Sunday, April 11, 2010

And so the Euro died...

Please Germany, help us!

I wrote a post a couple of days ago entitled The death of Greece – will the Euro follow? and in it I argued, as I’ve been doing for a decade now, that bailing out a membership state (in this case Greece) would be the coup de grâce of the Euro.

Of course the masters of our faith didn’t wait long to break their own set of rules and make statements contrary to the treaty they all signed - together with a €30 billion add-on to the fire of doom down by the Aegean.

The slick, olive-oiled Greeks waited for about… 75min, before a senior official told reporters that;

"40 billions (including IMF) for 2010 is part of a bigger amount for the three-year period. A logical amount for the three-year period would be double than 40 billion,"

I am watching for the time, day and date for when the rest of the shitty economies around the Mediterranean call for aid. The smart thing to do is to be first, so I expect it to take no more than weeks. My money is on Portugal because they are already pulling the screws and taking austerity measures, and I expect that Italians and Spaniards will hold out as long as possible.

Well, we also have countries tightly linked to the Euro such as Bulgaria or Lithuania that surely want some cash, but I suspect these bailouts are aimed at saving the Euro, not the countries themselves, so tough luck for those fucks.

Save Capitalism thinks that Germany will chose to leave the Euro if we go down this path, and I consider that to be a real possibility, but I think that long before that happens the cries from the other PIIGS will echo into any survivors history books. Also I expect the money printing to pick up speed pure Zimbabwe-style. This summer will be one of riots and political turmoil, but that’s just the prelude, it can only get worse.

The markets will of course like this move, and despite Russian built planes crashing with lots of Poles onboard and really horrific numbers spat out from the US I expect a pretty steady market tomorrow.

However, that calm is hiding what comes next.

How many billions/trillions of Euro will be needed now when the floodgates have opened? Shall we guess about €500 billion the coming year? And remember, these are bottomless pits. Not a single one of these countries will ever get their numbers in order. Never gonna happen.

And Germany cannot bear this burden alone, that’s impossible and the other countries with pretty good fiscal policies like Sweden and Denmark are too small, and Sweden isn’t even in the Euro. Maybe France can help out a little, but they have their pension debt to worry about.

How long can this last now when the Euro is doomed to fail?

If this was normal times I would probably argue they could keep it up for several years, maybe even a decade or two. However there’s nothing ‘normal’ about propped up markets, trillions in newly printed notes floating around, maddening low interest rates and asylum-style Debt Mountains. Add in the world-wide derivatives scam and so much more of absolutely insane schemes everywhere and I would be very surprise if even Greece will receive this first batch before all hell breaks loose.


  1. There has been a war every month in Europe since the beginning of time. The Euro is there to prevent that. So, the Euro can't fail, it's not allowed to!

  2. If they go down this path it will fail, that is unavoidable. And when this continues ‘war’ is exactly what comes next. If it is a civil war or between states – well, time will tell…

  3. Ta gärna en titt på konvergensprojektet inom EU.

    En bra översikt kring flödet av 308 miljarder euro.