Here We Go Again: German Government Advisor Says Eurozone May Not Remain Intact Over Next 12 Months

Tyler Durden's picture

Your daily diversion comes from German government advisor Bofinger:

  • Eurozone needs a very comprehensive solution, or may not remain intact over next 12 months
  • Need to consider EU stimulus measures for Greece in addition to belt-tightening
  • Have to change overall approach for Eurozone periphery countries

Euro now sliding since apparently the EURUSD traders did not get the Friday memo that the G-7 have decided fair value for the pair is 1.35 tops. Oh yes, in the meantime we can't wait for Germany to get back to the DEM which will buy about $10 USD and make German exports a thing of the ancient past.

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firstdivision's picture

So this is why the Euro and futures started to tank.

Is this as credible as Friday's rumor du jour?

SheepDog-One's picture

Is reality credible anymore? I just dont know...

Spitzer's picture

He is a proffesor of economics. That says enough.

Pure comedy that people think the Euro will break up.

Re-Discovery's picture

Didn't a bunch of economics professors come up with the "euro" in the first place?

Watch and see Grasshopper, watch and see.


DeadFred's picture

The classic manipulated news scenario with maximum profits for the insiders would have increasingly pessimistic news for a couple weeks to let the momos hop onto the Euro trade then, bam, a fix is announced, and another flock gets sheared.

Re-Discovery's picture

I am sure the euro (dollar, yen, etc) will reverse, drop, reverse, drop, etc.  all in a well-defined trading channel.  And there is a lot of fia that can be made correctly trading the boundaries.

All the while Godl, Oil, food (and even Silver) will move up and up and up.

Spitzer's picture

No, central bankers came up with the Euro. Not proffesors

Re-Discovery's picture

And your point is . . .?

(Check resumes, almost all central bankers were or became professors at some point.)

Spitzer's picture

The Euro was built by the old hard money sydicate in Europe.

jus_lite_reading's picture

Ten years ago, a close friend and colleague who was part of an EU economics think-tank and who was later ejected for his view that the Euro would not last much more than 10 years so now the euros time is up.......  was he right? 

Spitzer's picture

Are you aware that calling the end of the Euro is calling for hyperinflation in Euro land ?

Why does there seem to be no inflation vs deflation arguement for the Euro zone ? Everyone is a hyperinflatinist when it comes to the Euro....

Even allot of Keynes and Austrians agree that the Euro will not last(hyperinflation)


Canucklehead's picture

No, calling for the end of the Euro is calling for deflation in Euro land.  Think Weimar republic and the foreign currency which could buy anything in Weimar Germany for a song.

No one cares about the inhabitants within the soon to be expelled periphery euro states.  Certainly their own governments do not care about their subjects.

Spitzer's picture

No, calling for the end of the Euro is calling for deflation in Euro land.

So a Euro rally is the end of the Euro.....Hmmmmm...


Think Weimar republic and the foreign currency which could buy anything in Weimar Germany for a song.

So you are calling for hyperiflation in Europe ! Like i said the first time...


Canucklehead's picture

You are mixing up your currencies.

Sudden Debt's picture

6 weeks dollar trashing, 6 weeks eurotrashing

unky's picture

Eaxactly, and they cant do both at the same time because everyone would buy PMs. If they trash the dollar first, people rush into the euro, then they trash the euro and people run into the dollar ignoring PMs.

HoofHearted's picture

"A Swiss junkie in Turin ripped me off for my cash." When life becomes a Cracker song, at least there's a Eurotrash girl at the end...

SheepDog-One's picture

Just remember the Golden Rule- 'He who has the gold makes the rules'

Ahmeexnal's picture

"He who has the gun, taketh the gold."

RonnieHonduras's picture

The guns you speak of better be careful what they wish for.  Guns n' gold is the complete insurance policy against such idiots.  (...And those morons who think the 2nd amendment protects hunters... or government organized national guard.  AS IF!!)

centerline's picture

Yup. Same central bankers at the rotten core.  So, they have folks running from port to starboard to keep them from noticing the tilt towards the bow - or least thinking there might be lifeboats on the other side there somehow appeared since the last time they ran over there.  Keystone cop stuff now.  No dialogue required.  Just some funny music.

unky's picture

I ve read some older interviews by Bofinger in which he gave the Eurozone just a maximum lifetime of a few more years, so this statement from him isnt really something new, however judging the EUR/USD lower than 1.43 something was giving pressure to the EUro, maybe also partly the S&P downgrade of greece

Sudden Debt's picture

12 MONTHS...

God only needed 6 days to create the world... and we need a decade just to destroy a economy...


Re-Discovery's picture

I think the Germans are sick of hearing from/about the Greeks too.

All those who think Germans would perish in a Eurozone collapse ask yourself this:

Whose new local currency stands to benefit most from a Euro collapse?

Sure they would have to write off a lot of bank crap, but which european economy is positioned the best to take the hit and pick up the pieces?

Yeah, I thought that would be your reaction.  Heil Merkel!

centerline's picture

First one out wins.  But, the exit is booby trapped.  Need a few idiots to take out the traps.

Rynak's picture

The main problem is that germany and france, are those who lended them all the cash.

I.e. german debt may seem very low, but that debt-value assumes that all cash that has been lended will be paid back. You really need to realize the difference between how much cash germany "potentially" has, and how much it actually has....... potentially, it's balance is near zero..... actually, it's balance is you-don't-really-want-to-know. THIS, besides of banksters, IMO is why they are hitting so hard on the PIIGS to take the bailout.... its plain and simply a choice between facing reality, or continueing living in fairytale land: The reality is... most of the cash it lended, is gone.. it will not come back. Fairyland is: Debt is an asset.... all those overindebted countries will pay this stuff back.

Germany and france quite probably would not be able to handle a full on default of the PIIGS.... a partial default, would still hurt, but hey.... it can only get worse from here, in fairytyle land.

unky's picture

1 DM = $10, i would appreciate that and buy up a bunch of assets in the US ;- )

HoofHearted's picture

I have a zwei millionen mark note from 1923 on my desk in my office. I'M RICH!!!

Now I can buy a lot of gold and get out of the fiat Ponzi scheme...

Sudden Debt's picture

and buy up a bunch of assets

And be sewed for millions because some moron got sick while drinking water from the toilet which he forgot to flush 10 minutes before...



Dick Darlington's picture

The only solution they know is more debt and that's not working, surprise surprise. Euro is fundamentally ill-constructed and has no chance of surviving as it is. They need to cut off the periphery for good and even after that there's no guarantee.

TexDenim's picture

What a crock. No one has more to lose from the collapse of the Eurozone than the Germans. Through the EC, Germany has finally achieved the Greater German Co-Prosperity Sphere that was the aim of early 20th century German planners. They will bail out their serf cousins in Greece because they need them to buy German crap at inflated prices without the option of devaluing their currency. Enuf said.

Quintus's picture

The thing is though, that German export industries are now shifting focus to Asia in a serious way, having tapped out the suckers in Europe in the manner you describe.  I feel confident that they will let the European periphery burn the instant that the marginal cost of keeping it alive exceeds the benefit to German industry.  

First, however, they just need to figure out a way to get back all the money they lent the Greeks and other PIIGS to buy German goods.

unky's picture

German crap ? Mercedes, Audi, BMW? I question u have ever owned one of these to call it crap. Its really nice quality

Sophist Economicus's picture

I've owned a g500 for 4 years now (bought it new).   The front drive train broke within 25,000 mile -- replaced under warranty.  The front passenger electric window motor failed this winter, the front climate control motor failed, the air conditioning system deleloped a leak last summer, the sun-roof belt came off its wheel and needed to be replaced, the dash has a digital readout -- it's periphery fades on summer days because it gets warm, the electronic key needed to be replaced twice....

I bough a festool drill -- its bearingless motor failed within 6 months of use.   Festool replaced it.   I bought they Kapex chop saw.    The laser failed - i haven't replaced it, the plastic lever that contiols the pivot of the saw head broke -- put in the replacement


I owed a stahlwille socket set.   The 12mm socket was never bored out!    I didn't realize it till I was under one of my cars and couldn't get the socket to engage.    Stahlwille did send me a replacement


I owned a Hazet plier.   It sheared at its pivot while removing a bolt!   I never had a pair of pliers fail, ever.   It was replaced free of charge


I won't bore you with my Audi and VW stories


I could go on and on...   As an experienced consumer of German stuff - let me tell you, there is nothing special to "german quality'.  

Bubbles the cat's picture
Bubbles the cat (not verified) Sophist Economicus May 9, 2011 9:45 AM

You've just described the reason for their success. They made it. You bought it.

Sophist Economicus's picture

Ha!   Tis true.    I buy high end American or Japanese when I can, especially when it comes to tools and machinery.    The g500 was simply a 'look and feel' thing - more emotional than rational.


The design (i.e. thoughtfulness of function) is admirable in German products.   Unfortunately, their manufacturing quality is where they fail consistently.

kaiten's picture

Funny what you say. So how come Germany being the biggest exporter in the world? Due to the lack of their manufacturing quality? I dont think so.

Sophist Economicus's picture

I don't want to get into a country pissing contest.   But:

1.  China is number 1 in exports - and if quality = size of exports, I doubt they'd be number 1

2.  Germany exports high-end (price not necessarily quality) automobiles.   Ever check independent, third party rankings of german automobile quality?   Not stellar.

3.   German export number include intra-EU sales, which is a fair accounting.   However, then we will have to deal with the Euro issues that are currently on point -- would German exports be that high intra-EU if there were soveriegn currencies and each allowed to devalue as needed?   I don't know.


And besides, I buy German products.   My experience is that the quality is spotty - not like the bullet-proof Japanese or high-end American products.   I may have been unlucky over the years and my data points may be one off, bad luck examples.

ZapBranigan's picture

No, you're right, German quality is way-off, not nearly what it was twenty to thirty years ago.

(I think Tyler should institute a rule stating that you have to write 'zee Germans' instead of 'the Germans', it would make serious commenting here that much funnier)

unky's picture

was that manufactured in the U.S. plant they recently build? if so, that would explain it ^^

Sophist Economicus's picture

G500 was built in Austria - another country with spotty quality in manufacturing

Let me know if you want stories about my Felder sliding table saw...

SheepDog-One's picture

'We need them to buy more stuff so lets loan the bankrupt more money'?

Doesnt really make much sense, but who knows the Germans are a very strange people.

Saxxon's picture

TexDenim, the Germans don't make crap.  That's why they will still be standing when these fishing village land-scam countries tank back to their former jerkwater status.

Manipulism's picture

They sold their "crap" with a strong DEM and will do it again.

Even with 1 DM - 10$

simonsito's picture

+1 on that one, from Germany.

I am sitting in a town full of people who think they are going to build and earn money with Porsches and Mercedes' for the next 100 years....

Urban Redneck's picture

The Bosch bulldog hammer drill for my US house cost under USD200, the same drill for my Swiss house cost over CHF500, the only difference is a 60Hz/110V vs 50Hz/220V motor.  Purchasing power parity can suck, but Bosch does make good tools- I still have an older Bosch hammer drill I picked up almost 20 years ago and it works great.