Euro Headed For A Collapse

[kilroy]

RB,

You are predicting collapse of a major reserve fiat currency and gold. Surely if the euro collapses there would be a mad scramble to get into Yen and gold and maybe Dollars as safe havens. Probably not Sterling. The gold bugs are keen on gold because of the risk of currency collapse

eurozone != euro collapse

[50%deposit]

i hope the euro goes down, it'll make dutch girls cheaper to use.

[ParticleMan]

However we don't all buy our gold in dollars

Some of us crazier types like ZAUWBA quotes when we're playing in that pond, but fair warning, under stress that stuff sulks and gets surprisingly illiquid.

And when it does, it's a bitch of a flight, too; if you can reliably say that KLH at silly-o-clock is the highlight of your day, you know it's time to ask for a raise.

[kilroy]

i hope the euro goes down, it'll make dutch girls cheaper to use.

what could be cheaper than the current price of EUR 0?

[ParticleMan]

hey PM, where have you put yer peso's then ?

Me? What pesos, if you got nuthin' then there's nothin' to lose I always say.

I certainly don't have my pesos in pesos; they'll have to add another N to MXN before they're done there I think.

I've got a three-way gang bang going on between XAU, AUD, and GBP at the moment; it's scraps, but it works oddly enough; admittedly it's a full-time job keeping track of it all.

I like short Yen for the next say 6-12mo?

SPM9 calls look good too I think. I keep saying this, I'm hoping an adult will appear and tell me why not - soon.

Edited March 4, 2009 by ParticleMan

[_w_]

The author of this has been looking at my old posts?

No RB, I don't think the Daily Telegraph needs your input to forecast a falling euro. I believe pretty much every one on the planet is forecasting a falling euro (which I think is probably a buy signal).

BTW, are you now using subtitles to tap yourself on the back??? Titles next?

[piece of paper]

i hope the euro goes down, it'll make dutch girls cheaper to use.

...........or vice versa.

p-o-p

[grumpy-old-man-returns]

Me? What pesos, if you got nuthin' then there's nothin' to lose I always say.

I certainly don't have my pesos in pesos; they'll have to add another N to MXN before they're done there I think.

I've got a three-way gang bang going on between XAU, AUD, and GBP at the moment; it's scraps, but it works oddly enough; admittedly it's a full-time job keeping track of it all.

I like short Yen for the next say 6-12mo?

yes, I saw your 'this is what I'm doing & how/where I'm moving my currencies around too' thread.

SPM9 calls look good too I think. I keep saying this, I'm hoping an adult will appear and tell me why not - soon.

I had to look this up as I didn't know what it was. this is what happens when I find myself playing in the big yard as a junior, I suppose. Life experience, gut feeling & t'other stuff is all well'n'good, but it's not good for short quick stuff, it's better for longer projections & end of the world stuff eh.

1st google:

S&P 500 futures

The June [SPM9>SPM9] contract rallied strongly today on Friday's employment report and positive remarks on Internet stocks by some big brokerage houses. Tomorrow we will look to short this market if we get another rally, as we believe the S&Ps will continue to trade erratically. The volatility patterns right now indicate that there will be a good down trade, possibly in the next couple of days.

so it's intra-day trades'n'stuff then ? edited - on the S&P specifically

Edited March 4, 2009 by grumpy-old-man-returns

[InternationalRockSuperstar]

what will big businesses invest in right now then ?

name the asset or commodity or anything else in fact...

please don't say the stock market.

Something useful like reinvesting in the company or R&D maybe? A slightly more useful metal such as copper or steel? Besides, I didn't say it would be soon.

in free market capitalism, productivity is always edging forward such that in terms of return on you money:

hoarding stuff < investing in the means of producing stuff

for example:

you don't hoard food; you invest in a farm

you don't hoard 1999 iBooks; you buy Apple shares

the problem at the moment is that the state is so bloated that it is destroying productivity such that in terms of return on you money:

hoarding stuff >> investing in the means of producing stuff

until the state shrinks significantly in size, we will continue to be in an economic environment where the best returns on your money are from simply hoarding stuff.

[dr ray]

name='mmm....beer' date='Mar 4 2009, 05:47 PM' post='1714293']

I was once offered a tenner more than I paid a week ago for my trainers and I turned it down, that was mainly because I'd have had to walk home barefoot though so probably doesn't back up your point.

Something useful like reinvesting in the company or R&D maybe? A slightly more useful metal such as copper or steel? Besides, I didn't say it would be soon.

http://66.38.218.33/LFgif/au75-pres.gif (sorry - it wont let me just display it as an image)

Gold bubble anyone? In fact I bet the HPI trend line would superimpose nicely on that graph.

You are right. It does superimpose nicely up to around 2001

HalifaxHouse_priceGraph.bmp

HalifaxHouse_priceGraph.bmp

Edited March 4, 2009 by dr ray

[50%deposit]

what could be cheaper than the current price of EUR 0?

im too ugly for that price. i have to pay for it.

[grumpy-old-man-returns]

I was once offered a tenner more than I paid a week ago for my trainers and I turned it down, that was mainly because I'd have had to walk home barefoot though so probably doesn't back up your point.

Something useful like reinvesting in the company or R&D maybe? A slightly more useful metal such as copper or steel? Besides, I didn't say it would be soon.

I would go for agricultural land for one thing BUT dependant on price obviously, although I think that agri land prices haven't gone up anywhere near as much.

[ParticleMan]

so it's intra-day trades'n'stuff then ?

That's the fella.

Market looks so heavily sold that a re-test of the January high looks certain if not an attempt at the November one.

From what level and when... well. Hum. If I knew that, I'd be writing the options, not buying them.

Still, I figure the odds of a sub-720 June S&P call being worth something to someone before it expires are pretty good.

But it'd be nice to be torn a new one by someone who actually understands all this stuff - it's just numbers and gut instinct to me.

Edited March 4, 2009 by ParticleMan

[grumpy-old-man-returns]

That's the fella.

Market looks so heavily sold that a re-test of the January high looks certain if not an attempt at the November one.

From what level and when... well. Hum. If I knew that, I'd be writing the options, not buying them.

Still, I figure the odds of a sub-720 June S&P call being worth something to someone before it expires are pretty good.

But it'd be nice to be torn a new one by someone who actually understands all this stuff - it's just numbers and gut instinct to me.

PM, you're definetly on my BBQ invite list.

[1929crash]

http://www.telegraph.co.uk/comment/columni...ing-to-win.html

It's the Europhiles versus reality, and reality is going to win

Milton Friedman was right to predict that the euro might not survive a recession, notes Simon Heffer.

Simon Heffer

Last Updated: 8:36AM GMT 04 Mar 2009

Comments 18 | Comment on this article

A Euro sign in Frankfurt

The single currency may not survive the recession Photo: Reuters

During the current crisis we have several times heard invoked the wisdom of Milton Friedman about the unfeasibility of the euro as a currency surviving a recession. In an interview not long before his death three years ago, Friedman said: "The euro is going to be a big source of problems, not a source of help. The euro has no precedent. To the best of my knowledge, there has never been a monetary union, putting out a fiat currency, composed of independent states. There have been unions based on gold or silver, but not on fiat money – money tempted to inflate – put out by politically independent entities."

It is what lies below the surface of this observation that is putting not just the euro, but the entire confection of the European Union, under such intense pressure. Any recession would bring into play tensions between idealism and nationalism: the desire by those who pilot the European project to maintain the confection for as long as possible and as intact as possible, that it might come out on the other side of this economic horror bloodied but unbowed; and the inevitable identification of hundreds of millions who stand outside the fantasy world of the political class with their own nation state, their own nationals and their own national interest. Without a degree of coercion beyond what even this undemocratic, Sovietised swindle has attempted in the recent past, the national interest will in the end prevail.

.../

Incipient nationalism and a long history of being unable to cope with svere ecnomic downturns repeating? The author of this has been looking at my old posts?

Gold is next to go.

Lots of wishful thinking here.

[ParticleMan]

PM, you're definetly on my BBQ invite list.

fyi: spot looks like it wants to test $905 in the next 24h...

[mirage]

http://66.38.218.33/LFgif/au75-pres.gif (sorry - it wont let me just display it as an image)

Gold bubble anyone? In fact I bet the HPI trend line would superimpose nicely on that graph.

And can you think of one important difference between the y axis on your graph and the y axis on the HPC front page?

At roughly what point, given the last few millennia where the value of gold has held at, well...precious levels, are you expecting human psychology to utterly change and stop valuing display of status?

Edited March 4, 2009 by mirage

[Blue Nose Bear]

well, you've paid your money & made your choice.

we will see who's right then eh.....

Think RB's got you there GOM, aint nothin gonna hold up, everyone is gonna lose.

If it was worth anything I say - "I know what my moneys on"

[Injin]

And can you think of one important difference between the y axis on your graph and the y axis on the HPC front page?

At roughly what point, given the last few millennia where the value of gold has held at, well...precious levels, are you expecting human psychology to utterly change and stop valuing display of status?

You mean like the latest flares, tanktops or something along those lines?

Hey, you are right - people value the same things forever, don't they?

[InternationalRockSuperstar]

fyi: spot looks like it wants to test $905 in the next 24h...

it just did (the bid, anyway).

[Guest LongBlackKilt]

i hope the euro goes down, it'll make dutch girls cheaper to use.

What about the CAP?

[Super Mario]

You have to admit that it's pretty arbitrary substance for us to have assigned such worth to.

But it's so shiny!

[ParticleMan]

it just did (the bid, anyway).

Shoulder-riffic.

Pretty fancy footwork going on there, I must say.

(Injin's comment above reminded me of a great quip - "I'm tired of retro-cool and living in the past - I'm nostalgic for the present")

[Super Mario]

I find it a bit chavy looking myself really. I much prefer silver.

I wouldn't actually wear it - looks kind of gay unless you are Mr T

[mirage]

That it's in dollars? The graph doesn't seem to follow the fluctuations in the dollar completely if I recall them correctly.

Nope. Keep thinking.

Probably when people realise they can't eat it. Could be next year, could be in a thousand years (if we last that long as a species). You have to admit that it's pretty arbitrary substance for us to have assigned such worth to.

People already know they can't eat it.

I don't for a second think it is an arbitrary substance to have assigned worth to. It is clearly very heavy, nice and shiny and a very unusual colour in nature. Furthermore it is very rare with very stable supply constraints. It is very maleable and ductile, virtually incorruptible and just about perfect for portable ornamentation.

This is going to be valuable in almost any human culture. Social display is incredibly valuable to the extent that people will sometimes run at machine gun nests or commit sepuku in order not to lose status in the eyes of others. Or commit suicide if they do lose status.

Clearly something that displays your status in a virtually unfakable way is going to be valuable. The interesting thing here is that the status value is the product of rarity, recognisability and the aesthetic qualities.

The additional interesting thing that happens to gold demand is that the product of this display value and the monetary properties (we already have rarity, durability, portability and recognisability - now we can add fungibility).

Once you have monetary value you have an additional speculative drive to demand.

Each step "levers" up the value a notch. The synergistic combination of all these qualities is very rare if not unique.

Sure, the speculative component can collapse if there is suddenly demand for productive assets relative to value preservers. The monetary demand can wane too. However all these things are always underpinned by the psychological constant of display value, and it will consequently (barring some huge supply increase) be precious to one degree or another.

There is nothing remotely arbitrary about psychology of status or the evolutionary pressures that produced it.

Now I wish I knew if the speculative demand currently driving the market (jewellery demand has virtually dried up at present) is going to hold or wane. I don't so I am too scared to buy any at present, though if I had to guess I would think there is plenty more upwards movement to come in the next five years. There is just no particular fundamental pulling down the price. Return on other investments is so low. Purchase isn't generally funded on debt that must be serviced (and can therefore become unsustainable) as house purchase is. It should rise so long as risk adjusted projections on returns for everything else deteriorate.

The speculative value of gold is very interesting. It really isn't just money. It can always be converted into simultaneous aesthetic/display use and the value derived from that never runs down. It is thus like a perpetual bond (no maturity) whos value is based on the constant low level of coupon payments (return).

It indeed behaves like a very low risk, very low return perpetual bond as a refuge from uncertainty.

Edited March 4, 2009 by mirage