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Euro Risk Due To Possible Return of Italy To Lira - Drachmas, Escudos, Pesetas and Punts?

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Euro Risk Due To Possible Return of Italy To Lira - Drachmas, Escudos, Pesetas and Punts?

The European status quo and EU elites are becoming increasingly concerned by popular calls in Italy for Italy to leave the European Monetary Union and the euro "as soon as possible" and return to the lira. 


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Beppe Grillo, the leader of Italy's Five Star Movement has shocked EU elites by launching of a non-binding consultative referendum on the matter which will be put before the parliament.
 
"We will collect half a million signatures in six months – a million signatures – and we will take our case to parliament, and this time thanks to our 150 legislators, they will have to talk to us” the Telegraph reports Grillo, the popular comedian and increasing popular politician as having said.
Italy's Five Star Movement has thrown down the gauntlet and believes that a return to the lira may be the only way to end the economic depression and indeed save Italian sovereignty and indeed democracy.


Italian Lira

The movement, for whom 25% of Italians voted in last year's general election, and a further 21% in this years European elections, appear to be upping the ante following the failure of the the EU bureaucracy and the ECB to acknowledge demands, last May, for the creation of Eurobonds to support the Euro and the abolition of the EU fiscal compact.

Both measures are staunchly opposed in Germany. They see the creation of Eurobonds as a means to make Germany responsible for the borrowing of struggling peripheral nations.


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Peripheral nations such as Italy, Greece, Spain, Portugal and Ireland argue that they should not be made carry the entire burden of a problem caused, at least in part, by their participation in the monetary union. 

The customary method of devaluing a sovereign currency in order to make their exports more competitive is not open to them.

The fiscal compact requires that Eurozone states keep a balanced budget. According to Ambrose Evans Pritchard, the respected  International Business Editor of the Telegraph, the ”Fiscal Compact is economic insanity. It would force Italy to run massive fiscal surpluses for decades. These would cause an even deeper depression, pushing the debt ratio even higher, and would therefore be scientifically self-defeating."

While it is still early to speculate on the outcome of this process, it is worth considering the implications of the fifth largest economy in Europe jettisoning the Euro.

At the height of the Euro crisis in early 2012 it looked possible that the entire monetary union project might rupture as the interest yielded on the bonds issued by the more vulnerable states began to soar. This has begun to happen again in recent days and Greek bonds have seen a new vicious sell off and 10 year yields have soared to nearly 9% (see below).

That is, investors in the bond markets had come to regard the bonds of Italy, Greece, Spain and others as high risk investments and required a much higher rate of return to compensate for this risk.


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At that time, talk of the creation of a Eurobond was rife but the Germans held fast. It was looking as though these struggling countries would be forced to leave the euro until, at the eleventh hour, ECB governor Draghi stepped in, in July 2012, and announced that the ECB "is ready to do whatever it takes to preserve the euro." 

This was interpreted to mean, among other things, that the ECB would buy bonds of struggling countries if necessary. Without Draghi having to actually do anything, risk was regarded as having been removed, at least temporarily, from the system and there has been a relative calm and confidence in the viability of the single currency since then.

But crisis seems to be surfacing again as seen in the sharp increase in volatility and decline in stock markets and certain bond markets in recent days and again today.

For many Italians, the slow grind of depression has tested their patience beyond endurance. Youth unemployment is at an incredible 46% and industrial production has fallen 25%. Many note that, since joining the euro, Italy - once an industrial powerhouse of Europe - has been unable to compete with Germany due to an overvalued currency.

In Greece the effects of Draghi's pronouncements appear to have run their course and now actions may be required. The stock market has retraced around 50% of its gains since the "Draghi put." It is down a sharp 23.65% this year alone.

There are increasing calls in Greece for a return to the drachma – polls show 33% in favour of a return to the Greek drachma at this time.

The fact that it is impossible for Greece to regain competitiveness and recover from depression while clinging to the euro is becoming increasingly evident. Prominent economists such as Nouriel Roubini, as well as investor George Soros have said as much and influential voices in Greece are now questioning the wisdom of clinging to the euro.

Even uber Keynesians and money printing advocates such as Paul Krugman have previously warned of the euro breaking up and Italy returning to the Italian lira and France returning the French franc.

In Ireland, dissatisfaction is not being expressed through euro skepticism. However, there is certainly a sense that enough austerity is enough. 

Up to 100,000 people took to the streets the weekend before last, to protest the introduction of water meters and privatisation of the water supply. This was a very large turnout by Irish standards and may be the start of the Irish public awakening from their recent apathetic slumber.


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Criticism of the EU and ECB remains muted in Ireland. Although, the recent revelations by former central bank head, Patrick Honohan, regarding the manner in which the losses of reckless European banks were foisted onto the Irish taxpayer, is making even the most hardened euro phile somewhat skeptical. Not skeptical of the EU per se but of a policy of blindly accepting unfair and damaging policies foisted on Ireland.

In Spain and Portugal none of the structural problems that led to the crisis have been solved. And with data from Germany suggesting it is entering recession it may be only a matter of time before the eurozone is in crisis mode once again.

Debt levels remains very high throughout the EU.

In this environment, the ECB is in a much more difficult, some would say impossible position, as the panacea of ultra low interest rates can no longer be administered.

In the fifteen years since the introduction of the euro, we have had six years of austerity and monetary hardship.  If Europeans are faced with more of the same it is likely that disillusionment with the euro project will be inflamed. 

It is hard to envisage an orderly breakup of the EMU. Like Cortez - who burned all but one of his ships before marching inland to take on the Aztec empire - turning back was not factored into the architecture of the monetary union. 


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There are now three real scenarios that could play out in the coming months. 

First, is that the German people, politicians and Bundesbank manage to prevent the ECB from embarking on the ‘bazooka’ of Euro QE. Given huge deflationary pressures, this would likely lead to deflation and an economic depression in Europe and globally.  

The second scenario is that Draghi and the ECB manage to overcome German opposition to euro QE or euro debt monetisation and printing. This would lead to the euro being debased and devalued and falling in value versus major currencies and especially gold.

The third scenario is that Italy or Greece opt to leave the monetary union and revert to their national currency. Their new liras and drachmas see sharp devaluations.

There is also the possibility that we see the deflation first and then the euro or national currency devaluations. It is worth remembering that gold is both a hedge against currency devaluation and inflation and also gold is a hedge against deflation.

Gold has no counterparty risk and cannot go default or go bankrupt , unlike companies and governments.

Conclusion

What should investors and savers in European countries do to protect themselves from the risk of currency debasement and devaluations?

The answer remains obvious and can be seen in the charts above. Gold is an important hedging instrument and financial insurance that will protect people from the potential return to liras, drachmas, escudos, pesetas and punts.

These are the types of scenarios where gold comes into it's own as financial insurance and a store of value.

Get Breaking News and Updates On Gold and Markets Here

 

GOLDCORE MARKET UPDATE
Today’s AM fix was USD 1,241.00, EUR 972.65 and GBP 769.71 per ounce.
Friday’s AM fix was USD 1,238.00, EUR 966.89 and GBP 769.61 per ounce.
    
On Friday, gold fell $1.70 or 0.14% to $1,237.80 per ounce. Silver slipped $0.10 or 0.58% to $17.28 per ounce Friday. Gold had a second week of gains and rose 1.2% last week, while silver fell 0.40% after the selling on Friday pushed silver lower for the week. 

Gold in British Pounds - 2 Years (Thomson Reuters)

Gold in Singapore fell initially prior to rising in later trade prior to London opening when prices were capped again. Silver for Swiss storage or immediate delivery gained 0.5% to $17.40 an ounce. Spot platinum rose 1.1% to $1,272.75 an ounce after ending last week little changed. Palladium rose 0.6% to $761 an ounce, after falling 3.6% last week.

Gold has rallied almost 4% in the past two weeks and reached one month high of $1,249.30 last Wednesday. Futures climbed to $1,250.30 on October 15, the highest price September 11. 

The net long position in futures and options jumped 39% in the week to October 14, snapping the longest run of reductions since 2010, according to CFTC data.

While Asian shares rose today, European stocks fell again, following their longest streak of weekly losses in more than a year. Worse than estimated financial results from large companies added to concerns over the region’s recovery.

European equities have led a global rout that erased as much as $5.5 trillion from the value of shares worldwide as concern over the region’s economic recovery re-emerged, amid speculation that the ECB’s stimulus measures would not be enough to spur growth. 

Stocks pared losses today, due to rumours that the European Central Bank bought short dated French covered bonds.

Gold in Euros - 2 Years (Thomson Reuters)

Government bonds from Italy and Spain fell, extending a selloff from last week. Italy’s 10-year rate climbed another four basis points to 2.54% after increasing 17 basis points last week. Spain’s rose three basis points today to 2.19%.

The S&P 500 rallied on Friday, but it still locked in its fourth straight weekly decline. Its longest bearish run in over 3 years, as investors are becoming wary about the fragile global economy, another European debt crisis and the risks posed by the ebola virus and possible contagion.

See Essential Guide To Gold and Silver Storage In Switzerland

www.GoldCore.com

 

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Tue, 10/21/2014 - 07:47 | 5358539 commoncourtesy
commoncourtesy's picture

Germany looks to be doing okay to me if you look at The CIA World Factbook (but I do not understand these Accounts properly). Please will someone kindly explain.

https://www.cia.gov/library/publications/the-world-factbook/rankorder/2187rank.html

I really do not get it. I know we are a debt-based economy (the corporation that is the UK) but how are we even treading above water? Why are we not completely sunk? Are smoke and mirrors that good? Is that Offshore 1 sq. mile place called London (linked to Washington and the vatican) included in these figures?

I really want to learn, please will someone help.    

Tue, 10/21/2014 - 06:19 | 5358426 aleph0
aleph0's picture

The Euro is an instrument of Economic and Political Destruction in order to destroy Eurpean Nation States and FORCE a United States of Europe ( via an Economic Collapse ), commanded by the idiots in Brussels .. of all people !
It is NOT a currency.

Bernard Conolloy documented the FACTS in his book : The Rotten Heart of Europe ... way back in 1995.
He was THE leading EU-Commission Economic Consultant ... until he told the truth in a report he published to the Commission.
The Commission immediately sacked him ... of course ... which caused him to publish it in book form.

His book is highly detailed and the main Theme was to dis-empower the German Bundesbank...
... so that bEUrocrats could spend irresponsibly.

BTW ... has an Audit of the EU books been signed off yet ?
AFAIK  : NO ...  since over 15 years.

PS: The book is ca. 1000 pages.

Synopsis
Aiming to destroy illusions about what lies at the heart of Europe, this book provides answers to questions about European monetary union. The author, who is head of the Commission unit responsible for monitoring and servicing the ERM, offers a portrait of the motives of many Euro-propagandists.

The book addresses topics such as the real motives underlying the Franco-German determination to suck European countries into the monetary union, why the French and Germans are applying intense pressure to recreate an exchange-rate agreement despite the political conflict and economic disarray that its earlier incarnation caused, and how so determined a leader as Margaret Thatcher could find herself forced into submission on the ERM.

http://www.amazon.com/Rotten-Heart-Europe-Dirty-Europes/dp/057117521X

 

Tue, 10/21/2014 - 04:08 | 5358364 BeetleBailey
BeetleBailey's picture

The Euro

A mosh pit of shit, debt, controlled chaos and constant meddling by motherfuckers that have ZERO interets of the PEOPLE it controls.

Whether it stays or goes, I'll trade the cunt...

But it's shite lads....a fucked up, failed experiment, that is simply shite.

Tue, 10/21/2014 - 03:10 | 5358331 Aaronson.Jones....
Aaronson.Jones.Rutherford's picture

Though I wish there was, I can categorically say that there is absolutely ZERO call in Ireland for leaving the Euro. No one is talking about it, no one is thinking about it. The article is so full of conjecture in that regard.

Mon, 10/20/2014 - 20:01 | 5357287 Quantum Nucleonics
Quantum Nucleonics's picture

This is all kinda bogus.  The old European currencies are not traded on any real markets.  Somebody's just pulling these FX rates out of their a$$.

Tue, 10/21/2014 - 02:43 | 5358308 Jano
Jano's picture

conversion rate tables still exist (frozen sate) and are being used in statistics, for example, but not in the real transactions....

so I downvoted u to mark a doubtful statement.

Mon, 10/20/2014 - 21:26 | 5357627 swmnguy
swmnguy's picture

Yeah, I was wondering how they were coming up with that.  Maybe just taking the currencies last valuation, and extrapolating it forward?  As you put it, kinda bogus.  Interesting, but totally hypothetical.

Mon, 10/20/2014 - 19:28 | 5357119 himaroid
himaroid's picture

Whoever lent money to those douchebags deserves to lose it.

Mon, 10/20/2014 - 19:28 | 5357112 AdvancingTime
AdvancingTime's picture

It is ironic and only fitting that Italy is shaped like a boot. In many ways Italy could be viewed as the Achilles heel of Europe. Italy is loved and often the travel destination by many Americans and for good reason, it is downright charming, but it is also the third largest economy of the Euro-zone after Germany and France and yet it holds the largest public debt totaling over 2 trillion euro.

Almost everyone agrees that Italy’s public debt is unsustainable and needs an orderly restructuring to avert a default, but as usual in the Euro-zone no action is happening. More on why Italy may bring down the euro in the article below.

http://brucewilds.blogspot.com/2014/09/italy-achilles-heel-of-europe.html

Mon, 10/20/2014 - 18:34 | 5356890 Comte d'herblay
Comte d'herblay's picture

"and indeed save Italian sovereignty and indeed democracy".

You can only have "democracy" when the people in a given entity retain their vote. 

When you 'elect' to give another entity domination over you, you have used your last democratic vote and democracy ceases to exist. 

Extrapolating that premise to a country's people, when 51% of the people use their last vote to end their democracy, they have essentially stripped 49% of their vote as well.

As sure as Scotland's majority used their last vote to remain without one, by staying in the UK, Italians too, used to the socialism of generations, corruption as endemic as pasta, and scurrilous leaders play them for the fools they are,  they too will not end their alliance with the EU.


Tue, 10/21/2014 - 05:49 | 5358416 new game
new game's picture

cant wait to go to italy and have some slimeball pick pocket me...humans suck ass

Mon, 10/20/2014 - 17:55 | 5356762 limacon
limacon's picture

The only tour they could afford is to see :

https://www.academia.edu/8872647/Non-Aristotelian_Universes

 

Mon, 10/20/2014 - 16:28 | 5356456 limacon
limacon's picture

Some are born ethical , others have ethics thrust upon them 

The tourist trade depends on ethics , a rather delicious irony .

See

https://www.academia.edu/8871698/Ebola_and_Money

Mon, 10/20/2014 - 16:05 | 5356351 THE DORK OF CORK
THE DORK OF CORK's picture

But this is a very old euro story.

I have vivid memories of a Holiday in Glandore in the summer of 1990. (a place where the Cork well  off  do their stuff)

The real  Irish domestic economy was no more after the 80s mini depression (a euro entry event)

 

But the place was full of brand new Mercs  ,Volvos and BMWs

I was awe struck by the sheer decadence of it.

The waste of capital was absurd.

 

This was the start of the irish euro  credit hyperinflation - interrrupted somewhat by the first iraq war and subsequent EMU crisis. 

http://en.wikipedia.org/wiki/Glandore

 

 

Mon, 10/20/2014 - 15:50 | 5356270 THE DORK OF CORK
THE DORK OF CORK's picture

@Bemused

Ireland is German model economy.

It sacrifices basic consumption for more of its capital goods.

The Irish (really German) “growth” success of 2014
New Private car sales Y2013 vs Y2014 Jan – Sep % increase

Volkswagen :24 % increase (top seller in Ireland at 12 % market share)
Skoda : 30 % increase (6.5% market share)
Audi : 14.5 % increase ( 4.5% market share)
BMW :13% increase ( 4.2 % market share)
Merc :42% increase ( 2.2% market share)

There was 10,000 + Mercs , BMWs and Audis sold in Ireland this year already
The equivalent   of  a German second war tank division .

We live within a consumer war economy of enormous scale and scope.
Austerity is the rationing process seen in action

 

http://www.beepbeep.ie/stats?sYear%5B%5D=2014&sYear%5B%5D=2013&sRegType=1&sMonth%5B%5D=1&sMonth%5B%5D=9&x=27&y=11

 

 

Tue, 10/21/2014 - 05:02 | 5358393 SAT 800
SAT 800's picture

So, the people don't recognize that they shouldn't be buying German Cars; bicycles, or irish made motorbikes would be better financially. Shocking statistics. My favorite was Greece buying German Submarines; I'm sure those will come in handy.

Tue, 10/21/2014 - 06:35 | 5358437 THE DORK OF CORK
THE DORK OF CORK's picture

The guys that buy these tanks are generally the system managers in the rentier sector of the economy be they Politicians or in the new water scarcity management sector.

Also many new cars are bought by car rental companies used by tourists and the like.

It again proves the thesies that capitalism is not about creating wealth but concentrating it.

This in a economy where people cannot afford to buy clothes.
Expenditure on clothes and shoes have decreased for each year since 2009 -2013 (millions of euro)
3,627
3,293
3,106
2,984
2,906

 

Mon, 10/20/2014 - 15:00 | 5356046 Bemused Observer
Bemused Observer's picture

You know, for all the complaints by Germany, etc, about the irresponsible spendthrift lesser members, they sure as HELL kick up a fuss when anyone suggests leaving, don't they?

Makes you wonder...I'm pretty sure the Germans aren't doing this out of the goodness of their hearts, so why do they complain? You'd think they'd be GLAD to see the backs of the likes of Greece and Italy...

Because Germany NEEDS those lesser members as a foil. Despite all their economic prowess, they can't compete on their own in this economy. Without those deadbeat members to exert downward pressure, Germany would become too strong to support continued exports, and deflation would make their own debt load too heavy to service.

The Germans would do well to keep that in mind, for all their jawboning about fiscal responsibility. They NEED those lesser members. The lesser members do NOT need them.

Tue, 10/21/2014 - 04:12 | 5358369 Watson
Watson's picture

>>>
They NEED those lesser members. The lesser members do NOT need them.
<<<

I completely disagree.

If the EUR-zone collapsed tonight, all members reverting to old currencies, the following would happen:

1. Germany's DEM would rise sharply, probably causing a recession. Maybe quite a deep recession (though remember Germany's export market is the rest of the planet, not just dud Southern Europe). However since, as you admit, Germany produces stuff that the rest of the world actually wants to buy, they will survive: society will not break down, food and fuel will still be imported, etc. Democracy will continue.

2. Spain, Portugal, Greece (maybe others) will implode. No imported food, no fuel. My guess is military governments within six months...and no early return to democracy. France will be in trouble (lots of spending ambitions but no-one making any money), maybe keeps democracy but New Franc inflates like Old Franc.

Germany's genorosity stems from guilt (drummed in through school) for WW2, despite most in politics now not even born in the period.

The _original_ idea behind EU (Coal and Steel Community, tieing Germany and France together in something that made money) was excellent idea. However Common Market/EU has been feeding trough for politicians for years and is incredibly wasteful (indeed is highly corrupt - when were accounts last audited?).

Germany, if push comes to shove, will pay it's debts in full.
Are you so sure about all the others?

Watson

Tue, 10/21/2014 - 03:59 | 5358355 BeetleBailey
BeetleBailey's picture

Well said Bemused

Mon, 10/20/2014 - 19:44 | 5357201 Razor_Edge
Razor_Edge's picture

Spot on BMusedOb. When Ireland needed higher interest rates as our economy boomed and as property prices began their rise to the stratosphere,  we got low rates, because that's what Deutchland required at the time with their sluggish economy. Those low rates fuelled the property boom, and much of the money which funded that boom came from German banks and investors seeking  a higher return than they could get at home on deposit.

Now when Ireland needs a lower exchange rate, we can't have it, because as you say, a breakup of the Euro would see a reborn Deutchmark soar, which wouldn't help Helmuts exports at all at all. So it seems to me that Germany needs to Euro, and we need a reborn Irish Punt. What we should be doing is returning to the Irish punt on the original valuation of one Euro to I think it was about .78 or .79 Irish Punts. And as soon as we do this, devalue our currency. 

This is what would be in the interest of the Irish people. As I recall, back in 1992 during the Exchange Rate Mechanism, or ERM, which was a forerunner to the Euro, also called the supersnake,  when Soros broke the Bank of England, Ireland as well as the UK left the ERM and devalued. That was the lowest point for the Irish economy. From that point on, the economy accelerated, leading to the so called Celtic Tiger. And that was a real economic wirtschaftwunder, with annual growth rates of 10-11%. That surging economy continued beyond the dot com crash until after 9/11, when the Fed lowered rates to fuel the property boom in the US and we experienced interest rates set for Germany's benefit, not ours.  That's when the real malinvestment started.

Ireland is a very open economy, and therefore lives or dies by its exports. With a devalued currency, we at least would have some chance of getting this odious debt behind us and exporting our way back to health.  As it was, Ireland, even after the crash, was in very good shape public debt wise. It was only the ECB insistence that no bondholder should go even slightly singed that led to private losers being bailed out by Irish taxpayers. Those losing gamblers were principally German and British banks. And that bailout left Irish public debt close to where it is now, at about 116% - http://www.rte.ie/news/2014/0703/628161-gdp/

See this link for Irish debt/GDP prior to the bailout: - http://oisin.org/2014/10/20/no-the-euecbimftroika-did-not-bail-out-irish...

Yeppers, the ECB and the Euro are doing us no favours. Time for Ireland to grow up and grow a pair. We've been the good little boys and girls, teachers pets for too long. If only we had some half intelligent government officers with even just a modicum of negotiatiating skill, we would never have been in this situation post crash. We held all the aces, and folded in the face of deuces. Now we're just the joker in the pack.

 

 

Tue, 10/21/2014 - 04:57 | 5358391 SAT 800
SAT 800's picture

Or, in a phrase; economic colonialism.  The ECB I view as an attempt to keep French Socialism solvent for a while longer; Economic warfare viewed from Ireland. Very grotty business; in no case should banks be bailed out by taxpayers; this is not capitalism, it's just robbery.

Mon, 10/20/2014 - 22:57 | 5357892 Bemused Observer
Bemused Observer's picture

I like your phrase "This is what would be in the interest of the Irish people." This is what has been missing from the whole Euro experiment...any notion of what the PEOPLE of these very different, unique countries need. And the PEOPLE of each Euro nation have different needs, different economies, different strengths and weaknesses. The Euro imposes ONE standard on all, and it is a standard set by economic powerhouse Germany. Regardless of what may be in the interest of the Irish people, the Greek people, the Italians, etc...

Mon, 10/20/2014 - 14:37 | 5355952 WOD
WOD's picture

Bring back Milton Bradley Monopoly Bucks! Same difference....

Mon, 10/20/2014 - 14:29 | 5355919 ebworthen
ebworthen's picture

Bring back the Deutschmark!!!

That will be the real nail in the coffin.

France will hang on to the bitter end, the last to leave.

Mon, 10/20/2014 - 13:53 | 5355752 dixi3150
dixi3150's picture

Maybe the EU's puppet masters  ie the US will allow the various cou tries to go back to their original currencies?

Mon, 10/20/2014 - 14:31 | 5355927 detached.amusement
detached.amusement's picture

I didnt know every one of us was a banker over here

Mon, 10/20/2014 - 13:54 | 5355750 dixi3150
dixi3150's picture

Maybe the EU's puppet masters  ie the US will allow the various cou tries to go back to their original currencies?

Mon, 10/20/2014 - 13:22 | 5355586 talisman
talisman's picture

Placing control of their Sovereign economies in a central ECB system precludes individual nations from autonomously adjusting valuation of individual national currencies in the manner needed to regulate their individual trade balances.
 
It also has essentially consolidated and handed monetary control to Germany, and Germany's external puppetmasters.
 
The Euro, although it sounds like an excellent idea in theory, in practice it doesn't work  because in reality the participating nations lack the cultural unity of the US, and are too diverse in virtually all aspects of their societies, languages, ethnicities, and  economies. 
The nations of Europe do not want to surrender, homogenize, and pasteurize their individual national identities to the degree needed to make the euro and the ECB work.

The EU is similarly flawed, in that it has signed over virtually all individual Sovereign powers to Brussels and its foreign puppetmasters. The EU does not function properly as a true Federation of autonomous European countries

Mon, 10/20/2014 - 23:01 | 5357903 Bemused Observer
Bemused Observer's picture

Beautifully put!

Mon, 10/20/2014 - 18:29 | 5356862 Freddie
Freddie's picture

The Euro in theory was really not a good idea if people took a basic Econ 101 course.  Italy, Spain, Portugal and smaller less industrial countries have no comparitive advantage for their products which includes tourism, agriculture plus retirement real estate for Spain.

Mon, 10/20/2014 - 13:52 | 5355736 FeralSerf
FeralSerf's picture

The EU is an Ashkenazi colony. It's owned and operated for an elite Zioligarchy of bankers.

Mon, 10/20/2014 - 22:31 | 5357824 tarabel
tarabel's picture

 

 

I hate jukeboxes that only have one song in them, especially some old clunker of a tune like this one.

It's all the fault of the jews, it's all the fault of the jews, it's all the fault of the jews.

Can't you hum a few bars of something else at least once in a while, pretty please?

Tue, 10/21/2014 - 03:39 | 5358341 FeralSerf
FeralSerf's picture

What do you suppose is the reason for that? You do believe in cause and effect, don't you?

Tue, 10/21/2014 - 05:24 | 5358404 new game
new game's picture

not enough snowplows for a million people that figured out germany fucked us with euro up the ass...not to mention italy's own free shit army problemo...humans are losers...

Mon, 10/20/2014 - 13:05 | 5355509 limacon
limacon's picture

Funnily , at the moment France and Germany are leading the probability pack to EU disintegration .

There are major benefits for them :

See http://danielamerman.com/articles/Windfall.htm

Merkel nixed this , but there seems to be a new rapprochement between Russia and Germany .

France is getting deperate , and the temptation to jump the gun must be considerable.

 

See 

https://www.academia.edu/8816411/Rogue_Swan_EU_disintegration

See also https://www.academia.edu/7064849/Belarus_Dominoes_

and https://www.academia.edu/6432666/GINI_and_the_rubble_of_Empire

 

The mainstay of the poorer EU members is Tourism , and Ebola threatens to put a severe crimp into this when it spreads into EU .

 

 

 

 

Mon, 10/20/2014 - 10:59 | 5355030 THE DORK OF CORK
THE DORK OF CORK's picture

The price of Gold is a $ story , it has nothing to do with internal eurozone trade dynamics (which are darkly absurd)

Mon, 10/20/2014 - 11:01 | 5355023 THE DORK OF CORK
THE DORK OF CORK's picture

Ireland exports enough already - a devaluation will not solve the problems within Ireland.

Net tourist income is up bigtime  in 2013 &14 yet domestic purchasing power is down down down.

 

A return to purchasing power is needed in Ireland.

That means a complete stop of "capital investment" which is really nothing of the sort - its function is to extract purchasing power and concentrate it.

 

Ireland has a massive excess of cars and houses (the products of bank credit)

Yet cannot afford to buy or use them. (yet the governemt wants more of the stuff people cannot afford)

Ireland is caught inside a massive stock and flow crisis.

These assets such as houses should be simply given back to poor mortgage people.

These products has been built already so what are they really paying for - these goods are in huge surplus !!

 

There is not a hope in hell labour without capital can repay for this "investment"

Tue, 10/21/2014 - 04:49 | 5358387 SAT 800
SAT 800's picture

As far as I know a devaluation has never solved anyone's problem; nor is there any reason to expect it would. So you see too much buying on credit ? Well, that's believable, it's the same set up for another prat fall that the "leaders" here are pushing.

Tue, 10/21/2014 - 04:42 | 5358384 SAT 800
SAT 800's picture

Euro land, and the world in general, are in a structural depression; one feature of such, is over installed capacity; there's too much of everything. Your suggestion to turn over the ownership of the failing house purchases to the owners would probably be very helpful; but as you know, this sort of thing is always regarded as "impossible lunacy" by those in power. What are the un-employment numbers like ? You say you're exporting "enough" perhaps; but I'm doubtful as the market everywhere is satuated. Closed down or part time industry that lays off large segments of the population from productive labour is what causes a lack of purchasing power. A really insightful govrernent would, if "exports" have become a fetish, which they may well have, seek to enable and start up domesticate production of basics for home consumption; textiles and clothing; shoes and small scale fishing gear; anything you can actually turn over in the country itself. This may be impossible under the spider web of EU regulations, and of course, insightful and rightthinking political leaders hardly exist.

Tue, 10/21/2014 - 07:07 | 5358472 THE DORK OF CORK
THE DORK OF CORK's picture

As can be seen in this trade chart (Irelands trade in goods)

It was only in trade surplus back in 1941,43 and 44.(these were hard hard times)

The rest of the time it was in trade deficit (to Industrial UK)

 

However during the first 80s euro depression it became a trade surplus country after 1985 and never looked back.

In the 90s and beyond the surplus went exponential

reaching a peak in 2010 at nearly 44Billion !!!!

 

We are only a 100 billion + size economy.......

Relative to the size of its economy Ireland has perhaps the largest trade surplus in the world (this is the multinational sector)

http://www.cso.ie/px/pxeirestat/Statire/SelectVarVal/saveselections.asp

 

Tue, 10/21/2014 - 01:14 | 5358211 OldPhart
OldPhart's picture

Hang on Ireland.  You're the home of my fore-fathers and I plan to come visit next year and spend a shitload of useless american money in your pubs and whorehouses.

Hang tight, I'm an American thousandairre and I'm coming to your rescue!

 

Mon, 10/20/2014 - 23:07 | 5357923 Bemused Observer
Bemused Observer's picture

Yes! This "investment" is nothing of the sort! If Ireland's economy actually improves enough to pay off, all the gains would be funneled out of the country anyway. So why not just keep it at home, for now at least.

What they GET is more debt, and more austerity to pay it back, with empty promises of future prosperity if only they "stay the course". Stick to the path of righteousness, and you will emerge, washed clean of all your sins, into Paradise....

Mon, 10/20/2014 - 14:34 | 5355943 ebworthen
ebworthen's picture

Irish Mortgage Backed Securities sold to Spanish Banks, bought by the ECB, backed by Greek debt, funded by the IMF via derivative swaps sold by Goldman Sachs bought by CALPERS who sold their Fannie/Freddie portfolio to Irish Banks.

Mon, 10/20/2014 - 13:25 | 5355611 disabledvet
disabledvet's picture

You really are really smart.  Obviously it would be totally crazy to ditch the euro now that it in fact really is devaluing.  Might want to ditch Brussels though.  They're deciding how all the money flows back to the "outer rim" once they've generated their massive inflation.

Doesn't appear to be enough right now.

And yes....Germany has an inflation problem too.

Not as bad as Russia's though....

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