Will the Grexit be Euro positive, or Euro negative?

hedgeless_horseman's picture


Will the Grexit be Euro positive, or Euro negative?

Place your bets, ladies and, uhm, err, "gentlemen."


What is my thesis? Short term Euro positive...long term very Euro negative as the other PIIGS are slaughtered, as and when needed, by the American/British Treasuries covering money printing operations...




Germany, like Japan, are post-war pawns. Their currencies are DESIGNED to be debased, as and when needed, to achieve synchronized diving with the pound and dollar. If Germany wasn't in the Euro, its prior experience with hyper-inflation would prevent it from debasing when instructed to do so (obviously not a problem with the Nips).  Both countries go along as willing pawns simply because they have been re-created post-war as export nations totally reliant on weak currencies.

The PIIGS profligate spending has ALWAYS been there, like a fat store, and can be used by the brain when needed to feed the body.

What say ZeroHedge?


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Bubbles and Busts's picture

Agree on the basic outlook. Initially it is positive for the Euro since the weakest member is being kicked out. After the dust settles, other countries will start to really consider leaving the Euro. This may force Germany's hand to approve of significantly more stimulus or give consideration to a German exit...both which seem decidedly negative for the Euro value. 

ISEEIT's picture

What falak said only more.

It is in the air. I truly sense people waking up.

Bullshit is losing.

hedgeless_horseman's picture



What game are you watching?  Bullshit is kicking our asses.

Salt's picture

All FIAT (~non-backed) currencies are meant to be debased. There's no rational for them but for that.

Joebloinvestor's picture

If the Greek exit isn't positive then the EU is really fucked up.

How can getting rid of lying deadbeats be negative?

hedgeless_horseman's picture



How can getting rid of lying deadbeats be negative?

The EZ is perched atop a very slippery slope.  If one goes, the next PIIGS will follow.  If they get rid of ALL of the lying deadbeats, then there will not be much left to be positive about. 

ebworthen's picture

On the Euro issue:

Yes, the U.S. and U.K. will try to cover ECB money printing with currency swaps and shadow liquidity.

However, they cannot fix increasing nationalization and the rush to exit the Euro for more favorible native currency devaluation and default by PIIGS.

As calls for austerity are rejected by citizens, the Eurozone will slowly fall apart.

I believe France will hang on to the bitter end; it is Germany who has the best reason to return to the Deutschmark and end the Euro experiment.

LowProfile's picture

From http://www.caseyresearch.com/cdd/lacy-hunt-bang-point

"Right now, we're on a bad path. We're heavily indebted, but the Europeans are more indebted. The Japanese are more indebted. And so the dollar is getting a bid, not because of anything inherently good that we're doing, but because the situation is worse in a lot of other critical areas."


Mr Lennon Hendrix's picture

I am writing an article on my blog that is going to explain why the last STate standing in the Euro will retain all of the ECB gold, and why that was The Plan all along (to get gold as collateral to use the Euro and then kick everyone out).  Another idea by me first.


PS, Tyler is a Space Monkey

fredquimby's picture

No Greek exit from using the Euro (as there is nothing else to use).

Specs turn to the GBP when they realize the gold "backing" of the EURO is making the euro unbreakable.

GBP then crucified, then specs turn to the USD, USD then crucified.

Gold and the EURO then conquer the world with their new friend Mr. Yuan

ebworthen's picture

OMFG!  Turn on CNBC and two shills saying the Greek exit IS ALREADY PRICED IN.

DOW 14,000 after the election is "resolved" and that Europe doesn't matter.

"This is a generational buying opportunity."

"The markets have already priced in a Greek exit, Europe is not a problem."


No $16 Trillion in debt, no structural unemployment, no sick-care 'bankrupt yourself for a prescription' problem, no inflation - all fucking sunshine and roses as long as AAPL is above 500 and someone is elected somewhere.

The kleptoligarchy ponzi pyramid adds another stone.

LULZBank's picture

Lehman.. Greece.. bullshit.. Pretexts have to be created and promoted by the help of MSM to provide cover for Money Printing.

Money has to be printed, to fleece the sheep and steal their wealth. That was the whole idea behind the fiat ponzi. If they wanted an honest system, they would have had honest money from the inception.

Just remember, half the time scale and twice the size of money printing everytime to keep the pyramid scheme going, and a nice "collapse" to front run it.

LowProfile's picture

I guess a pop off an EUR short squeeze, then a strong decline until their markets clear via inflation and debt default.  End result is EUR and EUR bureaucracy negative, USD positive.

After that, the EUR rallies against the USD.

hedgeless_horseman's picture



After that, the EUR rallies against the USD.

Until the next PIIGS are brought to the slaughter house, right?  Easy to see how the Giant Squid, or other American firms, could easily kill the next sacrificial lamb all fattened up on debt and ready for butchering.

LowProfile's picture

Exactly, except I see it more as a function of saving the systems by destroying their currencies (as opposed to some "master plan" - I don't think they're all that smart, just greedy and conniving).

Eventually I see the EUR as ascendent over the USD as a transactional currency (and superior temporary store of wealth), competing with perhaps the RMB (assuming it adopts partial MTM gold reserves).

Bahamas's picture

One blow to the dollar (2008...Lehman Brothers) and one blow to the euro (2012 Greece)...the 2 currencies will both collapse and sheeple will welcome the saviour currency SDR.

Bahamas's picture

The SDR will emerge from the fiat bonefire like a phoenix ..or Hiram.


GeneMarchbanks's picture

We're in a period of currency wars, all fiat is therefore a potential weapon. If you're asking whether all currencies will submit to being debased on US command, I doubt it since the FED is a shared tool for Chimerica.

Both countries go along as willing pawns simply because they have been re-created post-war as export nations reliant on weak currencies.

What you're really referring to is a kind of neo-mercantalism not some conspiracy.

The Kabuki known as 'Grexit' is a sideshow distraction in comparison to how exactly a new BW type system will be initiated.

hedgeless_horseman's picture



...all currencies will submit to being debased on US command...

Any potential competitors to the petrol dollar really have little choice.  The Economic Hitman has been replaced with rating agencies, CDS "markets", and bailout funds waiving easy-money carrots-on-sticks that all politicians must follow.

Tippoo Sultan's picture

Frankly, I dispute the premise, as Brussels ultimately will not allow Greece to exit the euro. Germany and France will not stand by as their banks are sheared in the event of a Greek withdrawal.

Brussels will place Greece in a firm of protector/receivorship, with Athens retaining nominal control of its internal affairs - quasi-federalism, if you wish - yet, the fiscal strings will stretch to Belgium, and the KBA-GIORI presses - memories of 1923 regardless - shall print.

Impotent_Smurf's picture

I agree, Sultan. If Greece goes, then so do the banks that lent them the money. Can't happen, they'll bailout that cess pit until the printer breaks.

hedgeless_horseman's picture



Brussels ultimately will not allow Greece to exit the euro.

If true, then Brussels better pray to God the Greeks never learn of this.

GeneMarchbanks's picture

At this point the discussion turns geo-political and I'd say that always devolves into a strange kind of shouting match on these boards. So anyways...

The petrobuck is no longer the tool of one monopoly but a duopoly. Incestuous corporate deal making has basically created a kind of weird Hermaphrodite where 'US' corps have basically adopted a Chinese approach while the Chinese have become essentially the largest corporation on Earth. Wonder why their banks are opening US branches?

easy-money carrots-on-sticks that all politicians must follow.

No one, even politicians, must do anything. Truth is politicians wield no real influence swimming inside a sea of bureaucracy.

I think you're describing what has worked up until now and not what is happening presently. Just look at the Correa interview with Assange.

Ghordius's picture

Hedgeless Horseman, a few corrections:

1. Germany, Japan, Italy, etc. (i.e. the losers of WWII) are not pawns. They are allies. Together with the victors. Of course this would be more evident if the Military-Industrial Complex in the US would not lobby since the 50's for more lopsided expenditures and for less allied activity, for which the very best example is the way France and Britain where forbidden from invading Egypt in 1955.

2. Their currencies where not designed to be debased at will, this was a long historic process that first brought King gold-backed Dollar (for foreigners only) to take over from the British Pound and then the August 1971 "it's your problem" de-facto-default. To this, and to the failure of keeping speculation away from the currency grid, the solution was born: the EUR. This is the currency that can be debased at will vs. the Pound and the Dollar - and still achieve some continental price stability.

3. The PIIGS profligate spending? Compared to what? The US deficit pattern for the next five years? Greece is a special case anyway, Ireland is in this group only because of the bailout of AngloIrish bringing debt from 60% to 120%,  the Portugal & Spain "crisis" is due to the housing debacle there and the centerpiece Italy has the same debt levels as frigging 40 years ago.

I like your brain-fat analogy.

Ghordius's picture

By the way, while talking about the PetroDollar, what is the ZH opinion of why we (NATO) still are in Afghanistan? And don't mention the frigging Talibans or the Al Quaida.

Hint: It's pipelines. Have a look at the map and connect the newest biggest oil consumer with it's favourite source.

Ghordius's picture

very deep thought there, "'US' corps have basically adopted a Chinese approach while the Chinese have become essentially the largest corporation on Earth". It reminds me how the US political system reacted to the first Chinese contributions to political parties and campaigns during the Clinton era.

But to the original question: Greek Exit from the EUR?

1. too early. way too early. Just as a reminder, the Greek President has just dissolved parliament for lack of a majority and the caretaker PM he has chosen is for all purposes the best Germanophile (and most levelheaded judge - not banker or central banker) he could find. Don't see those two doing something rash at this moment when there is no Parliament in session and new parliamentary elections in June. And by August/September we might have a new crisis somewhere else.

2. The SYRIZA leadership is at the moment in Germany busily telling everybody that they don't want to exit the EUR, they just want a better bargain.

3. Popular will: (I know this will enrage all those that believe that popular will has no value anymore and anywhere) I repeat, the Greeks still answer polls about keeping the EUR with a resounding yes, first 60% two years ago, then 70% last year and just shortly 80%.


IMHO it's pure speculative empty talk. But it helps the King. Long live King Dollar, of which the EUR is only the favourite concubine (though being a fickle girl this relationship is not necessarily 'till death does part - the 1971 divorce from gold still hurts).

Meanwhile I'm told that in the UK honest bookies have stopped taking bets on Greece leaving the EUR, popular British sentiment about it being so lopsided...

LowProfile's picture

One thing I don't understand is why is it an either/or with the EUR/Drachma?

Why not BOTH..?

IMO, it makes sense.

Ghordius's picture

well, the textbook answer is that "bad" money drives "good" money away

but you are right, the Greeks would use the Drachma for paying taxes etc. and the EUR for a lot of other purposes the same way they used Drachmas, CHFs and DEMs before the introduction of the EUR

the big question is the denomination of debt, the old and the future

LowProfile's picture

As "debts that can't be paid, won't", I think they get paid in drachmas.

Agent P's picture

Short-term Euro positive...medium-term Euro negative...long-term Euro dead.

falak pema's picture

It will be Pax Americana negative; as the ponzi will be further exposed to the bone. The outer rings cave in and the inner core becomes exposed to people's ire. This thingie of NWO outsourcing and financialised binge, stripped of its surrogates, when you reach the gates of Rome, is now awesome in its naked convolution. No head no tail and just Oligarchs with their heads up their tail ends. If the USD tanks, and it will as only the NON Empire players are now hard asset positive, not drowning in irredeemable debt, it will mean the end of ponzi and maybe the end of capitalist Rome as we understand it today. A whole new world will have to emerge from the rubble. 

But before we get there the showdown at OK corral is between Oligarchy and Republican Democracy in first world; as the PAx Americana construct has morphed to the point where its ONE or the OTHER; not both. 

Watch out for those outside the Empire who now hold the keys to inside the coffers of Fort Knox. 

valkir's picture

As usual,Grexit will be possitive for banksters,and negativ for taxpayers.

Mr Lennon Hendrix's picture

You are all Space Monkeys.  Including Tyler.  You are all my Space Monkeys.  I own you all.  If you do not join me, you are against me.

Buy silver or die.