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"The Euro Is Finished"

Tyler Durden's picture





 

From Mike Krieger of KAM LP

There are two ways to conquer and enslave a nation.  One is by the sword. The other is by debt.
- John Adams

What lies behind us and what lies before us are tiny matters compared to what lies within us.
- Ralph Waldo Emerson

 

The Euro is Finished

To regular readers of my pieces over the last several years this may not seem like a particularly poignant statement.  After all, I have referred to the Euro and the U.S. dollar both as worthless political toilet paper for years.  The reason I bring it up right now is not to state the obvious long-term macro conclusion that the Euro is a foolish, unnatural creation that only political types twiddling their thumbs in a room could come up with.  No, rather the reason I say it now is because I believe the Sword of Damocles is now hovering right over it.

The only question in my mind at the moment regards the specifics of how it will end.  I would say that the majority of those that think there is a strong likelihood that the euro falls apart envision the PIIGS countries leaving or being thrown out.  While I certainly think this is a possibility, especially if Greece just calls it quits and then successfully transitions to its own highly devalued currency since this would for sure start the ball rolling and before long many of the other financially weak nations would also bail.  In such an event, I suppose what is left of the euro could be comprised of stronger Northern European nations and in that case what is left of the common currency could in fact strengthen materially versus other fiat currencies for which no such “restructuring” has occurred.  However, I am not convinced this is what happens.  The reason I am not convinced is because I don’t believe that the desired austerity measures will ever really go into effect in these nations and even if they did it would merely collapse those economies and the problem would not be solved.  As many have stated over and over (including myself) there is no conventional solution to this crisis.  There is far too much debt and there is no way real GDP growth can grow fast enough to counter this.  The debt will be defaulted on via restructuring/default or a dramatic destruction of the purchasing power of fiat currencies.  Nevertheless, the bureaucrats in Europe have such a deep love affair with their preposterous experiment they will turn a blind eye to all the transgressions of the PIIGS and continue to just pretend they have solved something with every new bailout scheme.

So that brings us to the other, and I think increasingly likely, outcome.  That is namely that the ECB continues to transfer wealth from the prudent and fiscally more sound nations (mainly Germany) to the periphery until the populace of Germany snaps.  I think that moment is very, very close at hand.  Once that tipping point is reached there will be no turning back.  The popular anger at the ECB and Euro will be so profound and so long festering that it will overwhelm all attempts to keep things together.  Germany could leave the Euro.  Or it could make it so difficult for the PIIGS that they are forced to leave.  Either way, Germany is EVERYTHING.  Nothing else in Europe matters right now besides the sentiment on the German street and it has become pretty clear lately which way that is going.  I am 100% convinced that Germany will play nice until that crucial moment is reached where it really is put up or shut up (we are close).  At that point, I have no doubt that Germany will do what is best for Germany.  In the event that Germany was to leave, the Euro would be gone forever.  It would become pure confetti overnight.  This is not my base case but it could happen.  Anything can happen right now.

The Fourth Turning is Global

All of this discussion about the euro brings me to a broader point.  While for obvious reasons I focus my attention on the United States because this is where I live and what I know best it is imperative for me to clarify my view that this Fourth Turing we are in is global in nature.  Remember, what really characterizes these shifts is the fact that the trends, institutions, political structures and parties, social mores, money systems, etc all die and are reborn during such episodes.  The last to get this of course are the elites and the political class who are always in bed together and seemingly at the height of their collective corruption once the Fourth Turning hits.  We see this everywhere at the moment, from the U.S. to the Eurozone to China.  What makes me laugh more than anything else are all these political hacks and financial “analysts” who keep saying that the answer to the crisis in Europe is a fiscal union in Europe.  That somehow this crisis will lead to the necessary resolve to form a fiscal United States of Europe, or some idiocy like that.  Sorry folks, it’s not going to happen.  This whole “problem, reaction, solution” playbook worked for the elite in the prior era but it will no longer work.  The playbook is out there.  It has been read and studied.  We know the playbook.  It’s not going to work this time. 

Like I have said before, one of the key aspects of the new age we are entering will be a dramatic reversal of a lot of the unrestrained globalization that has occurred since World War II.  Things are going to be more local everywhere.  Such as the food we eat and the products we use.  The lack of any breakthroughs on the energy front as we confront resource constraints demand that this be the case.  This reality will change everything in every possible aspect of life on earth.  Things in general will be much less “top down” on the political front.  There is a “tide in the affairs of men” indeed and that tide will take the Euro and any ideas of a fiscal union out to sea forever.  The key thing for everyone reading this to do is to get prepared for the new world as much as possible before it comes suddenly.  This has always been the idea behind my pleading to buy gold and silver.  We will need new forms of money and exchange.  It cannot and will not be a fiat SDR or any ridiculousness such as that.  That notion represents the past trends and the already failed dreams of our parents generation of central planners and free lunches.      

Quick Thoughts on the Swiss Franc     

While the move by the SNB to basically link its currency to the dying Euro was shocking and will send shockwaves throughout the global financial systems for months to come, in many ways it was inevitable.  The central planners are still in control and they are getting increasingly desperate.  Part of their desperation manifests itself in acts to prevent markets from sending out signals to investors and the general population.  This is why Central Bankers print money and buy government bonds.  This is why the ECB is buying worthless PIIGS debt.  This is why the SNB decided to destroy its currency.  After all, if they agree to destroy the value of the Franc at the same pace as the Euro then it will become less clear to the currency market just how quickly purchasing power is being destroyed.  Of course, you can always tell in the commodities sector.  What the Swiss did is unfathomably bullish for commodities, in particular energy, food and precious metals.  Every rich person with a Swiss bank account in Swiss Francs will be scrambling to turn that into the one hard currency left:  GOLD.  That is what the Swiss said to us earlier this week.  They told every investor on the planet “we don’t want to have a hard currency.”  If you want a hard currency you have once option now.  Gold.  When people really figure this out it is going to be a mad scramble for physical metal the likes of which no one alive has ever seen. 

Peace and wisdom,
Mike

 


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Thu, 09/08/2011 - 14:24 | Link to Comment caerus
caerus's picture

i say the franc (as a safe haven at least) is finished

Thu, 09/08/2011 - 14:25 | Link to Comment fiftybagger
fiftybagger's picture

terminado

Thu, 09/08/2011 - 14:32 | Link to Comment Ahmeexnal
Ahmeexnal's picture

maybe that's what "they" want everyone to think....

Thu, 09/08/2011 - 14:35 | Link to Comment caerus
caerus's picture

maybe...but given the way the snb caved to the irs and their recent desperate attempt to depress the value of the franc by taking on unlimited amounts of worthless paper that they will eventually have to disgorge at massive losses i think the simpler explanation is that they (the snb) are idiots

Thu, 09/08/2011 - 14:40 | Link to Comment dlmaniac
dlmaniac's picture

Never expect a sound currency from a rampant socialism union. Mathematical impossibility.

Thu, 09/08/2011 - 14:43 | Link to Comment EscapeKey
EscapeKey's picture

Are you talking about Europe or the States?

Thu, 09/08/2011 - 14:47 | Link to Comment dlmaniac
dlmaniac's picture

Both.

When politicians are allowed to pint money at will the currency is doomed b/c you can be sure as heck it's being spent on unproductive activity that ruins the real growth opportunities and economy at the end.

Thu, 09/08/2011 - 19:17 | Link to Comment Dugald
Dugald's picture

Nah, Nah, Nah.....Don't you get it?      Its all a fiendish plot.....!

Thu, 09/08/2011 - 15:00 | Link to Comment myTPisUSD
myTPisUSD's picture

I agree. I mean, think about it. The swiss peg the franc to the Euro, that means that gold will only go up (and faster) as the euro collapses, and swiss has a lot of gold. When the time is right they can depeg whenever they want to. Plus as the euro continues to fail it will make Swiss products (not just financial instruments) more attractive. Switzerland is used as a final assembly location for much of europe because of low taxes.

Thu, 09/08/2011 - 16:08 | Link to Comment DosZap
DosZap's picture

myTPisUSD,

< and swiss has a lot of gold>

For a small country they do, as for the toatal they own, NOT so much.

Since they went off the Gold Std

Thu, 09/08/2011 - 16:47 | Link to Comment Magnix
Magnix's picture

"...and swiss has alot of gold.." STOLEN by Nazis. :-)

Thu, 09/08/2011 - 16:48 | Link to Comment Magnix
Magnix's picture

.

Thu, 09/08/2011 - 14:35 | Link to Comment ratso
ratso's picture

Another simplistic article that does nothing more then say "Buy Gold".  No insight hear into the intricacies of the EU, the ECB, the SNB and the political realites of all the EU countries.  Just blah, blah buy gold

Thu, 09/08/2011 - 15:06 | Link to Comment Spitzer
Spitzer's picture

Funny how the ECB is way more hawkish then the Fed yet they say the Euro will hyperinflate first.

 

Thu, 09/08/2011 - 17:42 | Link to Comment destiny
destiny's picture

Pretty God Damn Article in my book ! We'll see how you blah blah when shtf...

Thu, 09/08/2011 - 14:43 | Link to Comment disabledvet
disabledvet's picture

"kaput" ...as in "not working as intended." "finished" connotes a failure of the intended purpose...yet you claim this is exactly what policy makers want. Therefore the "euro is kaput." this is very important to know this too. You see "you laugh but kaput is not funny." ....haha...i see you are laughing again.

Thu, 09/08/2011 - 14:25 | Link to Comment Crisismode
Crisismode's picture

They will continue to issue debt . . .

 

. . . until nobody will accept their debt anymore.

 

And then they will try to take what they want by force.

 

Until they are stopped by force.

 

.

Thu, 09/08/2011 - 14:28 | Link to Comment The They
The They's picture

agreed. The Euro is a debt prison pure and simple.

Thu, 09/08/2011 - 15:07 | Link to Comment Spitzer
Spitzer's picture

What is wrong with the Euro at the moment is what is right with it.

Thu, 09/08/2011 - 15:39 | Link to Comment DaBernank
DaBernank's picture

Only an ill-informed individual with no understanding of national identities in Europe would spout such nonsense. Other than not being the Fed, the ECB has nothing going for it.

By buying bonds from governments and providing cheap credit to banks around Europe in a bid to stem the debt and bank crisis, the Eurosystem which underpins the ECB has become hugely leveraged. With only €81.187 billion in subscribed capital and reserves, compared to €1.895 trillion in assets, the ECB is now leveraged 23.4 times.10 In contrast, strong central banks such as the Swedish Riksbank, the Norwegian Central Bank and the Swiss National Bank, are leveraged only 4.7, 5.9 and 6.3 times respectively. Meanwhile, the average hedge fund is leveraged around four or five times.

Table 1: Spot the difference between the ECB and other central banks

(€m)            Capital     Reserves     Assets         Leverage     C+R as %ratio of Assets
ECB              10,761     70,426      1,895,870     23.4: 1        4.25
Swiss NB       36,174         -          226,641         6.25:1        15.96
Sweden         110         7,235        34,757          4.73:1         21.1
Norges Bank   8,441         -           49,345          5.85:1         17.1

Source: ECB weekly financial statement 24 May 2011, SNB Balance sheet, Swedish Riksbank weekly financial statement and
Norges Bank Balance sheet April 2011

Thu, 09/08/2011 - 15:51 | Link to Comment TruthInSunshine
TruthInSunshine's picture

Not only did I 'up arrow' you, I now will give you a:

 

 

+1

Also.

Nice work.

Thu, 09/08/2011 - 18:06 | Link to Comment Ghordius
Ghordius's picture

Ehmmm...
Wait
The assets and ratios of CB's are only relevant for the DEFENCE of a currency.
Not the current situation, is it?

In a defensive I-have-to-keep-value situation RESERVES are what you need, FX and/or Au.

Thu, 09/08/2011 - 18:36 | Link to Comment Nate H
Nate H's picture

meaning they are (gulp) not that far from needing recapitalization....

Thu, 09/08/2011 - 14:45 | Link to Comment Little John
Little John's picture

  When democracy is replaced by tyrany those with rifles will still get to vote.

Thu, 09/08/2011 - 16:13 | Link to Comment taint
taint's picture

yippee, I will get to vote 25 times!!

Thu, 09/08/2011 - 19:23 | Link to Comment Dugald
Dugald's picture

Yeah so?   You can only fire one at a time chum......

Thu, 09/08/2011 - 19:52 | Link to Comment FeralSerf
FeralSerf's picture

"Those who vote decide nothing. Those who count the vote decide everything." - Joseph Stalin

Thu, 09/08/2011 - 14:51 | Link to Comment BigJim
BigJim's picture

Our overlords will continue to issue debt that no one wants, but which everyone will be required to purchase if they wish to see their banking licences unrevoked.

Thu, 09/08/2011 - 18:01 | Link to Comment QaplaSilver
QaplaSilver's picture

I'm very concerened that you are right about that.. sad times ahead.

Thu, 09/08/2011 - 14:25 | Link to Comment Roy Bush
Roy Bush's picture

Yeah, that's about right....couldn't have said it better myself.

Thu, 09/08/2011 - 14:26 | Link to Comment ml8ml8
ml8ml8's picture

Begs an interesting question:  What is a successful transition out of the EU from Greece's point of view? 

Thu, 09/08/2011 - 14:26 | Link to Comment DaBernank
DaBernank's picture

Basta!

Thu, 09/08/2011 - 14:29 | Link to Comment Stax Edwards
Stax Edwards's picture

Meh, transitory

Thu, 09/08/2011 - 14:29 | Link to Comment SheepDog-One
SheepDog-One's picture

Best line in the whole article 'This 'problem reaction solution' worked for the elite in the prior era but it will no longer work, we know the playbook now, it has been read and studied, its not going to work this time'.

Thu, 09/08/2011 - 14:29 | Link to Comment nope-1004
nope-1004's picture

Much appreciated Mike.  Always enjoy your views.

 

Thu, 09/08/2011 - 14:43 | Link to Comment TruthInSunshine
TruthInSunshine's picture

The only way the EUR is saved (if even temporarily, as in kick the can for a few months/years, and losing 50% or more of its value over a very short peiod as the ECB cranks out the EUR trash fiat), is if German Politicians fall on their literal swords as they pledge current and two or three future generations of Germans' labor, savings, sweat equity and output in order to bail out the welfare PIIGS+France nation states that surround them.

And even if German Politicians fall on their literal swords doing this, it can all be undone when their successors are brought into office, and the former office holders have to literally seek exile for reasons of their personal security.

 

Thu, 09/08/2011 - 16:58 | Link to Comment Highrev
Highrev's picture

I've never before seen anything blown so far out of proportion by so many completely uninformed "experts".

Thu, 09/08/2011 - 18:01 | Link to Comment TruthInSunshine
TruthInSunshine's picture

And your defense of the EUR and EU is so thick with meaty, substantive statistics.

Do tell how Germany is going to stretch itself thinly enough to bail out PIIGS+France.

Thu, 09/08/2011 - 14:32 | Link to Comment gratefultraveller
gratefultraveller's picture

They commissars don't want anyone to leave, neither the rich nor the poor.

EU = Hotel California?

"According to the opinion of the EU-comission, the highly indebted Greece cannot be excluded from the Euro zone. "Neither voluntary departure nor exclusion are possible", the spokesperson for EU-commissar Olli Rehn said in Brussels on Thursday. The Lisbon treaty specifies that membership in the currency union is "irrevocable". The spokesperson specified that his was both a judicial as well as a political reply, and added "There will not be a discussion about this."

 

(Source: Topnews Dow Jones)

Thu, 09/08/2011 - 14:59 | Link to Comment BurningFuld
BurningFuld's picture

Them's fight'in words!   

Thu, 09/08/2011 - 19:55 | Link to Comment FeralSerf
FeralSerf's picture

"Them's fight'in words", y'all!

Thu, 09/08/2011 - 15:04 | Link to Comment CD
CD's picture

http://en.wikisource.org/wiki/Consolidated_version_of_the_Treaty_on_European_Union/Title_VI:_Final_Provisions#Article_50

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

Perhaps these sources are outdated, but there explicitly IS an exit clause in the Lisbon treaty. If a country (esp. Germany) decides to withdraw, what is the EU going to do to stop it? Send in troops to prevent a humanitarian disaster?

For more detailed analysis:

http://www.ecb.int/pub/pdf/scplps/ecblwp10.pdf

Of course, you are absolutely right in that they want NOONE to leave.

Thu, 09/08/2011 - 15:28 | Link to Comment Clorox Cowboy
Clorox Cowboy's picture

I think J.C. "lie when it's really important" Juncker had a hand in crafting this statement...

Thu, 09/08/2011 - 14:33 | Link to Comment FunkyMonkeyBoy
FunkyMonkeyBoy's picture

How have we got into such a state that the fate of the world 'economy' rests on what a bald Jew fella has to say?

Oh yes, that's right, it's apathy that got us in such as state... and apathy is rife in the good old USA, more prevalent than ever.

At least the men and women of the middle east and parts of Europe got out of their chairs and put up a fight against the tyranny.

Thu, 09/08/2011 - 14:49 | Link to Comment Juan Wild
Juan Wild's picture

That's true but we already have a zog and they are ironically just starting one. If the UN and USA help liberate countries you can bet a Rothschild controlled central bank will appear. Then they can start thier lovely new lives repleat with ipads, wide-screen tv's and 7 credit cards each. That's not what I call liberation.

Thu, 09/08/2011 - 14:59 | Link to Comment web bot
web bot's picture

Leave the Jew stuff out of it... The Jews are our elder brothers and don't forget that.

Thu, 09/08/2011 - 14:38 | Link to Comment Shell Game
Shell Game's picture

"So is cheerleader Perry"  ..there, fixed it for you.

Thu, 09/08/2011 - 14:40 | Link to Comment fuu
fuu's picture

Ron Paul is done being the nice guy perhaps. Wtf was up with Perry grabbing him onstage?

Thu, 09/08/2011 - 14:43 | Link to Comment Shell Game
Shell Game's picture

You mean the status quo, college cheerleader, bully neo-con, also known as Mr. "I'll keep safing the shit out of you and abusing executive powers" Perry?
http://news.yahoo.com/photos/texas-governor-perry-talks-during-break-rep...

Thu, 09/08/2011 - 14:45 | Link to Comment e_goldstein
e_goldstein's picture

According to a police officer friend of mine, Class B assault (for assaulting a public official). 

Slick Rick should be facing charges.

Thu, 09/08/2011 - 14:45 | Link to Comment High Plains Drifter
High Plains Drifter's picture

paul can have a lot of fun with that one, there are pictures on the internet too....i heard it said he was thin skinned but please. you don't walk over and grab someone else by the arm during a debate..........good grief............ha ha ha ha .......where is rodent?  

Thu, 09/08/2011 - 14:57 | Link to Comment Juan Wild
Juan Wild's picture

Get your Gardasil-soaked hand off MY PRESIDENT, you, you CHEERLEADER!!!

http://www.ronpaul.com/2011-09-08/force-vs-reason/

Thu, 09/08/2011 - 14:35 | Link to Comment tempo
tempo's picture

The internet has made the earth flat and created worldwide labor rates rushing toward the bottom. Today labor is worth $5/day w no benefits. Tomorrow $4/day. Developed countries EU/USA with massive social programs are going down.
Then developing countries with following as EU/USA consumption drops. It was all created by the internet.

Thu, 09/08/2011 - 15:51 | Link to Comment New_Meat
New_Meat's picture

Earth being flat, as you say, hasn't hurt ol' Tom Friedman none. ;-) - Ned

Thu, 09/08/2011 - 16:49 | Link to Comment falun bong
falun bong's picture

Ding Ding Ding, we have a winner (partially). GATT/WTO put an additional 1 billion (mostly unemployed) people into the global labor pool. The internet just greases the skids

Thu, 09/08/2011 - 14:35 | Link to Comment lieutenantjohnchard
lieutenantjohnchard's picture

of course, mike. good job.

many have heard the rumblings. few have scrambled to safety by buying gold.

Thu, 09/08/2011 - 14:36 | Link to Comment Dick Darlington
Dick Darlington's picture

Good stuff Mike, keep up the good work!

Thu, 09/08/2011 - 14:39 | Link to Comment Pretorian
Pretorian's picture

Here we go eur/$ 1.6000

Thu, 09/08/2011 - 14:40 | Link to Comment Joebloinvestor
Joebloinvestor's picture

As long as the US can make loans "off the books", the Euro will not "collapse".

I wouldn't put it past Bernake to screw the whole system with his mis guided good intentions.

What he fears the most will happen, the history books will blame him for the greatest recession on record.

Thu, 09/08/2011 - 14:50 | Link to Comment disabledvet
disabledvet's picture

I think Greenspan has that one locked up tight. No...I think he's worried as we all are about his job. Clearly he has helped make it safe for the Fed's to borrow without regard to math or science. And as we all learned lasr night from "the new kids on the Presidential block" that means "you're fired."

Thu, 09/08/2011 - 14:41 | Link to Comment kensuneit
kensuneit's picture

Here I always thought the Emerson quote ended differently.  I thought it went, "What lies behind us and what lies before us are tiny matters compared to what lies right to our faces."

Thu, 09/08/2011 - 14:42 | Link to Comment Fuh Querada
Fuh Querada's picture

The power elite in Brussels will fight the exit of any members of the EUR currency zone with all means available until the entire continent lies in ruins. That includes tidal waves of QE by the ECB. If the EUR is to break up sooner, only the markets can do it. The German taxpayers and voters have as little influence under the current political parties  as their counterparts in the US. For Germany to leave the Euro, a new political party will have to be created with someone like Marine Le Pen as its head and win a majority in 2013.

Thu, 09/08/2011 - 14:49 | Link to Comment bigdumbnugly
bigdumbnugly's picture

true and true.

Thu, 09/08/2011 - 17:46 | Link to Comment Léonard
Léonard's picture

Marine Le Pen throw false euros in the River Seine in Paris to protest against the new bailing out of Greece.

http://www.youtube.com/watch?v=GOWFGbWvhxs&feature=player_embedded

Thu, 09/08/2011 - 14:47 | Link to Comment falak pema
falak pema's picture

I've seen this film before and its now coming back like a broken record. People in glass houses....

Thu, 09/08/2011 - 14:47 | Link to Comment Oh regional Indian
Oh regional Indian's picture

Could not agree more. Very well written.

This wave is coming over us all.

V

Tipping Points

Thu, 09/08/2011 - 14:49 | Link to Comment lix333
lix333's picture

 Everyone will flock to the Dollar. The gold market is too small and too volitile to be considered a safe haven investment. 

Thu, 09/08/2011 - 14:49 | Link to Comment lix333
lix333's picture

 Everyone will flock to the Dollar. The gold market is too small and too volitile to be considered a safe haven investment. 

Thu, 09/08/2011 - 14:55 | Link to Comment SheepDog-One
SheepDog-One's picture

If that happens, the central banksters are screwed, remember the FED's first mandate 'trash the dollar', a rising dollar is total disaster for the FED and its 'holdings'. Theyll never allow the dollar to rise.

Thu, 09/08/2011 - 15:08 | Link to Comment espirit
espirit's picture

One other possibility yet discussed would be that as the Euro devalues and eventually becomes par with the dollah, the IMF in desparation mode steps in with the SDR as a world currency to prevent an eventual global monetary collapse.

Temporary measures at best, looooong PM's.

Thu, 09/08/2011 - 15:52 | Link to Comment SheepDog-One
SheepDog-One's picture

Yes the endgame is 1 currency under world bank govt control, I think theyre stuck as they see their old 'problem-reaction-solution' way of operating is no longer working so theyre not really sure just how theyll get there but yea thats the goal.

Thu, 09/08/2011 - 14:49 | Link to Comment fredquimby
fredquimby's picture

FREEGOLD bitchez

The Euro Zone mark to market gold price party aint even started yet.

Article right to say buy gold but IMO, gold to the moon will SAVE the euro not end it. The nuclear option as FOFOA rightly highlights in

http://fofoa.blogspot.com/2010/05/open-letter-to-emu-heads-of-state.html

Thu, 09/08/2011 - 14:50 | Link to Comment alien-IQ
alien-IQ's picture

Well said Mike. Beautiful.

Thu, 09/08/2011 - 14:52 | Link to Comment Big Ben
Big Ben's picture

The Germans should "just say no" to more bailouts. Greece and other PIIGS may then choose to default or to exit the EZ and debase their currencies. It doesn't make any difference to their creditors, since either way they won't get paid.

Thu, 09/08/2011 - 14:52 | Link to Comment AE911Truth
AE911Truth's picture

Time for us to do the same. The best way to beat these crooks is buy and hold physical Silver. Do some research and I think you will come to the same conclusion.

Thu, 09/08/2011 - 14:53 | Link to Comment Sizzurp
Sizzurp's picture

The musical chairs game with currency is coming to an end.  The only chair left is gold, but there's not enough to go around, not at these prices anyway.

Thu, 09/08/2011 - 14:54 | Link to Comment Sophist Economicus
Sophist Economicus's picture

Mike, you continue to amaze me.

Most of your stuff is regurgitated pablum. But when you say things like 'we are going to be sourcing locally, growing food locally, etc' it confirms that you don't have the foggiest clue about business economics and the drivers of production.

Here's a career hint for you: Stop writing about stuff and go make stuff. Write once you get an education on how things work and stop pandering to dullards that anyone can whip up by saying things like 'elite', 'powers that be', blah blah blah

Thu, 09/08/2011 - 14:59 | Link to Comment LawsofPhysics
LawsofPhysics's picture

So do you run a business, if so what size?  what have your margins looked like for the last two years?  I can tell you that, where possible, we have started looking for local solutions.  It is called margin compression.  When are these ivy-league fucknuts going to get hung?  I think things will run much better after that.  They can't do, so they teach.  Crash the system already so that compensation can find its way back to folks that are actually worth a shit.  Hint for you; go run you own business with your own capital, not taxpayer's dollars.

Thu, 09/08/2011 - 16:26 | Link to Comment Sophist Economicus
Sophist Economicus's picture

I do run my own businesses.  Size would be in the small business classification.    And margins, they are stable.    They have to be.    I learned a long time ago, with my own money, btw, that one exits low margin efforts when at all possible (I understand loss-leader concepts and needing to sometimes provide certain products or services as hooking events, so there are exception, -- but, by and large, low margin = exit).  Local .vs. Regional .vs. National .vs. supra-national are choices that everyone always makes, what the current energy landscape looks has LITTLE to do with those choices.    You going to wait for someone to make cordless dril locally or are you going to buy a DeWalt or Makita or Festool?   Did energy enter in that equation?    Your local farmer going to supply you with tomatos, corn, wheat, hogs, cattle, chicken year round?   Really?     And let's talk about energy and how it mighjt drive the process.   Maybe bigger is better if resources are constrained - regardless of what resources we are talking about.    Large scale farming is less energy intensive than many local farms doing the same thing (think about that for a minute).   Maybe it's better that there are only a few LARGE companies that manufacture cars, batteries, windows, jars, pottery etc because they use LESS resources that lots of little, 'local' companies all pursuing the same thing.

 

Local DOES NOT EQUAL less resource use -- it is usually the other way around.    Instaed of going into a class tirade, or an 'Ivy league' bashing tirade, you might want to reflect on what is being said by the likes of 'Kruger'.   He has an agenda (don't we all).   As for your asinine comment about my capital .vs. taxpayer dollar, etc - you're a dope.

Thu, 09/08/2011 - 15:57 | Link to Comment Dr. Acula
Dr. Acula's picture

>But when you say things like 'we are going to be sourcing locally, growing food locally, etc' it confirms that you don't have the foggiest clue about business economics and the drivers of production.

That scenario could happen if energy and transportation costs rise abruptly: the global division of labor would suffer.

But energy futures suggest such a crisis is unlikely. It's just the quantity of clownbux that's causing prices to rise.

Thu, 09/08/2011 - 16:24 | Link to Comment Sophist Economicus
Sophist Economicus's picture

Doctor A, I submit that scale offers a better utilization of scarce resources .vs. the intuition pump of 'do things locally'.    As a matter of fact, that is how small companies became large companies at the expense of 'local choices' in the first place.    Also, many large scale players in lots of different spaces are practicing a think National - operate - regionally strategy.   One has only to look at a package from Amazon to see that they have many regional warehouse to facilitate shipping at advantageous rates.

 

What may happen is that people may need to drive less, consolidate vehicles, consolidate shopping trips, etc.   That will eliminate alot of 'waste in the system' IMHO....

Thu, 09/08/2011 - 17:55 | Link to Comment destiny
destiny's picture

When will we be using Free and unlimited energy ??? because it does exist ! so let's stop about those big companies making bucks and let's get down to real stuff..as I said in an previous post, I have serious concerns about those Big companies making money...legally

Thu, 09/08/2011 - 14:55 | Link to Comment Portugal
Portugal's picture

What??? the USA is the United Socialism of America???

Thu, 09/08/2011 - 14:55 | Link to Comment disabledvet
disabledvet's picture

This is another ridiculous article. How does the author explain the soaring yen even in the face of the biggest industrial accident in history? Obviously we already have the energy alternative "and it ain't nukers + mystical battery packs." i let u all figure it out since it's totally obvious.

Thu, 09/08/2011 - 14:55 | Link to Comment web bot
web bot's picture

If your thesis is correct and the Euro is finished, then parts of Europe are facing civil war...

Thu, 09/08/2011 - 14:57 | Link to Comment disabledvet
disabledvet's picture

No. We have that eventuality fixed as well. Move along...

Thu, 09/08/2011 - 14:58 | Link to Comment SheepDog-One
SheepDog-One's picture

We're all facing war, far sooner than most think.

Thu, 09/08/2011 - 14:55 | Link to Comment jmc8888
jmc8888's picture

Actually it was the banksters that wanted it more.

They just fooled the foolish into saying it was the first step of a larger political integration.

 

So the bankster got what they wanted as the first step on the foolish dreams of the politically corrupt.

 

Besides I don't know why Germany should be mad at Greece and other PIIGS. They should be made at the banksters who foisted and own the debt that Germany is paying off, because it was issued back to themselves with Greece's name on it.

No Germany, you aren't bailing out the PIIGS, you are bailing out the banksters. 

Focus the anger at the banksters, and YOUR political and judicial structure which has sold YOU down the same bankster river as Greece sold theirs down. 

Otherwise you may get the German Austerity Gestapo working on behalf of the banksters and be poorer for it, not to mention be the reprisal of probably some terrorism.

All to keep the banksters frauds going.

 

Glass-Steagall (and yes we also need to fund fusion...it will be possible...just when sooner or later...we'd all be better off with sooner rather than a century away)

Thu, 09/08/2011 - 14:58 | Link to Comment kaiten
kaiten's picture

I wish I had that many euros, how many "euro is finished" articles I ever read. Eh, what an easy life that would be :)

Thu, 09/08/2011 - 14:58 | Link to Comment unky
unky's picture

Look, you dont live in Germany. In the street there is no demostration/protest whatsoever against all the bailouts. All major parties agree to the bailouts. I think this can go on for a long time (bailout of the PIIGS)

Thu, 09/08/2011 - 15:01 | Link to Comment SheepDog-One
SheepDog-One's picture

No, it can go on until it suddenly doesnt, and you have no idea what that day is whether 6 months from now or tomorrow.

Thu, 09/08/2011 - 15:07 | Link to Comment unky
unky's picture

It sure isnt tomorrow. At least not because of the German people revolting. Maybe for other reasons.

 

Germany is not Spain, Italy or Greece. The unemployment is lowest in 20 years (at least government statistic says so). People will not go to demonstrate anytime soon.

Thu, 09/08/2011 - 15:14 | Link to Comment Jack Sheet
Jack Sheet's picture

Careful, those could be famous last words. There is a huge discrepancy in opinions regrding the bailouts between the ass-licking mainstream media like the Sueddeutsche Zeitung and radio stations, and the angry ripostes in the blogs and comments sections of the on-line newspapers.

Thu, 09/08/2011 - 15:19 | Link to Comment Jack Sheet
Jack Sheet's picture

..The populace might remain docile until the first swingeing tax increases are implemented to pay for the bailouts, or price inlfation as official CPI gets over 5% (inofficially it is way over that already) after all the money printing.

Thu, 09/08/2011 - 18:11 | Link to Comment Ghordius
Ghordius's picture

Nice avatar
Long fuse, I hope

Thu, 09/08/2011 - 15:16 | Link to Comment Big Ben
Big Ben's picture

As long as Germany keeps bailing out countries that spend too much, countries will keep doing it. Greece is still running a big deficit. The problem is getting bigger, not smaller. Bailing out the PIIGS just allows them to continue spending beyond their means.

Perhaps I have a bit too much faith in the intelligence of the German people, but I just have to believe that they will eventually see the futility of their government's current policy.

Thu, 09/08/2011 - 15:17 | Link to Comment jdelano
jdelano's picture

hang on a second here unk, do YOU live in Germany?  If so interested to know what you do see going on there...?  What about all the cars being set on fire that I keep seeing photos of in the papers.  Hype n fluff?

Thu, 09/08/2011 - 15:48 | Link to Comment SheepDog-One
SheepDog-One's picture

It sure isnt tomorrow....so said New Yorkers on Sept 10th.

Thu, 09/08/2011 - 15:53 | Link to Comment Jack Sheet
Jack Sheet's picture

" I always knew this day would come........

 

.............it just ain't today !"

Slyvester Stallone just before winning the last game of stud poker in "Shade"

Thu, 09/08/2011 - 15:53 | Link to Comment Jack Sheet
Jack Sheet's picture

dup

Thu, 09/08/2011 - 15:00 | Link to Comment joshua10
joshua10's picture

"After all, if they agree to destroy the value of the Franc at the same pace as the Euro then it will become less clear to the currency market just how quickly purchasing power is being destroyed."

A very interesting observation and it sounds like the primary motivation behind the Swiss Franc devaluation.

Thu, 09/08/2011 - 15:01 | Link to Comment buzzsaw99
buzzsaw99's picture

FECK GREECE, SAVE THE BANKS!

Thu, 09/08/2011 - 15:24 | Link to Comment plocequ1
plocequ1's picture

Ode to my beloved dollar

Its good to have you back. We have been through so much together. You were there when i bought my first set of wheels and my first Seymore Butts flick. You were there on my first date and my first lay.. You comfort me with meat and drink and a nice basement apartment.. Ode to my beloved dollar. Welcome home my friend

Amen

Thu, 09/08/2011 - 15:08 | Link to Comment MrBoompi
MrBoompi's picture

I definitely agree more production will be "local" in the future, because of energy.  At some point even cheap Asian labor won't offset the shipping costs to get goods to the US.  And many of us see this, which is why farmland is selling at record highs, even while the rest of the real estate market is in the crapper.

I also think the chances are countries like Greece will leave the Euro, either willingly or by force, before they would completely disband the Euro.

Thu, 09/08/2011 - 15:11 | Link to Comment falga
falga's picture

Such a simplistic Analysis with a big headline that gives no clarity except encourages everyone to buy Gold. Hmmm, ok follow the crowds and the herd of buffalos.... Come on, the end of the Euro or USD can only be deflationary because world trade cannot work with gold so quit the ranting...

Thu, 09/08/2011 - 15:11 | Link to Comment bbq on whitehou...
bbq on whitehouse lawn's picture

Debasement can go on a long, long, long time. Just ask the  Turkish Lira.

The grass grows,

the wind blows,

and the sky is blue.

Today is not the last day, so much as the first day.

 

Thu, 09/08/2011 - 18:14 | Link to Comment Ghordius
Ghordius's picture

Turkish Lira
Made all Turks millionaires!
Strike six zeros
And still there

Thu, 09/08/2011 - 15:15 | Link to Comment Chip
Chip's picture

China has been buying and will keep buying, which explains why every single time the last 18 months you have shorted you have had your heart broken. 

Thu, 09/08/2011 - 15:22 | Link to Comment samsara
samsara's picture

Highly recommend reading Martin Armstong's latest on the Euro.

Armstrong Economics: The Swiss Devalue the Franc (Martin Armstrong, 09/07/11)

On the topic of the Swiss's actions that Mike comments on.

Thu, 09/08/2011 - 15:27 | Link to Comment The Deleuzian
The Deleuzian's picture

I'm seeing many more businesses on the fringe becoming self aware of the fact that the PM's are all that's left.  One of the Cab companies in a town near me ( I happen to live in a prosperous Big 10 college town) has one of those (WE BUY GOLD) signs on the bottom part of the roof...

The owner who I personally know is a very wise skilled gentlemen and he told me that even when people start walking out of the store because they think they can get more somewhere else, has instructed all his clerks to just give them what they want within reason (10% profit at minimum)

Remember evrybody out there in ZH land....

1 penny weight = 1/20 oz. + the %K and you have a good approx. on the value of even rings and jewelry.

WARNING: DO NOT BUY ITALIAN JEWELRY AND RINGS!!!!!!!!

It almost always says italia or italian somewhere on the item.......

This isn't going to slow down... TD is certainly right once again that the self aware are growing and the 'days of easy pickins' are coming to an end...

 

Thu, 09/08/2011 - 15:28 | Link to Comment samsara
samsara's picture

"...The lack of any breakthroughs on the energy front as we confront resource constraints demand that this be the case, This  reality will change everything in every possible aspect of life on earth. ...."

Peak Oil is the reason it IS different this time (along with 6.6 billion pop). 

the TPTB/W cannot print, buyout, subvert, conquer, bomb Oil into existence.  They are against the only wall that will stop them.  Mother Nature and Raw Materials.

Thu, 09/08/2011 - 15:29 | Link to Comment 37FullHedge
37FullHedge's picture

This is just me, When I watch things I always think NWO The objective is clear and each move to a NWO Year on year The United States of Europe has been in the making since the EEC

Its ineviteble the the elite will get their next power grab, I ask how?

Lets say a 50% fall in global markets happens by the end of this year, Easy done if the elite want it. This will soften up the populace to fix things like a fiscal union. I hear the corrupt politicians doing the rounds as of now, The Treaty is a done deal like all the others now Eurobonds and taxation without representation happens and the Elite a very happy.

Gold: I am sure they could do something like the Swiss franc to Gold if push comes to shove infact I expect it, Physical is a must but like cocain it may be outlawed again or taxed to oblivian.

Greece may be used and kicked out but a United States of Europe I am sure the elite will get their way.

Fiat currency is the bedrock of the corrupt elite profits thats why Gold is not as safe as one hopes.

Thu, 09/08/2011 - 15:32 | Link to Comment FLUSA.com
FLUSA.com's picture

Eurmany...Is what we will see once Germany is done with things....future bailouts will require greater collateral....eventually this collateral will come in the form of land and with land comes rights and eventually leads to war....

Thu, 09/08/2011 - 15:33 | Link to Comment Azannoth
Azannoth's picture

"There are two ways to conquer and enslave a nation.  One is by the sword. The other is by debt."

Conquering is just the 1st step than comes rape and pillage I think we're way into that at this stage by now

Thu, 09/08/2011 - 15:36 | Link to Comment defcon
defcon's picture

Hi Tyler,

There is no other possibility than the Euro for the european contries. If the PIIGS would be forced to leave the Euro, or if Germany and its closest partners would create a different currency union, two things will happen:

1) competitive devaluation: the local currencies will drastically fall against the new EuroMark and it will be increasingly difficult for Germany and its partners to export to the PIIGS. Also the PIIGS will have a far cheaper labor market and therefore will compete with EuroMark exports. Finally, the PIIGS would probably retaliate and close the borders, making export to them even more difficult. Given the large chunk of German's economy that is export to these countries, that would make a big dent in the GDP.

2) debt default: the leaving countries will find increasingly difficult to fund their debt and will default. Or even if they will not default, they will convert all their current Euro obligations into the local currencies, which will then immediately loose a lot of their value. This would create an immense void in all european banks, and will create a chain reaction that will signify the immediate collapse of the banking system in the whole Europe.

We will have in essence a 1982 on steroids but with Germany having to support all the unemployed in the eastern part of the country.

The Euro has been created and used by Germany to control the european financial policies and allow Germany to compete on the markets without fearing the devaluation of the other contries. It has been incredibly successfull in that and the Germans would do whatever it takes to keep this advantage.On the other side the Piigs know that if they leave the Euro they will go back 30 years in time, will find increasingly difficult to get energy and raw materials, could face hyper-inflation and could go in a downward spiral that would take them into the pre-industrial age.

All that means that we will soon see an increasing part of the fiscal authority of the states be transfered to the EU via the Eurobond mechanism and a committee whose members will have a voting power given by the amount of contributions to the EU, and none of the debt nations would be able to say "no thanks".

 

Thu, 09/08/2011 - 17:10 | Link to Comment Highrev
Highrev's picture

Absolutely correct.

And a nice primer Tyler, to help you get going in the right direction - that is unless you're just another American agent provocateur distracting attention away from where it should be focused.

 

Thu, 09/08/2011 - 18:17 | Link to Comment Reven
Reven's picture

The absolute authority of a central Government to rule over many States requires the threat of force, and Germany has no threat generating capacity.  Being a EURO member is therefore completely voluntary, and nothing like the US.  In the United States, it required a deadly Civil War to finally put to bed the notion of "States Rights" and the question of leaving the union.

It can be argued that a single currency for any large nation creates distortions (somewhere), including the US Dollar zone.  This can easily be seen in the United States, for example, with California versus Arkansas (one of the poorest US States).  These are two completely different economies, yet they operate on a single cost of money (interest rate).  The only reason it has worked this long is due to the redistributive nature of federal taxation.  Arkansas and it's people receive much more money from the federal Government than they pay into the system in the way of taxes.  It is the same for many US States.  These are the PIIGS of the US.  And if Arkansas had to make due on their own like Greece and Portugal do now, the hyper-competitiveness of California, New York, Florida, or Texas would have forced them out of the currency union by now.  This problem is even more severe given that Europeans have a social safety net far in excess of the US, which therefore requires fiscal transfers far in excess of those between US States.

The other alternative is to completely shut down the welfare state, which neither the US or Europe will accept.  Throw a major financial crisis into the mix, and Europe is in a very tricky position.  Germany cannot maintain an export surplus while simultaneously refusing fiscal union (and the redistributive nature of that union).

Greece needs some sort of advantage or leg up to stay in the Euro, either transfer payments or a weaker currency.  Germany cannot have the cake and eat it too.  Any attempt to maintain the status quo and turn the PIIGS into perpetual debt slaves will ultimately fail, not because of any mistake either party makes, but because such a system is unsustainable.  You cannot make Greece's square peg fit in Germany's round hole.  And the distortions have escalated to an extreme level now, such that Germany may not be big enough to bail out the entire system, so the cancer will ultimately spread to Germany even if they issue Eurobonds, which is far from certain at this point.  Each day that passes without fiscal union only increases the level of painful adjustment for Europe whether the Euro survives in current form or not.

Thu, 09/08/2011 - 18:30 | Link to Comment Ghordius
Ghordius's picture

"The Euro has been created by the Germans" !?!?!?
Lol, where does this come from?

By the way, "would take them into the pre-industrial age"', something similar has already happened a few times to Germany, don't think it's a show stopper!

And no, there is not much appetite for a Eurobond INSIDE the EuroZone.

Thu, 09/08/2011 - 15:38 | Link to Comment I Told YOU So
I Told YOU So's picture

there is a much bigger game being played here, looks like the REAL powers (old europe banking families) are desperately trying to keep the world's financial center in europe, london-zurich (new york is a "subsidiary) while the usurpers (and eventual winners) asians finally have the opportunity to grab the plum.

currencies have to be devaluated  TOGETHER so they all go to zero at the same time. all the shheple in the west will be SCREAMING for the one world order, which will include only the west, and this unified block will be used to oppose the east, Rogers is right, learn mandarin and give yourself and family the greatest asset (besides gold)......MOBILITY.

Thu, 09/08/2011 - 15:48 | Link to Comment robertocarlos
robertocarlos's picture

You're nuts if you think those Greek leaches are leaving the EU voluntarily. Like was posted earlier on ZH the Germans will have to leave the EU.

Thu, 09/08/2011 - 15:49 | Link to Comment Peter K
Peter K's picture

The Euro will find its rightful place on the shitpile of history when the Chinese go into recession and the Germans wake up and realize that they are still the sick man of Europe, can't bail anybody out, including themselves. What they will also realize is that it's ok, since they don't really owe anybody anything since they don't have any DMark liabilities (read debt). And then the rest of the world (read reserve currency nations) will realize that holding Euros is like holding....... well......nothing actually. BTW, the Germans probably have a 26 letter word that describes this situation.

Thu, 09/08/2011 - 15:55 | Link to Comment Negro Primero
Negro Primero's picture

it's getting crazier and crazier..

Exclusive - Swiss central bank may be intervening via FX options

 

(Reuters) - "Switzerland's central bank may be using currency options to reinforce its target of capping the franc at 1.20 per euro in what would mark an unusually aggressive step that carries considerable risk.

The Swiss National Bank may be selling options -- in essence selling implied volatility -- to help reinforce the 1.20 line in the sand set this week in a shock move to stop further franc gains, according to about 10 option traders at major banks in Asia and Europe.

Using derivatives would allow the central bank to leverage its balance sheet and give itself more firepower, underlining its pledge to use "unlimited quantities" of intervention to maintain the 1.20 level.

One trader said the SNB appears to be selling volatility through a forward volatility agreement, which allows the central bank to sell volatility, or vols, without specifying a strike price -- such as 1.20 -- in addition to selling basic options via one or more of the big Swiss banks.

The SNB has resorted to some of the most extreme tools available to a central bank -- negative interest rates and now the potentially unlimited use of its franc printing press -- in its aggressive effort to stem the franc's damaging surge on the Swiss economy. The SNB declined to comment.

The franc has borne much of the pressure from market players reducing their exposure to the euro zone's debt crisis and seeking safety in the Alpine nation's economy, leading the currency to be massively over valued by most measures.

Acting directly in the currency options market could achieve two goals for the SNB.

By selling options, the SNB makes money if volatility stays low -- money that can help offset the cost incurred from any euro-buying intervention needed to maintain the 1.20 limit if the single currency comes under further pressure.

Selling volatility also means that the SNB has forced the euro/Swiss franc options market to turn suddenly long gamma, so that the hedging of option dealers would help dampen the daily moves in the currency pair. The opposite happens when the options market is short gamma, exacerbating sharp market swings.

DIPPING INTO DERIVATIVES

When central banks intervene in currency markets, they do so in the regular cash, or spot, market by selling or buying in big amounts.

Due to the risks involved with over-the-counter derivatives, from leveraged positions they create to the credit risk of engaging in bilateral contracts with banks, central banks tend to stick to the cash markets.

Using options also means that the central bank is exposed in both the spot and options markets if the franc strengthens sharply through 1.20 per euro.

The SNB's actions mean it is taking a big gamble that European policymakers will succeed in coming up with a solution to the debt crisis that will help the euro and take some of the pressure off the franc.

Since the 1.20 floor was announced and the franc vaulted nearly 10 percent to sit just above that level, implied vols in EUR/CHF have plunged from record highs.

Traders and analysts said it was unclear what were the main factors driving the sharp drop in implied vols across different strike prices: both the franc's sharp rebound and market players selling implied vol would lead to that outcome and reinforce each other.

Hedge funds and other market players likely rushed to sell options and volatility as well on the SNB's move to set the 1.20 floor, which would also generate gamma for options dealers.

WATCH THE RISKIES

One of the most closely watched FX option market gauges is the risk reversal, which shows how much market positioning is leaning in a particular direction.

Risk reversals reflect the extent to which players are leaning more towards call options (the right to buy spot) versus put options (the right to sell spot).

The extremes reached in EUR/CHF risk reversals rivalled anything seen in recent history, even during the 2007-08 financial crisis.

Before the Swiss central bank stepped in to institute the EUR/CHF floor, one-week implied vols were trading above 30 percent -- implying a huge move of 400 pips in the pair in a week was needed to make money on such a position. Indeed, just last week, the EUR/CHF range was a massive 1,000 pips.

The huge skew in the EUR/CHF implied vols towards puts showed the market bracing against further volatility and downside, even some long-term hedging against the risk of the 12-year-old single currency breaking up altogether.

The imposition of a 1.20 floor has arrested the violent volatility for now.

The market talk is that a lot of 1.20 strikes have been sold, which would increase the stickiness of the spot EUR/CHF rate around that level, traders and analysts said.

Double-no-touch options with downside barriers at 1.18/1.19 have also been cited that would do the same and would serve to help the SNB.

Robert Ryan, an FX analyst at BNP Paribas in Singapore, said that even with the sharp drop in short-term implied volatility from near 30 percent to near 6 percent, there was still more room for a slide to around 4-5 percent if the SNB succeeds a maintaining the spot rate close to the 1.20 floor.

But longer-term volatility would likely stay higher as the market braces for the potential that the euro zone crisis worsens and the SNB is forced to abandon its latest effort to stop the franc's rise, which could lead to an even more violent lurch lower.

If short-term volatility starts to rise again, it would be a sign the market is losing confidence in the SNB's ability to win this currency war.

"The steepness of the curve is going to be essentially a vote of confidence in the SNB," Ryan said"

http://uk.reuters.com/article/2011/09/08/uk-swiss-snb-intervention-idUKT...

 

Thu, 09/08/2011 - 15:57 | Link to Comment aerial view
aerial view's picture

The elites are not done with us yet

They don't want anyone leaving the euro as it may give others ideas

Debt enslavement continues until we accept anything they give us!

Fri, 09/09/2011 - 13:46 | Link to Comment honestann
honestann's picture

Yes, this action encapsulates the fundamental issue from which all other important issues flow.  The fact that one guy like Bernanke, or one tiny group (in the Federal Reserve or SNB or similar) can and does unilaterally destroy the entire history and fundamental character of nations.  They've destroyed liberty in america, fiscal privacy and prudence in Switzerland, and undoubtedly a great many other attributes earned by hundreds of millions of individuals over decades and centuries.

The world of humanity is FINISHED as long as a few people can play god with the very fundamentals of all other individuals around them.  They must be stopped, they must be exterminated, they must never be allowed to rise to power ever again.  Either that, or mankind is an absolute, complete, abject failure and permanently finished.

And good riddens to mankind if they let the current modus-operandi continue.  The predators-that-be are outnumbered by about one million to one, which makes plenty clear how pitiful human beings have become.

Thu, 09/08/2011 - 16:36 | Link to Comment vincent
vincent's picture

Posting deleted. RE: Legality of leaving the EU

Oh, SILVER BITCHEZ!

Thu, 09/08/2011 - 16:53 | Link to Comment defencev
defencev's picture

 I would not listen idiots who promote one thing as a panacea even if this panacea is Gold. Listen to wise people like Marc Faber and keep diversified. Of course, sovereign bonds are out of the picture but do not put all eggs in one basket. You do not want to end up sitting on a pileof  rapidly depreciating PM. I always followed Marc recommendation and whenever I am in HK or Singapore I buy several Gold coins and leave it there in safe deposit box. And I am doing fine. But Gold has always been considered as a core asset just in case of general calamity or meltdown not the way to speculate or get rich. Speculation is difficult and getting rich by doing one simple thing is very rare unless you are extremely lucky. Swiss Franc is not finished and at some point I will start buying it again. Only absolute idiot can presume that Swiss burgers will allow their currency to sink along with Euro.

Thu, 09/08/2011 - 18:38 | Link to Comment Ghordius
Ghordius's picture

Oh, oh. Now you've done it.
Sanity, at last!

Thu, 09/08/2011 - 17:07 | Link to Comment -273
-273's picture

I completely agree with pretty much everything you write however there are a hell of a lot of powerful people with an interest in keepin the euro together so if you are in fact correct on your predictions remains to be seen. Peak oil is throwing out a lot of non linear repercussions already so its brave or foolish to act like you know the future. Luckily ( or not) all my cash is now in hard assets but a messy end of the euro will leave few winners.

Thu, 09/08/2011 - 17:39 | Link to Comment Highrev
Highrev's picture

And a hell of a lot of average, main street citizens too, like something in the order of 350 million, who, by the way, are the ultimate back stop of the EU.

Anyone who tells you otherwise is nothing more than a glorified antisystemic or a Yankee jingoist doing whatever's necessary to avoid "fessing up" (or both).

 

Thu, 09/08/2011 - 18:41 | Link to Comment Ghordius
Ghordius's picture

And some of them even...
...pay taxes!

Thu, 09/08/2011 - 17:12 | Link to Comment automato
automato's picture

The problem IS the problem. Our education system at all levels no longer excels at teaching problem solving. It takes literally decades of practice to develop systematic techniques and gut instincts in order to excel at troubleshooting. There are very few short cuts and technology rarely makes the problem solving any easier although the tools that have been developed do help the few truly analytical minds that are left. We are in serious trouble because of the long learning curve and I can tell you from direct experience that most of the best troubleshooters are in their 50's and older. Most young people cannot handle the work load, the extremely long hours, the constant travel away from home to foreign states/lands and the isolation. They rarely last more than 2-3 years before burnout forces them to quit or take a stay at home job where they experience very little call for troubleshooting difficult problems. It's just like any muscle and ours are deteriorating rapidly.

Thu, 09/08/2011 - 17:30 | Link to Comment Highrev
Highrev's picture

And that's not to mention that they leave the starting line as COMPLETE IDIOTS.

Does anyone remember the survey of American high school students from about 20 years ago where the majority thought that Pennsylvania was a country in Europe and around 90% had no idea who the author of the Great Gatsby was?

Yet at the same time almost perfect scores on who Michael Jackson and Madonna were?

And that was 20 years ago. Imagine what they know today.

Something for you end-of-the world fans to think about. Oh, but are you under 40? Sorry, then you probably can't.

 

Thu, 09/08/2011 - 17:22 | Link to Comment Highrev
Highrev's picture

This article is one of the best examples of LINEAR, INSIDE-THE-BOX, GROUP THINK that I have seen in a long time.

Absolutely childish, infantile logic. 1 and 1 equals 2 without the possibility of any other independent variable what-so-ever coming into play.

Guess what ZHers, life isn't so happily simple (you'll have to stick with the TV and your Nespresso coffee for that).

 

Thu, 09/08/2011 - 20:03 | Link to Comment TradingChief
TradingChief's picture

Who ever said a "race to the bottom" has to be organized or fair? The farther the Euro drops the more the weakened countries can export. It is the US theory being applied to fight the US at their own game. If I was a European country watching the US run the show, I would talk collapse too.

All is not fair in love and war :)

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