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Over A Year After Being Dismissed As Sensationalist For Questioning the ECB's Continued Solvency After Sovereign Debt Buying Binge, Guess What!
- Bank Run
- Bond
- Budget Deficit
- Capital Markets
- Central Banks
- Creditors
- Currency Peg
- default
- European Central Bank
- European Union
- Eurozone
- Fail
- fixed
- Greece
- Gross Domestic Product
- headlines
- International Monetary Fund
- Ireland
- Italy
- Portugal
- Real estate
- Reality
- recovery
- Reggie Middleton
- Sovereign Debt
- Sovereign Default
- United Kingdom
There has been a lot of noise in both the alternative and the
mainstream financial press regarding potential risk to the ECB regarding
its exposure at roughly 48 to 72 cents on the dollar to sovereign debt
purchases through leverage, and at par at that. This concern is quite
well founded, if not just over a year or so too late. In January, I
penned The ECB Loads Up On Increasingly Devalued Portuguese Bonds, Ensuring That They Will Get Hit Hard When Portugal Defaults.
The title is self explanatory, but expound I shall. Before we get to
the big boy media's "year too late" take, let's do a deep dive into how
thoroughly we at BoomBustBlog foretold and warned of the insolvency of
both European private banks and central banks, including the big Kahuna
itself, the ECB! The kicker is that this risk was quite apparent well
over a year ago. On April 27th, 2010 I penned the piece "How Greece Killed Its Own Banks!". It went a little something like this:
Yes,
you read that correctly! Greece killed its own banks. You see, many knew
as far back as January (if not last year) that Greece would have a
singificant problem floating its debt. As a safeguard, they had their
banks purchase a large amount of their debt offerings which gave the
perception of much stronger demand than what I believe was actually in
the market. So, what happens when these relatively small banks gobble up
all of this debt that is summarily downgraded 15 ways from Idaho.
Well,
the answer is…. Insolvency! The gorging on quickly to be devalued debt
was the absolutely last thing the Greek banks needed as they were
suffering from a classic run on the bank due to deposits being pulled
out at a record pace. So assuming the aforementioned drain on liquidity
from a bank run (mitigated in part or in full by support from the ECB),
imagine what happens when a very significant portion of your bond
portfolio performs as follows (please note that these numbers were drawn
before the bond market route of the 27th)…
The same hypothetical leveraged positions expressed as a percentage gain or loss…
Relevant subscription material for BoomBustBlog paying members:
-
Greece Public Finances Projections - Banks exposed to Central and Eastern Europe
- Greek Banking Fundamental Tear Sheet
Online Spreadsheets (professional and institutional subscribers only)
- Greek Default Restructuring Scenario Analysis
- Greek Default Restructuring Scenario Analysis with Sustainable Debt/GDP Limits and Haircuts
Several months later I posted several followup pieces along the same vein:
To Cut or Not to Cut, The Irish Threaten To Play Rough With Those Clippers: Threats of Haircuts Rattle the ECB! Thursday, March 31st, 2011
- A Comparison of Our Greek Bond Restructuring Analysis to that of Argentina Wednesday, May 26th, 2010
- For our professional and institutional subscribers, the Ireland Default Restructuring Scenario Analysis with Sustainable Debt/GDP Limits and Haircuts are available online. All subscribers have access to the Irish Bank Strategy Note which adequately warned before Irish banks dropped 85% in value. The Ireland public finances projections is also available to all paying members.
I also made it very clear that haircuts and restructurings were on the table for Portugal.
- Introducing the Not So Stylish Portuguese Haircut Analysis Wednesday, June 2nd, 2010
- The Truth Behind Portugal’s Inevitable Default – Arithmetic Evidence Available Only Through BoomBustBlog Monday, December 6th, 2010
- The
Anatomy of a Portugal Default: A Graphical Step by Step Guide to the
Beginning of the Largest String of Sovereign Defaults in Recent History Tuesday, December 7th, 2010 - The ECB Loads Up On Increasingly Devalued Portuguese Bonds, Ensuring That They Will Get Hit Hard When Portugal Defaults Monday, January 10th, 2011
The last
bullet point is the kicker, but before I expand upon that, let's look at
what loading up on Portuguese bonds felt like back then. These
Bloomberg screen shots provided by Zerohedge tell the story in an instant:
Same thing for Ireland:
And below
are the three horsemen of the Eurocalypse. Ironically the bond market is
offering a far higher yield for ultra short-term Portuguese than Irish.
I pulled
the covers off of the speculation over whether Portugal would default or
not. Most of the “experts” declared that a default was not in the
cards. I strongly recommended that the so -called “experts” pull out a
calculator and run the math. Not only will there be defaults, but the
haircuts will look particularly nasty. SeeThe Truth Behind Portugal’s Inevitable Default – Arithmetic Evidence Available Only Through BoomBustBlog followed by
The Anatomy of a Portugal Default: A Graphical Step by Step Guide to
the Beginning of the Largest String of Sovereign Defaults in Recent
History (December 6th & 7th, 2010). We find the ECB Throws Portugal a Temporary Lifeline, but just as with Greece and Ireland, that faux lifeline will simply not be enough in the real world.
We consider serial defaults to be a foregone conclusion
The harder question is to determine which direction and it will originate from and when.
I will mathematically determine if the European safety net that was
formed is even physically possible of containing the threat. On that
topic, and back to CNBC:
The
toughest item on that agenda is the strengthening of the financial
backstops because of German resistance to increasing the size of the 440
billion euro European Financial Stability Facility, EU sources say.
Berlin has also opposed allowing it to be used more flexibly to provide
standby credit lines or to buy government bonds or fund bank
recapitalization before a country hits the buffers.
Portuguese
Prime Minister Jose Socrates said last Friday his country had no need
of outside assistance because it was ahead of schedule in reducing its
budget deficit.
Socrates,
who heads a minority socialist government, is stubbornly avoiding a
bailout, mindful of the traumatic history of Portugal’s two
International Monetary Fund rescues since its return to democracy in
1974.
The Mathematical Truth Concerning Portugal’s Debt Situation
Before I
start, any individual or entity that disagrees with the information
below is quite welcome to dispute it. I simply ask that you com with
facts and analysis and have them grounded in reality so I cannot right
another “Lies, Damn Lies, and Sovereign Truths: Why the Euro is Destined to Collapse!“.
In other words, come with the truth, or at lease your closest
simulacrum of it. In preparing Portugal’s sovereign debt restructuring
model through maturity extension, we followed the same methodology as
the Greece’s sovereign debt maturity extension model and we have built three scenarios in which the restructuring can be done without taking a haircut on the principal amount.
- Restructuring by Maturity Extension – Under this scenario, we
assumed that the creditors with debt maturing between 2010 and 2020 will
exchange their existing debt securities with new debt securities having
same coupon rate but double the maturity. Under this type of
restructuring, the decline in present value of cash flows to creditors
is 3.3% while the cumulated funding requirements and cumulated new debt
between 2010 and 2025 are not reduced substantially. The cumulated
funding requirement between 2010 and 2025 reduces to 120.0% of GDP
against 135.4% of GDP if there is no restructuring. The cumulated new
debt raised is reduced marginally to 70.6% of GDP from 72.2% of GDP if
there is no restructuring. Debt at the end of 2025 will be 104.8% of GDP
against 106.1% if there is no restructuring - Restructuring by Maturity Extension & Coupon Reduction – Under
this scenario, we assumed that the creditors with debt maturing between
2010 and 2020 will exchange their existing debt securities with new debt
securities having half the coupon rate but double the maturity. The
decline in the present value of the cash flows is 18.6%. The cumulated
funding requirement between 2010 and 2025 reduces to a potentially
sustainable 99.5% of GDP and the cumulated new debt raised will decline
to 50.1% of GDP. Debt at the end of 2025 will be 88.6% of GDP (a
potentially sustainable). - Restructuring by Zero Coupon Rollup – Under this scenario, the debt
maturing between 2010 and 2020 will be rolled up into one bundle and
exchanged against a single, self-amortizing 20-year bond with coupon
equal to 50% of the average coupon rate of the converted bonds. The
decline in the present value of the cash flows is 17.6%. The cumulated
funding requirement between 2010 and 2025 reduces to 100.1% of GDP and
the cumulated new debt raised will decline to 52.8% of GDP. Debt at the
end of 2025 will be 90.9% of GDP (a potentially sustainable).
We have
also built in the impact of IMF/EU aid on the funding requirements and
new debt raised from the market between 2010 and 2025 under all the
scenarios.
A more realistic method of modeling for restructuring and haircuts
In the
previously released Greece and Portugal models, we have built relatively
moderate scenarios of maturity extension and coupon reduction which
would be acceptable to a large proportion of creditors. However, these
restructurings address the liquidity side of the problem rather than
solvency issues which can be resolved only when the government debt
ratios are restored to sustainable levels. The previous haircut
estimation model was also based on the logic that the restructuring of
debt should aim at bringing down the debt ratios and addition to debt
ratios to more sustainable levels. In the earlier Greece maturity
extension model, the government debt at the end of 2025 under
restructuring 1, 2 and 3 is expected to stand at 154.4%, 123.7% and
147.0% of GDP which is unsustainably high.
Thus, the
following additional spreadsheet scenarios have been built for more
severe maturity extension and coupon reduction, or which will have the
maturity extension and coupon reduction combined with the haircut on the
principal amount. The following is professional level subscscription
content only, but I would like to share with all readers the facts, as
they play out mathematically, for Portugal. In all of the scenarios
below, Portugal will need both EU/IMF funding packages (yes, in addition
to the $1 trillion package fantasized for Greece), and will still have
funding deficits by 2014, save one scenario. That scenario will punish
bondholders severely, for they will have to stand behind the IMF in
terms of seniority and liquidation (see How the US Has Perfected the Use of Economic Imperialism Through the European Union!)
as well as take in excess of a 20% haircut in principal while suffering
the added risk/duration/illiquidity of a substantive and very material
increase in maturity. Of course, we can model this without the IMF/EU
package (which I am sure will be a political nightmare after Greece),
but we will be recasting the “The Great Global Macro Experiment, Revisited” in and attempt to forge a New Argentina (see A Comparison of Our Greek Bond Restructuring Analysis to that of Argentina).
Here is
graphical representation of exactly how deep one must dig Portugal out
of the Doo Doo in order to achieve a sustainable fiscal situation. The
following chart is a depiction of Portugal’s funding requirements from
the market before restructuring…
This is the same country’s funding requirements after a restructuring using the same scenario “4″ described above…
And this is the depiction of new debt to be raised from the market before restructuring…
And after
using the scenario “4″ described above… For all of you Americans who
remember that government sponsored TV commercial, “This is your brain on drugs. Any Questions?“
The full spreadsheet behind all of the calculations, scenarios, bond holdings and calculations can be viewed online here by professional level subscribers. Click here to subscribe or upgrade.
... Now back to the present day...
So, More Than A Year After I Sounded the Alarm About Insolvent
Central and Private European Banks, I See the Following Headlines in the
Mainstream News
Look at what's been floating in the news yesterday...
Financial Times: ECB firefight leaves it exposed to Greek shock:
As eurozone politicians scramble to bring Greek public finances
back under control, the question of how much the European Central Bank
will lose if they fail to avert a default has taken on greater
importance.
In
the past year, the ECB has bought €75bn ($110bn) in government bonds
from the eurozone’s weakest economies and provided unlimited liquidity
to their banks against collateral of declining quality. The suspicion in
eurozone capitals, especially Berlin, is that ECB opposition
to a debt restructuring is so vehement because the financial
consequences for the euro’s monetary guardian would be substantial.
“Hefty losses for the ECB are no longer a remote risk,” warned Open Europe, a London-based think-tank, in a report on Monday.
It estimates the ECB has €444bn in exposures to Spain, Italy,
Portugal and Ireland, as well as Greece. “There is a hidden – and
potentially huge – cost of the eurozone crisis to taxpayers buried in
the ECB’s books.”
Here's another one - European Banks’ Capital Shortfall Means Greece Debt Default Not an Option, as excerpted:
A failure by European regulators to make banks raise enough
capital to withstand a sovereign default is complicating efforts to
resolve Greece’s debt crisis.
The “fragilities” of Europe’s banking industry mean a Greek
default isn’t an option, European Union Economic and Monetary Affairs
Commissioner Olli Rehn said in New York
last week. By delaying a decision some investors consider inevitable,
policy makers risk increasing the cost to European taxpayers and
prolonging Greece’s economic pain.
“European officials are trying to buy time for the troubled
economies to get their house in order and the banks to be strengthened,”
said Guy de Blonay, who helps manage about $41 billion at Jupiter Asset
Management Ltd. in London.
While estimates of the capital shortfall vary, the vulnerability
of European banks to a sovereign shock isn’t disputed. Independent
Credit View, a Swiss rating company that predicted Ireland’s banks would
need another bailout last year, found in a study to be published
tomorrow that 33 of Europe’s
biggest banks would need $347 billion of additional capital by the end
of 2012 to boost their tangible common equity to 10 percent, even before
any sovereign default.
Here's a newsflash for all of you who are still not grounded
in reality. The loss to the banks have already occurred it just hasn't
been officially recognized. You see, their bond and debt holdings are
already devalued. The value is gone, vamoosed, disappeared.
Waiting makes things worse because the excessive austerity measures
imposed upon Greece (and every round of negotiations to appease the
political gods makes things that much worse) are very recessionary and
the debt noose is tightened with every proposed bailout. More debt is
being added (problem) when the path to recovery is less debt (solution).
It's really just that simple. The longer the asset holders wait under
these recessionary austerity measures smothered by increasingly
excessive debt, the less said assets will be worth. Those of you who
regularly read me know this song, I've been singing it in American
English to the stateside banks regarding real estate assets:
- Reggie Middleton’s Real Estate Recap: As I Have Clearly Illustrated, It’s a Real Estate Depression!!!
- There’s Stinky Gas Inside Of This Mini-Housing Bubble, You Don’t Want To Be Around When It Pops!
- The Residential Real Estate Week in Review, or I Told You We’re In A Real Estate Depression! The MSM is Just Catching Up
- Reggie Middleton’s Real Estate Recap: As I Have Clearly Illustrated, It’s a Real Estate Depression!!!
- Dexia
Sets A $5.1bn Provision For Loss On Trying To Sell The Same Residential
Real Estate Assets Upon Which JP Morgan Has Slashed Provisions 83% to
$1.2bn from $7.0bn
So fail to recognize your losses if you wish, you will just have bigger losses to recognize when the European fat lady sings :
- For Those Who Failed To Heed My Warnings On Portugal, Visualize The Contagion That Causes European Bank Failure!!!
- With Greek Debt Yielding 20%+ and Trading at Half Par Value, European Banks Are Trapped!
And from Professor Rogoff of "This Time Is Different: Eight Centuries of Financial Folly" fame, in the FT.com:
Yet if the euro is torn by centrifugal force, perhaps because
European leaders are constitutionally incapable of making tough
decisions on how to radically trim periphery debt burdens, it could take
a great many decades before any other region attempts a similarly
ambitious programme. The 1980s and 1990s taught us that for countries
with open capital markets, fixed exchange rates are a mirage that cannot
be indefinitely sustained. If the euro goes the way of the Argentine
currency peg, the noughts and tens – the first decades of the 21st
century – will be viewed as teaching the same lesson about more radical
currency marriages. Sovereignty and currency co-habitation do not mix.
Oddly, the euro was not at the heart of the recent financial crisis.
Only Spain can really be described as an epicentre country, and of
course the US and the UK had far greater systemic importance. Rather,
the sovereign debt crises that Europe is experiencing today are a
typical aftershock of a deep financial crisis. Nevertheless, even if the
euro system was not at the heart of the crisis, it needs to be able to
withstand two standard deviation shocks.
From Open Europe via ZeroHedge: ECB Has €444 Billion PIIGS Exposure, A 4.25% Drop InAsset Values Would Bankrupt European Central Bank
"The ECB’s attempts to paper over the cracks in the
eurozone may have temporarily softened the impact of the crisis, but
have exacerbated the situation in the long-term. The ECB has dug itself
into a hole and now we are seeing that there is no easy way out.”“Huge risks have been transferred from struggling governments and
banks onto the ECB’s books, with taxpayers as the ultimate guarantor.
There’s a real risk that these assets will face radical write-downs in
future with eurozone governments and banks teetering on the edge of
bankruptcy. This amounts to a hidden – and potentially huge – bill to
taxpayers to save the euro.”“The ECB’s wobbly finances and operations to finance states have
landed a serious blow to its credibility. It must now seek to become the
strong, independent bank that electorates were promised when the Single
Currency was forged.”
Requisite video viewing on this topic...
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Can't bring an end to the EU sham and its unelected Marxist-Fascists fast enough
...unlike the Apple v Google debate where there's only one clear winner (and Reggie ain't on it) this America v Europe who is down the toilet first is neck and neck
...never under-estimate Americas "friendly fire" record and ability to shoot up their allies and themselves faster than the enemy... you've got Geithner and Bernank afterall, epic world class cowboys
Reggie you made bold calls that look increasingly accurate.
I hope you get to go back on cnbc when greece " voluntarily reprofiles."
If the Eurozone had the power to launch a Marshall Plan of their own they could invest massively in Greece in Desertec type new energy projects and infrastructure and move some productive capacity for MENA and Turkey markets to them through greek affiliates. Greece has high sun/wind potential for renewables. There is much growth in coming years in these regional markets around the oil patch. With Chinese tie-ups they could secure the Greek situation via higher productivity gains as labor is cheap and will stay so until this debt crisis is resolved.
But all this requires a Marshall plan and infrastructure investment in MENA and Greece. Only the Chinese and ME oil countries have these resources. It could start a roll in EU...Brazil could come in for Portugal...the tie-in there is obvious as Portuguese companies could help develop Brazil for EU investments, as they are low cost and Portuguese affiliates could spear head German tie-ups into Brazil. Same for Spain and rest of South America, like Venezuela and Chile. But there again, EU does not act coordinated. Its every nation state for itself. This has to change. If this pain teaches us that it could be a good lesson for future.
You are right in principle but Chinese (orBrazilian) white knights cannot make workers out of chronic slackers and coffee-house frequenters, nor prevent the governments from recreating bloated and parasitic armies of public employees, like the hospital that has 30 gardeners but no garden (for all I know they are still drawing their paychecks). You cannot make a leopard change its spots.
Lol, Jack, empty stomachs are known to work wonders. Also, Its the state sector which is slack. The average greek small guy is like the diner owner in NJ; he works very hard! It is time that the Greeks, and all southern europeans got their act together... in terms of getting state side lean and organised. It has to come as in MENA and all Africa...but it'll take time. Should be easiest in Europe where its easy to cut and paste organisational methodologies from say Sweden to Greece. Its the same level of culture...those guys in Greece/ Portugal are not dumb. I've worked/lived in both countries. It's the Oligarchical culture, social vertical culture, that makes government a closed club of corrupt Oligarchs who use taxes to cheat the nation and help their private sector buddies. The small guy in government just falls along and lives off the bread crumbs. But this beast just grows and feeds itself. It needs to have its Oligarchic heads chopped off; not its feet. This has to change...but its true also in the USA...this crony culture within high level government and top echelons of private sector. We are moving backwards in civil values in the West. That is the real killer : value change for the worse!
Vamoosed isn't a word, is it? Your point is a good one, and it applies to US banks' REO holdings, the value is already gone its just not recognized. Perfectly legal, augh. But you said that.
Chickens coming home to roost indeed! And not just for the euro gangsters but the Amerikan banksters as well!
Reggie looks like the GOOG you have been touting all the way up in the $600's is about to sprout a $400 handle.
Notice that we are talking about countries with borders in what is supposedly a "unified" currency.
The politicians and people of each nation are still acting on national interests, not Euro interests or European interests.
When this happens there is always a divorce or someone leaving the party.
Reggie, I'm dismissing you for being sensationalist for claiming to being dismissed as sensationalist about the ECB's solvency.
Why do you always write everything from the perspective of a vicitim of a personal attack?
Please show me where this attack occurred, as I can't imagine anyone other than a troll or two here making claims that the ECB is solvent.
Your victim complex seriously detracts from your otherwise excellent work. Please take my criticism constructively, instead of using it to reinforce your persecuted status (as I've watched you react to others who've tried).
That said, I'll leave you alone now, as your information is not worth enduring its presentation.
if you have ever seen reggie on tv, you will see that is an incredibly humble man, i think that he just engages his alto ego when blogging. but i don't mind too much cos his analysis is so solid
It's too bad it has to happen like this, as it in no way aids any cause he chooses to pursue. It reminds me of the egotistical chest thumping that is all too common in sports.
I'm of the opinion that one's performance should speak for itself. Otherwise, what's the point of trying to be a professional?
The question isn't "are they solvent" - that's the deception in which you're engaged.
The question is, "to whom are they allegedly in default?"
You don't ask that question, either because you don't know the answer, or because you do. What you do know, however, is who writes that paycheck of yours.
Umm... I didn't ask any question (I'm well aware there is no such thing as a solvent bank). Were you meaning to reply to Reggie?
Oh, and one other point. It is insulting to your readers for you to constantly tell them how you've discovered that the sky is blue. Which I guess is why I find your presentation so irritable.
Reggie's stuff is incredible. But it's all fictitious - it has no connection to the real world.
Zero the garbage out and start over with something different. Bottom line: White Capital can't keep skull-fucking the planet.
Reggie should be doing serious work; instead he's going for the money.
White capital? WTF?
Fictitious debt? Really?
Does this mean my U.S. tax dollars don't have to go the the ECB via the IMF anymore?
Does this mean we can shut down all our military bases in Europa and stop wasting my tax dollars there too?
"Zero the garbage out and start over with something different. Bottom line: White Capital can't keep skull-fucking the planet."
Your words are very poetic but poetry apart we all start with reality. If you feel reality is garbage then we can zero it out...we have something different left : its called a void. Bottom line : your poetry is fine but your reality is not mine. You can keep your own garbage. I hope the ECB will not dump theirs on me!
But I'm sure they will! ...And all RM is saying, is...that the numbers say its going to happen... as the numbers get worse every day! It's not Reggie's fault. But maybe there is a way of "nuking" reality ...as that guy says in the first post.
"Gold dust and we'll adjust singing 'hey presto'...". I love it! Doesn't make it reality though!
You consider the Banker-Gangsters sacrosanct, and I don't - that's the bottom line. The earth would keep spinning if they weren't around.
And before long things would be better than they are now.
The ECB is WHOLLY OWNED by the Banker-Gangsters - don't blame real people, or even governments, for their actions. This is propaganda.
I wonder if Reggie appreciates how real people - mostly Black and Brown people - get torn apart and destroyed, fueled by the fictitious paper-games on which he's made a name for himself. One sure as hell wouldn't know from his blog.
I'm fairly certain that most Irish are not Black or Brown.
And, with each passing year, humanity is becoming more Dingo and less purebred.
Why r u pontificating about morality when the whole thrust of this article is about MATH and statistics. Can you reason or is your head somewhere where its hidden from daylight. Amen. Peace on your brain. I hope its not lying in a drain.
Don't poke at shadows like a righteous soul who can't tell fact from emotion.
what
Love Reggie's stuff, in-depth analysis and sensible conclusions. The layout of the research could use a little work though.
Looks like the path of least resistance is for both the US and Europe to be more like Japan.
...and let themselves blow up
they should hire you as consultant to the future finance minister of EU zone who will have to restructure ECB and EU financial and fiscal policy, once the crisis reaches its peak. But that will be in 2013 as everybody wants to kick the can until after election time USA : 11/2012 (as 5/2012 in France). The whole thing is so wrong it can't be set right. It will have to burst and with it the two tier EU restructuring...but nobody wants to say that openly...That's politics for you. Meanwhile the Oligarchs will fart ass their way, knee jerking short term currency/interest arbitraging wars to doom and bust in the West...They know nothing else.
What about a commodity led Bretton Woods type deal with banning of all naked derivative plays and eliminating all shadow banking deals by GS reinforced and regulated world wide. Now that would be something that no Oligarch will endorse...but maybe his dead corpse will!
I'll consult for free!
After gold becomes the defacto wealth and reserve asset again, some paper currencies will be used for a while still of course, but with the advent of bitcoin for digital transactions and soon no doubt more, the need for central "banked" multiple local and national currencies will probably diminish in the coming decade or so.... as do exchange rates between people of different regions diminishes with all electronic p2p trade, similar to the euro now, but electronic and without trace or taxation in the case of bitcoin.
The need for a managed policy as such, would diminish after such a freegold event I would have thought? Then I would use the opportunity to introduce the venus project to as many of them upstairs as possible and try and get them to base all future decisions of the EU following the doctrine of a resource based economy and peer reviewed scientific evidence...and I bet bitcoin would fit right into that sort of economy...or something like that.
The Euro will be fine. Stop your whinging Reggie.
Greece is but a pimple on the backside of places such as California and the other bankrupt US states..... That is where the real danger lurks.
The Euro was made knowing the USD was already in a nosedive to zero and it is only the US and UK media shills screaming about Greece and the so called PIIGS that is propbably keeping the USD from collapsing!
The EURO also has the "nuclear option" as so eloquently described by FOFOA in:
http://fofoa.blogspot.com/2010/05/open-letter-to-emu-heads-of-state.html
that can/could/will be employed to save the Euro....
"The Euro will be fine."
Please explain your definition of "fine".
I guess fine as in a) The quarterly mark to market party, and b) The Euro is like Hotel Carlifornia.....Check out, but you can never leave.....
But it will indeed be the captains (esses) that will probably capsize it unintentionally (!) by running around like headless chickens rather than kicking out the bankers and ushering in freegold to balance out the financial system. or something like that....
Famous last words as the entire great ship sinks...
had the same image
It's not the boat, it's the captains