Chart usGOLD   Chart usSILVER  
 
Food for thought
On a surface level, life is a comedy. On a deep level, life is a tragedy
Anonymous  
Search for :
LATEST NEWS  :
MINING STOCKS  :
Subscribe
Write Us
Add to Google
Search on Ebay :
PRECIOUS METALS (US $)
Gold 1286.99-0.02
Silver 19.44-0.01
Platinum 1422.002.50
Palladium 906.056.85
WORLD MARKETS
DOWJONES 1709815
NASDAQ 458023
NIKKEI 1547752
ASX 56295
CAC 40 4373-8
DAX 9461-10
HUI 2463
XAU 1021
CURRENCIES (€)
AUS $ 1.4058
CAN $ 1.4265
US $ 1.3135
GBP (£) 0.7896
Sw Fr 1.2071
YEN 136.9440
CURRENCIES ($)
AUS $ 1.0704
CAN $ 1.0860
Euro 0.7613
GBP (£) 0.6013
Sw Fr 0.9189
YEN 104.2590
RATIOS & INDEXES
Gold / Silver66.20
Gold / Oil13.44
Dowjones / Gold13.29
COMMODITIES
Copper 3.13-0.01
WTI Oil 95.741.19
Nat. Gas 4.050.00
Market Indices
Metal Prices
RSS
Precious Metals
Graph Generator
Statistics by Country
Statistics by Metals
Advertise on 24hGold
Projects on Google Earth
In the same category
France, Germany have "Intense Consultations" on Smaller Eurozone; Breakup Inevitable, but How?
Published : November 10th, 2011
817 words - Reading time : 2 - 3 minutes
( 2 votes, 5/5 ) Print article
 
    Comments    
Tweet

 

 

 

 

Realization the Eurozone is no longer tenable is at long last at hand. In fact, "intense discussions" have been underway for months but are just now admitted to by senior EU officials.

Bloomberg reports
U.S. Stocks Extend Declines on Concern Nations May Exit Euro

 

U.S. stocks extended declines following a report that German Chancellor Angela Merkel’s party wants to make it possible for European nations to exit the euro area.

Merkel’s Christian Democratic Union party wants to make it possible for European Union members to exit the euro area, Handelsblatt reported in a preview of an article to be published tomorrow, citing unnamed participants in the discussion.

A commission within the party, that is crafting a framework to be presented at a party meeting, has proposed allowing a euro member who doesn’t want to or isn’t able to comply with the common currency rules to leave the euro region without losing membership in the EU, the newspaper said.

 

France and Germany have "Intense Consultations" on Smaller Eurozone

Please consider
French and Germans explore idea of smaller euro zone

 

"France and Germany have had intense consultations on this issue over the last months, at all levels," a senior EU official in Brussels told Reuters, speaking on condition of anonymity because of the sensitivity of the discussions.

"We need to move very cautiously, but the truth is that we need to establish exactly the list of those who don't want to be part of the club and those who simply cannot be part," the official said.

The change has been discussed on an "intellectual" level but had not moved to operational or technical discussions, the EU official said.

A French finance ministry spokesman denied there was any project in the works to reduce the currency bloc's membership.

"There have been no conversations between French and German authorities at any level on decreasing the size of the euro zone," the spokesman said .

A radical overhaul of the European Union would be opposed by many members.

"This will unravel everything our forebears have painstakingly built up and repudiate all that they stood for in the past sixty years," one EU diplomat told Reuters."This will redraw the map geopolitically and give rise to new tensions. It could truly be the end of Europe as we know it."

 

Never Believe Anything Until It's Officially Denied

We now have an official denial from France that breakup conversations are taking place. This contradicts an admission by others that such discussion are taking place.

According to the 1980's British sitcom Yes Minister, "The first rule of politics,” Sir Humphrey, the wily civil servant in the show, insists is: “never believe anything until it is officially denied.”

Eurozone Breakup Inevitable, But How?


The Eurozone is a failed experiment. A breakup is inevitable just as it has been from the beginning. Structural flaws were too great, built up over the years. No currency union in history has ever survived unless there was also a fiscal union.

The German supreme court has ruled out a fiscal union and printing unless German voters approve (and they won't). Please see
Germany's Top Judge Throws Major Monkey Wrench Into Leveraged EFSF Machinery, Demands New Constitution and Popular Referendum for Further Powers for details.

The Italian bond market revolt (see
Yield Blowout, Bond Market Emphatically Rejects Italy's Solution; No Place to Hide) and the collapse of Greece says the breakup is sooner rather than later. However, politicians have a propensity to kick the can down the road longer than anyone thinks possible.

The key question now is how?

It would be best for all involved if Germany left the Eurozone and went back to the Deutschmark. Germany would have an immediately credible currency. Should Greece or Spain leave first, those countries might experience hyperinflation or massive inflation.

Breakup Scenarios and Logistics of Denial

For further details discussion of various breakup scenarios as well as a discussion on the "Logistics of Denial", please see my September 16 article
Eurozone Breakup Logistics (Never Believe Anything Until It's Officially Denied)

It's important to remember that Germany suffers regardless. As long as the Eurozone stays intact (it can't and won't over the long haul) German taxpayers have to keep acting bailing out foreign countries, foreign banks, and their own banks.

On the other hand, were Germany to leave, the debts to German banks will not be paid back in Deutschmarks but rather deflated Euros.

On the whole, Germany exiting the Eurozone would be less disruptive, than massive inflation scenarios in Greece, Portugal, and Spain.

If France wants to stay in the Euro, let them. They can have the ECB as well. Then the ECB will print money to bail out the French banks (just as French president Sarkozy wants).

Sarkozy may not want a collapse of the Euro, but it would happen. The message here is simple: If you are in Euros, get the hell out.

 

 

Data and Statistics for these countries : Germany | All
Gold and Silver Prices for these countries : Germany | All
Tweet
Rate :Average note :5 (2 votes)View Top rated
Previous article by
Mish
All articles by
Mish
Next article by
Mish
Receive by mail the latest articles by this author  
Latest comment posted for this article
Be the first to comment
Add your comment
TOP ARTICLES
Editor's picks
RSS feed24hGold Mobile
Gold Data CenterGold & Silver Converter
Gold coins on eBaySilver coins on eBay
Technical AnalysisFundamental Analysis

Mish

Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. He writes a global economics blog which has commentary 5-7 times a week. He also writes for the Daily Reckoning, Whiskey & Gunpowder, and has over 80 magazine and book cover credits. Visit http://www.sitkapacific.com
Mish ArchiveWebsiteSubscribe to his services
Most recent articles by Mish
9/1/2014
9/1/2014
8/31/2014
8/31/2014
8/30/2014
All Articles
Comment this article
You must be logged in to comment an article8000 characters max.
 
Sign in
User : Password : Login
Sign In Forgot password?
 
Receive 24hGold's Daily Market Briefing in your inbox. Go here to subscribe or unsubscribe.
Disclaimer