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The Euro is done

Discussion in 'Issues Around the World' started by ethics, May 14, 2010.

  1. ethics

    ethics Pomp-Dumpster Staff Member

    You heard it here first.

    It WILL affect US, unfortunately, but the currency known as the Euro is going bye bye. Europe is/will implode.

    France already threatened Germany that they will pull out of eurozone.
  2. tke711

    tke711 Oink Oink Staff Member

    Wow...that will affect everyone.

    I always wondered just how long that little experiment would work.
  3. SixofNine

    SixofNine Jedi Sage Staff Member

    Quick, what's that DVD software that you have to pay for in Euros? :)
  4. ethics

    ethics Pomp-Dumpster Staff Member

  5. Sierra Mike

    Sierra Mike The Dude Abides Staff Member

    How typical of those quitters! ;)

  6. Swamp Fox

    Swamp Fox Veteran Member

    I can see that, but I am not quite so confident the Euro will go bankrupt, the way I was confident GM would go bankrupt. I say this because the Euro is a currency, and it has a large economic bloc supporting it.

    So, yes, the odds are leaning towards the destruction of that means of exchange (I hope), but I would say it's a done deal.
  7. Swamp Fox

    Swamp Fox Veteran Member

    The Economist has an opinion and the main article on the issue, and the bottom line is that the super bailout has bought time for the Euro-zone, but much more fiscal discipline is needed, because the work isn't anywhere near done. I'm not sure the Euro will die as a currency, but I'm beginning to wonder if the default will still be coming, because the Europeans don't seem to have the will to implement the painful reforms needed.

    I'm becoming more concerned about the prospects of a second dip.
  8. Swamp Fox

    Swamp Fox Veteran Member

    Leon, you're ahead of the pack. A Bloomberg commentator is also saying that the EU will have to let the Euro die, because the economic bloc cannot impose the fiscal discipline on top of the member states. I had said it may not happen, because of the political implications, but, if it does, then the EU may die as a concept.

    So, one way or the other, the United States of Europe will not be united. And they will still depend on the real United States to protect them.
  9. ethics

    ethics Pomp-Dumpster Staff Member

    It's much worse than that, Stanley. Even if EU HAD the fiscal discipline, the countries being bailed out do NOT. Greece, Italy, etc... are too corrupt, have always been. They have been living on credit for at least 10 years and EU turned their faces away, they didn't want to deal with it because the economy all over was good. Now? They have no choice. My calling the Euro dead is mostly to do with the fact that no matter what package Germany lead coalition decides to apply, Greece will never ever abide by the rules. They will lie, cheat, steal, etc... what they have been doing.

    The PIIGS (Portugal, Italy, Ireland, Greece, Spain)were the perfect economic Trojan horse for the European Union.
  10. Swamp Fox

    Swamp Fox Veteran Member

    A rather big if, IMHO.

    And France isn't in that great a shape either, not to mention Eastern Europe. I think there will be another round of defaults, and, if so, what then?
  11. ethics

    ethics Pomp-Dumpster Staff Member

    Gold will go through the roof, many countries will go back to their own valuations. I am not sure if there's a benefit of creating one currency again.
  12. John R. Beanham

    John R. Beanham Typical Aussie Male

    Slightly off topic, perhaps.

    Can someone explain to me what will happen if devaluation of the US Dollar is allowed/made to happen?

    I THINK that the value and serousness of the US Treasury debt, both domestic and foreign, will be GREATLY reduced.

    The interest bill will be less and there will be a LOT of unhappy US treasury bond-holders around the world, including US Retirement and investment funds etc.

    Does the above have any validity, is it inevitable and unavaoidable?

  13. Swamp Fox

    Swamp Fox Veteran Member

    Leon, if the other countries are pushed out of the Euro zone, as Soros did with the pound a while ago, then the Euro may truly be dead - either that or continue in obscurity, like, say the language Esperanto. And I think the other countries will be so pushed.

    John, if the US dollar is devalued, the debt will still be the same, because it's in US dollars. But American exports will be cheaper, while American imports will be more expensive. And that will mean, in the short run, that Americans will have higher inflation and a lower standard of living. In the long run, however, the higher American exports may lead to higher income, which may more than compensate for the higher imports.
  14. John R. Beanham

    John R. Beanham Typical Aussie Male


    With inflation, there will be more dollars in the system, and also the Federal Budget, so the Treasury bonds will be easier to service I assume.

    BUT, the bottom line of the Federal Budget every year will be greater in terms of dollars, and there will be more need to sell more Treasury Bonds. So I suppose the advantage will only be temporary?

  15. Swamp Fox

    Swamp Fox Veteran Member


    Not really. As I understand it, the Federal Treasury cannot truly make money from the rising or falling dollar, because it sells and buys its own product, namely, the dollar.
  16. Swamp Fox

    Swamp Fox Veteran Member

    The EU is not just propping up Greece, it's also subsidizing the other governments to the tune of EU 750 billion. That's on top of over EU 100 billion for Greece. That's a lot of money, but that won't be enough, and, as the Globe and Mail says, the European governments are running out of money to keep this going, amidst more talk of the Eurozone collapsing.

    But that's not the only problem for the EU - as the Economist magazine has said, the European governments (aside from Britain) don't seem to realize that deep structural reforms are needed, and, so the longer-term problem will not be fixed. I want the Euro to collapse, but I don't want a double-dip. But I think that the Euro will collapse, and, when the European governments go into default, they'll give us that dreaded double-dip.

    And, this time, I don't know if the US can bring us out of the second recession.
  17. Swamp Fox

    Swamp Fox Veteran Member

    Interesting. The Euro is falling, and so are the stock markets. But consumer confidence in the US is rising, which can only be good for the economy. So, once again, if anyone can save the world, it's the US.
  18. Swamp Fox

    Swamp Fox Veteran Member

  19. ethics

    ethics Pomp-Dumpster Staff Member

    No, just in the business of knowing. ;) I am surrounded by people who rely on economic predictions as their livelihood. Granted, there are people who say the opposite, but as long as there's a place I can gather information... :)
  20. Swamp Fox

    Swamp Fox Veteran Member

    The OECD says that the US will still grow 3.2% this year, instead opposed to the 2.5% initially predicted, and the emerging economies will also cushion the blow from the collapsing Eurozone. From the Bloomberg article

    That said, China, like Japan before it, is facing a bubble, and if that pops, then the world will lose an engine of recovery. So, in the end, the world depends on the US.

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