$this->bbcode_second_pass_quote('kathaksung', 'T')he Inside Group has prepared one trap for you.
EUROPEAN NATIONAL CURRENCY REVIVAL GATHERS SPEED
One crucial by-product of this crisis, too, is that, as was exclusively reported in our previous posting, both France and Germany have started distributing pre-stored national banknotes (denominated in French francs and deutschemarks) to their respective central banks and leading commercial banks.
Read the news of Paulson's arrest. You will find the real meaning of this incident - a planned collapse of Euro. According to the news, the collapse of the WANTA fund will lead to the collapse of Euro. The events astonished me was that French, German had prepared to replace the Euro with their original currency: Franc and Mark.
I think if the December plot had succeeded, the Great Mall would have been bombed.(and somewhere else in US and UK been bombed as well. ) There would have been a civil war in Iraq followed the execution of Saddam. And there would have been the collapse of Euro following the arrest of Paulson. Iran would have to stay on Dollar because the money they turned on then worth nothing.
PeakOil is You
Recession or Depression (merged)
Re: Depression 2007?
by Euric » Fri 26 Jan 2007, 20:18:04
The last time a serious threat was launched against the euro, the London subway was bombed. In early June 2005, just after the votes on the EU Constitution were vastly against the idea, the anti-euroists took the opportunity to attack the euro and the result was a free fall. By early July the euro had fallen to under 1.20 to the dollar. The free fall was suddenly stopped by the subway bombings in London.
Coincidence?
Not really. It is from the UK that most of the anti-euro and predictions of a euro collapse emanate. Those in the UK who hate the euro hate it for a good reason. These people want the pound to be the #2 currency in the world after the dollar. The euro is in their way. The UK pound can only have strength when the UK Central Bank can keep interest rates 2 % higher then in the eurozone. As the ECB raises rates it forces the UK Central Bank to do the same.
The UK needs high interest rates to attract investment money from abroad to secure British debt. The UK debt/deficit situation is as bad, if not worse then in the US. There is no pound hegemony to secure the funds, so the British have to have high interest rates. The result is an increasing number of citizens falling into bankruptcy every year.
If you can get rid of the euro you can hope that those fleeing the euro will flock to the pound and prop it up. Thus you keep printing stories about a possible euro collapse or countries like Germany or France stock-piling old currency. Its not happening.
No matter what the EU said as for the reasons for the euro existing, none are true. The euro was created for only one reason, and that was for the euro to become a world reserve currency. Not only is it supported from within the EU, but from the outside too. The world wanted a 2-nd reserve currency. None of the small European countries had an economy strong enough to make it work. But pooling their currencies into one union was all that was needed to make the euro an acceptable reserve currency.
The euro actually saved the EU economies, despite the propaganda from the UK and some European media outlets. The economies of the EU did better in the 7 years following the euro then in the 7 years preceding the euro. Inflation was low and the economies stable during the rise in oil prices. Without the euro, you would have found the price of oil in the Eurozone soaring to unaffordable levels.
The euro saved Germany more then any other country. Germany was nearly bankrupted by the huge cost of restructuring its eastern part. Germany wasn't getting the investment capital it needed to keep going. The euro allowed it to tap into resources from the entire eurozone plus it was able to sell euro denominated bonds in greater numbers then when they were denominated in marks.
No country can leave the euro unless they want to commit economic suicide. Once out of the euro their national currencies would sink in value, yet their euro denominated debts would have to be paid back in euros. When your national currencies devalues against the euro then you become bankrupt when you can't pay back your euro denominated bills.
One thing the EU countries that are in the euro need to do is to change the policy of a fixed rate of their old currencies to the euro. The currency peg should be removed and there should be a forced devaluation over a 5 year period until those currencies are worth zero. This would end any hope of possible return to the old currencies and a realization that the euro is here forever.
Despite American and British efforts to collapse the euro, it will be the dollar and pound that will collapse. Instead of hoping for a euro collapse the British and Americans should be restructuring their economy to prevent a dollar collapse and reign in their huge deficits.
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Euric - Tar Sands
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Re: Depression 2007?
by topcat » Fri 26 Jan 2007, 22:10:44
Pardon me for asking what is probably a stupid question about the Euro, but,
Here in the US, we have inflation, true inflation, monetary inflation, the creation of additional USD's.
We (not me) print them, or issue gov't bonds, or lower fractional reserves, etc. to increase fiat currency.
What, who, how are Euro's kept in check from the same problem (or are they kept in check at all)? Can (for instance Germany, France) print their own extra Euro's? If not, just where do they come from?
Reading the last few pages of this thread made me wonder.
Here in the US, we have inflation, true inflation, monetary inflation, the creation of additional USD's.
We (not me) print them, or issue gov't bonds, or lower fractional reserves, etc. to increase fiat currency.
What, who, how are Euro's kept in check from the same problem (or are they kept in check at all)? Can (for instance Germany, France) print their own extra Euro's? If not, just where do they come from?
Reading the last few pages of this thread made me wonder.
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topcat - Tar Sands
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Re: Depression 2007?
by marko » Fri 26 Jan 2007, 22:18:18
$this->bbcode_second_pass_quote('topcat', '
')Here in the US, we have inflation, true inflation, monetary inflation, the creation of additional USD's....
What, who, how are Euro's kept in check from the same problem (or are they kept in check at all)? Can (for instance Germany, France) print their own extra Euro's? If not, just where do they come from?
')Here in the US, we have inflation, true inflation, monetary inflation, the creation of additional USD's....
What, who, how are Euro's kept in check from the same problem (or are they kept in check at all)? Can (for instance Germany, France) print their own extra Euro's? If not, just where do they come from?
The euro is subject to the same inflationary phenomena as the dollar. Theoretically, the central bank (Federal Reserve in the US, European Central Bank) is supposed to prevent inflation by raising interest rates to the point where growth in the money supply is no greater than (or perhaps just slightly greater than) economic growth. However, both central banks have abdicated this responsibility, because their economies have become dependent upon the expansion of debt, which would be threatened by interest rates high enough to stop monetary inflation.
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marko - Coal
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Re: Depression 2007?
by MrBill » Sat 27 Jan 2007, 08:18:53
$this->bbcode_second_pass_quote('topcat', 'P')ardon me for asking what is probably a stupid question about the Euro, but,
Here in the US, we have inflation, true inflation, monetary inflation, the creation of additional USD's.
We (not me) print them, or issue gov't bonds, or lower fractional reserves, etc. to increase fiat currency.
What, who, how are Euro's kept in check from the same problem (or are they kept in check at all)? Can (for instance Germany, France) print their own extra Euro's? If not, just where do they come from?
Reading the last few pages of this thread made me wonder.
Here in the US, we have inflation, true inflation, monetary inflation, the creation of additional USD's.
We (not me) print them, or issue gov't bonds, or lower fractional reserves, etc. to increase fiat currency.
What, who, how are Euro's kept in check from the same problem (or are they kept in check at all)? Can (for instance Germany, France) print their own extra Euro's? If not, just where do they come from?
Reading the last few pages of this thread made me wonder.
The euro is kept in check by The Maastrict Treaty that was agreed to in 1992 before the creation of the European Monetary Union (EMU). Two of its main tenents are a) budget deficits of no more than 3% p.a. of GDP, and b) government debt no more than 60% of GDP. Both criteria are regularly ignored. Ironically, the deficits are measured AFTER transfers to the EU budget.
However, it only covers monetary policy that is delegated to the ECB and not fiscal policy which is still in the member's national domaine. That is why Italy continues to issue debt at dangerously high levels and this makes other EMU members obviously nervous.
The ECB is by law prohibited from bailing out any EMU country that gets into financial trouble, but the legacy central banks, like the Bundesbank, still can, and still do, buy up Italian bonds, while selling German bonds to keep the spreads between EU government bonds in-line.
They got very upset at Citigroup last year for attempting to expose this little trick by simultaneously selling a large number of 'weak' government bonds and buying the 'strong' ones. The eurozone central banks were not happy at all. They called it market manipluation. I call it calling the CBs bluff. Either you have the Maastricht criteria or it is a sham currency union no better than its predessor the ERM that collapsed in 1992/93!
$this->bbcode_second_pass_quote('', 'I') do note that the USA is creating M1 at -0.4% and M2 at +4.8%. That is a lot lower than the eurozone that is creating M1 at +6.3% and M2 at +8.5%. But they both pale in comparison to Australia who created it at +11.4% and +13.0%. Even Canada who have a budget & current account surplus and in my opinion is more fiscally conservative than America created M1 at +14.2% and M2 at +8.6% in the 12-mos. leading up to mid-December.
But if you look at the country by country statistics within the EU and compare them with the USA or other developed countries you will quickly see that some eurozone members are catching a free-ride on the core members with regards to deficits and debts. In this respect I disagree 99% with everything Euric posted above. But no real interest to correct him, again, today.
The organized state is a wonderful invention whereby everyone can live at someone else's expense.
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MrBill - Expert
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) Not that I have something with Germany, but don’t you realize how “narrow” your view is?
