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End Game: The Euro As a Concept Is Finished
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
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gold and silver miners? agriculture? oil?
diamonds? Plutonium?
Unobtanium. He doesn't know; he's just another fracking newsletter writter. Check out "parabolic" price rise prediction. Anyone with this level of ignorance just embarrases themselves by writting. Price curves never become parabolic; they become exponential. The "parabolic" theme is education by internet; language by plagiarization.
Where are we on the collapse clock? If you had to speculate on timing what events or threshold would be the best indicators?
Now that would be cool if somebody could visualize that!!
The higher the deficits, the higher taxes will become which are already very high in Europe.
We can't borrow from the future anymore!!
And still we keep going on... here in Belgium, all the government employees will get another 5% raise next year because of inflation. The rest of the working class gets 2,52%.
I CAN'T WAIT UNTILL THIS BOMB EXPLODES!!
Belgium tits up , naaaah . Can't be true . After all Herman Van Rompuy , one of our ex prime ministers and now prez of Europe recently said that Belgium is actually one of the better performers . Politicians don't lie , everybody knows that .
And the bombs in Greece are blooming like madness in the spring.
YouTube - Shattered windows, blasted cars as bomb explodes outside court in Greece.flv
mfl
T.U.E Day
Tits Up In Europe.
Won't the FED backstop the Euro? Aren't we all in the same boat at the same time?
Yesterday our interests rate (10yr Bond) reached 4,8% but our economic newspapers said that we have no problem for the future, that all the word likes our GBond and worst is back.
Parmalat bunkruptcy story was the same. Everything was O.K. according to our newspapers.
For this I will buy gold immeditely.
About two weeks ago (more or less) Bernanke announced (rather loudly) that the Fed was extending it's swap lines with the ECB and the Bank of England. This will provide an American backstop to their problems, and while I think Spain will blow sky high this year, I don't think it will bring about a financial apocalypse.. at least not in 2011. But just wait for the sh!tstorm when it becomes known that the US will have to contribute $20-30 bln via it's promise to the IMF to Spain whilst we deny our own states and municipalities aid. Get popcorn & beer and watch the pretty fireworks to the east !
I remember reading in the Wall Street Journal in the 90's(back when it was worth reading) that this Euro thingy they are proposing had to end badly. The article went on and on how they have tried this before and yadda yadda....and I remember standing in the PATH train reading this wondering to myself, Why the hell would they want to go down this road that is so obviously doomed to fail? Then I got off the train and went to work secure in the knowledge that people are stupid.
end game
Would be great if life was like that. End game by here, end game by there and the game never ends.
Maybe time to end the game of declaring end game for anything and everything?
End game.
Nothing is backing the flimsy currency with no images of soverign heroes.... and no military or real government asset backing. Just a concept of fluff, debt, and internationalist rhetoric.
Owww...
How about printing on the rim of the Euro coin; "blah blah blah blah blah....."