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End Game: The Euro As a Concept Is Finished

Phoenix Capital Research's picture




 

 

Thanks to
the blizzard, holidays, and so forth, EVERYTHING that occurs in the markets
this week is largely irrelevant. Once the holidays end, we’ll be back to
reality in short notice.

 

What’s
reality?

 

The reality
is that situation in Europe has literally reached a fever pitch. We have now
progressed to the “contagion” point in which the entire system is at risk
versus individual countries.  To
whit, Ireland has only just been bailed out and already Spain, Italy, Portugal,
and Belgium.

 

What’s truly
odd is the fact that anyone is surprised by this turn of events. We played out
this exact same drama from 2007-2008 in the US. Throughout 2007 to 2008 Ben
Bernanke and Hank Paulson assured us that the Financial Crisis was largely
“contained” and would not “spill over” into the US economy.

 

This charade
was maintained even as contagion spread. I recall (as I’m sure you do) that
with each successive bailout the problems were deemed solved. At one point we
had weekly proclamations that “the worst [was] over” from various Wall Street
CEOs.

 

Then the
whole thing came crashing down.

 

The clear
conclusions to draw from that period in the US are:

 

1)   Each
successive bailout will produce smaller and smaller effects until systemic risk
hits all at once

2)   The
world’s central banks are in fact powerless to stop systemic risk once
contagion hits

3)   The
powers that be will do everything they can to maintain the illusion of control
despite the clear fact contagion is spreading

4)   To
the unthinking masses, things will appear
to be alright right until we’re literally in the eye of the storm

 

We now see the
same drama unfolding in Europe. It is clear to anyone with a thinking brain
that Greece, Ireland and the like will never
pay their debts off. Moreover, the European Central Bank (ECB) will not be
able to do anything to stop the now accelerating collapse.

 

Indeed,
consider that while Greece and the ECB proclaimed “all is well” for five
months, the Euro nose-dived from December (when Greece first caught headlines)
until June when the ECB announced a $1 trillion bailout.

 

 

This $1
trillion bailout kicked off a relief rally from June to early November.
However, at that point it was clear that:

 

1)   The
European situation was much, much bigger than just one country

2)   $1
trillion would not be adequate to solve the problem

 

Since then,
the Euro has begun to breakdown in a major way. Timing this breakdown will not
be easy. The powers that be will do all they can to intervene and attempt to
stop this from happening.  However,
these interventions ultimately do nothing to change the big picture.

 

The big picture is that the Euro is on the
verge of entering a “systemic risk” period similar to what happened in the US
in Autumn 2008. This period will feature accelerating contagion combined with
panic selling that will push the Euro down to test its June 2010 low and
potentially break it. The long-term Euro chart makes this clear:

 

 

 

This break-down in the Euro will coincide with a rally in
the US Dollar and a drop in stocks and commodities across the board. It this
sounds like 2008 all over again, you’re right, we’ve essentially re-entered
that exact environment.

The only
difference is that after the collapse is finished, investors will then set
their sites on the US Dollar as the next currency to fall. That’s when inflation
will accelerate as the US Dollar collapses, destroying purchasing power while
inflation hedges EXPLODE higher.

 

Some, like
the most popular picks (Gold an Silver bullion) will records strong gains.
However, others, (the ones that 99.9% of the investment world are currently
clueless about), will go absolutely parabolic.

Be prepared, because 2011 is looking to be one ROUGH year.

 

Good
Investing!

 

Graham
Summers

 

PS. If
you’re like me, you’re probably worried about the future of the stock market.  And if you have yet to take steps to
prepare for the Second Round of the Financial Crisis… I highly suggest you
download my FREE Special Report specifying exactly how to prepare for what’s to
come.

 

I call it The Financial Crisis “Round Two” Survival
Kit
. And its 17 pages contain a wealth of information about portfolio
protection, which investments to own and how to take out Catastrophe Insurance
on the stock market (this “insurance” paid out triple digit gains in the Autumn
of 2008).

 

Again, this
is all 100% FREE. To pick up your copy today, got to http://www.gainspainscapital.com
and click on FREE REPORTS.

 

PPS. We ALSO
publish a FREE Special Report on Inflation detailing three investments that
have all already SOARED as a result of the Fed’s monetary policy.

You can
access this Report at the link above.

 

 

 

 

 

 

 

 

 

 

 

 

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Fri, 12/31/2010 - 07:47 | 839209 David99
David99's picture

China prepares for war 'in all directions' Peter Foster, Beijing

CHINA is preparing for conflict ''in every direction'', its Defence Minister says.

''In the coming five years, our military will push forward preparations for military conflict in every strategic direction,'' General Liang Guanglie said in an interview published by state-backed newspapers in China.

''We may be living in peaceful times, but we can never forget war, never send the horses south or put the bayonets and guns away.''

Koreas on alert

Miners in big trouble, big plunge

Fri, 12/31/2010 - 06:53 | 839190 Eric Cartman
Eric Cartman's picture

Realitively speaking, I guess the USD is more stable in the near term. Mainly because of its reserve status and we hid our bullshit better. This scenario makes perfect sense. I'd be suprised if it didn't play out this way. 

I'll short the EUR/USD but with a grain of salt. Either way, I'm not about to sell my gold near term because these crashes come quick! 

Fri, 12/31/2010 - 06:21 | 839185 David99
David99's picture

USA is broke, 33% population living on food stamps

Fri, 12/31/2010 - 05:57 | 839175 David99
David99's picture

Pilbara faces cyclone risk

A tropical depression over Australia could develop into a cyclone over the next few days and bear down on offshore oil and gas installations, and iron ore shipping zones, Australia's Bureau of Meteorology said today.

Gale-force winds may develop along the Pilbara coast in Western Australia by Saturday as the storm makes its way out to sea, though flooding was not expected due to the storm's steady movement, the bureau said in a warning notice.

BHP Billiton, Rio Tinto and Fortescue Metals export hundreds of millions of tonnes of iron ore mined annually from inland Pilbara deposits via coastal terminals at Port Hedland, Dampier and Cape Lambert.

Also Cockatoo Coal ceases operations as mine flooded , Anglo American AAL has closed few mines

Anglo American plc Declares Force Majeure

Be Careful with longs of miners

Fri, 12/31/2010 - 05:12 | 839167 David99
David99's picture

Australia Floods Cover Area the Size of France, Germany

All the miners, AAL, Rio Tinto, BHP etc. are in real very big trouble but Corporates & Media will never report any bad news as they all work with Fraud Street gang with the support of FED

Thu, 12/30/2010 - 21:42 | 838886 HistorySquared
HistorySquared's picture

Although it will appear to be doomed when the Euro craters, it's actually the sovereign independence of these countries that is doomed.

The politicians will lose their right to manage their countries in exchange for steep haircuts on their debt when they default. 

Fri, 12/31/2010 - 07:42 | 839202 goldenboy
goldenboy's picture

Spot on! And the ECB masters have artfully structured reserves which mark-to-market Gold. 

Fri, 12/31/2010 - 02:52 | 839127 honestann
honestann's picture

Which was the plan and purpose of the NWO elitists right from the start.  Enslave everywhere and everyone.  Politicians are predators.  Humans are spineless morons.

Fri, 12/31/2010 - 04:56 | 839162 AnAnonymous
AnAnonymous's picture

It seems that slavery is best when contained. When slavery turns to hit people who thought they would never know it, suddenly, slavery is no longer that good.

Thu, 12/30/2010 - 20:08 | 838764 knukles
knukles's picture

Too much pessimism. 
Plenty of sun shining thru the holes burnt in the ozone layer.

Thu, 12/30/2010 - 20:38 | 838820 BigDuke6
BigDuke6's picture

its true , i'm a total dour bastard like my ancestors before me.

therefore gold suits me,

i was out of the market in 2008, got back in and then baled out again in june this year, just in time for qe2....

sod it, i like ringing my bell 'Doom, Doom...'

not getting me far though.

Thu, 12/30/2010 - 20:05 | 838759 BigDuke6
BigDuke6's picture

Its the endgame - not for the euro 

but for the the europeans....

they will fight or die.

http://www.dailymail.co.uk/news/article-1333537/Nine-men-Derby-jailed-gr...

the usa should be grateful for its neighbours and lack of empire derived guilt.

Thu, 12/30/2010 - 19:56 | 838739 Henry Chinaski
Henry Chinaski's picture

IDK about all those charts, but my cab driver in St. Martin said: "The Euro is a mess, everyone wants (US) dollars."

Thu, 12/30/2010 - 20:09 | 838768 knukles
knukles's picture

There's the reality check. 

Thu, 12/30/2010 - 19:30 | 838702 RoRoTrader
RoRoTrader's picture

From Willem Buiter; http://www.telegraph.co.uk/finance/financetopics/financialcrisis/8230413...

Willem Buiter, Citigroup's chief economist, said the response (Europe) had been "woefully inadequate", raising the risk of fresh bank failures and a wave of sovereign defaults next year. He said the EU authorities may need a mix of measures worth up to €2 trillion to stop the rot.

Thu, 12/30/2010 - 19:37 | 838713 4xaddict
4xaddict's picture

Buiteris great

Thu, 12/30/2010 - 19:30 | 838698 goldenboy
goldenboy's picture

The Euro will survive.

Thu, 12/30/2010 - 19:17 | 838680 sabra1
sabra1's picture

when all is said and done , the elite, will, one day, have to face God, and will have a lot of explaining to do! i'd love to be an angel on the wall, and watch Him pull the lever casting these elite bastards to hell, or even Detroit! 

Thu, 12/30/2010 - 18:19 | 838601 greenewave
greenewave's picture

Bank of America is a Public Disgrace and Should be PUT OUT OF BUSINESS!! The BANKING ELITE have cost TAXPAYERS TRILLIONS in FUTURE BAILOUT MEASURES and the AMERICAN PEOPLE are SUFFERING!

To find out more about the TRUTH of the recent MORTGAGE SCAM, watch the YouTube video “BANK OF AMERICA ~ A PUBLIC DISGRACE” at (http://www.youtube.com/watch?v=cXDpOBOS94A).

Anonymous-

This is absolutely appalling and I am dumbfounded why the American people aren’t RIOTING in the STREETS as we speak. Thw civil and political unrest we’ve seen in Europe is without a doubt coming to the United States!

Bend over America and enjoy getting SCREWED by the BIGGEST BAILED OUT BANK in the Country!!

Thu, 12/30/2010 - 17:47 | 838546 BigDuke6
BigDuke6's picture

Europe will slide into civil war soon enough.

the socialists have ensured that.

the financial side of things will be the catalyst but other things will come to the fore.

http://www.telegraph.co.uk/news/uknews/law-and-order/6440594/Jack-Straw-...

Muslim population in the uk has doubled to almost 3 million from 2001 to 2010, since 9/11 attacks.

When things go bad , things get nasty.

Thu, 12/30/2010 - 17:09 | 838474 walküre
walküre's picture

Euro stocks will outperform USD stocks next year.

Mucho Euros and Dollars are chasing yields in Central and Northern Europe.

The bond game is up.

Thu, 12/30/2010 - 15:42 | 838265 dbradsha
dbradsha's picture

This guy hasn't got a single thing right all year !

Thu, 12/30/2010 - 14:09 | 838065 Whore_of_Babylon
Whore_of_Babylon's picture

Perhaps futures in Depends™ and toilet tissue, you know, for when the shit hits the fan (and britches).  Oh, and umbrellas, gonna be popular when said shit comes raining down.

Thu, 12/30/2010 - 13:48 | 838018 andia
andia's picture

There is another country - Estonia  adopting EURO in January 2011 despite all problems. On 13 July 2010, Estonia received the final approval from the ECOFIN to adopt the euro as from 1 January 2011.  On 20 July 2010, the mass production of the Estonian euro coins started at the mint of Finland.

 

Depiction of Estonian euro coinage | Obverse side € 0.01 € 0.02 € 0.05 Contour of Estonia € 0.10 € 0.20 € 0.50 Contour of Estonia € 1.00 € 2.00 € 2 Coin Edge

Estonia  originally planned to adopt the euro on 1 January 2007 and officially changed its target date to 1 January 2008, and later, to 1 January 2011.

It looks like there are still  forces in Europe (and probably in FED - swap lines) - planning to keep Euro afloat for a long time.

Thu, 12/30/2010 - 13:48 | 838016 AnAnonymous
AnAnonymous's picture

As usual: no end game and watch for more integration procedures.

Thu, 12/30/2010 - 13:44 | 838009 JustACitizen
JustACitizen's picture

Actually, I think that the problem in Europe is denial. They just have not realized and accepted the fact that we are in a global race to the bottom - at least for the ordinary citizen/worker.

On the other hand - the elite have never had it so good. As time goes on the paranoia will set in for them. "I have all of this - I know someone is going to want to take it from me." I wonder how long it will take them to realize that the "law" will not protect them once civil society breaks down.

Thu, 12/30/2010 - 14:08 | 838068 Shameful
Shameful's picture

Huh how lucky for them we have police states slamming into place.  More and more uniformed goons of the state to keep the serfs in line.  It's almost like they saw it coming...nah!

Thu, 12/30/2010 - 15:07 | 838181 JustACitizen
JustACitizen's picture

I don't know. It seems a lot like the "market". Everything works great - until it doesn't. History is full of authoritarian states - sometimes they go out with a bang - sometimes a whimper - sometimes they just keep going. However, a lot of tyrants and elites get it in the neck along the way - inspite of "protection".

Thu, 12/30/2010 - 17:46 | 838542 Shameful
Shameful's picture

Ah but that is the beauty of it.  Never forget that powerful people tend to be very competitive and often, especially in government, sociopaths.  What is to say that they would not kill each other off should the opportunity present itself?  Predators often hate each other and will kill competitors at the first sign of weakness.  Social Darwinism at it's finest.

Thu, 12/30/2010 - 19:59 | 838752 penisouraus erecti
penisouraus erecti's picture

fascinating

Thu, 12/30/2010 - 13:38 | 837990 Fat Ass
Fat Ass's picture

What does the phrase "literally reached a fever pitch" mean?

Like, do people have the fever (rheumatic fever? influenza? or?)

Sloppy writing like that is so, so stupid. It's a shame.

Thu, 12/30/2010 - 16:50 | 838423 maddy10
maddy10's picture

Give the guy a break, mister

Thu, 12/30/2010 - 19:36 | 838709 4xaddict
4xaddict's picture

+1 fat ass

Apocalypse, sky falling and a guy riding in on a white horse to save the day if you subscrive to his service.

Are ZHers actually stupid enough to eat up this sh1t?

Fri, 12/31/2010 - 04:35 | 839157 HungrySeagull
HungrySeagull's picture

Not stupid no.

Stuff from Europe is getting a little cheaper these days. I keep an eye on the British Pound and the German Mark.

 

Keep in mind that Euro's headquaters resemble a unfinished tower of Babel from the Bible and it all will come down and when it does, it will settle everything.

Thu, 12/30/2010 - 13:36 | 837981 tim73
tim73's picture

So "long term" is 1.5 years?! Take a look at eurusd chart from 2005 to 2010, it is pretty much in the middle of trading range. I remember the "talk" in 2002, when eurusd reached parity...it certainly would not go much higher than that, right?

 

Thu, 12/30/2010 - 21:34 | 838878 John_Coltrane
John_Coltrane's picture

Yes, that's true, the 5 year mean is about 1.4.  However, it is in a downtrend as defined by lower highs and lower lows which is what traders pay attention to.  Maxima at 1.6, 1.5 and 1.4, minima in between at 1.25 and 1.2.  The $ is also near its 5 year mean but has decreased from around 1.15 to .8 over the last decade (30% loss of value).  Meanwhile equities down 10% over the decade.  As all zero hedgers know gold is up about 350%-hardly a zero hedge, eh.  But get this, copper (as measured by FCX, the big copper producer) is up 1200%.  What's interesting is that copper was still up 200% (relative to the decade start) at the financial crisis minima.  Got to love those conducting metals!

Thu, 12/30/2010 - 13:36 | 837980 Sudden Debt
Sudden Debt's picture

GREECE BONDS ARE NOW AT 12.55%!!!

 

Thu, 12/30/2010 - 17:49 | 838548 Hugh_Jorgan
Hugh_Jorgan's picture

Like a bear trap; "oh lookee-here free num-nums! This is a strange looking plate, oh well, no matter..."

Thu, 12/30/2010 - 17:25 | 838494 edotabin
edotabin's picture

Providing more ammunition for the politicians to quiet the rioting crowds there. "Look, look how bad things are! Only a euro-wide bond will save us!"

The second the european bond is issued, the headlines will read "AMERICA is INSOLVENT!!!"

"Russia, China and XYZ, sign pact to trade only in Euros"

"The Dollar is toast", said expert XYZ. "We are seeing a move into commodities and foreign currencies. This will not abate until spending is under control and I am not sure the FED can do much to reverse the tide."

Pathetic at best.

 

 

 

 

Thu, 12/30/2010 - 17:44 | 838540 Hugh_Jorgan
Hugh_Jorgan's picture

XYZ, a.k.a: Mr. George Soros

Thu, 12/30/2010 - 20:02 | 838756 penisouraus erecti
penisouraus erecti's picture

Is that bastard still alive?

Thu, 12/30/2010 - 13:27 | 837959 PigsOnTheWing
PigsOnTheWing's picture

The problem with the Euro concept is that TPTB will continue to drain the lender of last resort (the taxpayer) until the fat lady has sung.

Thu, 12/30/2010 - 13:29 | 837964 Sudden Debt
Sudden Debt's picture

NO, the problem with the Euro is that all the Euro countries have morons for presidents who don't do shit!

 

Thu, 12/30/2010 - 17:08 | 838469 edotabin
edotabin's picture

The model is tired. They are creating a problem and offering complete unification as the solution. It is old, tired and weak. The only thing going for it, is that it is somewhat peaceful. Not sure how long that will last either.

 

 

Thu, 12/30/2010 - 13:28 | 837956 ac3
ac3's picture

I see on the horizon a perfectly formed mushroom cloud...

Thu, 12/30/2010 - 13:20 | 837939 Idiot Savant
Idiot Savant's picture

Some, like the most popular picks (Gold an Silver bullion) will records strong gains. However, others, (the ones that 99.9% of the investment world are currently clueless about), will go absolutely parabolic.

 

To what is he referring?

Fri, 12/31/2010 - 01:51 | 839102 66Sexy
66Sexy's picture

pt and pd

Thu, 12/30/2010 - 19:08 | 838662 Freddie
Freddie's picture

I would like to know what he is talking about the "others." I think you have to subscribe to his service to find out.

Thu, 12/30/2010 - 14:50 | 838156 Dr. Gonzo
Dr. Gonzo's picture

24 hour massage parlors?

Thu, 12/30/2010 - 15:49 | 838279 Encroaching Darkness
Encroaching Darkness's picture

Rare earth metals?  Crude oil, soybeans, cattle futures?

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