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!
(22 votes)
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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.