00.html

[Devon]

[quote user="just john "]

Whether Greece leaves the euro, or approaches civil war through swinging cutbacks the truth is unknown and is of little importance compared to its effect in stopping the downward spiral of the pound against the euro last week.[:)]

 http://www.dw-world.de/dw/article/0,,15058930,00.html

[/quote]

 

No doubt someone will be along soon and say Hans-Werner Sinn is a sneaky American or Brit pretending to be German trying to undermine the Euro [:D]

"If Greece were to exit the euro, it would be able to devalue its currency and thus become competitive once again," Hans-Werner Sinn, head of the Munich-based Institute for Economic Research, said in the Sunday edition of the Frankfurter Allgemeine newspaper.

 

Which is why we will not see a strong pound for a very long time unfortunately [:(] Britain is doing what Greece needs to do and has devalued the pound by printing money and constantly pointing out how far up the creek without a paddle Britain is. 

[just john]

Alls well in Euro land?

General Strike & riot as Greece announce massive fire sale to help service its debt putting vast areas of state-owned land on the market to raise £44billion in the next four years.

 

  Greek-debt-Greece-launches-massive-sale-riot-police-clash-protesters.

[mint]

1.1515!!!!!

Quick, pass me the smelling salts!  Can this be?

After last week's 1.11......Talk about rollercoasters!!

[powerdesal]

And diesel down to 1.28, Early Christmas anyone?

[just john]

 imf-warns-eurozone-meltdown-fix-banks 

especially glad my account isn't with France's BNP Paribas, 
though as Sweet 17 says the comments are perhaps more revealing than the article,

Politicians won't accept failure of Euro and would rather fleece the taxpayer to prop banks up again,  

A man is sentenced by his king to death.
The latter tells him that he can keep his life if he teaches the monarch’s horse to talk within a year.
The condemned man agrees. Asked why he did so, he answers that anything might happen:
the king might die; he might die; and the horse might learn to talk.[:D]

A new word for Scrabble, how many points is bwankers worth?