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Mr. Miyagi

The Rumour Is Not Going Away

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So, what are the chances? The Germans leave the Euro, mass devaluation can then occur for the southern states Ireland and France and we are all saved?? Or would a strong Mark be disastrous for German exports?

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So, what are the chances?

0% because germany is currently run by a bunch of clueless muppets.

The Germans leave the Euro, mass devaluation can then occur for the southern states Ireland and France and we are all saved??

no the Germans don't want it but its better then the other options.

Or would a strong Mark be disastrous for German exports?

It is the locked in German exchange (Euro) rate that is keeping Germany going while the rest of Europe falls apart. Until the German currency can appreciate nothing will be solved however stopping the German boom times (and relative to the rest of Europe Germany is still booming) is not something any Government will contemplate.

Its strange because I would have thought the easiest option was for Germany to walk away. Unfortunately that would mean admitting that the single currency and a united Europe was a foolish pipe dream and that is not something any German Politician can admit to.

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So, what are the chances?

0% because germany is currently run by a bunch of clueless muppets.

The Germans leave the Euro, mass devaluation can then occur for the southern states Ireland and France and we are all saved??

no the Germans don't want it but its better then the other options.

Or would a strong Mark be disastrous for German exports?

It is the locked in German exchange (Euro) rate that is keeping Germany going while the rest of Europe falls apart. Until the German currency can appreciate nothing will be solved however stopping the German boom times (and relative to the rest of Europe Germany is still booming) is not something any Government will contemplate.

Its strange because I would have thought the easiest option was for Germany to walk away. Unfortunately that would mean admitting that the single currency and a united Europe was a foolish pipe dream and that is not something any German Politician can admit to.

The Germans won't initailise it, I'm guessing the Euro bailout will fall apart because of one of the tiny nations, the Germans won't walk first as they won't want the blame. Although I wouldn't bet against contingency plans being in place in Germany despite the rhetoric, the Germans are nothing if not meticulous.

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So, what are the chances? The Germans leave the Euro, mass devaluation can then occur for the southern states Ireland and France and we are all saved?? Or would a strong Mark be disastrous for German exports?

The Germans need the Euro more than the PIIGS. Without the Euro the Mark would have appreciated and the Drachma et all would have sunk. An equilibrium would have occurred.

The Germans will do everything they can to try and maintain the Euro.

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Its strange because I would have thought the easiest option was for Germany to walk away. Unfortunately that would mean admitting that the single currency and a united Europe was a foolish pipe dream and that is not something any German Politician can admit to.

My only issue with that argument, is nobody suggests the US should split up because half of their counties are going to default.. Linky

The German/French just need to get on with sucking it up and bailing out the PIIGS.

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My only issue with that argument, is nobody suggests the US should split up because half of their counties are going to default.. Linky

The German/French just need to get on with sucking it up and bailing out the PIIGS.

True, thats all they need to do. The competitive devaluation done via QE just pushes the dilemma onto the next player, like some sort of bizarre poker game where you just devalue your chips against the other players. IF the germans did attempt the create a strong Deuchmark 4, which would be much more credible than the Euro, it would be perceived as such a threat the existing US Dollar based global economy that the anti German rhetoric would be deafening and unanimous throughout the western media.

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The Germans need the Euro more than the PIIGS. Without the Euro the Mark would have appreciated and the Drachma et all would have sunk. An equilibrium would have occurred.

The Germans will do everything they can to try and maintain the Euro.

They would save the exhorbitant cost of bail outs instead - hundreds of billions of Deutchmarks not being sent to nations who overspent and are putting their hands out? Which solution would you vote for if a German? Less exports and no bail outs - return to normality. Or, better exports for a while until Euro nations collapse anyway under the weight of their ridiculous borrowing...and then lower exports and still a bloo*y Euro round their necks...and bail out after bail out having been spent just to save a flawed currency.

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So, what are the chances?

0% because germany is currently run by a bunch of clueless muppets.

The Germans leave the Euro, mass devaluation can then occur for the southern states Ireland and France and we are all saved??

no the Germans don't want it but its better then the other options.

Or would a strong Mark be disastrous for German exports?

It is the locked in German exchange (Euro) rate that is keeping Germany going while the rest of Europe falls apart. Until the German currency can appreciate nothing will be solved however stopping the German boom times (and relative to the rest of Europe Germany is still booming) is not something any Government will contemplate.

Its strange because I would have thought the easiest option was for Germany to walk away. Unfortunately that would mean admitting that the single currency and a united Europe was a foolish pipe dream and that is not something any German Politician can admit to.

I disagree.

Germany is certainly not run by useless muppets.

this is cold and calculating,not incompetent.

and I very much doubt the german people have been let in on this intrigue.

there are a couple of people(of german descent) who are about to get the once decent concept of a europe free from war as envisaged at its inception,into a LOT of trouble....and it's THEIR fault for being way too hasty to federalise everything.(of course the politicians will blame it on the little people,but this time the little people are going to bite back....hard)

this is going to end in pan-european civil wars the likes of which has NEVER been seen before in history...it'll make bastille day look like a quaint village fete...muslim immigrant smokescreen does not seem quite thick enough....the real danger lies with the marxist/fascists hiding under silver-tongued fabian camouflage.

she's got a new party dress on,all nice and shiny and spangly,but is still wearing jackboots underneath.

Edited by oracle

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I disagree.

Germany is certainly not run by useless muppets.

this is cold and calculating,not incompetent.

and I very much doubt the german people have been let in on this intrigue.

there are a couple of people(of german descent) who are about to get the once decent concept of a europe free from war as envisaged at its inception,into a LOT of trouble....and it's THEIR fault for being way too hasty to federalise everything.(of course the politicians will blame it on the little people,but this time the little people are going to bite back....hard)

this is going to end in pan-european civil wars the likes of which has NEVER been seen before in history...it'll make bastille day look like a quaint village fete...muslim immigrant smokescreen does not seem quite thick enough....the real danger lies with the marxist/fascists hiding under silver-tongued fabian camouflage.

she's got a new party dress on,all nice and shiny and spangly,but is still wearing jackboots underneath.

Anyone for Pimms?

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It's difficult. The Germans have benefited massively from the EU.

They're a huge producing nation. They were before the EU, but did even better with the free trade that the EU brought them. The wealth they created has been saved (savings/pensions/investments) and then 'lent' to other nations (often EU). A lot of this money has been spent again on German products.

For Germany to pull out now, could be a really bad move ... but then to stay in could be even worse.

It's a mess. The EU should only ever have been a trade union with a few shared rules (mostly taxation). You can't have a single currency without a single government.

To take Greece as the obvious example. Under a single government, they wouldn't lend money to them, they'd give it to them (like London might subsidise other parts of the UK).

Right now, German banks are lending German people's money to Greece so they can buy German goods .... total mess.

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Could someone please explain why a strong currency makes your exports expensive?

If your product costs 4DM, and the DM doubles, then surely now it costs 2DM?

Why not? Your 2DM will buy exactly the same amount of stuff as before, so why hold out for more?

I can understand that equilibrium will take a while, and that rapid changes will have some effect, but in the long run, what exactly is the problem?

Meanwhile, why can't Greece simply default?

Having its own currency is a way of defaulting whilst pretending not to but no-one is fooled by the pretence.

So the question remains - inflate at 10% a year, or default at 10% a year, what is the actual difference?

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Could someone please explain why a strong currency makes your exports expensive?

If your product costs 4DM, and the DM doubles, then surely now it costs 2DM?

Why not? Your 2DM will buy exactly the same amount of stuff as before, so why hold out for more?

Because when the DM doubles, it is against other currencies so buying in those currencies is now twice as expensive. EG 1 DM = 1$. If the DM doubles then 1 DM now = 2$

Meanwhile, why can't Greece simply default?

They have. They just haven't admitted it yet :)

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I liked the 1000DM note back in the day, Four Hundred Quid in your sky :)

On a mostly unrelated note, I've managed to go my whole life without ever owning or even seeing, a fifty pound note.

I dunno, it just kind of bugs me.

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News to expect in the coming days and weeks:
  • Greece defaults

  • Germany protects German banks but other countries cannot do the same thus quickly provoking multiple sovereign defaults and or bank failures, all of which may easily lead to a payments crisis in the global banking system. Derivatives are particularly at risk in terms of operation and execution.

  • The Euro falls in value especially against the US dollar

  • The Germans announce they are re-introducing the Deutschmark. They have already ordered the new currency and asked that the printers hurry up.

  • The Euro falls even more on any news that Germany is withdrawing from the Euro.

  • Legal wrangling begins as to the legality of Germany’s decision. Resolution takes years.

  • Germany insists that the Euro continues to exist even they do not use it any longer. They emphasize that European unification will continue and suggest new legal instruments to strengthen European Unification including new EU Treaties.

The markets are focused on the imminent default by Greece. But, this is not the most important issue now. The historic development the markets have not priced in as that Germany is preparing to exit the Euro. The markets are very likely to have to contend with the re-introduction of Deutsche Marks in the near future. This is bound to mean a collapse in the value of the Euro for those countries that will remain in it (devaluation for the rest of Europe). This step may seem unthinkable but, I believe that the German government is telling us in multiple ways that there is no other solution from their point of view. It is also why you will hear various policymakers at the G7 meeting his weekend echo Christine Lagard’s comment that the world economy is entering a "dangerous new phase." This was certainly the atmosphere at Jackson Hole where policymakers openly talked about entering a period of history where we would face challenges beyond the scope of anything we have seen in our careers.

http://www.pippamalmgren.com/77.html

Interesting blog

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  • 336 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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