Jump to content

Will the euro crash in 2011


Devon
 Share

Recommended Posts

  • Replies 556
  • Created
  • Last Reply

Top Posters In This Topic

Problem with comments like you find in these articles is that they are aimed to alarm. Try looking at historical exchange rates for the Euro/Dollar. The dollar has gained a little ground but still is no where near the level it was at the end of 2010 i.e. 1.44 or 2008 when it was in the 1.57's. It's all relative and also depends on what reference point these so called 'experts' are using. To me things have got to get a lot worse for the Euro or more accuratly a lot better for the dollar before you need to start panicing but then thats no fun I guess.
Link to comment
Share on other sites

[quote user="Quillan"]Problem with comments like you find in these articles is that they are aimed to alarm. Try looking at historical exchange rates for the Euro/Dollar. The dollar has gained a little ground but still is no where near the level it was at the end of 2010 i.e. 1.44 or 2008 when it was in the 1.57's. It's all relative and also depends on what reference point these so called 'experts' are using. To me things have got to get a lot worse for the Euro or more accuratly a lot better for the dollar before you need to start panicing but then thats no fun I guess.[/quote]

It's a long time since forex rates were connected to economic reality! They are so easy to manipulate.

Try the bond markets. http://markets.ft.com/RESEARCH/Markets/Government-Bond-Spreads

You will note the EZ(inc DE) members all have higher yields than the non-EZ countries (SE/CH/DN, and good ole bankrupt Britain).

So we have the Med countries borrowing costs at unsustainable rates. We have FR and BE close to the borderline.

This is THE crisis.

The EZ have bought it on themselves.

What was an irritation is now a full blown crisis. EZ banks cannot get funds from bonds or interbank, they are down to liquidity swaps, borrowing good assets from insurers, etc (note the collapse in the AXA/Allianz share prices) which are then accepted by ECB as collaterol.

A German take on the crisis

http://www.spiegel.de/international/europe/0,1518,799397,00.html

Where this will lead is anyone's guess, but a lot of very clever people have started to bet on a possible collapse of EUR. Personally, I don't see it. Business in Europe will effectively cease to function, with the mass unemployment that will bring. Let's hope the political will is there.
Link to comment
Share on other sites

And the Economist

http://www.economist.com/blogs/freeexchange/2011/11/euro-crisis-16

I would not disagree with the final paragraph. The politicians (Merkel) created this crisis, by insisting private lenders took a hit on Greek debt. The lenders then realised their investments in EZ were not bulletproof, and stopped lending. Doh! Is she a complete numpty?

They can still (hopefully) fix the problem.

Link to comment
Share on other sites

Not being an economist, I don't suppose the solution is as simple as a bunch of US Marines kidnapping the Chinaman who is owed all the money, taking him up to 25,000 feet and threatening to chuck him out if he won't cancel the debt?

(This might not be a technically watertight suggestion, not least because I have been having another clear-out of the drinks cabinet, prior to restocking.)

Link to comment
Share on other sites

The rumoured quick deal creating a mini group of eurozone countries based on Germany & France plus some viable others eligible for a credible stability pact may be aired publicly in die Welt am Sonntag today. This could all be cut and dried for the december EU summit.

Le Monde has been running the story from saturday evening.

http://www.lemonde.fr/economie/article/2011/11/26/zone-euro-vers-un-pacte-de-stabilite-limite-a-certains-pays_1609786_3234.html#ens_id=1268560

If plausible in market terms a sharp rebound in the value of the euro would occur on monday.

Link to comment
Share on other sites

The rumoured quick deal creating a mini group of eurozone countries based on Germany & France plus some viable others eligible for a credible stability pact may be aired publicly in die Welt am Sonntag today. This could all be cut and dried for the december EU summit.

Le Monde has been running the story from saturday evening.

http://www.lemonde.fr/economie/article/2011/11/26/zone-euro-vers-un-pacte-de-stabilite-limite-a-certains-pays_1609786_3234.html#ens_id=1268560

If plausible in market terms a sharp rebound in the value of the euro would occur on monday.

Link to comment
Share on other sites

[:P]Further to the rumours in Le Monde yesterday evening, as anticipated Die Welt this morning gives further information on the secret negotiations between "mutti" and the "dwarf". The steps to implement the agreement for an inner eurozone club of crucial players would appear to be well in hand and final agreement should be feasible in conjunction with the forthcoming summit in december.

http://www.welt.de/politik/ausland/article13737213/Merkel-und-Sarkozy-gruenden-Klub-der-Super-Europaeer.html

Also from last night:some complementary information included touching on the "modus operandi" of the negotiations.

http://www.welt.de/politik/ausland/article13736526/Geheimverhandlungen-ueber-neuen-Euro-Vertrag.html

P.S.  PPP thinks this will fly!

Advice of Q and SS awaited.

In english:

http://www.reuters.com/article/2011/11/27/us-eurozone-integration-ecb-idUSTRE7AQ00F20111127

http://uk.reuters.com/article/2011/11/27/uk-eurozone-integration-ecb-idUKTRE7AQ00J20111127

Link to comment
Share on other sites

[quote user="pachapapa"]

[:P]Further to the rumours in Le Monde yesterday evening, as anticipated Die Welt this morning gives further information on the secret negotiations between "mutti" and the "dwarf".[/quote]

Not very secret then, were they? 

[quote user="pachapapa"]

Advice of Q and SS awaited.

[/quote]

Usual rate for advice is £100 per hour, but for you I'll make an exception. 

Invest in land.[;-)]

Link to comment
Share on other sites

uters) - German Chancellor Angela Merkel and French President Nicolas Sarkozy are planning more drastic means - including a quick new Stability Pact - to fight the euro zone sovereign debt crisis, Welt am Sonntag reported on Sunday.

The Sunday newspaper reported in an advance before publication that if necessary Germany and France were ready to join a number of countries in agreeing to tough budget discipline.

The report, which echoed a Reuters report on Friday from Brussels, quoted German government sources as saying that the crisis fighting plan could possibly be announced by Merkel and Sarkozy in the coming week.

Is it not because none of them have tried to stick to budget discipline since the Euro was set up. That they face this mess now ? So who in their right mind is going to believe they are capable of turning over a new leaf and sticking to agreements now ?

Link to comment
Share on other sites

[quote user="Frederick"]uters) - German Chancellor Angela Merkel and French President Nicolas Sarkozy are planning more drastic means - including a quick new Stability Pact - to fight the euro zone sovereign debt crisis, Welt am Sonntag reported on Sunday. The Sunday newspaper reported in an advance before publication that if necessary Germany and France were ready to join a number of countries in agreeing to tough budget discipline. The report, which echoed a Reuters report on Friday from Brussels, quoted German government sources as saying that the crisis fighting plan could possibly be announced by Merkel and Sarkozy in the coming week. Is it not because none of them have tried to stick to budget discipline since the Euro was set up. That they face this mess now ? So who in their right mind is going to believe they are capable of turning over a new leaf and sticking to agreements now ?[/quote]

Reports in the german press this afternoon tend to discount the secret almost complete mini agreement rumour.

Rather that "mutti" and the "dwarf" are endeavouring to give everyone a kick in the "butt" to get Treaty Change up and running before the december 8/9th "gipfel".

http://de.reuters.com/article/topNews/idDEBEE7AQ05A20111127

Link to comment
Share on other sites

Well the USD/EUR has changed maybe 30 pips or so during the day. So looks like just a rumour without real substance.

Check link below, if it doesn't display then you need Java.

http://www.forex-markets.com/quotes.htm

Sunday evening take on the approaching eurogeddon.

http://www.telegraph.co.uk/finance/markets/8918763/Markets-pricing-in-endgame-for-the-euro-warns-UBS.html

Link to comment
Share on other sites

3 Key dates.

Jan 9. France has to borrow EUR 29billion

Jan 30. Italy has to borrow EUR 32billion

Feb 28. Italy has to borrow EUR 46billion

Very scary, considering what happened last week when Germany failed to get EUR 6billion!!

I doubt the Dwarf will sleep well over Noel.
Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
 Share


×
×
  • Create New...