OK, I'm trying to ascertain the major repercussions of this potential outcome, but it is quite difficult to find information that is not draped in hyperbole, or is driven by some overzealous agenda. Of course, no one has a crystal ball, but perhaps those with a more sophisticated grounding in macroeconomics might be able to shed some light. Obviously a major credit freeze, and many of the unfavourable circumstances that followed the GFC would ensue, but what further significant scenarios would this bring rise to. Just trying to get some straight-talking perspectives, try to keep the astronaut talk to a minimum.
Thanks for your earth-shatteringly insightful and witty contribution. Why I oughta!!! * shakes fist *
Merkel wants 'permanent' supervision of Greece, warns of war By Valentina Pop Brussels - Peace should not be taken for granted if the euro fails, German chancellor Merkel told MPs Wednesday (26 October) ahead of the eurozone summit where an increase of the bail-out fund firepower may lead to Germany's own state assets being taken as collateral. http://euobserver.com/19/114075
euro fall euro bank fall aussie banks smashed aussie banks call in debts over leveraged homeowners evicted housing crisis cheap houses no loans for anyone stackers of hard assets in best position but will be a tough world wide depression
Hey Citizen, sounds like you're trying to figure out how to potentially profit/gain from a Euro collapse...or are you mainly concerned with keeping what you've got (wealth preservation)? PM's are a good way to insure you won't lose everything...that's all I'm hoping to accomplish by having a stack. If you think it's good to be AUD cash heavy, here's some news to consider... "The issue came to a peak yesterday when it became increasingly likely that three CDOs in particular-- Torquay, Scarborough and a portion of the Parkes CDO, would collapse, an event that would cost Australian investors up to $250 million." http://www.businessspectator.com.au...the-brink-of-collapse-report-pd20111024-MXPXK Don't know if this is old news for Aussies...just trying to share something that might be important...
I think that this would be pretty close to the mark, except that the USA would also be involved, just after the euro bank fall.
Get things into perspective - Aussie banks are exposed no more than US$50Bn - Peanuts, comparatively speaking... as a % of Aussie GDP (and retained bank profits in near history) that's insignificant... But of course there'll be a big stink about it in the press, everyone will demand people be fired, and Tony Abbott'll have a field day at Labour's expense. The ASX will be rattled but only temporarily, as those looking for another buying opp after the Summer trough in equities will buy back in and shed loads of cash will come off the sidelines from retail investors & fund managers alike. Then the focus will switch back to Europe & we'll all get on with the usual business of criticizing Greece, Italy, Portugal, Spain & Ireland and witnessing the bickering between Merkel & Sarkozy - neither the French or German public want to assist any of the countries which might default - they are (rightly in my opinion) better served concentrating on keeping their own houses in order. With the French banks this is problematic as the exposure is enormous - and may see Paribas & Soc Gen stumble, if not fail entirely. Make no mistake - Germany will come out of this as the strongest survivor - and dictate the renewed European framework to its own liking - they're neither stupid - nor willing to let what cash they have as savings - pay for more Bilderberg moussaka. http://www.post-gazette.com/pg/11296/1184315-82.stm http://www.washingtonpost.com/world...german-might/2011/10/19/gIQA3baZ7L_story.html http://www.zerohedge.com/news/revis...k-debt-gdp-peaking-186-here-what-happens-next http://www.gcnlive.com/wp/2011/10/0...any-will-still-lead-the-european-super-state/ VRS x
Is it cascading dominos. . . Euro failure-> European Financial Chaos and bank failures -> Euro Money printing (*to the moon*) -> Insurance claims on big US banks CDO -> US Financial Meltdown -> US currency printing (*to the next nearest galaxy*) -> Combined Euro & US crisis -> next to zero demand for increasingly expensive Chinese products -> increasingly decellerating growth in China -> Overall increased tensions around the world as respective domestic politicians seek others to blame, secure energy resources and deflect attention away from themselves-> increased financial uncertainty and rush into Gold for sovereign states, central banks and the wealthy and Silver for everyone else. All of which -> reduced demand for Australian mineral exports -> Returns Australia to a one-speed economy -> Crashing income for Australian Government -> invested savings in super and managed funds wiped out -> AUD interest rate reductions and currency debasement to re-stimulate exports and deter savings -> AUD falling in value -> accelerated appreciation of all PMs relative to other currencies -> increased domestic demand for Gold and Silver because the whole bloody mess is unravelling. OR . . . Wayne (WaaaWaaa) Swan will demand Australian Banks pass on any Reserve Bank interest rate cuts, Kevin (UN Employee of the year) Rudd will shunt Gillard the concubine aside, Finance Minister Wong will do what she is good at, Mr. (I prefer the) Brown will increase the Resource Tax, the Carbon Tax and the GST for more bike paths and a more equitable Australia and somehow all will be right with the world again. OR . . . We just muddle along in this on-again, off-again global crisis, as they paper over all the debts while manipulating the Gold and Silver prices for apparent stability while stocks in prison and detention centre operators go on a tearing multi-decadal bull run.
If something major happens in the Eurozone in the next few weeks, I think there will be a US dollar rally. If that happens, then the commodities and PMs will tank in the short term.
i saw one news feed yesterday 7:48am "the euro is doomed". Another news channel 7:52am "the euro is saved". and the markets reacted wildly. as they do i'm pretty sure each and every member of the European union is covered under the framework set out in the Copenhagen summit, that every member of the European Union must assist other member countries in financial need. They cant join the union without having economic stability, human and religious rights, etc. its not a question of will they help. They have to.
Doomed euro = dollar rally = pressure on metals Doomed Euro = stocks crashing = margin call selling = everything falling I think if the Euro falls apart, there will be some heavy pressure on PMs, but it will be short lived and then take off into the stratosphere. YMMV.
Good question, not exactly sure myself. But if every day was a MUFTI day in Minister Wong's office, she might be a good boss. :|
Gino, thanks for your concise, clear and considered response. Thats exactly the sort of broad perspective I as seeking. Is the assumption of a USD rally based on the idea that Europeans will view the USD as a 'safe haven' - or is this based on some other factor/s?
If the Euro falls, then it's quite possible the US dollar will follow suit not long after. Perhaps a few months. How is the US any different to the Euro zone. Ok, it can print until it reaches trillion dollar note denominations. Hmm, Zimbabwe? I say buy a wheel barrow while you can afford one so you can load your 'currency' to go buy some milk and bread.
You bail me out I'll bail you out and we will keep borrowing from each other and keep spending. Not sure how that works when they are all up to the eyeballs in debt. Paying debt with further debt does not work and is one of the reasons for the current problems. I was thinking of paying for my mortgage with my credit card and when that runs out apply for another card and pay for both mortgage and maxed card and buy some more stuff with it just to see what it is like to be a European nation or America. Somehow I don't think I would be able to get away with that and doubt there would be a bail out for me for being so stupid or negligent with other peoples money. Let the market speak and let the chips fall. Stop with the can kicking and manipulation. (How long is the road they keep kicking the can down anyway?) Have I simplified this to much? I must have, it just seems like a no brainer...
