Did Merkel Just Usher In The Deutsche Mark?

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Wed, 11/09/2011 - 15:17 | 1862281 Motorhead
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Deutsche Mark, bitchez!

Wed, 11/09/2011 - 15:26 | 1862343 TruthInSunshine
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Last one out of the toilet paper fiat casino (and especially the Barnum & Bailey/Ringling Brothers/BernankAlchemy equity 'markets') is a rotten egg, bitchez!

Wed, 11/09/2011 - 15:28 | 1862371 hedgeless_horseman
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Did Merkel Just Usher In The Deutsche Mark?


Did Merkel Just Usher In The Drachma?


Wed, 11/09/2011 - 15:33 | 1862392 TruthInSunshine
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Did Merkel just break the glass of the derivatives market exposure (I see how you're all swimming naked - watch your backs, peoples) alarm?

Merkel moves makers to mandate mark-to-market?

Donkey Kong & Godzilla mate 1/2 mile off the coast of Fukushima.

Wed, 11/09/2011 - 15:51 | 1862549 Timmay
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If the result of that union is "God-Kong", I kind of like the sound of that....


Great Porn name.

Wed, 11/09/2011 - 16:11 | 1862664 tmosley
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More likely you will get Donkyzilla.

Great porn name in different circles.

Wed, 11/09/2011 - 16:58 | 1862832 sqz
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Did Merkel Just Usher In The Deutsche Mark?


Germany has an insane artificial competitive advantage to having the Euro as a currency. Obviously, being German, they prepared many moons ago to being able to leave the EU (let alone the EZ) too, if they needed. But Germany has such an advantage and control over their Euro baby, they can afford to be the last one left than the first one to leave, barring somehow being overruled on money printing or Eurobonds.

This article is at most about proposing a framework for any country to leave the EZ without leaving the EU. Something that should have been there from the very start. To me, this seems to be a hint of the first piece of common sense from Angela Merkel.

Wed, 11/09/2011 - 16:52 | 1862907 Cui Bono
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"different circles" eh.... Worst pun ever! CB

Wed, 11/09/2011 - 15:52 | 1862552 ghengis86
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Break the glass? Funny you should use that term:

Kristallnacht, 73 years ago, today (11-9-1938)

Wed, 11/09/2011 - 16:14 | 1862678 Vergeltung
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Erie. Just erie.


Wed, 11/09/2011 - 17:12 | 1863005 barkster
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Huron. Just huron.

Wed, 11/09/2011 - 18:30 | 1863403 TruthInSunshine
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Superior, too!

Wed, 11/09/2011 - 18:22 | 1863366 dark pools of soros
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very bullish!

  -Cocaine Krugman

Wed, 11/09/2011 - 15:52 | 1862557 earleflorida
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the ptb's got maximum time to get out  - now it's time for reality to set,... the hopium 'field-of-dreams' are being burnt to ashes with a 'phoenix blow-torch', made in china -

Wed, 11/09/2011 - 16:02 | 1862629 quintago
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WTF is the Cusip for Black Swan?

Wed, 11/09/2011 - 16:10 | 1862660 dracos_ghost
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Wed, 11/09/2011 - 15:46 | 1862522 Ragnar24
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History would suggest the stronger members of a currency union leave first.  See: history of Bretton Woods... France and De Gaulle simply refused to sell his country's gold to support the dollar peg and Johnson's "Great Society" (sound familiar?)

Wed, 11/09/2011 - 15:51 | 1862550 Lux Fiat
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Agree. Their external debts would be in Euros, which would decline precipitously if the stronger members leave.  Conversely, Italy and Greece just wind up getting shafted further if they leave the Euro, as their Euro-denominated debt would rise in value vs. the new domestc currency, pretty much dictacting a 100% vs. 50% default.

Wed, 11/09/2011 - 15:52 | 1862554 TruthInSunshine
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The Federal Reserve 'Bank,' European Central 'Bank,' 'Bank' of Japan and Peoples 'Bank' of China are about to make public the creation, after years of tedious, incredibly expensive research and development, the Fiatenstein 9000, able to print a quadrillion SDRs per second.

Wed, 11/09/2011 - 16:04 | 1862637 fractal trader
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Wed, 11/09/2011 - 15:54 | 1862577 hedgeless_horseman
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You make a good argument using history.  However, exporters wear the knickers in Germany.

Wed, 11/09/2011 - 16:09 | 1862653 Lux Fiat
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German exporters are screwed either way.  Austerity will kill demand.  Periphery countries with independent weak currencies won't be able to afford as many German goods.  However, large german exporters who have euro-denominated debts will at least win on that front.

Wed, 11/09/2011 - 16:32 | 1862792 hedgeless_horseman
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Austerity will kill demand.

Austerity...in Greece...if they can print their own Drachmas?  That is the best joke I have heard in quite some time.

This is a faillacy, as we all should know that demand is not ever created by the actions of Central Bankers.

Wed, 11/09/2011 - 16:48 | 1862893 Lux Fiat
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So my thinking is not just fallacious, it's faillacious... ha!  Semantics aside, debasing a currency brings inflation.  Unless Greece is economically self-sufficient and not importing lots of things, inflation brings an austerity of its own.  Will they get back on their feet over time, albeit without the cushy retirements, etc?  Sure.  Perhaps your point of view it that a self-inflicted wound is preferrable to one of someone else's making, and heals faster?

Wed, 11/09/2011 - 16:09 | 1862655 Ethics Gradient
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Except if they prepare one country to leave, every Euro in the world will travel to Germany. There will be quite a rip-tide.

Because of that, the new DM will have about 30x as much currency floating about as Germany needs. Ironic, really. What is Germany trying to avoid? What does too much currency do?

Wed, 11/09/2011 - 16:33 | 1862799 TruthInSunshine
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If austerity kills demand, EG, you should get a taste of what massively accelerating and never-to-be-repaid sovereign and private sector debt does to it.

Wait, that's why they keep kicking the can, in an attempt to prevent people from seeing the ugliness and gore that does result from the latter approach, right (and accumulating even more unpayable debt in the process)?

Kick the can is all fun and games until a world war or other catastrophic global crisis breaks out.

Wed, 11/09/2011 - 16:34 | 1862816 hedgeless_horseman
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That's a bingo!

Wed, 11/09/2011 - 15:30 | 1862378 ZerOhead
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Threat of the Deutsche Mark is more likely.

(Merkel is pulling a G.Pap)

Wed, 11/09/2011 - 16:52 | 1862906 kengland
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Why is this "rumor" taken as gospel but bullish rumors are looked at as heresy? Unreal how consistently inconsistent TD is

Wed, 11/09/2011 - 15:43 | 1862437 The Limerick King
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The Euro is coming unglued

And Germans are now getting screwed

The tide is now out

There is no more doubt

The whole God-damned Union is nude

Wed, 11/09/2011 - 16:10 | 1862663 bearnanke
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Great! I like it...


Wed, 11/09/2011 - 16:30 | 1862789 Ponzi Unit
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Wed, 11/09/2011 - 21:53 | 1864153 Max Fischer
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You rule. Keep it up.  Always a good laugh.

Max Fischer, Civis Mundi

Wed, 11/09/2011 - 15:31 | 1862399 Joe Sixpack
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Adolf Linköln bitchez!

Wed, 11/09/2011 - 16:01 | 1862619 bernorange
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Hopefully the death of the Euro doesn't give birth to the "globero" (IMF SDR based "currency").


Wed, 11/09/2011 - 16:33 | 1862809 Gief Gold Plox
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One global currency? As I understand there's been one in place for millennia: GOLD bitchez.

Wed, 11/09/2011 - 15:18 | 1862290 devo
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Serious question: why is leaving the Euro a bad thing? Seems good.

Wed, 11/09/2011 - 15:21 | 1862319 BandGap
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Leaving the Euro, bad.  Leaving the EU, really bad.  These are your customers. The idea is to feed their addiction to buying your goods. Sound familiar?

Wed, 11/09/2011 - 15:44 | 1862463 TruthInSunshine
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Paul Krugman just tweeted that the solution is to print twice the number of EURs that currently exist, and use the latter half to pay back creditors of the existing half.

Wait...there's more...


He also said everyone could then have their money for nothing, and their chicks for free.


Wed, 11/09/2011 - 15:47 | 1862529 s2man
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EURUSD @ 0.75.  Not.  So then the U.S. prints more. Rinse and repeat.

50% inflation, anyone?

Wed, 11/09/2011 - 16:13 | 1862575 TruthInSunshine
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I forgot the /s

Though it was implicit.


It was implicit!

Wed, 11/09/2011 - 15:21 | 1862322 NotApplicable
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It is good, which is why it won't happen (in the long-term). This is just a big head-fake to scare everyone into compliance.

Wed, 11/09/2011 - 15:37 | 1862347 Village Smithy
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Because it means that Germany wants to save itself and jump ship leaving the rest of the Euro countries to founder.


Why did you junk me? I'm not saying that's a bad thing. There is no sense in the good being dragged down.

Wed, 11/09/2011 - 15:39 | 1862462 AbelCatalyst
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That would be the smart thing for Germany to do.  If the US had the opportunity to inflate away all their debt and not have to experience the consequenses you bet they'd do it.  What country would not?  Germany needs to find a way to do it and save face so other countries don't start dropping bombs on German cities....  

A total and complete mess, no real solutions, the ship is sinking, and no one knows what to do - that is the very definition of panic.  Things need to crash in order to begin to rebuild, and the longer we wait the harder the fall.  It's simple common sense.

Wed, 11/09/2011 - 15:44 | 1862503 Going Loco
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3 entities:-

  1. German banks
  2. German export customers in Europe
  3. German state

Can't save them all. Not possible. Might be able to save 2 out of 3. Time to choose. 

Merkel is an East German, friend of Putin. Will choose to save state.

But will she succeed?

Wed, 11/09/2011 - 15:25 | 1862349 ZerOhead
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Not for the bankers it ain't.

A commission within the party, that is crafting a framework to be presented at a party meeting, has proposed allowing a euro member who doesn’t want to or isn’t able to comply with the common currency rules to leave the euro region without losing membership in the EU, the newspaper said.


Expect the price of leaving voluntarily to be severe.

Wed, 11/09/2011 - 15:30 | 1862391 srsly-wtf
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I think the Euro is in effect keeping Germany's exports cheap.  The DM will appreciate strongly and hurt exports. 

Wed, 11/09/2011 - 15:41 | 1862480 Fips_OnTheSpot
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Yeah, like we germans reaaaally had a baaad, bad time exporting stuff before EUR? Gimme a break... you want that shiny new Porsche, no? =)

Wed, 11/09/2011 - 15:44 | 1862509 DCFusor
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Yup, and if it appreciates too much they can always print more!

Wed, 11/09/2011 - 15:49 | 1862537 SilverIsKing
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Before the EUR, the buyers had a currency that was perceived to have some value to Germans.  When the EUR cracks, will the Germans accept toilet paper for their goods and services?


I'll trade you a 24 roll count of Charmin Ultra for that shiny new Porsche.  Deal?

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