Peter Hun
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Posts posted by Peter Hun
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Attempting to break up or leave the euro would trigger an immediate run on the banks. Would you just leave your cash in the bank if you knew it was about to be converted into a weaker currency? No, you'd get it out and re-deposit it AFTER the devaluation. The only orderly way out would be years of parallel running first. Some analysis of the Irish situation here.
Fascist ********. The Irish can simply announce a conversion to the Punt at 7am, no need to pre announce it or risk a run on the banks. Euro sign swapped for a Punt (whatever that may be...)
Other countries have switched/ remade their currencies, nothing fancy about it at all. If countries can announce new currency with the statement 'Drop 5 noughts off the old currency' switching to euro's at parity would be easy. Also note that the Euro notes and coins are country specific, Ireland has its own Euro.
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duplicate
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I saw a program about land grab where some people were having their gardens taken by the council which was then sold to developers to build on. The double whammy was that they were then charged for the costs of building the infrastructure to provide access etc for the new houses.
Does the new document also make them safe from that and guarantee their land?
This sort of thing:
http://www.thisismoney.co.uk/news/article.html?in_article_id=317925&in_page_id=2
Well not exactly.
The spanish have a little trick; the government can give you a document thats says what you are doing is legal. Then declare that part of govenrment were crooks therefore your are a criminal who must be punished.
Another trick; you buy a house for xxx thousand. Government decides that you are crook and underpaid so you have to pay tax on the figure they invented (which matches/exceeds the valuation that supports the banks). Another trick - you have to pay tax on rental income, even though its impossible to rent a spanish property.
Yet another, they tax you on worldwide wealth; Rich? pay more tax in Spain.
And yes of course they will steal land from you and make you pay for its redevelopment. BTW, don't try to got to court unless you are connected.
I only know a few of the tricks, there are more.
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Europe is discussing the horror scenario of a break-up of the euro zone. At present, that still seems unlikely (Obviously they don't read HPC), but experts are alarmed. A comeback of national currencies would be fatal -- especially for Germany.
The deutsche mark is still around. Even almost nine full years after the introduction of euro notes and coins, German households still have an estimated 13 billion deutsche marks -- stashed in hiding places, in collections or under grandma's mattress. And, if opinion polls are to be believed, almost 50 percent of Germans would like to see the currency reintroduced as the country's official means of payment.
In fact, pollsters at the EU's Eurobarometer have determined that: "For many Germans, the deutsche mark was the symbol of economic security, stability and prosperity." Those are attributes that euroskeptics will never be able to associate Europe's single currency with.
From one perspective, they might be right. Hasn't the financial crisis in Europe gotten drastically worse in recent weeks? First it was Greece, and now Ireland too has had to draw on the €750 billion ($993 billion) euro rescue fund set up this year to prevent the euro zone from breaking apart.
A number of other euro-zone countries may be about to share the same fate. Financial markets are already betting that Portugal will need a bailout. And, if worse comes to worst, it could even happen to Spain, which would surely mean the end of the euro as we've known it.
But what would really happen if the euro collapsed? Would it really herald a return to the good, old days, to a Germany that uses the much-revered deutsche mark? Or could it actually be a harbinger of chaos and economic depression?
Daniela Schwarzer, an analyst of EU economic policies at the Berlin-based German Institute for International and Security Affairs (SWP), sees two possible scenarios.
According to the first scenario, Germany and the other more stable euro-zone countries -- such as Austria and the Netherlands -- would jointly introduce a "hard-currency euro." A similar idea was recently floated by Hans-Olaf Henkel, the former president of the Federation of Germany Industry (BDI) on German public television. Henkel called for the establishment of two distinct euro blocs: a northern one "that doesn't want any inflation and is used to budget discipline" and a southern one that can go ahead and devalue its currency whenever it feels so inclined.
According to the second scenario, Germany actually would return to the deutsche mark. There would no longer be a shared-currency zone in Europe, and each former euro-zone country would decide its own monetary policy again.
But is that something anyone would really want? After all, Germany has reaped all sorts of benefits from the euro. A collapse of the common currency would have dramatic effects. Here is a list of possible consequences:
http://www.spiegel.de/international/europe/0,1518,731798,00.html
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but the UK and Sterling?, all it would take would be a few well placed rumors and announcements by "respected" Wall Street analysts to push it over the cliff.
UK doesn't have many funding requirements, and a large number of UK institutions who will buy regardless. Plus with control of the pound it can be devalued and QE'ed.
So the jerk on Wall street can talk all he likes, won't make much difference
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As the man said it is Catch 22.
The market in Spain is already lot further down the road of price sanity than the UK. Unfortunately this process involves lots of financial losses that are not just going to hit the impecunious borrowers.
Spain is not a lot further along than the UK. There are several problems with Spain. The government lies about sales prices, the illegal planning nightmare that may result in people losing their homes even though they were (apparently) legally built. The rampant corruption of the legal system, the massive overhang of 1.4-1.6million properties.
Prices should fall to the 25K Euro level for apartments that are nothing more than an occasional holiday home,at that point there maybe interest from poor Brits.
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According to this article 1.4 million homes are unsold in Spain and 280,000 properties are likely to be repossessed this year alone
http://www.moneyweek.com/news-and-charts/economics/eurozone-spain-debt-spanish-bail-out-04713.aspx
Spanish accounting practices force losses to be recognised within 2 years once realised which is a severe disincentive to foreclosure.
http://ftalphaville.ft.com/blog/2010/02/03/140216/bbva-an-exercise-in-spanish-banking-losses/
Given that Spanish banks are more likely to novate a loan (ie ease or extend repayment conditions) rather than call them in the 280,000 repossessions are probably the tip of a huge iceberg of under performing loans that will probably sink the Titanic of the western financial system. The current Irish bailout is just an attempt to delay the catastrophe for a few more months by taking some of the heat off the European debt markets which might delay the flight of capital from Spain
I read on another forum that there are 70% more repossessions than sales in Spain at the moment. Properties are held on the books at full price without any fall so they can hide the loss.
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We would have to bid on eBay to get our aircraft carrier back. Knowing our luck we would end up with a pirated copy of Call of Duty, some bootleg nylons and a genuine Prada bag made in Hong Kong!
Seriously there is no chance Argentina would attempt to invade. The Falkands themselves are the biggest aircraft carrier in the South Atlantic and the Argies only have 30 aircraft, most of which are probably un serviceable.
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Regardless, imagine working for a mortgage company and not being able to figure out the simple maths example the OP gave. We are being run by complete idiots!! Seriously, how can they not understand the benefit when looking at the maths?
Total faith in your employers business mode is more important that intelligence
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I realise it's completely fecked. The Irish have stolen taxes from other nations, now they have to borrow from those nations, but in order to have any remote chance of paying said nations back they need to keep the taxes they stole in the first place.
I suppose in a way the Europeans are not taxing Ireland via interest repayments to get some of the tax money back they stole in the first place.
So the question is how long do Irish tax payers keep subsidising the wealth corporations for.
Correct, thats why the interest rate is so high, becuase the Irish can afford to pay it. Irish taxpayers are not paying much tax and public sector employee's are the highest paid in Europe.
If they defaulted and left the euro their wages would fall 50% like Iceland (although a fake exchange rate masks the real fall of 75%).
And remember Ireland is owned more than 110% of its GDP by the PIGS, thats about 170Billion it could lose if it triggered mass default
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I saw that too. And what puzzled me a bit was according to an IMF press release the rate on the IMF portion of the loan is between 3% and 4%.
And the breakdown acccording to Bloomberg is:
"Ireland said it will pay average interest of 5.8 percent on the loans, which break down into 45 billion euros from European governments, 22.5 billion euros from the IMF and 17.5 billion euros from Ireland’s cash reserves and national pension fund."
Which I make to be about 9.2% on the contribution from the European governments. Presumably I've missed something, as that is just market rate.
Maybe, as they don't pay interest on the money its not included in the calculation? ZH are just being idiots.
Also, they won't be drawing on all the money immediately, so not paying interest on it until they do.
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Does it matter what the interest rate is?
Can they pay any of it back?
Yes, easily, given their can afford the very generous tax free allowance. 15K tax free isn't it?
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Now the bankers will move on to the next sucker, rinse and repeat, until the fiat money system to FUBAR.
Ireland is by no means innocent in the scheme. If they defaulted, it would make the PIGS default too and Ireland would lose over 100% of its GDP it has lent to them.
The banker ****ers have linked it all together like spaghetti.
Regarding borrowing in a high inflation,or in anticipation of,environment are you expecting equivalent pay rises/increase in interest from capital?In high inflation wages don't keep up, same as savings. (I remember the 27% inflation in the UK and it is real bad)
Its a case of protect what you can. Gold bugs say buy gold, but it doesn't give an income. Personally I bought property in Poland becuase the Zloty is the most undervalued, saving rates are 5%, property demand is high and the economy is booming, I'm half Polish and I got married to a Polish woman.
Ferfal is living in Argentina and he give a lot of advice about the situation there. http://ferfal.blogspot.com/
I'm loath to recommend you visit his site though, his advice on the economic crash is good but he is clueless about the rest of the world and the problem of living there. He is obsessed about moving to the US, though if the authorities see that he is a gun freak with an obsession about buying gold and economic collapse they will exclude him as a terrorist threat.
However, he recommends
a) Buy gold. Not coins or bullion (becuase its difficult and very dangerous to sell) but scrap gold - rings, chains and break they up to sell to a jeweller to convert to cash.
Keep cash, a month or two's worth at least. Dollars, Euro good whatever to spread risk.c) Buy rent-able property. Cheap and cheerful, people who still work still pay rent.
d) Get the option to emigrate to another country, put some of your investment/assets there. Source of foreign currency if yours go down. Bug out destination if things get hot.
e) Find a dependable source of income, nothing depending on high spending shit.
f) Keep fit and healthy (this is number one above all else, actually).
g) Buy solid dependable consumer goods while you can afford them and never buy tat, unnecessary stuff. This does not mean buy years worth of supplies and eveything you may need if the end of the world comes. Spend spare cash on Gold.
f) Buy a Glock, .22 LR and shotgun plus body armour and spend a few thousand per year training to use it all. (This in my opinion is bonkers, if you need to spend that amount of money teaching yourself, wife and kids how to survive a gun battle... MOVE)
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Interesting story. I presume this also means that Britain won't be able to make a claim for a bailout should we need it. Sounds good, since we will then have to let our banks fail rather than borrow to bail them out.
Uk's lenders would have to bailout the UK regardless. However, UK don't need to borrow as its bonds are longest term in the world - 14years on average. Plus UK can devalue the Pound and inflate away the debt.
Germany has to borrow far more than the UK this year, if the Euro fails they will need a bail out
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So how are you planning for the future for when you are retired. I'm taking for granted that you do work......
Sell my business, or depend on its dividend. That and farming.
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Thanks for that Ralph.
Reasonably good news - that only about 30%? of gov. gilts is held abroad.
That means that most (70%?) of the interest the UK gov. will pay in the next decades will remain inside the British economy. Not too bad, macro-economically. At some point interest rates will go up, unavoidably, but at least then UK savers will be rewarded, and their expenditure will help the UK economy. We may have a chance after all.
Also its a reminder that the person who gets hit when a country like Ireland or Greece is you and me with our pensions.
That said I don't have a pension, its another mugs game like a mortgage.
I think the OP is looking for this.
Ireland has the largest claims against the UK as a percentage of the its respective GDP, the largest in the world. In the rush to raise cash to sell assets, expect some fire sales in the UK.Ireland can also be expected to pull assets our of the ailing PIIGS group as well, since they are, bar none, the biggest lender to that group as a percentage of GDP.
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Is that true? I have re read the article and it is not clear either way but does mention future mechanisms.
Yes its true
http://www.bbc.co.uk/news/world-europe-11855990
Spain, Portugal, Italy and a few others will need bailing out before 2013.
However, this means UK is opting out fiscal union (which is where I see all this going so the Euro is saved).
That could be very significant,
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You don't need a default, inflation can be used to wipe out debts. With a area the size of Europe a default wouldn't affect Europeans like Argentinians who had all their savings and pensions in US dollars due to a ridiculous dollar peg
In Argentina imported products got astronomically expensive and inflation is still running at 25%++. In fact they didn't have 5000% inflation after the last crash in 2001, it was more like 400% as the Peso devalued 75%.
However, default doesn't wipe out the debt. Argentina (had to) stole the savings and pensions to pay back the bond holders in USD, its just taken them 10 years to do it, with the legal cases regarding the bondholder haircuts and deals.
Argentina had 5000% inflation before they introduced the dollar/peso parity peg in the early 1990's. It wiped out all manufacturing while giving them the feeling that they were rich for a few years,
I wish people would stop using Argentina and Iceland as shining examples of how default is a good option. Argentina is hell. Iceland no longer has any working currency or the ability to attract investment and is looking at a couple of lost decades.
You're not going to be popular making suggestions like that. The consensus here is that a 40% property crash can happen with no real ill-effects, just a few people dusting themselves down after a few years negative equity and the shrewd hawks who STRed (like me), or sat out of the housing market, picking up bargains to prove how clever we are.
The scenario you described is now far more likely.
Indeed it is.
The super rich are buying property and paying over the odds for art. Commentators claim its because the rich don't need to borrow to buy; it doesn't stop them borrowing as a inflation hedge - which is what they are doing. With the fall in the pound its made double sense to buy property for the rich.
I went out on bought a farm (on credit) the moment the credit crunch happened. I was a first time buyer.
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Liar loans are good.
The first people to get repossessed and the more the merrier as far as I'm concerned.
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ECB getting worried over the money it's had to lend to the Spanish banks?
Spain is they key. If that goes the EZ will need to accept full financial integration or the Euro will break. I'm certain they will not allow the Euro to fail, no matter the cost. Germans will be very very pissed but they will have no choice. Bondholders will be forced to take a haircut on Spanish bonds I expect.
if every country is exposed to the others, then the answer is they all default, recalculate the balance sheet, sack 80% of the banks execs, and everything will be just fine.No it won't be fine. But they won't allow it to happen, just dump the debt on all counties, UK included.
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So that would make the Pound, Euro and a few more toilet paper in 2011. Or what am I missing here?
Its a Gold ramping thread and should be moved....
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Count yourself lucky. I once read an article in the Evening Standard that I regarded as so outrageous that I emailed them in disgust. The next day the paper published two letters with opposing views on the article. As obviously no one had written in to support the tosh the journalist had written they simply edited my letter so heavily that it read like I was supporting her.
Console yourself with the knowledge that no one actually has to pay to read the drivel in the Evening Standard any more and, very soon, no one will pay for the Guardian either. These days you can share information and opinion in a million different ways rather than silently accept the perspective of professional journalists and their paymasters.
Its a reminder that news sites are about selling advertising and copy, not free speech (a ******** concept in itself)
I very rarely post on the Grauniad because I know from experience so many of my posts are deleted.
If you are abusive of actively encouraging violence, then maybe there is a case for posts to be removed. Otherwise, there is no excuse for it.
I stick with the ToryGraph, who do incidently allow leftie socialist trolls to post there without any problem
The Torygraph have a similar level of Right wing crap. There is an American woman who attracts the worst red necks form the US. I find them so twisted that I can't even begin to understand WTF they are talking about.
But its makes the Telegraph money by getting US page views so good luck to them
Also, people read the newspaper that they agree with. They don't want some one giving them crap as they are never going to change their views based on your comments
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who pays the community fees?
Well the banks don't. They probably realise these properties are still occupied so they are happy to have them secured and maintained until they can sell
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Hehe.
‘Back at port, the giant fish was celebrated vigorously.’
Does he cash in with Iceland kroners or Euros?
(on Topic)
Krona's, accepting Euro is a criminal offence in Iceland, all conversion to foreign currency in exchange for ISK paper has to done at a government sanctioned rate in Icelandic banks. Nobody outside Iceland will accept ISK a a valid currency.
2008 Again, Money Printing May Be Required Soon
in House prices and the economy
Posted
http://ftalphaville.ft.com/blog/2010/11/30/420421/barge-pole-european-debt-no-thank-you/