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Did Merkel Just Usher In The Deutsche Mark?
Rather worryingly, Bloomberg is reporting a Handelsblatt report (due tomorrow) that Mrs. Merkel is investigating ways to enable countries to leave the Euro.
Merkel's CDU Seeks to Make Euro Exits Possible (via Bloomberg)
RMBS patents ruled invalidGerman Chancellor Angela Merkel’s Christian Democratic Union party wants to make it possible for European Union members to exit the euro area, Handelsblatt reported in a preview of an article to be published tomorrow, citing unnamed participants in the discussion.
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.
Incredible!
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Deutsche Mark, bitchez!
Last one out of the toilet paper fiat casino (and especially the Barnum & Bailey/Ringling Brothers/BernankAlchemy equity 'markets') is a rotten egg, bitchez!
Did Merkel Just Usher In The Deutsche Mark?
No.
Did Merkel Just Usher In The Drachma?
Yes.
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.
If the result of that union is "God-Kong", I kind of like the sound of that....
Great Porn name.
More likely you will get Donkyzilla.
Great porn name in different circles.
No.
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.
"different circles" eh.... Worst pun ever! CB
Break the glass? Funny you should use that term:
Kristallnacht, 73 years ago, today (11-9-1938)
Erie. Just erie.
Huron. Just huron.
Superior, too!
very bullish!
-Cocaine Krugman
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 -
WTF is the Cusip for Black Swan?
666-666-666
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?)
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.
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.
LOL!!
You make a good argument using history. However, exporters wear the knickers in Germany.
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.
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.
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?
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?
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.
That's a bingo!
Threat of the Deutsche Mark is more likely.
(Merkel is pulling a G.Pap)
Why is this "rumor" taken as gospel but bullish rumors are looked at as heresy? Unreal how consistently inconsistent TD is
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
Great! I like it...
Nice!
You rule. Keep it up. Always a good laugh.
Max Fischer, Civis Mundi
Adolf Linköln bitchez!
Hopefully the death of the Euro doesn't give birth to the "globero" (IMF SDR based "currency").
www.pmbug.com
One global currency? As I understand there's been one in place for millennia: GOLD bitchez.
Serious question: why is leaving the Euro a bad thing? Seems good.
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?
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.
???
EURUSD @ 0.75. Not. So then the U.S. prints more. Rinse and repeat.
50% inflation, anyone?
I forgot the /s
Though it was implicit.
It was implicit!
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.
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.
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.
3 entities:-
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?
Not for the bankers it ain't.
Expect the price of leaving voluntarily to be severe.
I think the Euro is in effect keeping Germany's exports cheap. The DM will appreciate strongly and hurt exports.
Yeah, like we germans reaaaally had a baaad, bad time exporting stuff before EUR? Gimme a break... you want that shiny new Porsche, no? =)
Yup, and if it appreciates too much they can always print more!
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?
Yep, not to mention you pissed off all your customers for leaving the party early.
SHTF in spades tomorrow. Much wailing and gnashing of teeth over what to do. First one to blink, wins!
Exports are already dead! This arguement does not make any sense when weighed against Germany paying off everyone else's debt. The scale is quickly tipping toward the Mark - there is not much left holding Germany to the EUO...
If you have sold debt in Euros and you leave the Euro and your new currency falls 50% against the Euro then you have twice as much debt in your new currency than you did before, i.e. your debt to GDP just doubled, of course your new currency could fall much further making your debt/GDP even worse, your countrys private and public sectors are now about as risky to lend to those in Somalia and your society looks about the same as theirs, go long AKs and pirates!
@devo----i think everybody has it backwards. germany wont leave the eu. the structurally unsound countries will leave. and this is GOOD not bad. countries like greece can print their own currencies, devalue their debt, bolster their exports, thereby improving their economies again. yes, germany and france and the other core countries would have a disadvantage in their export business, but they will be looking more and more to asia for exports, not greece and spain. germanys consumers will benefit from lower prices imports from the peripheral countries. the alternative is for germany to continue to prop up eu countries that wont get out of their funk under current structuring. so yes, germany may take a bit of a hit on their exports, but the alternative is much worse.
Taken in isolation, leaving the euro and defaulting explicitly is good for a country like Greece. However, this will be a death-blow for the banking system globally since all of a sudden bank balance sheets will be exposed. Only way out is for ECB to print like mad, or to nationalize banks and impose tough medicine on everyone. If they choose the latter (which is the only long term real solution) then anything that is levered on the growth story is toast.
This is not like Argentina or Asian crisis...we are all in bed together.
MAKE IT HAPPEN!
Looks like the next tweet got into the snippet. Bitchez!
Just hand over all of your remaining assets to the attendant at the door, please.
good thing they ordered that new printing press. They didn't wait for the Black Friday sales. Guess they wanted it bad!
Sure did!
'Incredible!'
I'd say: Predictable!
Good stuff. Even better would be putting this whole bag of shit to the Greeks to vote on...
"democracy is too important to be left up to the votes of the people"
Henry Kissinger before authorizing the overthrow of Salvador Allende.
Bushs fault
-Democrats
and that, boys and girls, is the sound of one shoe dropping.
Blow up time.
Unless its Germany that leaves, EZ banking is cooked.
Actually ...
The bit I liked was "RMBS patents ruled invalid"
;-)
I thought the RMBS was the Chinese currency. Oh, I get so confused by all these acronyms.
I read:
invalidGerman Chancellor Angela Merkel
without losing membership in the EU? whose laws preside over national law? curious..
This can't be. Larry Fink has been devouring Euro debt. Criminal Syndicate Wall Street bankers are the smartest people on the planet.
Ummm /sarc...as the selling opportunity on BLK is just rich. Unless, of course, you believe other criminal syndicate Wall Street bankers who have been saying for months that US exposure to such debt is tiny.
Ahem...
Angela of Death...
Plan G
abandon ship bitchez!
The Greeks played this well. Get what we can from the Eurocrats...drag it out as long as we can...wipe out the bulk of our debt then exit the Euro. Rinse and repeat. Well played G-Pap.
But but but...
11-09 14:12: EU's Juncker says the EUR is not in crisis and the single-...
11-09 14:12: EU's Juncker says markets 'not taking into consideration...
How did the old saying go again? Ahh, yes, now I remeber!
Quoting Mr Jun(c)ker: "When things get tough I have to lie"
P.S. There has been same talks at least in Finland where, amazingly, both opposition and the ruling coalition agreed there has to be a mechanism to exit eurozone.
The end is nigh.
The problem is in your head, Merkel said to they.
The answer is easy if you take it logically.
I'd like to help you to be free.
There must be 50 ways to leave the Euro.
She said it's not my habit to invade.
Furthermore, I hope my meaning won't get misconstrued.
But I must repeat myself, at the risk of hiking the price of crude.
There must be 50 ways to leave the Euro.
"50 Ways to Leave the Euro"
Catchy title. Got the makings of a pop hit there.
How about "Smells like Greek Spirit" for the B-side?
Maybe a hit among the Keynesians would be a soulful addition, "Bridge (to nowhere) over troubled waters"?
You Just slip out the back, Greece
Make a new plan, Irelan(d)
You don't need to be coy, Belgium
Just get yourself free
Hop on the bus, Spain
You don't need to discuss much
Just drop off the key, Italy
And get yourself free
http://www.youtube.com/watch?v=298nld4Yfds
It's the only practical solution for France and Germany.
My read on this is that they want to create the necessary legal structure to more easily push out the periphery countries. All a matter of interpretation I guess, but this seems Euro bullish to me actually.
My read, too. They want to keep the euro intact, so looking for a way to push out the schlepps.
Basically, cheap USD is the goalseek here, and I'm just not seeing any credible threat to that play.
Reuters headline:
Euro zone has no plans to rescue Italy: officials
http://www.reuters.com/article/2011/11/09/us-eurozone-italy-bailout-idUS...
Dick around with G-Pap for a couple of years but drop bunga-bunga in the toilet immediately. Guess the French and Germans do not hold much Italian debt so no need to bail them out.
Maybe the Italians were buying the German cars in large enough numbers?
Have to open the vaults and sell teh shiny stuff now, ow, wait a minute.....
Flash Crash?
Ya, ya, she makes us so very proud.
Thank goodness, now once they deny this rumor we can rally again
Euro is at 1.35.
soooo, risk off?
need.rumour.right.now!
VIX +30% WOW!
yep...although this is the new normal for VIX. Everyone is trading the wall street hype with primary dealers providing liquidity and backstop....BUT with one finger on the sell button since they all know deep down inside this is just a massive pump and dump.
Where on earth is the late day rumor? Merkozy....where are you.
Another fiat currency, bitchez! (NOT!)
Who thinks loudly first, will eventually have to exit.
Has anyone done the arithmetic to determine what yield Italian bonds would be trading at if the ECB had NOT been buying Italian debt?
just shoot the horse, ok?
No need to get this complicated. BTP's will go to their pre EMU levels, i.e. 12% +. If the EURO experiment demonstrated anything, it is that you might do away with your country's currency, but your country still has currency risk. And that catchs up with you in the end. Just like it did with the Soviet Union:)
Interesting.
oooo, I'd say 50% write-down implied.
Trouble is the system is dynamic. If there was any sort of meaningful write-down of debt it would impact the economy, which reduces the ability to pay, which increases write-offs etc etc ad infinitum....
Mrs Merkel...???
Mrs...????
You mean someone married that old coot.
Must have a white cane.
For some sick reason your post made me think that dirty talk during sex with Angela must at some point involve the words "auterity measures". Oh shit, now I'm reminded of ze "price stabileetee"... damn the images in my head. Damn it.
ok, well...
...that's that, then
christianity had a smooth start, compared to this!
First healthy one out gets to survive and flourish. It survival of the fitest mode now.
Sarkozy will be left holding the bag...
True. The French are the largest recipients of EU funds under the CAP. Last time I checked, 40% of EU budget went to the CAP, and 40 of all CAP went to the French. It pays to have backward farmers. Yes :)
First healthy one out gets to survive and flourish. It survival of the fitest mode now.
this news and the first big dead bank would be great before christmas...ah!! the circle of life
Weee. there goes gold. Wait. Wait. Wait for the dip...
The euro will collapse? Yes
Then the Yen.
woops
If I recall correctly, reports from several weeks ago stated that Germany was already printing new Deutchemarks.
Wonder if they are using the same type of magnetic ink our lovely US FRNs use?
They can't go to a one world currencie now that the Euro didn't work. They will all go back to their former currencie.
Another new avatar, Mr Hendrix? Who is that? They don't look in very good shape.
Leaving the Euro involuntarily = liabilities in Euro, revenues in toilet paper
The first country that tries it will beg to have "austerity" back.
this is true...but, well they just won't pay. They'd have to cut a deal that will leave creditors longing for the days when they could have gotten a 50% haircut. in the LatAm crises i thin ksome of those debt were settled for like .10 on the $
The sovereign can do what it likes. If you're an exporter, would you make delivery on a banker's acceptance in drachmas? Not terribly likely. Post-exit the real currency would still be EUR, and Greece and Italy don't have any foreign reserves they could use to defend a peg.
A country (Finland, say) could conceivably leave from a position of strength, but having a strong currency--or paying healthy yields--in the midst of the EZ also has its dangers. See also Iceland and Switzerland.
It's just a shitstorm however you look at it. And yes, LatAm countries have repeatedly repudiated their debts, but these are not exactly developed-world democracies you're talking about. Of course, if Italy has a secret wish to become Guatemala on the Mediterranean, then by all means yes they should dust off the plates for lire right away.
Wrong. Leaving Euro means liabilities in toilet paper, revenues in toilet paper, just more toilet paper. It's just that simple.
Tyler,
Have you seen this post: http://fatasmihov.blogspot.com/2011/11/plan-b-for-europe-do-not-stare-into.html?
There was a comment how the picture looks like Zero Hedge's!
i.e. the con game requires more willful ignorance.
if you close your eyes real hard...it'll go away. it like, totally works.
Or wrap a towel around your head. Because if you can't see the abyss, then it can't see you.
"Rather worryingly" ??
It's great. It's only bad if you are a NWO Eurocrat.
Germany exits and goes back to the Mark, it's where all the Euro currency goes and it survives. France is a leech. Germany wins.
Haven't seen Robo trolling around here today. I'll have to post for him. FAZ seems to be rockin today. SDS is up 7%. Now all you bulls junk me and I won't respond.
"and I won't respond."
so true! priceless.
Germany will NOT pay for socialism in Greece or anywhere else in Europe.
Told you so!
It's apparent that most Germans do not understand the levered EFSF financial vodoo trick that a certain banking cabal had tried to implore on Germany and the rest of Europe. Just like fractional reserve lending should have never be allowed in the first place, just like usury is against every law in the good book; the weirder it gets the worse it gets.
The financial markets are a FREAK SHOW, run by FREAKS. A good cleanse would do wonders!
except for the occasional mass slaughter brought about when one country or another tried to impose it by force, europe worked much better without centralized authority. I suspect North America would have been better off that way also. sic semper tyrannis
don't need investigating anything... Europe is in a big explosion, politics must study how to avoid a new WAR.... but may be too late...
what? politics is currently studying how best to initiate war, because that's all they know. it's pretty much just a matter of picking sides now.
Here's a question: Why would any country want to be in the Euro if it weren't a requirement for being in the EU?
Because the ECB is such a kind and benevolent entity?
I'm used to reading comments by idiots on ZH but this takes the biscuit. I won't even bother to explain to this depleted cranium why he is an idiot.
Because it makes it easier for the deadbeats to apply for hand-outs / subsities.
EU's Juncker says the EUR is not in crisis
Now you know for sure that it is FUBAR
What are you talking about -- I'm buying Italian bonds with both hands, 7% return are you kidding ? Where do I sign!
Euro was ill and overpriced for a while. The Leech countries wanted the Euro. It took 12 years of the PIIGS sucking the wealth out of the rest of Europe. Now the check is due and the PIIGS are looking for non-ending handouts.
germany is not leaving the euro, the laggards, the ones with social/political structural defects that will take generations to fix, those are the ones that will be leaving....
Let's hope so, because then we won't have to re-name the Euro "the new Deutschmark".
just checked in on my physical gold and silver coins and bars. it's still there in all its shiny glory, relaxed, confident, smiling, unaware of all the tumult.
Frankly, when I saw her call for a new Europe, I thought she wanted to change the treaty so the ECB could print, but on further reading, it is clear she won't let the ECB pile that liability onto Germany.
Those folks over there surely see that the game is over now.
I dont think she was talking about Deutsche Mark, rather it was about greek drachma, italian lira, spanish peseta, portuguese escudo ...
We can only hope that it is Germany that wants to leave. If this happens, it defused half of the time bomb that is destablizing the global economy. Now if Merkel could just find a way to convince the Chinese to allow the RMB to float, the world would be saved. It's just that easy:)
Leaving the Euro is a thought on most German's minds, and has been for some time. Actually it's something long overdue. Germany should leave the Euro, and leave it as soon as possible.
"on most German's minds" ???
France can't go back to franc however Germany can go back to mark without much effort because mark is still accepted as valid currrency.
Germany needs to give the rest of Europe a good financial enema!
let's hope it's Deutsche Mark and not Reichsmark