• Steve H. Hanke
    05/04/2016 - 08:00
    Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke. A few weeks ago, the Monetary Authority of Singapore (MAS) sprang a surprise. It announced that a...

Guest Post: Why The Eurozone And The Euro Are Both Doomed

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Fri, 06/24/2011 - 12:31 | 1398804 FunkyMonkeyBoy
FunkyMonkeyBoy's picture

But the Euro notes look pretty!... the U.S. dollar looks worse than monopoly money, at least they have color.

Fri, 06/24/2011 - 12:39 | 1398825 SheepDog-One
SheepDog-One's picture

We can just get a new US dollar with a 3D pic of a tropical aquarium on it, blow all the other fiats away!

Fri, 06/24/2011 - 13:34 | 1399004 AcidRastaHead
AcidRastaHead's picture

Putting art on the dollar may be the only way to increase it's value.

Fri, 06/24/2011 - 17:11 | 1399765 tiger7905
tiger7905's picture

Highlights from Don Coxe on Spain and Greece. He spending 2 weeks in Spain currently.

http://goldandsilverlinings.com/?p=1316

Fri, 06/24/2011 - 12:41 | 1398851 Clueless Economist
Clueless Economist's picture

I advise Germany to print more fiat money and pay off all of the Greek debt.  This stimulus will lead to millions of shovel-ready government jobs throughout the Euro zone.

It would have worked in USA if only we had the willpower to stimulate more trillions of fiat currency.

Fri, 06/24/2011 - 13:03 | 1398913 SheepDog-One
SheepDog-One's picture

And who knows, all those Greek politician escape tunnel cleaning jobs may just unearth long forgotten fat sacks of gold!

Fri, 06/24/2011 - 13:21 | 1398961 Piranhanoia
Piranhanoia's picture

There are thousands of shovel ready jobs in every country. They will not require any investment whatsoever. It is simply a matter of arresting and trying those that have openly stated they committed crimes.  There are hundreds of thousands of economists and wall street players that can be fitted with shovels, orange jumpsuits and manacles. It has a two fold effect.  It will end the reliance on pretense regarding financial stability, and put those that caused it to work doing the jobs the people they raped and killed were doing.  Those people will be their leaders in prison. Their support network, their pimps.

Fri, 06/24/2011 - 12:44 | 1398867 Atomizer
Atomizer's picture

We were planning to release 1.1 billion new (eye candy) $100 bills into circulation but they contained flaws. Canada is presently printing new laundry-friendly plastic banknotes.

Fri, 06/24/2011 - 12:57 | 1398906 fonestar
fonestar's picture

I hate all of the modernist concepts of today's banknotes.  I actually like the traditional Greco-Roman inspired motifs with calligraphy of US/UK currency of decades ago.  Looked serious.  Everything else looks like monopoly money.

Then again, I hate everything else in the world today too.

Fri, 06/24/2011 - 15:19 | 1399452 tarsubil
tarsubil's picture

Made my day.

Fri, 06/24/2011 - 13:29 | 1399002 Reptil
Reptil's picture

Guilders were much prettier. And stronger.. (of course we took a hit when switched)

http://www.oudevalutas.com/Resources/50guldenres.jpg

Fri, 06/24/2011 - 14:25 | 1399246 KCMLO
KCMLO's picture

didn't they used to have a bar code on there as well?  I remember looking at a guilder note and thinking it looked like one hell of an acid trip!

Sat, 06/25/2011 - 13:11 | 1401155 Reptil
Reptil's picture

yeah the good old days.
the "nineties" were my "sixties" you know..
^__^

Fri, 06/24/2011 - 12:30 | 1398805 Eddyspain
Eddyspain's picture

With Italian bond spreads at (record) 214  the EFSF is dead on arrival.

Fri, 06/24/2011 - 12:34 | 1398819 Vergeltung
Vergeltung's picture

excellent read. very well explained for the novice (like me).

 

Fri, 06/24/2011 - 12:45 | 1398871 Vergeltung
Vergeltung's picture

how does what I typed above deserve a junk? this place is wierd....   :\

 

Fri, 06/24/2011 - 12:49 | 1398882 SheepDog-One
SheepDog-One's picture

Euro longs throwing a tantrum.

Fri, 06/24/2011 - 12:59 | 1398916 Dapper Dan
Dapper Dan's picture

someone 2-3 months ago said they junk to indicate comments that they have read. don't remember who.

Fri, 06/24/2011 - 13:01 | 1398923 Baron Robber
Baron Robber's picture

you made an honest comment, don't worry about being junked.

Fri, 06/24/2011 - 13:27 | 1398997 Piranhanoia
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There be free speech here,  fear not. 

Fri, 06/24/2011 - 13:43 | 1399035 Rocket-Man
Rocket-Man's picture

Ignore the junk... you are spot on.  This article provides a simple and clear explantion of some of the systemic European macro economic issues.  As you mentioned it is a good read for the novice and worthy of passing on.

Fri, 06/24/2011 - 17:11 | 1399719 Greyhat
Greyhat's picture

Not really. The commentators always forget that Germany IS already the "lender of last resort" by an abused TARGET2 crediting system.

http://www.bundesbank.de/statistik/statistik_zeitreihen.php?first=1&open...

The EU actually lives from bankruptcy fraud. They buy German goods, but the other EU central banks dont pay the bills to the Bundesbank, they just transfer "the finest EU collateral possible", unrated Irish and Greec paper trash.... Actually they owe us a third of a trillion Euros.

But the commission will slaughter the "imbalanced" German export cow, so this will not continue forever.

"When assessing imbalances, account should be taken of their severity, and of the potential
negative economic and financial spillovers which aggravate the vulnerability of the EU
economy and are a threat to smooth functioning of the monetary union.
Actions to address macroeconomic imbalances and divergences in competitiveness are
required in all Member States, particularly in the euro area.
"

http://register.consilium.europa.eu/pdf/en/11/st07/st07839.en11.pdf

Fri, 06/24/2011 - 12:49 | 1398829 RetiredSilverBug
RetiredSilverBug's picture

Euro will do fine. All media channels are stuffed with anti-euro junk news, but it holds 1.4 just fine. Europe should be more active in responding to the media attack (of US and UK). They should start with voiding US credit agency license in EU. And limit US hedge funds.

Fri, 06/24/2011 - 12:47 | 1398875 tim73
tim73's picture

In the speculation economy Euro is the one always "collapsing" but in the real economy level (hey Americans and Brits, you should try that sometimes!) it is working quite nicely.

In the old days a truck driver from Spain would have needed many different currencies in his journey to Germany and Netherlands, losing needlessly money in each currency exchange.

The current crisis is a banking crisis, not currency. Banks worldwide have been stupid, too greedy and loaned too much once again to insolvent customers. USA and UK is holding up mainly due to money printing keeping their banks solvent but once that goes away, it will all collapse eventually.

Sat, 06/25/2011 - 05:23 | 1400756 Ghordius
Ghordius's picture

+1
a lot of this media barrage originates from Australia, the Greek Expat community is worried and enraged - what easier quick scapegoat then Germany and the Euro...
If only things were so simple!
Greece could try to adress the issue of 7 times more civil servants then what other countries need, an issue which would bankrupt anybody, anytime...

Fri, 06/24/2011 - 12:38 | 1398836 SheepDog-One
SheepDog-One's picture

BIG haircuts must be taken by the central banksters, just that none of them want to be first in line for the barbers chair understandably...now what we'll see unfold is zombie world bankster battles to the death. Should be great.

Fri, 06/24/2011 - 13:55 | 1399102 john39
john39's picture

sure, but that is really not why the bankers push.  its only paper money anway.  They want to leverage the debt issue to get control over hard assets.  taking a haircut alone won' t get that done.  the whole point is to steal real assets in exchange for fiat debt.

Fri, 06/24/2011 - 12:39 | 1398839 tim73
tim73's picture

The same logic could be applied between Alabama and New York...or Scotland and England. USA states among themselves are as "incompatible" as Eurozone nations. 

Fri, 06/24/2011 - 12:41 | 1398852 SheepDog-One
SheepDog-One's picture

Yes, exactly. For all the Eurozone problems and bankruptcies and failures, its nothing compared to the staggering US default looming. Wait till it comes around to us in a month or so.

Fri, 06/24/2011 - 12:39 | 1398842 SheepDog-One
SheepDog-One's picture

Greeny, is that you junking? I know your 1.46 Euro quick trade got blown out of the water, but dont throw a tantrum its unbecoming.

Fri, 06/24/2011 - 12:44 | 1398845 RobotTrader
RobotTrader's picture

Crude and gasoline at LOD.

CRB Index just crashed to new lows for the year.

http://www.crbtrader.com/data.asp?page=chart&sym=CIY0

Uncle Gorilla has succesfully "whipped inflation" for now, using margin hikes, paper contract shorting, and unleashing the SPR.

Wow, no wonder XRT is $1 from 3-year highs.

Fri, 06/24/2011 - 12:43 | 1398866 SheepDog-One
SheepDog-One's picture

Meanwhile prices are still at record highs, and all your longs are underwater.

Fri, 06/24/2011 - 12:44 | 1398846 Greeny
Greeny's picture

I tell ya what, I trust Chinese, more than this article,

If Chinese are buying EUR bonds and EUR (unless you

think they are stupid), instead of $USD,

get a clue.

Fri, 06/24/2011 - 12:46 | 1398860 SheepDog-One
SheepDog-One's picture

And yet your 1.46 Euro long trade is more underwater. Dont fight it, be a real trader, admit you were wrong and move along, oh master trader.

Fri, 06/24/2011 - 12:49 | 1398869 Greeny
Greeny's picture

Dude, did I told you to hold for 1 year? I made 50 pips, that's

all it matter, was hoping for more though.. Next time, ones

Austerity plan passes, Next week?

Fri, 06/24/2011 - 12:56 | 1398874 SheepDog-One
SheepDog-One's picture

OH that was a 'buy n hold for 1 year trade' now I see. Well Im not a 'buy and hold' in anything thats the biggest bunch of nonsense in history.

Just 1 question though, why did you sell at a 50 pip when you said a 300 pip was in the bag? I guess youre just THAT good....

Fri, 06/24/2011 - 17:47 | 1399866 walküre
walküre's picture

+1 clue

you get it.

Fri, 06/24/2011 - 12:44 | 1398848 jointhewave
jointhewave's picture

Watch the YouTube video...


The Manchurian President - A story of war and deception

http://www.youtube.com/watch?v=PhOwfn4wA8k

 

Absolutely amazing, cunning and enlightening short film depicting the collapse of Empire America.

Fri, 06/24/2011 - 12:46 | 1398857 JimBobOMG
JimBobOMG's picture

Is this going to be in 3D?

Fri, 06/24/2011 - 12:48 | 1398878 Greeny
Greeny's picture

So, my cut is that, NO Currency would be allowed to collapse,

either whole System collapses at ones, or they all (currencies)

going to

be just overprinted and devaluated. If need it, Fed will print

enough to bailout entire Euro-zone, to save the system.

Fri, 06/24/2011 - 12:54 | 1398887 SheepDog-One
SheepDog-One's picture

Go print $100 trillion....nothing at all would be fixed. Your thesis is garbage.

Fri, 06/24/2011 - 12:51 | 1398885 Conor
Conor's picture

It seems to me that Germany's problem with Greece is more easily solved than say Texas's problem with California.

Germany can pick up it's marbles and go home, take a big hit upfront and recover.  Texas, or any other state for that matter, can't just run from the US contagion, e.g. terminally ill banks in New York and and dying states like Michigan and Illinois.

Or am I stupid?

Fri, 06/24/2011 - 13:26 | 1398978 NotApplicable
NotApplicable's picture

The elites have gutted Germany twice in the last century, and my guess is they'll do it again, as that ole coercive force known as 'collective guilt' will be applied heavily by the MSM painting Germans as once again unwilling to cooperate with the rest of the "civilized world." All while stirring up neo-neo-Nazi sentiments at home.

Treaty of Versailles, redux?

Fri, 06/24/2011 - 17:22 | 1399803 walküre
walküre's picture

Over my dead body, Freund.

And you can take that to the bank.

Fool me once, shame on me

Fool me twice, shame on you

Germans are a different breed today. Collective guilt is a thing of the past.

Fri, 06/24/2011 - 13:40 | 1399036 Pchelar
Pchelar's picture

Well they can, but....  The last time it was tried 150 years ago, it got messy in a hurry.

Fri, 06/24/2011 - 12:52 | 1398892 svendthrift
svendthrift's picture

A sovereign nation should have a sovereign currency. No, bank produced debt-notes don't count.

Fri, 06/24/2011 - 12:54 | 1398898 SheepDog-One
SheepDog-One's picture

Thats right, the 'one size fits all' New World Order plan is garbage, it will never work. And probably about 5 billion will have to die before the elites admit failure.

Fri, 06/24/2011 - 15:02 | 1399380 pops
pops's picture

Why do you assume that they would consider the deaths of 5 billion to be a failure?  Their agenda could very well be to thin the herd, and this currency squaredance is just a warmup.

Fri, 06/24/2011 - 12:59 | 1398902 kote
kote's picture

Well written, good argument, just technical enough.  I like this guy.

Fri, 06/24/2011 - 13:20 | 1398950 Atomizer
Atomizer's picture

Now that you understand the frame work, watch this to simplify it even more.

http://www.abc.net.au/news/video/2010/05/20/2905304.htm

Christine Lagarde is a bailout queen. Hence the push for IMF appointment.

 

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