Is the Euro dead in the water?

[Spicy]

It's Christmas in three days time.

Ho ho ho to all those who voted remain.

 

[larus]

Would agree with most but SNP have reached their zenith, they are becoming less popular as their achievements in government are poor, which is why independence is regularly wheeled out, also there were 40% voted for leave in brexit, some 36% of the SNP vote. Sturgeon will not and cannot go for another referendum, it will be political suicide and she knows it.

I wish that there was the time to allow for another Scottish Referendum so that the issue could be buried for a long time. As you say, the polls point to there not being the desire for this and, with the drop in oil prices, most sensible Scots will realise that they benefit from the wealth of the UK as a whole.

 

[GT49er]

It's the stock markets that we need yo be worried about along with 100% mortgages and the removal of tax relief for buy to let, manufacturing is such a small part of our output these days we heavily depend on stocks,shares and the property market which drives these from a UK perspective it's all a pack of cards once any one of these fails the rest will follow.

My predictions for 2017 are as follows:

Supreme Court upholds Brexit ruling
Britain triggers Article 50 as set out
French national front win the presidential election but it's close
The far right Dutch party win
Mrs Merkel remains chancellor but with a much weakened coalition
U.K. Government concedes it's forced to put outcome of Brexit negotiations to a vote in parliament
Mrs May uses this as a platform and calls a snap general election
SNP win an even bigger majority totally wiping out the three main parties in Scotland
UKIP win no parliamentary seats and sees it share of the vote plummet
Labour surprise many doing better than predicted but unable to win an outright
The LibDems make major strides forward but are still way behind the SNP for third largest party
The Conservative Party win the election but without a working majority
Labour,SNP and LibDems form a coalition
The deal will involve Scotland gaining much more self government and the U.K. holding a second referendum on the terms of Brexit

You forgot the squadron of eager pigs lining up on the runway!

On a serious note, there are inconsistencies in your dream for the future. When we activate Article 50, that's it, we're leaving. Our government will then of course try and negotiate the best possible deal on future relations with our erstwhile EU partners - but that deal will depend on what the rest of Europe agrees to; it won't be for the Commons to unilaterally decide the terms.

If, in your fantasy world, the Commons do reject the deal, what do you think would happen then? Realistically. We'd have to go to that nice Mr. Tusk and apologise for all the inconvenience we'd caused, and would he mind if we tore up Article 50 and pretended it (and the rejection of the EU by more than 17 million people) never happened and could we please just rejoin the EU. Without, of course, all those tiresome opt-outs that we had before, from closer political union, from Shengan and open borders, from joining the EURO - we'd probably even have to agree to drive on the friggin' right and change all our signposts to kilometres! Ain't going to happen (hallelujah!)

 

[neilbard]

 

[warmleyseagull]

The euro is flawed at base - there has never been a long-standing currency union involving large economies without fiscal union. In the long-run it can never work because monetary policy cannot substitute entirely for fiscal, and the spending controls within the euro are easily avoided, retrospective, and not enforceable.

The euro has been a disaster for Greece (it will never recover without the creditors' haircut that Merkel continually kicks into long grass); a near disaster for Portugal Ireland and Spain, and an impending one for Italy. Germany has done very well because it the Deutschmark would have floated upwards during last 10 years, instead its manufacturers have benefitted from (effectively) a weakened currency. The euro was always a politically driven Trojan Horse; the Junckers of this world saw it as a way to make political union a necessity and in a way they are right, it is just that is not the way that most folk want to go. Consequently there is an uneasy impasse between an economic structure that demands political unity, and a lack of will on the ground for that to happen.

Difficult to predict what will be the straw that breaks the euro's back - there is extraordinary political resilience in the flawed project that results in elastoplast solutions; the latest is Renzi not resigning after he said he would, thus denying Five Star Movement and allies the opportunity to get enough power to enforce a euro vote (which the outs would probably win). Wilders will do well in Holland, but probably not well enough to stop a coalition of the unholy to gang up on him and prevent a euro vote there. Le Pen will reach second round but Fillon will win. AfD will get seats in Bundestag, but not power to enforce a vote on euro (which they would lose anyway).

My bet is Italy will ultimately be the first domino. More elastoplast will probably be enough to prevent a banking crisis as long as Germany agress to let Italian government bail out private investors - a classic case of bending the rules. The bigger issue is Italy's debt, which is rising from a high base despite attempts to reduce as a consequence of a rapidly ageing demographic and consequent pension liability.

 

[Bob'n'weave]

The euro is flawed at base - there has never been a long-standing currency union involving large economies without fiscal union. In the long-run it can never work because monetary policy cannot substitute entirely for fiscal, and the spending controls within the euro are easily avoided, retrospective, and not enforceable.

The euro has been a disaster for Greece (it will never recover without the creditors' haircut that Merkel continually kicks into long grass); a near disaster for Portugal Ireland and Spain, and an impending one for Italy. Germany has done very well because it the Deutschmark would have floated upwards during last 10 years, instead its manufacturers have benefitted from (effectively) a weakened currency. The euro was always a politically driven Trojan Horse; the Junckers of this world saw it as a way to make political union a necessity and in a way they are right, it is just that is not the way that most folk want to go. Consequently there is an uneasy impasse between an economic structure that demands political unity, and a lack of will on the ground for that to happen.

Difficult to predict what will be the straw that breaks the euro's back - there is extraordinary political resilience in the flawed project that results in elastoplast solutions; the latest is Renzi not resigning after he said he would, thus denying Five Star Movement and allies the opportunity to get enough power to enforce a euro vote (which the outs would probably win). Wilders will do well in Holland, but probably not well enough to stop a coalition of the unholy to gang up on him and prevent a euro vote there. Le Pen will reach second round but Fillon will win. AfD will get seats in Bundestag, but not power to enforce a vote on euro (which they would lose anyway).

My bet is Italy will ultimately be the first domino. More elastoplast will probably be enough to prevent a banking crisis as long as Germany agress to let Italian government bail out private investors - a classic case of bending the rules. The bigger issue is Italy's debt, which is rising from a high base despite attempts to reduce as a consequence of a rapidly ageing demographic and consequent pension liability.

Totally agree. Come 2020 they'll be wheelbarrowing euros down the streets for a loaf. Just hope no dodgy arian characters emerge with suspect moustaches talking a about a 'new order'. Just saying.

 

[Brighton Mod]

View attachment 80430

A picture paints a thousand words!

 

[Eeyore]

She can with a vote of no confidence

Who from ?

 

[Eeyore]

A picture paints a thousand words!

With many different interpretations.

 

[larus]

The euro is flawed at base - there has never been a long-standing currency union involving large economies without fiscal union. In the long-run it can never work because monetary policy cannot substitute entirely for fiscal, and the spending controls within the euro are easily avoided, retrospective, and not enforceable.

The euro has been a disaster for Greece (it will never recover without the creditors' haircut that Merkel continually kicks into long grass); a near disaster for Portugal Ireland and Spain, and an impending one for Italy. Germany has done very well because it the Deutschmark would have floated upwards during last 10 years, instead its manufacturers have benefitted from (effectively) a weakened currency. The euro was always a politically driven Trojan Horse; the Junckers of this world saw it as a way to make political union a necessity and in a way they are right, it is just that is not the way that most folk want to go. Consequently there is an uneasy impasse between an economic structure that demands political unity, and a lack of will on the ground for that to happen.

Difficult to predict what will be the straw that breaks the euro's back - there is extraordinary political resilience in the flawed project that results in elastoplast solutions; the latest is Renzi not resigning after he said he would, thus denying Five Star Movement and allies the opportunity to get enough power to enforce a euro vote (which the outs would probably win). Wilders will do well in Holland, but probably not well enough to stop a coalition of the unholy to gang up on him and prevent a euro vote there. Le Pen will reach second round but Fillon will win. AfD will get seats in Bundestag, but not power to enforce a vote on euro (which they would lose anyway).

My bet is Italy will ultimately be the first domino. More elastoplast will probably be enough to prevent a banking crisis as long as Germany agress to let Italian government bail out private investors - a classic case of bending the rules. The bigger issue is Italy's debt, which is rising from a high base despite attempts to reduce as a consequence of a rapidly ageing demographic and consequent pension liability.

Add to this the stagnant/shrinking economy (due to the deficit/surplus rule of 3% of GDP) which means hat the debt/GDP ratio increases if the economy shrinks slightly. The government are aiming to add about 30Bln Euros (from memory) to the national debt to bail out the banks. Italy is screwed - sadly.

 

[Half Time Pies]

It's the stock markets that we need yo be worried about along with 100% mortgages and the removal of tax relief for buy to let, manufacturing is such a small part of our output these days we heavily depend on stocks,shares and the property market which drives these from a UK perspective it's all a pack of cards once any one of these fails the rest will follow

Absolutely this, in my opinion the whole world economy is on the brink, probably starting with the stock market where the QE money and low interest rates has created a massive speculative bubble and other assets such as property will probably follow on. All it needs is a trigger which could be a number of things: lower than expected US growth, Italian Banks failing, collapse of the Chinese real estate bubble. There are a number of potential threats to economic stability and I think its only a matter of time before something gives.

 

[larus]

Absolutely this, in my opinion the whole world economy is on the brink, probably starting with the stock market where the QE money and low interest rates has created a massive speculative bubble and other assets such as property will probably follow on. All it needs is a trigger which could be a number of things: lower than expected US growth, Italian Banks failing, collapse of the Chinese real estate bubble. There are a number of potential threats to economic stability and I think its only a matter of time before something gives.

Yep.

We haven't finished with the last 'Financial Crisis' yet. We're still in the middle of it (or maybe still at the start of it). The question that we should be asking is "If we are now nearing the end of the current expansionary period since the last crash in 2007/8, why are so many countries running with record low/negative interest rates?".

QE (Monry printing/devaluation) is going on all over the world. The banking system, which relies upon trust/faith, is still weak, and this is after the taxpayers have bailed out the banking elite with public money. What's happened to sorting out the "Too Big To Fail" banks? Yep, sweet FA.

Don't get me wrong, I am far from a left-wing fanatic. I'm a natural conservative (free enterprise etc.) guy, but the current fractional reserve banking model feels like it must fail. The requires growth to pay the interest on loans.

Something I read recently is it's time to invest in G. Not gold but guns. Maybe extreme, but if the system does collapse (and I sincerely hope it doesn't), then it will collapse quick. Once the banks go, everything fails.

 

[yxee]

QE (Monry printing/devaluation) is going on all over the world. The banking system, which relies upon trust/faith, is still weak, and this is after the taxpayers have bailed out the banking elite with public money. What's happened to sorting out the "Too Big To Fail" banks? Yep, sweet FA..

Quite a lot? Capital requirements are higher, leverages are down, banks now have to publish resolution plans...

A bailout isn't bailing out the banking elite. It's wiping out the shareholders to save the depositors from losing all their money. The banking elite are the shareholders. The average man on the street is the depositor.

 

[portslade seagull]

What you have said is so true. It is also worth mentioning that the current problems with Deutsche Bank may bring about a disaster early next year, depending on the fine being levied on it by the USA.

http://www.thecommentator.com/article/6412/could_deutsche_bank_crisis_cause_the_eu_to_collapse

I bet Merkel will bail it out if it came to it

 

[Blue3]

What most people do not seem to understand is the the value of any currency is the result of other factors, currency value is the end result

 

[Baldseagull]

Add to this the stagnant/shrinking economy (due to the deficit/surplus rule of 3% of GDP) which means hat the debt/GDP ratio increases if the economy shrinks slightly. The government are aiming to add about 30Bln Euros (from memory) to the national debt to bail out the banks. Italy is screwed - sadly.

BoE created £70Bn to dump into the economy after the Brexit vote, but apparently we are fine. I am sure Italy can handle doing just over a third of that.

 

[larus]

Quite a lot? Capital requirements are higher, leverages are down, banks now have to publish resolution plans...

A bailout isn't bailing out the banking elite. It's wiping out the shareholders to save the depositors from losing all their money. The banking elite are the shareholders. The average man on the street is the depositor.

Really? Please let me know of ANY bank where the regulators have separated the Depositor side of banking from the Investment side? Just one. Any one will do.

 

[portslade seagull]

BoE created £70Bn to dump into the economy after the Brexit vote, but apparently we are fine. I am sure Italy can handle doing just over a third of that.

Our economy is obviously more robust than the Italians. I thought all countries pumped loads in during the banking crisis, maybe Italy are still dodgy through that

 

[larus]

BoE created £70Bn to dump into the economy after the Brexit vote, but apparently we are fine. I am sure Italy can handle doing just over a third of that.

Check our government debt/GDP ratio and that of Italy. Once a debt/GDP gets to a level where markets lose confidence, then bond rates ratchet up. Theirs is about 130%. Ours is about 86% roughly (from memory).

 

[yxee]

Really? Please let me know of ANY bank where the regulators have separated the Depositor side of banking from the Investment side? Just one. Any one will do.

You said: "What's happened to sorting out the "Too Big To Fail" banks? Yep, sweet FA..", so I gave some relevant counterexamples...

If you want to separate retail and investment banks then that's a much more specific issue! I'm not trying to deceive you... such a separation does not exist in our current world (though Trump may change that). But it doesn't mean nothing has been done.