• Steve H. Hanke
    05/04/2016 - 08:00
    Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke. A few weeks ago, the Monetary Authority of Singapore (MAS) sprang a surprise. It announced that a...

Guest Post: Could the Euro Trigger A 2008-Like Crash? Si, Oui, Yes.

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Thu, 11/10/2011 - 11:49 | 1866102 SDRII
SDRII's picture

Might want to consider this little tid bit about US being approached on a coup in Pakistan...

http://www.dawn.com/2011/11/10/mullen-denies-receiving-ijazs-letter.html

 

Thu, 11/10/2011 - 11:53 | 1866125 Harlequin001
Harlequin001's picture

and where does gold sit on this see saw?

Thu, 11/10/2011 - 11:57 | 1866158 Withdrawn Sanction
Withdrawn Sanction's picture

It's the fulcrum

Thu, 11/10/2011 - 14:28 | 1866843 FreshMind
FreshMind's picture

I picture hands on both sides pushing down only to snap the board and allow the fulcrum to float away.. up, up and away!

Thu, 11/10/2011 - 12:02 | 1866184 EL INDIO
EL INDIO's picture

It's the reference.

Thu, 11/10/2011 - 18:11 | 1867909 h3m1ngw4y
h3m1ngw4y's picture

i think gold is the reference point ;-)

so aginst all ods, the gold on the ecb balance sheet is the bullish euro factor. its more or less to market (40,22 anyone)

so it could soak up all to easy the bearish bias and then some more. only from balance sheet appreciation

at least i wouldnt be surprised if eur up big time. the euro bearish is no contrarian bet.

should the fed too decide to mark gold to market, all bets are off for all cross pairs.

Thu, 11/10/2011 - 12:02 | 1866190 Dr. Richard Head
Dr. Richard Head's picture

It's the pivot of the see saw.  Basically US Dollar and Equities/Euro can go up and down all day, while the pivot can rise up with no one (aside from central banks, Austrian economists, and the ZH crowd) noticing.

Thu, 11/10/2011 - 12:16 | 1866252 falak pema
falak pema's picture

gold is archimedes's finger. thats what scares the fiat nymphomaniacs.

Thu, 11/10/2011 - 12:25 | 1866283 Dr. Richard Head
Dr. Richard Head's picture

Fiat Nymphos sounds like a great band name.

Thu, 11/10/2011 - 12:59 | 1866452 viahj
viahj's picture

Fiat Nechros

Thu, 11/10/2011 - 12:08 | 1866213 The Big Ching-aso
The Big Ching-aso's picture

Plenty of fools out there, however greater fools are getting scarcer by the minute.

Thu, 11/10/2011 - 12:54 | 1866418 CPL
CPL's picture

Like cancer, the patient is killed inch by inch and the systemic issues are too far along for treatment.

 

Right now all people are doing is attempting to keep the patient alive even though there is nothing left to save.  It is now just an effort in how far they can torture the body before it inevitably coughs it's last breath out and the body liquefies the same moment it dies.

 

Even then the TPTB will attempt to reanimate the slop that was once known as the EU.

 

 

 

Thu, 11/10/2011 - 13:11 | 1866503 flattrader
flattrader's picture

This is nothing but run of the mill chart porn.

Here's a guy who can do real charts--

http://www.ritholtz.com/blog/2011/11/our-supercycle-oscillator-updated/

 

Thu, 11/10/2011 - 14:01 | 1866692 flacon
flacon's picture

Interesting. Do his charts take into consideration exponential debt to get us where we are now? How does that affect the supercycle?

Thu, 11/10/2011 - 12:51 | 1866387 Iwanttoknow
Iwanttoknow's picture

I know Soth asia quite well.The above mentioned person is a US intelligence asett.I find it difficult to find the report credible.

Thu, 11/10/2011 - 11:49 | 1866106 DormRoom
DormRoom's picture

too much global stock (liabilities) problems.  Everyone's looking for good, safe flows.  USD is that conduit.  How USD flow is a good broad macro indicator.

Thu, 11/10/2011 - 11:50 | 1866111 qussl3
qussl3's picture

Ben will kill it before it hits the high 80s.

The elections depend on it.

Thu, 11/10/2011 - 12:00 | 1866168 J 457
J 457's picture

That's right, but S&P will hit 1,040 range before he starts to devalue again.  Oil and commodities need to cool off before any more printing begins.  Don't underestimate impact of US debt debate and potential for govt layoffs as a result. 

Thu, 11/10/2011 - 12:03 | 1866194 qussl3
qussl3's picture

Agreed.

Perhaps the DXY isnt such a good measure.

My bet is crude <80 and brent < 95, before he goes to town.

 

Thu, 11/10/2011 - 12:08 | 1866218 11b40
11b40's picture

It really feels more an more like they are losing control.

The weaker Europe gets, the stronger the $.  The only way to keep Europe from blowing up is massive printing = weaker Euro, stronger $.  So, Bernake prints like hell trying to weaken....but the public is getting more attuned to his printing press, and what it is doing to the inflation rate.  This may not go down well at all with the electorate in 2012.

One thing I do believe is that 2012 will be a water-shed year - for better or for worse.

Thu, 11/10/2011 - 11:51 | 1866117 Dick Darlington
Dick Darlington's picture

*ITALIAN 2012 DEBT SALES `NEAR IMPOSSIBLE TASK,' SCHRODERS SAYS

*SCHRODERS FORECASTS RECESSIONS IN WIDER EUROPE, INCLUDING U.K.

*SCHRODERS FORECASTS `SERIOUS RECESSION' FOR EURO REGION IN 2012

*SCHRODERS SAYS ITALIAN DEBT WILL BE DOWNDRAGED IN COMING MONTHS

What will the EU-dictatorship do next? Prohibit free speech? In the name of democracy and zee stabeeletee, of course.

Thu, 11/10/2011 - 11:52 | 1866123 Irish66
Irish66's picture

Q-Bath tub..he is leaking

Thu, 11/10/2011 - 11:54 | 1866131 Henry Chinaski
Henry Chinaski's picture

The euro crash will be the signal that the dollar is next.  Then it's on like donkey kong, deer in the headlights, rule 48, ZH website crash, you name it.  Bitchez.     

Thu, 11/10/2011 - 12:21 | 1866271 Tramp Stamper
Tramp Stamper's picture

ZH website crash.........I knew it was going to be bad,  but not that bad.  Now I am scared.

Thu, 11/10/2011 - 13:56 | 1866660 jiggerjuice
jiggerjuice's picture

ZH crashed in August already. Don't you remember? All it takes is the DJIA going up and down 500 points a day for ZH servers to get overloaded and facefail.

Thu, 11/10/2011 - 12:24 | 1866279 fourchan
fourchan's picture

404 ECONOMY NOT FOUND

Thu, 11/10/2011 - 13:21 | 1866532 Toolshed
Toolshed's picture

Too funny!!!! +1

Thu, 11/10/2011 - 14:33 | 1866866 graspAU
graspAU's picture

Good one, or for the Commodore crowd:

LOAD "economy",8,1

FILE NOT FOUND

Thu, 11/10/2011 - 12:40 | 1866323 tarsubil
tarsubil's picture

This all makes me think of the upside down pyramid. Cold hard cash will have its 15 min before final reality reality with gold.

Thu, 11/10/2011 - 11:54 | 1866132 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Bernanke has unlimited ammo to keep the dollar low.  In fact, Europe is counting on this.

He will keep the dollar low to keep prices "stable" because he wants (needs) stocks to stay elevated to keep pensions returning.

The scenario is what ZH used to so poigniantly call, "A Race to the Bottom"; a term which was stolen by the Economist and other MSM.  Too bad we haven't been using Race to the Bottom as much lately, it still fits.

Thu, 11/10/2011 - 12:11 | 1866231 onelight
onelight's picture

But, but..the MHFT said it was all bullish going forward...

Thu, 11/10/2011 - 12:13 | 1866238 11b40
11b40's picture

Yes, there may be an unlimited supply of Bernake Bucks for now, but there is a rising chorus of complaint regarding inflation, money-printing, debt, etc.  If Bernake is not careful, he may not last until the elections...in fact, he may be dumped in a PR effort to shore up Obummer's popularity.

Thu, 11/10/2011 - 11:54 | 1866134 lapedochild
lapedochild's picture

Thank you for your post... As per your model which seems correct recently.. Any USD weakness ramps stock... what would happen if ECB starts to print? You would get dollar strenght... but would markets tank? That defies logic... since there's more fiat chasing the same assets... thoughts?

Thu, 11/10/2011 - 11:54 | 1866138 xcehn
xcehn's picture

TPTB definitely KNOW that it can. They will do whatever is in their power to print their way out of this mess at taxpayer expense. Taxpayers are more expendable than the TBTF banks.

Thu, 11/10/2011 - 11:58 | 1866162 SheepDog-One
SheepDog-One's picture

No you miss the point the printing was to get us INTO the mess...not out of anything.

The printing is over. Next youll face world war, again.

Thu, 11/10/2011 - 12:26 | 1866284 Uchtdorf
Uchtdorf's picture

Do you know the board game called Risk? I think it will become popular again.

Poll time, ZHers! Can you pick the alliance members on each side of the next world war? My best guess is that unlike WWI and WWII, die Vereinigten Staaten von Amerika and Deutschland will be on the same side in the next one.

Thu, 11/10/2011 - 12:41 | 1866327 pods
pods's picture

Not sure who the purported combatants will be, but the real war will always be banksters vs humanity.

pods

Thu, 11/10/2011 - 13:09 | 1866488 flattrader
flattrader's picture

Excellent analysis pods...with the bankers as proxies (bitches) for the uber wealthy.

Everything else is just political/nationalistic noise.

Thu, 11/10/2011 - 13:24 | 1866540 Zedge Hero
Zedge Hero's picture

IMF,ECB,WB,FED,BOE vs Human Species

Battle Ground = World

I think a world civil war could happen, every country revolts from within, oh yeah, thats right, it's already happening.  Instead of fighting each other this time we might turn on TPTB and take the fight to the Banksters!! Give em a taste of their own medicine this time.

"This just in George, all the Central banks have been occupied and destroyed by citizens around the world. And Now back to Real Jersey Whores and your regularly scheduled program."

This revolution will not be televised.

It's a Bank run Bitches!

 

Thu, 11/10/2011 - 21:01 | 1868425 DarkestPhoenix
DarkestPhoenix's picture

I've said for a long time....US takes Iran....three countries in a row....extra men at the start of the turn, FTW.

Thu, 11/10/2011 - 11:57 | 1866139 EL INDIO
EL INDIO's picture

All FIAT currencies are equally worthless and there is no reason for the USD to be the weak one all the time. That is why it is going up for a while. That's the game, currencies are trading in a range and they will depreciate and die together.

Thu, 11/10/2011 - 12:06 | 1866206 Dr. Richard Head
Dr. Richard Head's picture

Agreed.  Debt to GDP levels (of the disclosed debts at this point anyway) are similiar in Portugal, Greece, Spain, US, etc.  When one's value holder currency is a debt-based one and banks can create capital through fractional reserve lending (ledger created capital), the recipe for purchasing power loss is guanranteed.  Unless of course you have close friends in the Central Banks/Governments.

Thu, 11/10/2011 - 12:12 | 1866236 s2man
s2man's picture

yep, they just take turns ratcheting the currencies value down, yet keep the exchange rates in a range which makes them appear to maintain their values.

Thu, 11/10/2011 - 11:55 | 1866142 Captain Benny
Captain Benny's picture

Beyond the charts, it seems like the Euro has a long way to come down relative to the dollar.  The political structure of the Eurozone is in shambles and they are urgently looking for a way for the ECB to monetize the sovereign debts.

Of course the US equities market is going to tank from this.  Simple margin calls aren't enough to handle the deleveraging needed in the equities and commodities market.

Thu, 11/10/2011 - 11:57 | 1866155 SheepDog-One
SheepDog-One's picture

I cant understand why Europe is not totaly engulfed in riots and flames...same with the US actually, I dont get it.....unless theyre dumping Lithium and Xanax and Flouride into drinking water supplies like mad.

Thu, 11/10/2011 - 12:00 | 1866171 EL INDIO
EL INDIO's picture

Sex, alcohol, drugs, entertainment … that’s why.

Thu, 11/10/2011 - 12:02 | 1866191 SheepDog-One
SheepDog-One's picture

No one can afford hardly any of that anymore.

Thu, 11/10/2011 - 12:08 | 1866215 Dr. Richard Head
Dr. Richard Head's picture

Oh yeah they are rioting. Just over the wrong fucking thing.  GOD DAMN THE RETARDS - http://www.twirlit.com/2011/11/10/penn-state-riot-2011-video-rallies-getting-voilent-after-joe-paterno-fired/

Thu, 11/10/2011 - 12:24 | 1866280 john39
john39's picture

what an incredible event.   these kids are so deluded that they riot to protect a washed up old football coach who covered up for child rape.   Until Americans wake up, they will continue to get raped.

Thu, 11/10/2011 - 12:27 | 1866289 Dr. Richard Head
Dr. Richard Head's picture

Those same students also fight for continued government funded debt to become part of the system.  College is only good for getting threesome with drunks whores and access to home-grown.

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