Collapse of the euro is 'inevitable': Bailing out the Greek economy futile, says FRENCH banking ch

Collapse of the euro is 'inevitable': Bailing out the Greek economy futile, says FRENCH banking chief

www.dailymail.co.uk

The European single currency is facing an 'inevitable break-up' a leading French bank claimed yesterday.

Strategists at Paris-based Société Générale said that any bailout of the stricken Greek economy would only provide 'sticking plasters' to cover the deep- seated flaws in the eurozone bloc.

The stark warning came as the euro slipped further on the currency markets and dire growth figures raised the prospect of a 'double-dip' recession in the embattled zone.

(visit the link for the full news article)

It does not sound optimistic. Mainly the Greek economy, due to the recent crisis, but also Portugal, Ireland, Spain, and I've also read Italy are in a group of euro countries known as PIIGS, which are fundamentally less competitive economies. But with a common currency, it causes a lot of macro problems.

It appears Britain has little chance of adopting the euro, and France and Germany, the richest eurozone members, are balking at any bailout for Greece.

Apparenly it's an unworkable solution, because without the ability to independently lower interest rates, and devalue currency, the poorer euro countries are either forced into dramatically lower standards of living, or their central governments run excessive deficits to make up the shortfall.

I guess theoretically, it would be possible to borrow a lot against the future, to ease the transition into a modern economy, but if there isn't enough improvement in GDP and the reduction of corruption, in a timely fashion, it's like a credit card with a high balance and low "easy" minimum payments.

I've noticed the Euro has been losing value against the dollar lately. I would like to see it trade back at 1=1.

I can't imagine what will happen if the euro actually desolves. How would it work ? Each country reissues its own paper and offers period of time to convert ?

www.dailymail.co.uk
(visit the link for the full news article)

I'm gonna get back with an in-depth reply on this story later on as I lack the time now, but I wanted to show you the following graph:




I'm curious as to what conclusions you'll draw based on this graph.

reply to post by Mdv2


Without a labelled y axis it's a bit hard to form a judgement on the graph. Could you post the complete graph?

reply to post by zenius


You should be able to move the horizontal scroll bar to be able to see the Y-axis.

reply to post by Mdv2


Oh, sorry, thanks. It's a bit late in the day for me. From that graph I can't see what all the fuss is about over the euro, not yet anyway. Maybe they know something that's gonna have a major affect on it in the not so distant future? Economics is just one big game for those with money and power.

Originally posted by Mdv2
I'm curious as to what conclusions you'll draw based on this graph.

I'm not an expert, but it looks like the dollar started inflating around the start of the Iraq/WMD fiasco. Didn't Bush refuse to include it in the budget ? I don't really understand what that practically means. A license to print money ?

I think the uncertainty around the fate of the euro is bolstering confidence in the dollar. However large the bailout, the US Treasury still has a AAA credit rating. Germany, France, UK and others are ok, but don't want to go down for the cause.

If this French Bank official is correct, I would expect that graph to plunge over the next year. But like I said earlier, how the transition would happen is murky to me. I don't think there is any precident for the "soft" collapse of major currency. It probably will not affect the stronger countries badly. They are really the ones to force the issue, if it happens. Greece could be borrowing from the World Bank.

What do you see as the future trend ?

reply to post by Mdv2


Looks like the Dollar has tanked more than the Euro to me, but I'm no economics expert. I'd certainly like to hear your in-depth analysis.

reply to post by Mdv2


I see rising bottoms every time the Euro has corrected. Greece probably won't default but who knows how long it will take for them to supply a debt reorganizing plan that will satisfy the European community.

I don't believe the other countries using the Euro would allow it to completely collapse. I think they would kick Greece out of the European union if other measures didn't work. However I'm going out on a limb using pure speculation about what may eventually happen. I really have not read much about this issue. What I did read was that the debate about what to do with Greece involves a lot of horse trading because whatever happens with Greece will set a precedent for all the other PIIGS countries that also have debt problems. I do believe somewhere sometime I did hear something about someone suggesting kicking Greece out of the European Union. Maybe that was just remembering something in a dream and wasn't reality. I don't remember anymore.

Just my opinion but one way to fix this problem would be to float a new temporary currency maybe called the Euro2. It would be set at a different exchange rate so that the PIIGS countries could better adjust. Eventually they may come back in line with the other countries using the Euro. If they don't, then they might be kicked out and would need their own currency back so that their own currency could adjust as needed. I'm not even sure if this idea makes sense or not. I just thought of it. If something like this did happen, I can imagine the value of the dollar compared to the Euro jumping up a lot. The price of oil and gas would plummet in US dollars which would be great for the US economy.

When the PIIGS countries inevitably collapse, the resulting financial mess will make the US SubPrime issue look like a rehearsal.
Thanks to the massive bailing out of those who got into debt so far over their heads it was not funny, interest rates have plummeted to 0.5%.
This means that all those who have saved & retired are now broke, as their savings are worth nothing. It is pointless saving, as you will earn nothing after inflation (another consequence of the bailouts) has taken it's bite.
This means those who owed nothing are forced to sell up, and there are no buyers. They will end up on the breadline - all to fund the insane socialist dream that was all sold on consumer debt.

Double dip? Oh yes. Things are going to come crashing down when this little lot hits home.

Let's deny ignorance.

Money doesn't disappear into thin air. This is a fact. It only went into hiding, either in safest bank vaults or at home right now, after the '08 financial crisis. One man's loss is another man's gain.

Most of the money is still sitting there doing nothing and not CIRCULATED. They are not investing in manufacturing or service projects, banks are fearful to loan out their holdings and are attempting to recall back loans to shore up their holding loan limits.

EU is one of the RICHEST global community. They hold the greatest assets seized or robbed during ancient days. Gold, of which modern money is backed, had been mined for centuries, and those ancient civilisations had lost such gold hordes to European conquering armies, beginning with Rome, then Spain and England in the new world.

The Compaigne was a Dutch holding in the far-east and africa, along with France. Austria hapsburgs/Germany did pretty well in extending its european empire back in 1700s.

While much of those gold had ended up in the US after WW2 to rebuild their war torn infrastructure, much still remains in Europe and accounted for their economic success from the 50s till the 90s.

Money makes money. But with the rise of the asian tigers and now china, much of such capital had flowed back to the east, throught the trick of cheap labour and western corporate greed.

But unfortunately, most of the asian tigers and china are corrupt anway. Their ill begotten earnings only ended up in safe western banks. There is a whole hoard of dollars inside that if you were to line them up side by side, it may form a brigde to Mars. Think of the gold dugged up since civilisation began till today and converted to dollars and I may not be wrong.

Think of one individual named Bill Gates who was reported to have billions saved, more money than he could even use in this lifetime or even the next several life times, and then extrapoliate upon the huge numbers of rich men and the corrupt despots that owned vast amounts of cash, you will puke at the obscene amounts, and sitting there in the vaults or home.

The question now is - should EU use such funds and help one another, after all it is only loans and not charity give aways, or to hell with the poorer non robbing and non colonial european countries?

Either they hang as one or they will surely be hunged one by one when the EU splits up in animosity. Can't just share human capital but not its wealth from richer nations.

PS: Corporations may fail and collapse, but nations don't, simply because there is still the greatest resource - human capital. After WW2, Japan did not collapse, but within 7 years, with resiliance and hardwork, they paid off their debts and became an economic powerhouse. Soo too can any other country, for we are all of the same make - human beings.

Zimbawe may seem to have collapse, but the country is still intact despite its high debts and inflation. Tough times, but austerity measures, they too will claw back to even greater heights.

The only ones to collapse in bankrupt states will have to be the irresponsible govts - capitalist, democracies, communist, socialist or military juntas, and may the people be given the power of vote which is necessary and vital for change and better checks/balances.



[edit on 14-2-2010 by SeekerofTruth101]

So, a banker that has been bailed out says that bail outs are futile ?

Oh # this is my bank.

[edit on 14-2-2010 by ickylevel]

I mentioned this in another thread. Goldman Sachs played a hand in Greece's debt by attempting to hide it. The same old trick used here in the USofA.

Wall Street tactics akin to the ones that fostered subprime mortgages in America have worsened the financial crisis shaking Greece and undermining the euro by enabling European governments to hide their mounting debts.

Source

I've posted my thoughts in this thread:

click

reply to post by Schaden


Knowing for years, how all these events are created to further the Global Elites agenda's. I had been telling my then mocking friends about 3 years ago (none are mocking now) that to collapse the UK's economy and force us to go Euro they'd need the good old false flag and I have to say I was wrong. I was telling them that the country was Italy as its an easy country to corrupt (even at the MSM level) and has an appalling economy already. So a little Banking manipulation with the current (non-hiding) totally corrupt politicians there and bang its in economic meltdown and the country is in the public mind enough for the stupid to believe that it could happen to them (GB!). But I guess Greece or indeed Spain would have sufficed. So I guess we await the 'economic experts' and the BBC/Radio4 trusted presenters to wade in with their scripted support of why we need to go the Euro route and shore up the Global Elites world financial control?

Who on this ATS in the UK actually believe what they are hearing in the MSM is by chance?