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The Consequences Of The Unthinkable: Here Is What Happens When The Euro Breaks Up

Tyler Durden's picture


As the following image from Spiegel summarizes, three things will happen simultaneously when the unthinkable finally occurs: i) economic output plummets, ii) unemployment rate soars, and iii) consumer prices explode. Of course, this is nothing but merely deferred consequences for Europe partying for over a decade under an unsustainable regime that borrowed from the future (sound familiar?). And now the inevitable hangover. In other words: payback is a bitch.

Source: Spiegel


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Mon, 06/25/2012 - 11:02 | 2557898 Rahm
Rahm's picture

King Dollar!

Mon, 06/25/2012 - 11:04 | 2557908 Dr. Engali
Dr. Engali's picture

King Gold !

There fixed it for you.

Mon, 06/25/2012 - 11:16 | 2557920 BaBaBouy
BaBaBouy's picture

Bouy Is BACK ...

Losta  meetings...


World Fin "System" Being taken DOWN...


Get ready for Potato(e) & Soup linups.

Big Mack linups

IPod linups

42" LED linups


AND .................... GOLD linups ...


Weeeeeeeeee ... Wacko Times ARE HERE, Bitchez ...



Mon, 06/25/2012 - 11:30 | 2558047 Comay Mierda
Comay Mierda's picture

EU will never break up but the Euro was designed to fail.  Think of the power these unelected technocrat ass clowns will gain when the banking system fails, several countries default, and joint fiscal treaties enter into reality, the banks are nationalized, and martial law is the new way of life.  and EU politicians will deny the eurobond rumors for now.  But they have wet dreams at night of them.   They cant wait for the shit to hit the fan.

Mon, 06/25/2012 - 11:54 | 2558168 Marginal Call
Marginal Call's picture

Europe is going to go through struggles as long as it takes to break China.  That is the point of the whole exercise. 


hOpium Wars:  Part Deux

Mon, 06/25/2012 - 12:14 | 2558285 NotApplicable
NotApplicable's picture

Well, them and nearly six billion others.

Mon, 06/25/2012 - 12:19 | 2558322 old naughty
old naughty's picture


So unemployment is projected to be 165.7MM...and growth down between 8.4 to 15.4%

Are these making a case for the can-kicking?

PIIGS prices shot up 9.5 to 18.6% Ouch! Is this the reflection (eh, reality) of gold prices…But going back to own currency will bring depreciation, no? Good for exports…

Germany,  leave please!

Mon, 06/25/2012 - 14:27 | 2558917 macholatte
macholatte's picture


Go here to read Part 3 of the article


You will see this:


The German Finance Ministry's prognosis is even grimmer than that of the ING experts. According to their scenarios, in the first year following a euro collapse, the German economy would shrink by up to 10 percent and the ranks of the unemployed would swell to more than 5 million people. The officials were so horrified by their conclusions that they kept all of their analyses under lock and key, for fear that the costs of rescuing the euro could spin out of control. "Compared to such scenarios, a rescue, no matter how expensive it is, seems to be the lesser evil," says one Finance Ministry official.

German citizens haven't recognized yet what an abyss they are facing. If the euro collapses, not only will many people lose their livelihoods, but German retirement pensions will also be threatened. The economic success of the last few years would be destroyed, and Germany would fall back into the crisis status of the 1990s.

On the other hand, if the German government gave in to the Southern Europeans' pressure to communitize debt, the risks could even be greater. Instead of an uncontrolled euro crash, Germany could be confronted with an uncontrolled transfer union. Year after year, the Germans would have to transfer sums in the double-digit billions to Southern European countries.

Europe's politicians must surrender power to Brussels to supplement their common currency with the political union that's been missing until now.


Has the the Propaganda Machine just cranked up to convince the German sheeple that a German bailout of the EU is for their own good and, to convince the rest of the EU that the loss of sovereignty is really their only choice? 


Tue, 06/26/2012 - 04:35 | 2560734 bombimbom
bombimbom's picture

no, it's just a rational analysis of what would happen. a rescue IS the lesser evil. like it or not. you should go beyond ideologies and be honest enough to accept facts as they are.

That obviously make the case for a much quicker process of integration a must. but if you look at what it is really happening that was already apparent.

this is not germany conquering europe we are seeing, this is germany realizing that they will have to give up part of their sovereignity and trying, at least, to have an important role in shaping how the european federation will work.

Mon, 06/25/2012 - 14:49 | 2559041 LongBalls
LongBalls's picture

The EU will most likely not break up in totality. But there will be some countries to exit. Either under their own power or force. Enter the dragon.

Mon, 06/25/2012 - 11:30 | 2558074 Jolly.Roger
Jolly.Roger's picture

Who or what is "Bouy"?

What's a "linup"?



Mon, 06/25/2012 - 11:49 | 2558153 akak
akak's picture

Beets me!

Mon, 06/25/2012 - 11:56 | 2558188 DoChenRollingBearing
DoChenRollingBearing's picture


Mon, 06/25/2012 - 12:44 | 2558443 JPM Hater001
JPM Hater001's picture

And these are numbers ON TOP of the drops so far.  I think net net will be somewhere around "Mom and dad Save the World" bad.

Light Grenade anyone:


Mon, 06/25/2012 - 12:54 | 2558479 zorba THE GREEK
zorba THE GREEK's picture

Sum thymes eye dew knot no watt ewe meen. 

Mon, 06/25/2012 - 15:46 | 2559246 akak
akak's picture

Vary fun-knee!

Mon, 06/25/2012 - 11:07 | 2557926 Rahm
Rahm's picture

It was a joke, needed the /sarc

Europe banks are in ICU. Germany is on bath salts if they don't bail on the failed experiment.


Mon, 06/25/2012 - 11:10 | 2557949 GeneMarchbanks
GeneMarchbanks's picture

''America is the most grandiose experiment the world has seen, but, I am afraid, it is not going to be a success.'' --Freud

Mon, 06/25/2012 - 11:20 | 2557999 Bay of Pigs
Bay of Pigs's picture

How about some Karl Marx too?


Mon, 06/25/2012 - 12:16 | 2558296 Carl Spackler
Carl Spackler's picture

"What's yours is mine, and what's mine is mine."

                                            - my wife quoting the late Karl Marx

Mon, 06/25/2012 - 12:16 | 2558297 Carl Spackler
Carl Spackler's picture

"What's yours is mine, and what's mine is mine."

                                            - my wife quoting the late Karl Marx

Mon, 06/25/2012 - 11:32 | 2558084 rqb1
rqb1's picture

the only thing freud has to be afraid of is that he was wrong

Tue, 06/26/2012 - 04:14 | 2560724 Ar-Pharazôn
Ar-Pharazôn's picture

in 20 years we will see if you're right or if Freud was right. personally i bet on Freud vision

Mon, 06/25/2012 - 11:36 | 2558098 Ropingdown
Ropingdown's picture

Freud wrote that quote during a period of his life during which he was heavily addicted to cocaine and was, historians seem to believe, sleeping with both his wife and his wife's sister.  I wouldn't make too much of it.  He was also writing a lot of sex books projecting onto everyone his lust for his mother.  Must have been a wild ride.

Mon, 06/25/2012 - 11:45 | 2558140 Monedas
Monedas's picture

Freud was for sick liberals !    Ludwig Von Mises is for healthy Libertarians !            Monedas       1929         Comedy Jihad Economics 101 Export Your Best Stuff .... Factory Seconds And Odd Sized Fruit Can Be Sold In Local Swap Meets

Mon, 06/25/2012 - 11:55 | 2558183 lasvegaspersona
lasvegaspersona's picture

Unfortunately for Freud he lived in an era when the chemestry of the brain was not understood. He tried to explain problems in the way science undertstood things at the time. When we write the last page on the human brain he will be but a footnote in a chapter on history.

Mon, 06/25/2012 - 12:12 | 2558240 Lebensphilosoph
Lebensphilosoph's picture

Materialistic neuroscience still cannot explain the existence of the mind and its origin from matter. And, if its proponents bothered to read Leibniz, they'd know that the endeavour is in principle impossible.

We illustrate with an example: why should and how can some motion of matter in some configuration, in all its colourless, soundless, tasteless, odourless, thoughtless glory, give rise to a visual phenomenon we call by the universal 'red' that appears in the mind? Hocus pocus. No acceptable answer is, or ever will be, forthcoming.

Mon, 06/25/2012 - 12:53 | 2558476 Spastica Rex
Spastica Rex's picture

Metaphysiscs used to be the "Queen of the Sciences." Not anymore. 

However, I agree with you 100%. +1

Mon, 06/25/2012 - 14:15 | 2558879 Boxed Merlot
Boxed Merlot's picture

Only the concept of aseity does no harm to the law of cause and effect.  It allows for the organization of matter and the right to conclude logical consequences, i.e. it legitimizes scientific inquiry.  Whereas an effect requies a cause, a self existent "I AM" requires no cause as it cannot be and not be simultaneously, and therefore cannot be classed as an effect.  imo, for now.

Mon, 06/25/2012 - 13:14 | 2558570 FeralSerf
FeralSerf's picture

How is sleeping with one's sister-in-law any worse than having children with your brother's daughter, a common (faux)-Jew custom.  The Rothschilds commonly married their neices.  This may be a reason they are more likely to have genetic diseases like the Habsburgs did.  It also keeps the wealth and power in the family.

Siggie was a member of The Tribe, of course.

Mon, 06/25/2012 - 16:38 | 2559403 Iwanttoknow
Iwanttoknow's picture

Was also fucking Gustave mahler,the composer's wife.Thw words of a charlatan(father of modern psychiatry is Emil Von Krapelin) is worthless.

sigmund fraud.

Wed, 06/27/2012 - 11:59 | 2565220 FeralSerf
FeralSerf's picture

Alma Maria Schindler?  She fucked just about every genius contemporary in Vienna -- a remarkable woman.  They don't make them like her anymore.  She also married Walter Gropius and Franz Werfel.

Mon, 06/25/2012 - 11:46 | 2558144 Waffen
Waffen's picture

Freud caused a lot of damage to humanity and set back mental health 50 years. His nephew Edward Bernays is even worse.

Mon, 06/25/2012 - 15:54 | 2559267 pufferfish
pufferfish's picture

Edward Bernays is responsible for most of this entire mess. He is the pied piper for 'sheeple'...

Mon, 06/25/2012 - 11:19 | 2558000 Caviar Emptor
Caviar Emptor's picture

Ahh when paper dreams go up in smoke, a shaft of Gold shines out through the thick clouds

Mon, 06/25/2012 - 11:08 | 2557932 rsnoble
rsnoble's picture

No, actually that is bullish for the dollar. Which is inverse to the markets so that equates to lower markets in the US.

Of course that's only temporary, just chasing shit around in a circle till it's finally realized everyone is screwed.

Mon, 06/25/2012 - 11:11 | 2557948 CPL
CPL's picture

Paying out in IOU's eventually means someone else will eventually hand back your IOU.


If you end up inheriting your own IOU, does that make you libel for it to yourself?


Or is it an excuse to trade the debt again?  <--- I believe this is the system in place now.

Mon, 06/25/2012 - 11:21 | 2558015 Its_the_economy...
Its_the_economy_stupid's picture

Do you have to pay state and fed taxes on the money you use to pay off your your IOU to yourself?

Mon, 06/25/2012 - 11:33 | 2558086 Ropingdown
Ropingdown's picture

Of course.

Mon, 06/25/2012 - 11:40 | 2558119 brooklynlou
brooklynlou's picture

Hey! Change your avatar! There only one Savalas allowed on ZH ;-)

Mon, 06/25/2012 - 12:05 | 2558241 viahj
viahj's picture

you're Kojak, he's Maggott

Mon, 06/25/2012 - 11:40 | 2558120 brooklynlou
brooklynlou's picture

Hey! Change your avatar! There only one Savalas allowed on ZH ;-)

Mon, 06/25/2012 - 11:22 | 2558026 flacon
flacon's picture

But IOU's are legal tender for all DEBTS... how does that work?

Mon, 06/25/2012 - 11:43 | 2558132 rosiescenario
rosiescenario's picture

The grass is greener only appears so because it is more distant and less understood.


Surprised we have yet to see a massive flight of capital into the big name NYSE stocks, also seen by those at a distance as a safe haven.


And, with China exporting about 30% to Europe, what might have been a soft landing now appears rock hard. Watch for more easing over there which will boost the peasants' demand for PM's.....they be smart peasants.

Mon, 06/25/2012 - 12:03 | 2558230 lasvegaspersona
lasvegaspersona's picture

and I wake every day thankful for another day of false normalcy. Another day to get things in order another day to (try to) get a loan and redo a 30 year mortgage. Another day to perhaps buy physical gold. Another day for a hyperinflationinst to take advantage of what is coming while ignoring those around me who think I am nuts or at least paranoid.

My goal is to be criticized like Michael Burry. I want folks to say: " he just took advantage of the system". Meanwhile they won't. They do not want to know what is coming. Mostly I think they can't do much about it but many just find it too scary.

Mon, 06/25/2012 - 11:25 | 2558046 Stormy Weather
Stormy Weather's picture

King Food and Water !


Fixed your fix.

Mon, 06/25/2012 - 11:58 | 2558193 tocointhephrase
tocointhephrase's picture

King SUN, there fixed all your fixes BITCHEZ

Mon, 06/25/2012 - 12:38 | 2558418 Dingleberry
Dingleberry's picture

No. Rahm is correct. We have seen this movie before. A few times, actually. I'm as big a gold bug as anyone, but with the CBs the LME doing their thing, gold will truly explode only when the USD gets into trouble. Gold will rise, but not explode until then. 

Mon, 06/25/2012 - 11:20 | 2558005 Ghordius
Ghordius's picture

trust Der Spiegel to do an asinine forecast based on one and only one of the highly unlikely scenarios of an eurozone breakup... and trust them to translate it in the most bleak way to goad their readers to shriek in horror

the big point is still currency. we are in a currency war, nobody is going to break up as long as this environment stays so. call me when the CHF leaves the floor...

meanwhile, China's CB is buying up in the Japanese Stock Market and the Japanese are not resisting the move. this is the news of the week.

long live King Dollar...

Mon, 06/25/2012 - 11:24 | 2558041 Alea Iactaest
Alea Iactaest's picture

Going against centuries of Sino-Japan tradition and hostilities. Just the first score of many being set right by the Chinese. Let's see, who else might be on the list?

Mon, 06/25/2012 - 11:45 | 2558141 Marginal Call
Marginal Call's picture

LOL.  The Japs have learned the bamboozle from us.  Let them buy up a bunch of shit, tank the market, buy it back for pennies.  Get all your money back.

Mon, 06/25/2012 - 12:14 | 2558278 g speed
g speed's picture

-get all "your shit back too"  ---don't forget you can sell it again ---

Mon, 06/25/2012 - 11:31 | 2558078 Ropingdown
Ropingdown's picture

I don't find the Spiegel numbers so bleak.  They just look like a typical report from Europe in the 1970's.  If that's as bad as it gets it's not a problem.

Mon, 06/25/2012 - 12:22 | 2558341 Jethro
Jethro's picture

Not to mention the Cold War v 2.0. 

I remember the 70's being a very strange time, but I was a child, and watched Land of The Lost...

I have no recollection of gas lines or inflation.  I was blissfully unaware of anything until the oil bust in the early 80's.

Mon, 06/25/2012 - 12:24 | 2558351 gratefultraveller
gratefultraveller's picture

They didn't publish my comment about the 4th comma of paragraph 20 of the german basic law (right of the people to depose the government by force if said goverment betrays the constitution by giving away unalienable powers to supra-national entities) being mentioned more and more frequently in discussions, in fora and even in mainstream media...

Mon, 06/25/2012 - 13:04 | 2558529 Carl Spackler
Carl Spackler's picture

Ghordius, is Spiegel re-making itself into the weekly version of Bild Zeitung?

Mon, 06/25/2012 - 12:22 | 2558344 U6 Alabamian
U6 Alabamian's picture

King nothing.

Mon, 06/25/2012 - 12:56 | 2558487 Clowns on Acid
Clowns on Acid's picture

The King with no clothes !

Mon, 06/25/2012 - 11:02 | 2557899 Northeaster
Northeaster's picture

The next decade will be interesting times.

Mon, 06/25/2012 - 11:06 | 2557923 Dr. Engali
Dr. Engali's picture

I think these are intersting times. We are watching a pivotal moment in history...slow as it may seem. It's still very exciting.

Mon, 06/25/2012 - 11:11 | 2557954 financial apoca...
financial apocalyptic contagion's picture

all this is taking too much time now

all this talk of exponential and nothing has changed on the surface. sure we can see cracks, but the foundations of this ponzi are taking forever to collapse

oh well, winter is coming come on george martin write faster, damn you

Mon, 06/25/2012 - 11:20 | 2558009 N. B. Forrest
N. B. Forrest's picture

The markets can remain irrational longer than you and I can remain solvent. 

Mon, 06/25/2012 - 11:52 | 2558169 akak
akak's picture

No, governments can (and always will) remain irrational longer than THEY can remain insolvent!

Mon, 06/25/2012 - 16:25 | 2559364 Gief Gold Plox
Gief Gold Plox's picture

I seem to have an uncanny ability to convert paper to various metals on almost regular basis.

Irrational markets... eat your heart out.

Mon, 06/25/2012 - 11:23 | 2558035 Ghordius
Ghordius's picture

there are two classes of people on ZH that think it's taking too long: those who wish their shorts to make them rich and those who are too young to appreciate that multi-generational problems most of the time don't move that lightly

Mon, 06/25/2012 - 11:43 | 2558131 i-dog
i-dog's picture

*sigh* ... more false dichotomies....

Mon, 06/25/2012 - 12:02 | 2558221 akak
akak's picture

There are two kinds of people: believers in simplistic (and usually erroneous) dichotomies, and everyone else.

Mon, 06/25/2012 - 12:24 | 2558323 Ghordius
Ghordius's picture

akak, the world is much simpler: those who know better and those who know best. mamas belongs to the latter category.

but hear me, i-dog is being mean to me again. when I try to be serious he claims I'm a propagandist, and when I try to do some humour he claims false dichtonomies. I'm starting to believe he is the white persian dog on Dr. StrangeSchäuble's lap. is there a referee in the club or a rule I can claim? ;-) I resent false dichtonomies charges on stupid comments!!! I demand satisfaction from the cynical canine!

meanwhile I was thinking about you: I was traveling with two crazy girls and visited three parties in three european countries, all organized in complete illegality on abandoned and occupied industrial plants by the very local but highly connected anarcho-syndacalist scene. great recreational stuff, top music, etc. it literally blew my mind (again), it was some 15 years since I have seen that scene, and it's really, really alive. gives me great hopes in youth, as usual... I wish you would have seen that... I just hope that by being syndacalists you don't find them a tad too socialistic...

Mon, 06/25/2012 - 13:00 | 2558510 i-dog
i-dog's picture

I calls it as I sees it, Ghordie. "If you see something, say something"!

And thank you for not lumping me in with Akak as one of them Anarcho-Syndicalist thingies. I wasn't aware that he was one, so I'll be keeping a close eye on him in future. It sounds dangerous.

Mon, 06/25/2012 - 14:07 | 2558844 Ghordius
Ghordius's picture

lol, it's me calling akak anarchist, jokingly, and as a reference to his avatar, I'm not lumping anybody together with anybody. It's me sympathizing with the Anarcho-Syndacalists. Which remind me of the voluntarists you were talking about. me? you know what I profess. but I can sympathize, can't I? ;-) And I can tell you the scenes I have seen have nothing dangerous about them, it's mostly people that organize themselves despite the world that is around them, of the "thank you but leave me alone, I don't need you" type. which is quite a feat, here in europe.

Mon, 06/25/2012 - 11:46 | 2558146 Tydown4fun
Tydown4fun's picture

Since I belong to neither of your two classes, do you wish to add a third?


Mon, 06/25/2012 - 11:51 | 2558155 Ghordius
Ghordius's picture

ok, ok, add, "I recognized up to now", with an IMHO and a pretty please. nevertheless, I do see a lot of youthful impatience that translates in radical thinking and a lot of "where are my shorts now?". so, now please give me the third - and note that I'm still commenting on "this is all taking too long..."

Mon, 06/25/2012 - 12:02 | 2558218 CommunityStandard
CommunityStandard's picture

Everyone who wants to be proven right.

Mon, 06/25/2012 - 11:50 | 2558156 disabledvet
disabledvet's picture

Just? Wall Street itself is at risk here...and one need only see the half dozen abandoned cities to see the difference between "places we like" and "places we don't" relative to that set. Trust me "these folks have no problem telling all of us here you got what's coming." you and I don't get the trillion dollar check when we go belly up tho. Should be interesting SHOULD there be a collapse how much blowback there really is. I have suubscribed to a theory that a blow up of the EU leads directly to a massive war in the Middle East and I have not been disappointed. Relative to Brussels "so it becomes quieter." biggie.

Mon, 06/25/2012 - 12:27 | 2558375 Ghordius
Ghordius's picture

sure, but does preoccupied also mean "impatient to see how the penny drops" and "can't wait, crash now, bitchez"? just asking

Mon, 06/25/2012 - 12:51 | 2558463 i-dog
i-dog's picture

How about adding the "Let's crash this fucker now, so that we can get started on re-building while we still have a planet!" group ... of which I am one?

Mon, 06/25/2012 - 11:32 | 2558083 CPL
CPL's picture

I was more worried about Jim Butcher and his Dresden Files Series.  It'll never be finished.


That's the real shame of this mess.  All the little things that helped overshadow the daily annoyances of life.  Like book series. ass.

Mon, 06/25/2012 - 11:33 | 2558088 potlatch
potlatch's picture


very simple reason things are kind of in musical chairs mode during summer...

Mon, 06/25/2012 - 11:20 | 2558007 Caviar Emptor
Caviar Emptor's picture

True, Dr Engali. THings rarely turn on a dime. But they sure are turning

Mon, 06/25/2012 - 12:09 | 2558265 lasvegaspersona
lasvegaspersona's picture

Dr. Engali

you have expressed my thoughts as well. These events are the Super Bowl of economics, no...the olympics...even rarer..a less than once a century event of such porportions that our grandchildren will ask us about nothing but..."what did you do in the transition?"

I have even started a diary of 2012. "Another Journal of Another Plague Year" apologies to DeFoe.

Mon, 06/25/2012 - 19:23 | 2559885 krispkritter
krispkritter's picture

Have to agree but every once in a while I get the sensation that this is like standing next to a very large tree that's being felled...and I'm in its path. Watching in rapture as the age old goliath succumbs to the chainsaw and gravity takes its course...and somewhere in the background I hear the faint, 'timberrrrr...', and only too late realize that I'm about to become a square peg in a round hole.

Then I wake up and have a shot of Scotch and things go back to normal...

Mon, 06/25/2012 - 11:03 | 2557903 kralizec
kralizec's picture

Winning by others losing first.  Yippee...


Mon, 06/25/2012 - 13:10 | 2558554 Carl Spackler
Carl Spackler's picture

Such method is frequently referred to as "a war of attrition."

If the method is intended, then such strategy is called "siege warfare" or "being in the right/wron place at the right/wrong time."



Mon, 06/25/2012 - 11:04 | 2557906 Seize Mars
Seize Mars's picture

Yeah, if the ruler is deposed, everything will be bad.


Mon, 06/25/2012 - 11:04 | 2557911 i_fly_me
i_fly_me's picture

Bullish.  Long cotton, toner and pitchforks.

Mon, 06/25/2012 - 11:13 | 2557964 AssFire
AssFire's picture

Stay loose, Remington Typewriter IPO coming soon.

Mon, 06/25/2012 - 11:24 | 2558036 GeezerGeek
GeezerGeek's picture

Are the typewriters going to be purely mechanical, like my Remington 870? It's be a bitch to own an electric one when the power goes out.

Mon, 06/25/2012 - 11:05 | 2557914 walküre
walküre's picture

If that's the worst case scenario, let's do it.

The bankers are too scared to let it happen.

Mon, 06/25/2012 - 11:06 | 2557924 mrktwtch2
mrktwtch2's picture

doesnt look so bad..i guess the sun will still rise in the morning..and if the euro dies you will see gold back at 600 as the dollar makes a run to 115

Mon, 06/25/2012 - 11:08 | 2557938 ohhhhhbaaaaahhh...
ohhhhhbaaaaahhhhhhhhhmaaaaaahhhhh's picture

Yes if you have a bad trip on magic mushrooms.

But otherwise the sun won't rise. 

Mon, 06/25/2012 - 12:15 | 2558295 lasvegaspersona
lasvegaspersona's picture


FOFOA has suggested a level of 300. (Paper only no redemption in physical)

One must be aware that the current gold market is a market in which to BET ON THE PRICE OF GOLD not to procure the real deal.

Physical is at the best price we will ever see it at now (my guess). Soon when the craziness gets started we will see most physical disappear into hypothecation hell and what you have will be all you'll get for a long time. The market will go physical only but without a viable market to declare the price none will move.

Mon, 06/25/2012 - 11:06 | 2557927 Alejandrito
Alejandrito's picture

So if everyone loses, what interest there is in breaking the euro?

PD: the euro area continues with surplus and eur/usd goes down

Mon, 06/25/2012 - 11:06 | 2557928 monopoly
monopoly's picture

And the above coming to a country in your neighborhood where the almighty dollar will be the last currency on the trash heap. But garbage it will become.

Mon, 06/25/2012 - 11:08 | 2557931 insanelysane
insanelysane's picture

The bus has run out of gas and the engine is blown but at the moment we are coasting down a hill.  When it stops, all of the people will need to get out and push, not just the half that a currently working.  It is not really a bad thing since everyone will finally see what crap costs.

Mon, 06/25/2012 - 11:45 | 2558118 cgbspender
cgbspender's picture

Fear not, the inevitable demise of said bus can be delayed even further with amazing state programs such as BOSS:


I just drove through the BOSS test pilot zone in NC yesterday. I can't wait to see what a nightmare this bizarre plan will amount to.


Mon, 06/25/2012 - 11:51 | 2558159 Overfed
Overfed's picture

Bus on Shoulders. Ok, everybody out, now lift on 3! :-)

Mon, 06/25/2012 - 13:09 | 2558547 Goner
Goner's picture

It works great for the bus's. Its a pain for the comuters as the law rests squarly on the sid of the buses. Going from memory but as the bus screams up on the shoulder (no way they only go 15 MPH faster than traffic) and cuts you off, you have to yeild. And I think you are even at fault if you put on your signal and turn to your exit and the collide with a bus coming up behind you on the shoulder.

If I remember right the system is a huge drain on the state as only about 1/3 of the costs of the bus is covered by the people who use it (fares)


Mon, 06/25/2012 - 11:55 | 2558173 El Oregonian
El Oregonian's picture

Make sure that when the bus settles at the bottom of that hill that you get those sitting on their ass doing nothing get out of the bus and join in helping push. The bus is heavy enough without pushing the dead weight, also.  There is no free ride.

Mon, 06/25/2012 - 11:09 | 2557933 Dubaibanker
Dubaibanker's picture

If Euro breaks, all hell will break lose....this sure looks like a picture of hell.

One more problem with Spain, Germany and the French etc is that they are not trained to learn English at schools which makes them unemployable in US, UK, Canada, Australia, India or in Dubai.....which makes remittances and new money flows into these countires in crisis times as not an effective strategy. They will end up choking on their own unemployment. Tourism also gets slower as people travel less into countiries where it is frustrating for English speaking people to travel and spend less in USD terms and get more in Euro terms, even artifically, because these people wont speak damn English.

Rant over!

Mon, 06/25/2012 - 11:22 | 2558016 i-dog
i-dog's picture


"this sure looks like a picture of hell."

That's the intention! ... the propaganda machine has been turned up to '11'.

Somebody please explain to me how EVERY country's economic output will fall simply because of a change in the name on a currency note?

I call 'bullshit'!

Mon, 06/25/2012 - 11:41 | 2558125 Antifaschistische
Antifaschistische's picture

I don't think of it in terms of output...I think of it in terms of spending.   When people realize their wealth is really 1/2 what they thought it was, consumption contracts...everything else is just a downstream effect.

This will happen in the US when people realize they have no retirement, their debt based 401ks blow up, and their corporate pension plans implode and end up being forced to cut benefits to 1/3rd.  The US will experience a spending contraction tsunami.  (and then output falls)

Mon, 06/25/2012 - 12:00 | 2558203 i-dog
i-dog's picture

Well, call me 'crazy' ... but what the whole western world needs right now is to reduce spending and increase production (ie: economic 'output') - preferably trading that production of what each is good at with somebody else who wants/needs it.

The globalist finance ponzi must be burned and buried for TWAWOKI (the world as we once knew it) to progress again.

Mon, 06/25/2012 - 13:24 | 2558617 Carl Spackler
Carl Spackler's picture

Economists call such behavior "Deflation."

Treasury Secretaries and Finance Ministers hate deflation, because fewer currency units will be available to roll forward sovereign debt, when government operating deficits continue to be negative (which holds for most of the world).

Mon, 06/25/2012 - 11:47 | 2558127 Ghordius
Ghordius's picture

+1, i-dog, pure propaganda - of that kind that is supposed to move German hearts: defend your currency.

note also that they just assume all partecipants would leave (this would be the globalist's complete euro-de-nationalization scenario I was writing about lately) and they don't mention how the EUR-debt would be treated, something that would be of enourmous importance in a crisis that is about debt and banks, not currency.

Mon, 06/25/2012 - 12:23 | 2558304 i-dog
i-dog's picture

I agree with your other points, Ghordie, but this one is simply bizarre:

"all partecipants would leave (this would be the globalist's complete euro-de-nationalization scenario"

A return to [one or more] national currencies would be the exact opposite of "de-nationalization"!

The globalists wish to build ever larger de-nationalised unions (eg. EU, African Union, American Union, Trans-Pacific Union, Asian Union, etc), in order to finally merge them all into a single global union - with a single central global politburo controlling the global secretariats (IMF, WTO, WHO, etc).

I'm not sure whether you don't understand this, or whether I'm misunderstanding your use of the word 'de-nationalize'?

However, I don't see the currency itself as being the issue, but rather the demand for decreased sovereignty of the participants in favour of a central economic planning unit - whether in Brussels, or Berlin, or Bogota.

All that would be needed for me to also back the Euro is to set out the rules and for each of the contracting participants to actually follow what they agree/d to ... or leave! If the benefits of being in the joint currency were obvious, then none would run the risk of being asked to leave....

Mon, 06/25/2012 - 12:37 | 2558412 Inthemix96
Inthemix96's picture

Dubya, at least if you're gonna criticise it.  Try and make it legible.

And yes, I may not be able to spell, but good fucking god, at least folk can understand what I am talking about.

Inthemix lesson 66 in ethics is now closed.

Mon, 06/25/2012 - 14:32 | 2558948 Hohum
Hohum's picture

Germans don't learn English in school?  The Germans I've met speak English better than the majority of Americans.

Mon, 06/25/2012 - 11:08 | 2557936 marco1324
marco1324's picture

And to top it off escalating tensions with Russia

Do we have a perfect storm heading in?

Mon, 06/25/2012 - 11:28 | 2558063 GeezerGeek
GeezerGeek's picture

How dare the Russians send attack helicopters to Syria! Don't they know that there might be some collateral damage and some civilians might get killed? That's totally different from the US drones causing collateral damage and killing civilians as well as Al Qaeda leaders, because Obama says it's okay to do that.

Mon, 06/25/2012 - 12:31 | 2558388 Jethro
Jethro's picture

You can sign up for the "Do Not Kill List" registry here;


Mon, 06/25/2012 - 11:09 | 2557942 JustObserving
JustObserving's picture

What happens to $700 trillion in derivatives?  All major US and European banks will go under.  The Fed and ECB will have to print tens of trillions to save the too-big-to-fail banks.

Mon, 06/25/2012 - 11:25 | 2558042 insanelysane
insanelysane's picture

I don't get the too big to fail bs.  These banks have already failed.  Printing money only "works" if the money is but in and the debt is eliminated but the fix has always been the money goes in, bankers get bonuses and take more risks, and then need more money.  Fail the banks, eliminate the debt, restart.  The sun will come up.  People will need to live and the real economy will continue.

Mon, 06/25/2012 - 11:31 | 2558077 JustObserving
JustObserving's picture

The Fed is owned by the big banks.  It is unspoken charter of the Fed to not allow its owners to fail.

Mon, 06/25/2012 - 11:59 | 2558198 Bam_Man
Bam_Man's picture

You're right!

From now on we should refer to them as "TBTAPTTF" banks.

That stands for "Too Big To Admit Publically That They've Failed".

Mon, 06/25/2012 - 11:25 | 2558044 N. B. Forrest
N. B. Forrest's picture

It depend on who holds the derivatives and who the counter party risks are. 


$700 trillion is indeed a big number, but it means nothing if you hold both sides.  If I owe myself $100,000,000, then we have $200,000,000 in derivatives that just canceled itself out. 

Mon, 06/25/2012 - 11:31 | 2558080 GeezerGeek
GeezerGeek's picture

Except you'd have to pay yourself interest and that would probably be considered a taxable event.

Mon, 06/25/2012 - 11:34 | 2558091 JustObserving
JustObserving's picture

Derivatibes are bets.  Why would you hold both sides of a bet?  That is simply pointless.  

Mon, 06/25/2012 - 12:52 | 2558473 Clowns on Acid
Clowns on Acid's picture

Forrst - What you say makes sense on paper (no pun intended). The actual result is the problems with settlement.

When one tries to "net" the assorted derivatives vs their actual pieces of paper (Int. Swaps, CDS, CMO, etc..) with their counterparties, the bid/ask spreads go very wide and liquidity becomes an issue. Chaos ensues (just like in 2008).

There is just too much interwoven chaos built into the "derivatives"markets....that is the real definition to TBTF...... Cash flows ultimately going to Mutual funds, IRA's, Pension funds, indeed Int'l trade settlements (letters of credit, etc) are all interwoven into the "derivatives" markets.

Settlement issues will create a crisis. Hank Paulson was correct in his assessment "Bread will not be on shelves in a weeK" if the TBTF banks fail.

It is a real mess...and one that is wayyy too scary for any real analysis of the potential outcome to be published to the sheeple. Bernanke and his minions know this, therefore their "hope and change" money printing policies.

It has too end badly...timing the ending is a very tricky proposition.



Mon, 06/25/2012 - 14:21 | 2558904 emersonreturn
emersonreturn's picture

@ clowns: +1

Mon, 06/25/2012 - 11:12 | 2557957 Sudden Debt
Sudden Debt's picture



Mon, 06/25/2012 - 11:12 | 2557958 mendolover
mendolover's picture

As much as I HATE to quote Jeremiah Wright; "America's chickens are coming home to roost!"

Mon, 06/25/2012 - 11:30 | 2558073 GeezerGeek
GeezerGeek's picture

Is it time, yet, to start the grill and prepare the barbecue sauce?

Mon, 06/25/2012 - 11:45 | 2558113 potlatch
potlatch's picture

most politics, are people segregating into petty tribal groups, and seeing the exact same atrocities in the world, but because of their pettiness, refusing to develop a shared, and therefore effective, language and perspective.


Funny, isn't it? 


I am fairly certain, except for some real loons, everyone is objecti8ng to the same things, but, due to pettiness, demanding it be called by certain names: eg, billions fo capital markets = "socialism" somehow.  Why?  Becau7se for those people, socialism is what they call the irresponsible vampire that is ruining our economy.  People on the Left call it "Wall St," :Globalism," etc.


It would be nice if you could all realize, we are all pointing at the same thing.



divide and conquer.  Gte nthe people to be bitterly divided about what exactly to call the vampire at their neck.

Mon, 06/25/2012 - 11:14 | 2557961 crawldaddy
crawldaddy's picture

This bullshit sounds like the same bullshit we heard in 2008.  OH MY GOD if the bankers arent saved, all hell will break loose!!

send trillions to the bankers and the rich... stat


The short run may be painful, but on the other end of it, there is a new day, new hope.  God I only wished we let JP, CITI, Goldman and the lot go down in 2008.  By now we would be back on our feet, the cancer would of been removed, and our children would have a future.

  Instead.. we have banking overlords,

let it fail, its our only hope.

Mon, 06/25/2012 - 16:41 | 2559419 OpenThePodBayDoorHAL
OpenThePodBayDoorHAL's picture

Totally agree, I'm sick of these suicide bankers. Like in the movies we need a hero to come along and notice their bundle of wires aren't connected to anything. Banks = Jim Jones, Us = Kool-aid drinkers.

Don't do it

Mon, 06/25/2012 - 11:13 | 2557962 slewie the pi-rat
slewie the pi-rat's picture a headache?

Mon, 06/25/2012 - 11:16 | 2557980 slewie the pi-rat
slewie the pi-rat's picture

no, shithead!

the consequences would be that we would get new false dichotomies PDQ...

...well, maybe you were right...

Mon, 06/25/2012 - 11:21 | 2558013 slewie the pi-rat
slewie the pi-rat's picture

you're getting one,  too...?

Mon, 06/25/2012 - 11:42 | 2558129 fuu
fuu's picture

That was a bit odd.

Mon, 06/25/2012 - 11:53 | 2558172 slewie the pi-rat
slewie the pi-rat's picture

it only appears that way to one who is avoiding

The Consequences Of The Unthinkable
Mon, 06/25/2012 - 12:53 | 2558474 fuu
fuu's picture

I think my slewie to english translator has dead batteries today.

Mon, 06/25/2012 - 13:36 | 2558668 zelator
zelator's picture

hey slewie - do you always green arrow your own posts?

Mon, 06/25/2012 - 11:55 | 2558182 ebworthen
ebworthen's picture

Coffee, three aspirin, vitamin tablet, and a half-pound of bacon.

Mon, 06/25/2012 - 12:01 | 2558212 slewie the pi-rat
slewie the pi-rat's picture

... and tyler too!

Mon, 06/25/2012 - 11:13 | 2557966 Catullus
Catullus's picture

Bullshit propaganda from Speigel. Prices skyrocket in terms of what?

Scare piece.

Mon, 06/25/2012 - 11:28 | 2558060 N. B. Forrest
N. B. Forrest's picture

No shit!  Prices may go up in Euro terms, but may go down in Deutchmarks.

Mon, 06/25/2012 - 12:12 | 2558279 C-B77
C-B77's picture

oil for starters


Mon, 06/25/2012 - 12:39 | 2558425 Clowns on Acid
Clowns on Acid's picture

Catullus, Commodity prices skyrocket because a loss of trust in trade (locally and Internationally), and therefore distribution costs go up.

End prices to the consumer are the addition of many stages - cost of distribution (oil, gas, electric), financing (letters of credit, etc), and storage at an end point (supermarket / store).

When socieatl trust breaks down...costs go up. Pretty simple. I do not think it is bs propaganda. 

Mon, 06/25/2012 - 11:13 | 2557968 czarangelus
czarangelus's picture

The mainstream retards have been wrong about every single economic forecast so far... based on their track record I predict Greek unemployment to be 6% two years after a Euro breakup

Mon, 06/25/2012 - 11:38 | 2558112 rqb1
rqb1's picture

that is one great profile pic

Mon, 06/25/2012 - 12:34 | 2558405 Clowns on Acid
Clowns on Acid's picture

Quite possibly czar, however 94% "employment" does not necessarily mean that inflation won't be 25%.

The USSR had a very low "unemployment" rate for decades. "We pretend to work and they pretend to pay us". Historically Greece has been prone to fascism, and one cannpt see any trend or developments that would prevent it's inexorable rise again. Or do you?

Just what do you envision the Greek population to be producing that their "Darkma" will have any value on an international basis?

Mon, 06/25/2012 - 11:17 | 2557981 Zola
Zola's picture

THe change in CPI for germany is way underestimated. I think the german savers would LOVE a return to the DM, there would be a huge windfall for them, much more than the petty 0.9pct stated there

Mon, 06/25/2012 - 11:17 | 2557986 Pairadimes
Pairadimes's picture

Some of these numbers look like fair estimates, but I am betting that the post-breakup inflation estimates are low, especially for the PIIGS. The longer this charade continues before the rubber band breaks, the worse those results will be, when sovereign fiat backed by bankrupt governments takes the place of the euro and gets repriced by a market that wants nothing to do with these ersatz currencies. Club med countries are going to get fist-fucked by a currency transition under these circumstances. A multitude of Weimar republics.

Mon, 06/25/2012 - 11:20 | 2558002 crawldaddy
crawldaddy's picture

Weimar had a foreign army on its soil asking for payment.  Thats the difference. Most people dont even know what happened to create that perfect storm in Germany.  Its wasnt just economic policy. It was retribution following a failed war, and basically an occupation.

Mon, 06/25/2012 - 11:22 | 2558022 Caviar Emptor
Caviar Emptor's picture

it was also the old German elite, disenfranchised by democracy, restoring their ancient powers

Mon, 06/25/2012 - 11:25 | 2558043 crawldaddy
crawldaddy's picture

so its they who marched the French army in to Ruhr in 1923 due to none payment?

Mon, 06/25/2012 - 11:30 | 2558067 Caviar Emptor
Caviar Emptor's picture

They bankrolled Hitler from the very beginning. And benefitted from national socialism. They wanted short-lived  Weimar to collapse. 

Mon, 06/25/2012 - 11:18 | 2557994 vegas
vegas's picture

If the Euro breaks up, what will all the caterers do with no more summits? Ohhhhh the humanity.

Mon, 06/25/2012 - 11:21 | 2558018 crawldaddy
crawldaddy's picture

time to short pastry puffs, and toothpicks.

Mon, 06/25/2012 - 12:06 | 2558249 Bam_Man
Bam_Man's picture

And we will finally see the price of Grand Cru Burgundy and Bordeaux return to Earth from the stratosphere.

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