Is the Euro party almost over?

[Bumpa STIKKA]

Greece will be the first but not the last of the idiot 'PIIGS' to go bankrupt.

If you have any Euros my advice is to dump them fast.

Luckily the UK isn't a part of this insane idea for a single European currency so it will suffer less. But even so - if the IMF decides to jump in then even the Brits will be paying for the failure of the Euro. Not to mention that as the currency is trashed then trade with Europe will suffer.

What a mess the Western world is in... and the crisis hasn't even started yet.

With EU states proffering their begging bowls and the largest companies soon defaulting on their pension schemes I would recommend anyone with any Euros or invested capital to seriously take a fresh look at the dollar!

Much of my money is safely in baht!

[Snick]

Financially Greece is a pimple on Europe's ass, its too small to cause any problems. If the rest of the Piigs (portugal,Italy,Ireland+Spain) ALL went belly up at the same time then it might cause problems. But thats not going to happen.

What is going to happen is that the problems with Piigs will prevent Europe from lowering interest rates and lowering taxes, and that will slow down the recovery in EU zone - specifically Germany and France.

Euro is too high.

[Bumpa STIKKA]

(Snick @ Feb. 12 2010,08:05) Euro is too high...

Not for long!

I think your assessment is optimistic.

Greece is a 3% pimple and if it decides that it simply can't keep to the Euro rules of engagement (which, btw, keep changing for these PIIGS) then it will encourage others to follow suit.

One of the problems is that France and Germany can't seem to agree on what to do and to exacerbate that further the big boys are finding support from previously enthusiastic Europhiles harder to come by.

Europe is committed to the single currency so it's not going to disappear, but there will be some portions of the Euro-zone that will be considering their options.

The EU aren't thinking ahead and are dealing with each crisis as it happens.

What they should be doing is figuring out how to create a protective strategy when mass unemployment PLUS double digit inflation PLUS the eventual rise in interest rates takes a hold... early next year.

They'll probably do what the Brits do - start a war with someone!

I'm glad I'm well out of it.

[pacman]

Angela Merkel has just announced that Germany won't be joining in any bailout of Greece. She is insisting on a rigorous policing of the Greek austerity program by the EC, the ECB & the IMF. This tough line is unprecedented but will keep the Euro from inevitable default should the EU take the soft option of an open cheque book for Greece & the others bound to follow.

Ireland has already slashed its budget with savage public sector wage & pension cuts.

The Euro will fall in the short term with the anti-Euro noise being led by US banks & US/UK related interests who would dearly love the EU joined them on the downward spiral they are on with their massive Quantative Easing programs. This is the fancy term for printing money with which the US & the UK are buying their own Treasury Notes. (They have to buy them, no one else wants them)

By holding fast to the principles agreed upon under the terms of the Maastricht Treaty, the Euro will emerge as the major VIABLE currency on earth, with the Renminbi & the Yen being the other two. (Roubles anyone? Don't bet against them)

How low the Euro goes will depend entirely on how successfully the anti-Euro forces can scare the market. With so much at stake I suspect it will come in for a battering but how long will it take before Forex buyers wake up that the Euro will survive this stronger than ever, unlike the US dollar which will eventually hyperinflate - there's just too many of them.

[guydesavoy]

If Greece pulls out of the Euro and reverts to the drachma, then it will be devalued...Property prices would fall..

We could all chip in and buy an island...Ladyboy Island anyone ?

Of course there would be issues with re-populating, so we'd have to ship in fresh ones on a regular basis.

[Master Bator]

(guydesavoy @ Feb. 12 2010,09:30) We could all chip in and buy an island...Ladyboy Island anyone ?

What a brilliant idea and a good location for a LB resort...
I'm sure you will find a lot of support for that....

[PigDogg]

For diversification purposes I have a little mony in Asian currencies, Swiss francs and Canadian dollars, and agriculture futures. Missed the boat on the Aussie dollar.

Euro been's gone for me for a a couple weeks.

[Torurot]

How Goldman Sachs Helped Greece to Mask its True Debt
February 11th, 2010

Via: Spiegel: http://www.spiegel.de/international/...676634,00.html

Goldman Sachs helped the Greek government to mask the true extent of its deficit with the help of a derivatives deal that legally circumvented the EU Maastricht deficit rules. At some point the so-called cross currency swaps will mature, and swell the country's already bloated deficit.

Greeks aren't very welcome in the Rue Alphones Weicker in Luxembourg. It's home to Eurostat, the European Union's statistical office. The number crunchers there are deeply annoyed with Athens. Investigative reports state that important data "cannot be confirmed" or has been requested but "not received."

Creative accounting took priority when it came to totting up government debt.Since 1999, the Maastricht rules threaten to slap hefty fines on euro member countries that exceed the budget deficit limit of three percent of gross domestic product. Total government debt mustn't exceed 60 percent.

The Greeks have never managed to stick to the 60 percent debt limit, and they only adhered to the three percent deficit ceiling with the help of blatant balance sheet cosmetics. One time, gigantic military expenditures were left out, and another time billions in hospital debt. After recalculating the figures, the experts at Eurostat consistently came up with the same results: In truth, the deficit each year has been far greater than the three percent limit. In 2009, it exploded to over 12 percent.

Now, though, it looks like the Greek figure jugglers have been even more brazen than was previously thought. "Around 2002 in particular, various investment banks offered complex financial products with which governments could push part of their liabilities into the future," one insider recalled, adding that Mediterranean countries had snapped up such products.

Greece's debt managers agreed a huge deal with the savvy bankers of US investment bank Goldman Sachs at the start of 2002. The deal involved so-called cross-currency swaps in which government debt issued in dollars and yen was swapped for euro debt for a certain period €” to be exchanged back into the original currencies at a later date....

[PigDogg]

(Torurot @ Feb. 11 2010,20:59) Goldman Sachs helped the Greek government to mask the true extent of its deficit with the help of a derivatives deal that legally circumvented the EU Maastricht deficit rules.

"I'm doing 'God's work" Lloyd Blankfein

[pacman]

(Torurot @ Feb. 12 2010,11:59) Greece's debt managers agreed a huge deal with the savvy bankers of US investment bank Goldman Sachs at the start of 2002. The deal involved so-called cross-currency swaps in which government debt issued in dollars and yen was swapped for euro debt for a certain period €” to be exchanged back into the original currencies at a later date....

This news would have gone over like a lead balloon with the EU Commissioners & the ECB. Greece has obviously breached EU covenants & they may still yet be expelled from the EU over this. But only until they get their house in order.

Greece will default on their derivatives contract, their new (old) currency, the drachma will devalue out of sight, they will suffer the lowest standard of living in Europe but once their manufacturing base is rebuilt by companies keen to secure Chinese level wages in Europe, they will recover. Eventually.

Out of the ashes will rise a much stronger economy but not before Greek Security Forces have to deal with the massive backlash from a very upset population. This is the textbook way for failed states to rebuild their balance sheet.

Anyone brave enough to predict that the US will go the same way? They will go down the other path - major conflict leading to all-out war. Thank heaven for the deranged leadership in Iran...        

[Snick]

Greece will not leave the Euro zone

too much 'face' will be lost by all involved.

What you might see is the Greek government forced to issue people vouchers to be used for food,rent,utilities. i.e. food stamps++, to compensate for those who will see salary cuts.

[Bumpa STIKKA]

I agree with Snick about the second currency... many communities in countries with large rural populations have already started this or have been doing it for a while.

It wouldn't surprise me that in five years time the Euro is a currency for city boys and banks only while half the population barter with vouchers or even dollars or pounds.

[gizmo]

Biggest mistake Ireland ever made
was going into this crap!
Now we are paying the price!

Unemployment is now
nearly as bad, if not worse
than the 80,s and the bank's
are fucked! We should get out
bring back the Irish punt!

[Bumpa STIKKA]

Amen to that. But more than anything it cost the Irish their dignity when it was railroaded into that massive swindle.

[whore]

But more than anything it cost the Irish their dignity

We lost that long before the EU came along.