Stick a fork in the EU because it's done. The collective political paralysis of the 17 nations guarantees this thing hits a wall. As a writer said, the extend and pretend strategy will only hold for so long. Eventually, without a meaningful solution we are going to see the Greece mess replay itself in Portugul, Spain, Italy and possibly more countries. Already we are seeimg the cost of fund shoot up in EU countries as much of their debt comes up for renewal. It's a short skip from here to not having access to funds to borrow and then the civil unrest that follows when govt wages and pensions are no made.
It's time to be scared and to be prepared cause the qheel are coming off in Europe. The real challenge is seeing where the dominos after Europe crashes.
Quote from: Dan on October 30, 2011, 11:01:37 AM
Stick a fork in the EU because it's done. The collective political paralysis of the 17 nations guarantees this thing hits a wall. As a writer said, the extend and pretend strategy will only hold for so long. Eventually, without a meaningful solution we are going to see the Greece mess replay itself in Portugul, Spain, Italy and possibly more countries. Already we are seeimg the cost of fund shoot up in EU countries as much of their debt comes up for renewal. It's a short skip from here to not having access to funds to borrow and then the civil unrest that follows when govt wages and pensions are no made.
It's time to be scared and to be prepared cause the qheel are coming off in Europe. The real challenge is seeing where the dominos after Europe crashes.
All I can say is, at some time the toilet must be flushed.
A Euro collapse will hurt China and to a lesser extent the US. But it will also lead to a lot of hardship in places like Africa and South America where the economies are largely dependent upon exports to Europe.
You may be feeling the ground shake start. More down grades on friday followed by calls from Germany to have Greece turn over control of its finances to the EU.
ft.com>World>Europe (http://www.ft.com/intl/cms/s/0/33ab91f0-4913-11e1-88f0-00144feabdc0.html#axzz1kmgqg7id)
Quote from: Possumpoint on January 28, 2012, 12:20:54 PM
You may be feeling the ground shake start. More down grades on friday followed by calls from Germany to have Greece turn over control of its finances to the EU.
ft.com>World>Europe (http://www.ft.com/intl/cms/s/0/33ab91f0-4913-11e1-88f0-00144feabdc0.html#axzz1kmgqg7id)
OUCH!!!
The first Domino is about to fall and there will be no stopping the momentum.
We're all paying the price for our short-sighted leaders when their most compelling ambition is for themselves.
Europe is getting hit by the double whammy of the unbearable cost of their bloated wellfare state and the complete lack of monetary flexibility resulting from the EU structure.
The only reason we aren't hitting the wall right now is because we can print more money to fund our deficit spending. Unlike Greece, Italy, Spain and Portugul.
Quote from: Dan on October 31, 2011, 07:10:24 AM
A Euro collapse will hurt China and to a lesser extent the US. But it will also lead to a lot of hardship in places like Africa and South America where the economies are largely dependent upon exports to Europe.
Dan, it will put us into a depression, if not a collapse. Sorry to have to say this but we have quite a few global companies right here in the US for which I work for one that will be impacted directly. This is not a case of it just being contained in Europe, this will be a global event, It can not be simply contained to Europe. Europe is going to come apart at the seams and we are going to witness riots and collapses we have not seen since the last Great Depression. There simply is no where for the world to turn to too hide their investments. We are also in a dire strait. 16 trillion in debt and climbing going rapidly down the same path that Europe has been on.
Obviously it cannot be contained. But that doesn't mean the US will go into depression.some stocks will go down and a few corporate jobs will be lost but our strong internal consumption and the relative strength of our banks will position us far better than the developing economies.
I think that since about 30% of our exports go to Europe it would cause a deepening of our recession and an increase of 3 to 6 percentage points on our unemployment index. Next question would be would that be enough to sink Obama's re-election hopes?
Quote from: Dan on January 29, 2012, 05:08:47 PM
Obviously it cannot be contained. But that doesn't mean the US will go into depression.some stocks will go down and a few corporate jobs will be lost but our strong internal consumption and the relative strength of our banks will position us far better than the developing economies.
Well, it's hard to say just how hard it will impact us but as we stand today we are in deep trouble with our own debt and inability to reign in our government's spending. We have done nothing to turn this massive ship around.
I don't dispute the problems of our debt. But to an extent they are mitigated by two factors. First the deleveraging of corporate and personal US debt at a strong rate. Second is the monetary flexibilty that few other countries have.
Our chickens will eventually come home to roost but we are playing by a different set of rules than most countries.
What different set of rules?
First, we have greater monetary flexiblity. When we run out of money we just print more (ie getting the Fed to buy our treasuries) while the Europeans can only spend what they are able to borrow. If we played under those rules we would be seriously worse off than today.
Also our growing govt debt is largely offset by the deleveraging of our personal debt and corporate debt. Total debt (govt, corp, personal) in the US is about 200% of GDP. More or less the same spot we were in 4 years ago while Japan and the UK are around 500% of GDP when you look at all categories of debt.
Also our banks are far more liquid, have far better capital reserves and far less exposure to EU sovereign debt than our counterparts in the European banking sector. And along those lines the banking sector of the EU is far bigger relative to the EU's GDP than our banking sector is relative to American GDP.
I'm not saying we will not be affected. Of course we will. This thing cannot be localized or controlled in a global economy. But I am saying we will not be hit the same way for some pretty basic fundamental reasons related to less exposure.
Quote from: Dan on January 30, 2012, 10:21:32 AM
Also our banks are far more liquid, have far better capital reserves and far less exposure to EU sovereign debt than our counterparts in the European banking sector. And along those lines the banking sector of the EU is far bigger relative to the EU's GDP than our banking sector is relative to American GDP.
I'm not saying we will not be affected. Of course we will. This thing cannot be localized or controlled in a global economy. But I am saying we will not be hit the same way for some pretty basic fundamental reasons related to less exposure.
Wish I could believe this. Nothing against you but based on everything I have read it does not seem as if we could survive a Euro collapse unscathed. We are teetering on the point of no return in regards to our own currency crisis.
Quote from: Seawolf on February 05, 2012, 03:13:25 PM
Wish I could believe this. Nothing against you but based on everything I have read it does not seem as if we could survive a Euro collapse unscathed. We are teetering on the point of no return in regards to our own currency crisis.
Who is saying we would go unscathed? The difference between survival and being unscathed is pretty big. Obviously it will affect us. But I think it is very easy to overstate it's impact on us. We will not be affected nearly as badly as the French or Germans or even the Chinese.
Quote from: Dan on February 06, 2012, 07:27:37 AM
Who is saying we would go unscathed? The difference between survival and being unscathed is pretty big. Obviously it will affect us. But I think it is very easy to overstate it's impact on us. We will not be affected nearly as badly as the French or Germans or even the Chinese.
Let's hope you are right Dan because we are not prepared for something on the scale of a collapse of our currency.
Beginning to appear that even the EU has it doubts about the viability of the current Greek Bailout.
(Reuters) - Euro zone finance officials are examining ways of delaying parts or even all of a second bailout program for Greece while still avoiding a disorderly default, several EU sources said on Wednesday
Reuters Eurozone Article (http://www.reuters.com/article/2012/02/15/us-eurozone-greece-package-idUSTRE81E14620120215)
EU Says Greek Bond Swap in Aid Plan Requires Time for Investor Decisions.
Euro-area finance ministers need to agree on all elements of the bailout plan and the conditions Greece must meet to receive the bailout, Amadeu Altafaj, spokesman for EU Economic and Monetary Affairs Commissioner Olli Rehn, told reporters today in Brussels. When asked whether the debt swap would be technically able to proceed ahead of a broader deal, he responded that "decisions are first and foremost political."
Even though a framework and many of the details have been agreed upon, the bond exchange has stalled because of broader clashes between the EU and Greek authorities. EU officials have said Greece needs to show more commitment to promised reforms in order to receive the 130 billion-euro ($170 billion) aid package that was broadly endorsed in October.
Bloomberg Cites Need For Time for Investor Decisions (http://www.bloomberg.com/news/2012-02-15/eu-says-greek-bond-swap-in-aid-plan-requires-time-for-investor-decisions.html)
Greece is a lost cause. They just don't have the political will to admit they lack the political will needed to fix things.