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View Poll Results: How long does the euro have left?
Monday 4 3.85%
Before/near Xmas 12 11.54%
Mid-February 34 32.69%
It'll stay intact due to an overnight hallmark 54 51.92%
Voters: 104. You may not vote on this poll

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  #21  
Old 09.12.2011, 14:48
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Re: How long does the Euro have left?

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Where the poll option for 'I haven't got the foggiest'.
More importantly for me are those 2 questions

a/ What will happen to the UK/£ - better or worse now that they've made a symbolic break and isolated themselves

b/ What will be the knock on effect for the CHF - how can it be prevented from taking off further and causing more trouble for Swiss industry, exports and tourism?
UK can't sign any treaty that dictates how it can tax and spend given that The City is the reason MF Global operated where it did. The pound will likely weather the storm far better than the euro or the franc.

I'm curious about what happens to the franc when the euro tanks as well. Already I've started to notice that prices on some of the groceries have come down a lot in the last few weeks which is likely related to the currency issues and the economy in general.
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  #22  
Old 09.12.2011, 14:54
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Re: How long does the Euro have left?

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huh???? they're printing new ones?
http://online.wsj.com/article/SB1000...874422516.html

This is one of the newest, but there were reports of new deutschmarks being printed back in October.
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  #23  
Old 09.12.2011, 14:58
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Re: How long does the Euro have left?

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b/ What will be the knock on effect for the CHF - how can it be prevented from taking off further and causing more trouble for Swiss industry, exports and tourism?
According to the article I linked to above, the SNB is already looking at other non-Euro currencies for reference.
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  #24  
Old 09.12.2011, 16:44
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Re: How long does the Euro have left?

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Thankfully, the UK, Sweden, Hungary and Czech Republic refusing to sign the next treaty should put option B) to bed. Finally.
Well the last I read was that Hungary have corrected their earlier statement to say they would support a change and Sweden and the Czech Republic want to go home and consult their parliaments... so right now I count only two definite no votes - the UK and Finland.

For the 17, I don't see any option but B at this stage and that seems to be the way it is going... it will take a long time as it will be done in the usual European style of seeking consensus and considering every option before committing to anything, so I expect we are facing into a long period of financial instability.
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  #25  
Old 09.12.2011, 19:12
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Re: How long does the Euro have left?

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Since it is nearly certain that the politicians in Brussels are doing nothing to solve this crisis and few believe the circus surrounding the summit, how long do you think it will last before things really get darwinian?

Monday?
Christmas?
Mid-February?
Or, do you think they'll patch things up overnight?
The Euro will outlive us all.

The crisis is at its core a political crisis, not an economic crisis. The Eurozone is a common currency region, not a monetary and fiscal union.
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  #26  
Old 09.12.2011, 20:50
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Re: How long does the Euro have left?

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The Euro will outlive us all.

The crisis is at its core a political crisis, not an economic crisis. The Eurozone is a common currency region, not a monetary and fiscal union.
I know we live in Europe and all... but seriously dude... wherever you're hiding your reefer, it's not hidden well enough.
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  #27  
Old 10.12.2011, 00:33
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Re: How long does the Euro have left?

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The Euro will outlive us all.

The crisis is at its core a political crisis, not an economic crisis. The Eurozone is a common currency region, not a monetary and fiscal union.
Any more news from planet Dysfunction??
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  #28  
Old 10.12.2011, 09:53
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Re: How long does the Euro have left?

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Any more news from planet Dysfunction??
Does that mean you are very confident in your opinion that the Euro is doomed?
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  #29  
Old 10.12.2011, 10:09
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Re: How long does the Euro have left?

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I know we live in Europe and all... but seriously dude... wherever you're hiding your reefer, it's not hidden well enough.
I am serious in what I am saying. Let me entertain you with an explanation since you are interested. Crisises (what the hell is the plural of crisis again?) that are essentially political, tend to get resolved, because, ehm... they can. The really problematic crisises are those that are economic at their core, eg. the housing bubble in the USA which involved crazy overleveraging by institutions and the public.

For a purely political crisis to evolve into an economic crisis and become sustainable (reinforcing its own momentum), the economic linkages must fire. The typical linkages are business confidence and consumer confidence. Confidence in the Euro as a currency, ironically, is not one of the linkages, as a weaker Euro is good for the Euroland economy, on balance.

At the moment their is a slight pullback in business and consumer confidence, granted, but in my opinion a good part of it is due to scaremongering by those in whose interests it is to do so, and the incessant media chatter. I don't see it sustained, as busineses and consumers are going to get weary of this and get on with their normal lives, such as building infrastructure and projects in the fast growing developing world, read China, India, Brazil and Africa.
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  #30  
Old 10.12.2011, 11:00
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Re: How long does the Euro have left?

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I am serious in what I am saying. Let me entertain you with an explanation since you are interested. Crisises (what the hell is the plural of crisis again?) that are essentially political, tend to get resolved, because, ehm... they can. The really problematic crisises are those that are economic at their core, eg. the housing bubble in the USA which involved crazy overleveraging by institutions and the public.

For a purely political crisis to evolve into an economic crisis and become sustainable (reinforcing its own momentum), the economic linkages must fire. The typical linkages are business confidence and consumer confidence. Confidence in the Euro as a currency, ironically, is not one of the linkages, as a weaker Euro is good for the Euroland economy, on balance.

At the moment their is a slight pullback in business and consumer confidence, granted, but in my opinion a good part of it is due to scaremongering by those in whose interests it is to do so, and the incessant media chatter. I don't see it sustained, as busineses and consumers are going to get weary of this and get on with their normal lives, such as building infrastructure and projects in the fast growing developing world, read China, India, Brazil and Africa.
When you are up to your eyeballs in debt and digging further, it most certainly is an economic crisis. I dare you to take a look at most European nations and have a look how much of the GDP is created from government spending alone.

Last edited by Lex; 10.12.2011 at 11:23.
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  #31  
Old 10.12.2011, 11:54
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Re: How long does the Euro have left?

the problem i see with the EURO experiment is that it doesn't follow the standard historic narrative. I recall that from my international business theory units the model was bilateral trade -> unilateral trade -> trade zone -> economic zone (common currency etc) -> political union.

The euro being the bastard child of the last two steps. My knowledge of history made me question these assumed progress. you have complete political union and economic union in the same step. one requires the other!

Hi to all the citizens of modern confederated states! Part of the reason to confederate was to create economic union (Australia especially and the US).

The Euro hasn't done this at all! Too much economic sovereignty lies in with the member states. The old idea of Nation State resonate too strongly for it to work properly. In Aus i have little problem bailing out our fellow confederated states, we see it as necessary. I am more Australian than a New South Welshman. Within the EU Germans are more German than European etc. Here is the problem, this leads to too much sovereignty.

But to be fair it is quite a young system, it will evolve from this or collapse.
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  #32  
Old 10.12.2011, 13:23
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Re: How long does the Euro have left?

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When you are up to your eyeballs in debt and digging further, it most certainly is an economic crisis. I dare you to take a look at most European nations and have a look how much of the GDP is created from government spending alone.

No, it's not. For 2011, Japan has a Gross Public Debt to GDP ratio of 205%, the Euro area 97% and the United States 95%. The average for all 34 OECD countries is 100%. So the Euro area is even below that. If the size of government debt alone constituted an economic crisis, Japan would not have been able to borrow money for the last 10 years.

It's all relative. Like they say in South Africa: "How fast must you be able to run to escape a lion?". Answer: "Faster than your buddy".
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  #33  
Old 10.12.2011, 13:39
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Re: How long does the Euro have left?

According to Sarkozy yesterday - now that banks can borrow money for 3 years from the ECB @ 1% so the banks can then lend money to their Governments, e.g. Italy, at less than the 6/7% that sovereign bonds fetch.

Seems like a crazy roundabout.......
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  #34  
Old 10.12.2011, 13:42
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Re: How long does the Euro have left?

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the problem i see with the EURO experiment is that it doesn't follow the standard historic narrative. I recall that from my international business theory units the model was bilateral trade -> unilateral trade -> trade zone -> economic zone (common currency etc) -> political union.

The euro being the bastard child of the last two steps. My knowledge of history made me question these assumed progress. you have complete political union and economic union in the same step. one requires the other!

Hi to all the citizens of modern confederated states! Part of the reason to confederate was to create economic union (Australia especially and the US).

The Euro hasn't done this at all! Too much economic sovereignty lies in with the member states. The old idea of Nation State resonate too strongly for it to work properly. In Aus i have little problem bailing out our fellow confederated states, we see it as necessary. I am more Australian than a New South Welshman. Within the EU Germans are more German than European etc. Here is the problem, this leads to too much sovereignty.

But to be fair it is quite a young system, it will evolve from this or collapse.

Yes per definition, the Euro can not be following the standard historic narrative. The creation of the common currency on the inter-national scale that it has been, is historically unique. It will evolve, as it has to, to survive. The new treaties or modifications to old ones, are signs pointing to this evolution.
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  #35  
Old 10.12.2011, 13:44
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Re: How long does the Euro have left?

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According to Sarkozy yesterday - now that banks can borrow money for 3 years from the ECB @ 1% so the banks can then lend money to their Governments, e.g. Italy, at less than the 6/7% that sovereign bonds fetch.

Seems like a crazy roundabout.......
Yes, its carousel and some people still believe in free lunch.
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  #36  
Old 10.12.2011, 13:46
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Re: How long does the Euro have left?

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According to Sarkozy yesterday - now that banks can borrow money for 3 years from the ECB @ 1% so the banks can then lend money to their Governments, e.g. Italy, at less than the 6/7% that sovereign bonds fetch.

Seems like a crazy roundabout.......
The issue is to recapitalize banks that has seen their capital invested in government bonds take a huge hit.
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  #37  
Old 10.12.2011, 14:00
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Re: How long does the Euro have left?

The Euro as a currency will be with us long after Jan 1st. It is very expensive to change a currency and it takes a lot of time for each country to not only print and mint enough replacement currency and get it positioned to go into circulation but it also takes a lot of time to financially prepare for such a conversion, it just can't happen this quickly without causing financial meltdowns.

In my opinion the great majority of the countries using the Euro are in no position financially or politically to add the many millions it would cost to their existing debt to move off of the Euro. Not to mention the absolute trashing their individual bond ratings would take as most of them would be rated in the junk bond range. Their ability to raise capital would either be non-existent or would cost so much it would push some countries into bankruptcy and an economic depression.

Now the Eurozone as a political body?? That's an entirely different matter and I expect we'll start seeing a lot more push back from the attempted France/German so called "leadership", telling everyone else what they should do but doing next to nothing in reforming their own welfare states.

Individual federal tax rates in Germany for the so called "top earners" is at 42% and one party even wants to raise it to 49%, Then you start adding in all the rest...When I worked there last in early 2010, 53% of my gross was gone with all of the deductions, including pension and insurance.

The welfare systems have got to be reformed and they just don't have the political stomach/courage to face what has to be done. With so many other Eurozone countries in worse shape they can continue to deflect away the attention...but it will have to be dealt with sooner or later. I don't know any first hand details on the French systems so I won't comment on France, but the comments from the French nationals I speak to I heare similar views.

It will be very interesting to see what happens over the next few months, hopefully it won't also be depressing. Thankfully we're here and on the CHF.
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  #38  
Old 10.12.2011, 14:27
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Re: How long does the Euro have left?

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No, it's not. For 2011, Japan has a Gross Public Debt to GDP ratio of 205%, the Euro area 97% and the United States 95%. The average for all 34 OECD countries is 100%. So the Euro area is even below that.
That is the very reason I like to stick to the facts, rather than be lead by all this mass hysteria that spouts from the press, which is designed to sell newspaper, not give you the facts.

Historically we've seen much higher rates of unemployment, inflation and debt and we've worked our way out of that, so there is no reason to expect that we will not be able to deal with it this time around either.

Historically too the EU has gone through may similar situations and in each case the decision process has proceeded along the same lines as now - long drawn out and with many false turns.... this time it may however be a bit faster as there is little chance of one of the 26 seeking an opt out clause.
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  #39  
Old 10.12.2011, 14:29
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Re: How long does the Euro have left?

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No, it's not. For 2011, Japan has a Gross Public Debt to GDP ratio of 205%, the Euro area 97% and the United States 95%. The average for all 34 OECD countries is 100%. So the Euro area is even below that. If the size of government debt alone constituted an economic crisis, Japan would not have been able to borrow money for the last 10 years.

It's all relative. Like they say in South Africa: "How fast must you be able to run to escape a lion?". Answer: "Faster than your buddy".
But this isnt just a problem of debt to GDP alone - Spains for now, is actually lower than most other European nations. Its more the structural problems i.e. building a welfare state with other peoples money......... until all of a sudden there is nothing left to pay the promises. In the meantime private sector is being strangled, but government sector keeps growing, and thats unsustainable.

Japans debt to GDP grows because it still is able to get a source of funding - internally from its own citizens. But you cant look at that on its own and say 'well, Japans is 200%, therefore no problems till we get there'. Thats the whole issue here. A few years ago, nobody even cared about debt, because funding was raining down from the sky. People only seem to take note until all of a sudden it stops or gets expensive - like now. Who said Japan wont/doesnt have problems? Japans problems are actually quite huge themselves. The demographics are a disaster and most of their debt is to their own citizens. That in itself is not a problem until the citizens begin to retire and need to use that capital themselves. Its the trend thats important here and its getting worse. I have heard all the stuff about debt not being a problem for years - its not a problem, until it is

Euro area at 97% (if it is so) is completely irrelevant when European banks havnt been recapitilised - lets revisit that figure once they are. Germanys banks alone are leveraged at over 30 to 1 - scary stuff.
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  #40  
Old 10.12.2011, 14:35
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Re: How long does the Euro have left?

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The Euro as a currency will be with us long after Jan 1st. It is very expensive to change a currency and it takes a lot of time for each country to not only print and mint enough replacement currency and get it positioned to go into circulation but it also takes a lot of time to financially prepare for such a conversion, it just can't happen this quickly without causing financial meltdowns.

In my opinion the great majority of the countries using the Euro are in no position financially or politically to add the many millions it would cost to their existing debt to move off of the Euro. Not to mention the absolute trashing their individual bond ratings would take as most of them would be rated in the junk bond range. Their ability to raise capital would either be non-existent or would cost so much it would push some countries into bankruptcy and an economic depression.

Now the Eurozone as a political body?? That's an entirely different matter and I expect we'll start seeing a lot more push back from the attempted France/German so called "leadership", telling everyone else what they should do but doing next to nothing in reforming their own welfare states.

Individual federal tax rates in Germany for the so called "top earners" is at 42% and one party even wants to raise it to 49%, Then you start adding in all the rest...When I worked there last in early 2010, 53% of my gross was gone with all of the deductions, including pension and insurance.

The welfare systems have got to be reformed and they just don't have the political stomach/courage to face what has to be done. With so many other Eurozone countries in worse shape they can continue to deflect away the attention...but it will have to be dealt with sooner or later. I don't know any first hand details on the French systems so I won't comment on France, but the comments from the French nationals I speak to I heare similar views.

It will be very interesting to see what happens over the next few months, hopefully it won't also be depressing. Thankfully we're here and on the CHF.

Agree. My sense is that new treaties for closer fiscal "union" and tighter economic "integration" is to some extent an exercise in giving the markets what they want to hear, or rather, what the politicians think the markets want to hear.

I don't think the Germans actually intend for this evolution to go the route of more fiscal and monetary centralization, with a bigger role for the ECB to play; but definitely more COMMON RULES for the Eurozone members to honour and a means to punish the members who break the rules. Germans like rules - and so do the Swiss for that matter. But they also like their freedom.
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