Currency's Days Seen Numbered: Investors Prepare for Euro Collapse

So while we have governments and banks preparing for imminent financial collapse as it were, so Spiegal announce that investors are preparing for the Euro to collapse as well.

Well, let’s just call this for what it really is: One mega world-changing global financial collapse!

Spiegal Online International


Cited in part....

Banks, companies and investors are preparing themselves for a collapse of the euro. Cross-border bank lending is falling, asset managers are shunning Europe and money is flowing into German real estate and bonds. The euro remains stable against the dollar because America has debt problems too. But unlike the euro, the dollar's structure isn't in doubt.

Banks, investors and companies are bracing themselves for the possibility that the euro will break up -- and are thus increasing the likelihood that precisely this will happen.

There is increasing anxiety, particularly because politicians have not managed to solve the problems. Despite all their efforts, the situation in Greece appears hopeless. Spain is in trouble and, to make matters worse, Germany's Constitutional Court will decide in September whether the European Stability Mechanism (ESM) is even compatible with the German constitution.

There's a growing sense of resentment in both lending and borrowing countries -- and in the nations that could soon join their ranks. German politicians such as Bavarian Finance Minister Markus Söder of the conservative Christian Social Union (CSU) are openly calling for Greece to be thrown out of the euro zone. Meanwhile the the leader of Germany's opposition center-left Social Democrats (SPD), Sigmar Gabriel, is urging the euro countries to share liability for the debts.

On the financial markets, the political wrangling over the right way to resolve the crisis has accomplished primarily one thing: it has fueled fears of a collapse of the euro.

In effect, the bankers are sketching predetermined breaking points on the European map. "Since private capital is no longer flowing, the central bankers are stepping into the breach," explains Mayer. The economist goes on to explain that the risk of a breakup has been transferred to taxpayers. "Over the long term, the monetary union can't be maintained without private investors," he argues, "because it would only be artificially kept alive."

The fear of a collapse is not limited to banks. Early last week, Shell startled the markets. "There's been a shift in our willingness to take credit risk in Europe," said CFO Simon Henry.

Particularly large amounts of money have recently flowed into German sovereign bonds, although with short maturity periods they now generate no interest whatsoever. "The low interest rates for German government bonds reflect the fear that the euro will break apart," says interest-rate expert Burkert. Investors are searching for a safe haven. "At the same time, they are speculating that these bonds would gain value if the euro were actually to break apart."

Indeed, investors are increasingly speculating directly against the euro. The amount of open financial betting against the common currency -- known as short positioning -- has rapidly risen over the past 12 months. When ECB President Mario Draghi said three weeks ago that there was no point in wagering against the euro, anti-euro warriors grew a bit more anxious.

Everybody needs to withdraw whatever cash they have out of the banks.

Pile all the money up outside Buckingham Palace, and have a bonfire.

Why? Because it's created out of nothing anyway to produce debt slaves.

Well maybe not burn it, but withdraw it - Yes.

Been saying for a while now, September will be a VERY interesting month financialy speaking.

In the UK, we have a big risk of going under. Once all the Olympic 'feel good' factor starts to go, people will realise (many already do) that the Olympics was a HUGE error, it has ran this country dry, some just dont realise how dry the UK is financialy yet. Our trade defecit has been the worse since 1997, just today I seen on the news that the Coventry Stadium (which was used for several olympic football match's) is in deep s**t because they haven't paid their ground rent, they simply can't afford to, and they just had the olympics which was meant to bring money.

The London High street has taken a hit too due to the olympics

"We have experienced a big dip in trade since the games began," says William Jones, who runs the T-Shirt Store in Covent Garden. "It is really quiet - the media and Transport for London have scared everyone away. Usually at this time of year we get lots of tourists, but our turnover is down 30%."

BBC News

This is just the UK, Greece is an obvious pointer. Spain, over the last few weeks, have been sliding into chaos, Italy is becoming increasingly hostle. At the moment, many European governments are on break untill September when they return to their Parliments. European countries tend to make alot of their tourism money during the summer months, but less and less people are going on holiday now due to lack of money, this is going to hit the tourism industry, which many european countries are used to recieving a huge chunk of money from, all this tends to be reviewed around September (July/August review), and this review will send bad messeges to the 'all powerful markets', causing a termmor in a china shop.

reply to post by surrealist


I have been staying up on world financial news for years, I have never seen the #storm so big, I believe that the euro will fail in the near term also. When it does it will take America with it, as we are now joined at the hip china will be pulled down, when china falls so does the entire asian market. It is like having a bunch of dominoes standing. Once one gets pushed over the cascade will not be stopped.

I always had the feeling I would have to experience the end times, I just always hoped it would be when I was too old to give a damn, or at least my kids would be grown. Sadly, I am neither old, and my kids are not much over half grown.

I hope they quit trying to grab every penney they can and start trying to fix it. But that would require them to do what is right, not what is profittable.

There's not even enough cash "in play" to cover the amount "on the books" Not even close.

Most money is transacted on books and computers.

Currency's days have been over for a long time.

(sorry hit the button too early)

Having said that, the Euro will collapse....when is the big question.

How will it effect the world.

Who stands to gain?

The entire situation with the euro and dollar collapse is disturbing to say the least. People were talking that this summer was suppose to be a significant time for change but nothing has happened. The only thing that is evident to me is that the debt can will be kicked down the road and markets will be manipulated so that the system stays functional.

Currency Volatility is so low that I wouldn’t expect much of movement until traders get back to work in September. Then all hell may break out. Problem is; there is a US election near and that could have a big impact.

reply to post by surrealist


The level of disinformation and ignorance is very strong on ATS regarding the EURO crisis. Especially from the Americans that model the EU as a loosely copy of the US (they are very distinct, even if some would like an higher level of federalism, the EU is not there yet and THAT is the issue).

The Anglo-American coalition always worked to undermine the EURO, to a point that was in their national interests (at least the Americans, it is harder to define the UK position, that is not rooted on the currency but on a moronic but historically consistent geopolitical dislike and distrust for France that has valid reasons even if outdated and only persistent by a refusal to address them). The problem of the UK with the EU is more about political structure and unwillingness to go the path of a true federation.

The issues with the Anglo-American coalition are two fold, economic and military, but it can be summarized to keeping the projection of power over the world, and so it is also political. Economically Germany has always been a issue, having Germany and France cooperating is something they would like to avoid and undermine as much as possible. A failure of the EURO and of the EU (that would be the consequence of the disintegration process), is very much to the interest of the Anglo-American coalition.

Then we can look at the military interests how NATO serves the interests of the American Military industrial complex that now also has gained control of all UK interests. Having a European Army would end the lucrative arms deals and even undermine the mind-lock that the US has on many of the top ranks in most of Europe that go periodically to the US for formation.

An independent Europe is not at all what they want not because of the fear for the repetition of the past (that is exacerbated by the disintegration or even by keeping the process of integration to go forward, like we've seen in the Balkans).

Europeans like the EURO and the free movement, they appreciate the benefits of integration more that Americans do when referencing the Federal Government. One thing that is true is that we do not like the political structure of the EU as is, but that again was fostered in great part by the Anglo-American coalition (and then France, much more than Germany). Germany benefited from the EU and the EURO during their own integration (East and West Germany), even now they have much to lose from a collapse due to how their banks have invested in the EURO-zone and we could even say that the present crisis has been in part beneficial to Germany that had a very grave demographic problem and is not as attractive to immigrants from the south mostly due to the language barrier but also for the high level of mobility of their work force that does not match easily other nations educational systems.

I think that the Anglo-American coalition should look themselves in the mirror as they are even more rotten economically and socially than most of Europe. The troubles in France were racial based and due to a lack of cultural integration with migrants, now look at the UK and US and see what is waiting to happen, it is not the fringe of society. Economically the quantitative easing done in the US and the UK will be extremely damaging in the long run, the pressure that has been put on Germany to agree with this idiotic policy shows clearly how corrupted into the "lending" crazy that was created in the US most of the European governments have become. I applaud Germany to stand fast and require both a limitation to borrowing and of taxes integration (it is idiotic to no end to have nations on the EU-zone competing for external investment using tax breaks without no central planning).

The euro zone is doomed to fail because the divide between the northern and southern countries is just too great.
At the outset of the creation of the euro in 1999, it was expected that the southern eurozone economies would like those in the north; the Italians would behave like Germans. They didn’t. Instead, northern Europe fell into subsidizing southern Europe’s excess consumption, that is, its current account deficits.
As the south's fiscal crisis deepens, the flow of goods from the north will stop altogether and southern Europe's standard of living will go down.
The effect of the divergent cultures in the eurozone has been grossly underestimated. The only way to have several currencies from divergent nations lumped together is if they are culturally close, such as Germany, the Netherlands and Austria. If they aren’t, it simply can’t continue to work.

I am not very educated about all of this, so cannot form a very strong opinion- I am somewhat dependant upon the opinions of others.
I find it significant that those are so divergent amongst financial experts concerning the euro?
Despite the current problems facing it, some claim that it is NOT at risk of collapsing, and that America is only trying to make that happen, through spreading such rumors in the media.

There seems to be enough evidence from both positions to not jump to believing anything too quickly.

reply to post by Bluesma


Huh? Some of the most doomsday coverage actually comes out of European media.

Originally posted by surrealist
reply to post by Bluesma

 

Huh? Some of the most doomsday coverage actually comes out of European media.

Really? Hm. I guess I am seeing less of it over here in Europe. One could argue that is only because they are hoping not to encourage such a collapse, so not revealing the true state of things... a plausible possibility.
When it comes to economics, it really is an area in which thought directly effects reality!

reply to post by Pedro4077


All a mass withdrawal will achieve is making a possible collapse a sure thing. Not good advice.

Unless of course you wish to see the system fall apart, us all lose our jobs, everyone be broke and barely able to feed themselves or their families. If that is the case, crack on and withdraw that cash.

On that note, this brings me to a point I make quite a bit. This "recession" is almost entirely self-feeding. By being told we're in a recession and being told that we're facing collapse, people will save their money and not spend, making the warnings of a recession actually come about.

The Governments could easily solve this overnight, at lest in the UK. Cut VAT from 20% to 15%. Demand shoots up, economy recovers. Simples. The immediate shortfall in VAT receipts will be made up from increased sales generally quite easily.

But what did they do? Up the VAT from 17.5% to 20% and now we're in a cycle of tiny growth or worse, shrinkage. All the while telling us we're facing eco-doom, so people stop spending even more. Result? Tax receipts down, deficit grows, more cuts planned...

Wash, rinse, repeat...

Originally posted by Trolloks
In the UK, we have a big risk of going under. Once all the Olympic 'feel good' factor starts to go, people will realise (many already do) that the Olympics was a HUGE error, it has ran this country dry, some just dont realise how dry the UK is financialy yet.

I don't agree. The UK really needed that shot in the arm and besides, it was good fun

Originally posted by Trolloks
Our trade defecit has been the worse since 1997, just today I seen on the news that the Coventry Stadium (which was used for several olympic football match's) is in deep s**t because they haven't paid their ground rent, they simply can't afford to, and they just had the olympics which was meant to bring money.

That has nothing to do with the economy, but more to do with a dispute between the owners of the Stadium and the club. They have been relegated and receipts are lower, but their rent remains the same and they don't get access to other revenue streams.

Originally posted by Trolloks
The London High street has taken a hit too due to the olympics

"We have experienced a big dip in trade since the games began," says William Jones, who runs the T-Shirt Store in Covent Garden. "It is really quiet - the media and Transport for London have scared everyone away. Usually at this time of year we get lots of tourists, but our turnover is down 30%."

Again, that was largely down the Olympics putting people off shopping. It does raise the question on whether other shopping destinations faired better as a result? We see the same thing on a smaller scale in Reading every year with the festival. So many smelly hippies come to town, the residents stay clear of the shopping centres for the most part.

edit on 28/8/12 by stumason because: (no reason given)

TIME FOR A RESET

I've heard a lot of rumors of economical collapse. Personally, since the whole "recession" has started, I personally have done nothing but become better financially. I got a new position at work, which was actually a pay cut, but helped form a better budget. I still see tons of people going out and spending money, and I actually spend more money buying things than I used to. I have known a few people to lose their jobs and homes, but the ones I knew that lost their homes was their own fault, and actually would have kept their homes had they not been so stuck up and refused to tell the extended family they were having problems. I personally feel a lot of the "recession" and fall of currency is mainly due to the media, and possibly in part that the Governments want it to happen so they can reach some sinister goals they might have.

The U.K. economy is not “rocking hot” by any stretch of the imagination. However, its currency has held up nicely, mainly because it’s “not the euro.” Lots of money that has been scared to remain in the euro has found its way to its nearby neighbor, the British pound

U.S. Companies Brace for an Exit From the Euro by Greece
Even as Greece desperately tries to avoid defaulting on its debt, American companies are preparing for what was once unthinkable: that Greece could soon be forced to leave the euro zone

Bank of America Merrill Lynch has looked into filling trucks with cash and sending them over the Greek border so clients can continue to pay local employees and suppliers in the event money is unavailable. Ford has configured its computer systems so they will be able to immediately handle a new Greek currency.

JPMorgan Chase, though, is taking no chances. It has already created new accounts for a handful of American giants that are reserved for a new drachma in Greece or whatever currency might succeed the euro in other countries.
In a survey this summer, the firm found that 80 percent of clients polled expected Greece to leave the euro zone, and a fifth of those expected more countries to follow

“Companies are asking some very granular questions, like ‘If a news release comes out on a Friday night announcing that Greece has pulled out of the euro, what do we do?’ In some cases, companies have contingency plans in place, such as having someone take a train to Athens with 50,000 euros to pay employees.”
www.nytimes.com...

Well looks like those in power are hell-bent on keeping the Euro.
We'll see what Finlands right wing closet racist party Perussuomalaiset (True Finns) are up to. Some hints have been made about the Euro by Timo Soini (leader of a party).
www.bbc.co.uk...
The day after - this:
www.cnbc.com...
Now it's all quiet.

Max Keiser, noted provocateur of the bankers and the affluent elites...

on his website makes a best guess-timate that by April 2013... the Euro calamity will have begun,
who knows what any EU structure will look like, the currency, the core EU members...

i believe the EUnion will still remain in some form so that the NATO treaties and alliances will remain intact,
because i can't see NATO having to renegotiate the missile/Drone installations spread all across the larger EU membership (what do they number 20-25 nations?)


as for common currency, i believe Russia that supplies natural gas to Europe is equipped to transact payments in any number of mediums of exchange-trade agreements...
the British Sterling will likely span the destruction/replacement of the €