The Euro is dead

[Jog On]

What if the market sentiment was the other way and the 'whizzkids' were pushing the EUR or GBP or [insert financial instrument here] up instead? Should they have their wings clipped then?

Wasn't there a temporary ban on shorting certain securities in 2008 for a bit when it was all kicking off?

The Mayday riots next year are going to be quite substantial methinks now all the students and people losing benefits will no doubt be pitching in as well..

[scooterscot]

Because it is our pound and we can do what we like with it. More than the poor Irish can do

Like printing more of them? Phew - I'm glad that worked out.

[doodab]

WHS - but how do you clip wings on a global scale? And our ethics are in sort supply so we're unlikely to lead the way, ever.

I don't think it's necessary. The line of argument that requires global coordination basically says that if anyone takes unilateral action a) financial services firms will relocate en masse and b) the cost of financial services will rise damaging the local economy, and that these two things will outweigh any possible benefit that comes from greater regulation.

This is an assertion largely put forward by the financial industry, and given the costs currently being borne by central government and the wider economy on their behalf, the idea that what is best for them is best for all of us is starting to look less and less credible.

If politicians were to decide that the wider economy is better served by limiting their activities, even if that risks some damage to incumbent financial services firms, then that is a de facto rejection of the above line of reasoning and instead of a need for global coordination we have competition to devise a regulatory framework that's best for the wider economy.

Of course, it's also reasonable to say that any action taken is going to be 5 years to late.

[CheeseSlice]

Proper cracks appearing in the Euro now

Euro falls on rumours Greece is to quit the eurozone

Of course EU ministers and ECB deny this, we're used to this mechanism of releasing information about sovereign debt now:

1. Drop a rumour about <replace with name of PIIG country> seeking bailout that appears in hundreds of tabloids and news channels worldwide.
2. EU ministers, ECB and <PIIG country> furiously deny the reports.
3. 1-2 months pass whilst market reaction is assessed, and politicians invent cover story/spin.
4. <PIIG country> admits it is seeking bailout.

[scooterscot]

Proper cracks appearing in the Euro now

Euro falls on rumours Greece is to quit the eurozone

Of course EU ministers and ECB deny this, we're used to this mechanism of releasing information about sovereign debt now:

1. Drop a rumour about <replace with name of PIIG country> seeking bailout that appears in hundreds of tabloids and news channels worldwide.
2. EU ministers, ECB and <PIIG country> furiously deny the reports.
3. 1-2 months pass whilst market reaction is assessed, and politicians invent cover story/spin.
4. <PIIG country> admits it is seeking bailout.

Cracks or speculators looking to make a quick buck?

Greece full well knows departure would like leave them in a worst position than they are currently in.

[CheeseSlice]

Greece full well knows departure would like leave them in a worst position than they are currently in.

They could devalue if they go back to the Drachma...

[AtW]

They could devalue if they go back to the Drachma...

Yes, they could.

But all their debts are in euros, not drachmas!

And even if that was not a problem (default on debts), then they'd still have to pay upfront (especially after default as nobody will give them credit) in hard currency (USD) for oil, wheat, gas, metals etc etc.

Only strong euro members like Germany actually have way out because they can do on their own if necessary. All weak members can do is bluff and blackmail, but Germany does not strike me as the kind of country that can tolerate such stuff any further.

[swamp]

Cracks or speculators looking to make a quick buck?

Greece full well knows departure would like leave them in a worst position than they are currently in.

If Greece could default on its debt, like Argentina, then in five years it may bounce back. On its current course it faces a generation of ruin.

[scooterscot]

They could devalue if they go back to the Drachma...

That's what the speculators want us to believe is the way forward.

Surely such actions would mean the Drachma would be devalued by half and rampant inflation would result. A plan that's worked for us and the US so well thus far. A default would mean no country would lend to them for years and years.

I don't think the people of Greece are going to go for that.

I think what is more likely to be the outcome of this weekend (he holds his breath) is Greece shall hand over control of it's domestic financial affairs to EU bodies who can do a better job.

[scooterscot]

On its current course it faces a generation of ruin.

I ask you, are we in the UK that different.

First time buyers: 35 years+

Graduates: £30K of debt

Public sector pensions: Someone remind how many billion we're short

UK debt: At the end of December 2010 general government debt was £1105.8 billion, equivalent to 76.1 per cent of GDP.



Bravo, yeah, we're off to a flying start. At least Greece has predictable sunny weather.