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Post 17 Jan 2011, 9:21 am

When even Paul Krugman is a doubter can the end be far off?
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Post 17 Jan 2011, 2:55 pm

Suddenly you agree with the guy? Gosh, golly gee.
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Post 18 Jan 2011, 10:07 am

I don't think the end is imminent, there's too much political capital invested in the Euro for it to be allowed to fail, and nobody really wants it to. I agree with much of the analysis in that article though. I was always opposed to Britain joining the Euro and I'm certainly glad we stayed out.
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Post 18 Jan 2011, 2:44 pm

I thought it was a great article. Thanks for posting it, though I'm not sure that Krugman would agree with you that the Euro is in its death throes.

As I've said before, your notion of the Euro failing ("Death Knell") is probably very different than most people. If Greece ends up dropping the Euro and reviving the Drachma, I don't think many people would say that is evidence the Euro failed. Rather, I would think that such an event would be evidence that Greece failed and was not able to bring the Euro down with it.
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Post 18 Jan 2011, 5:11 pm

danivon wrote:Suddenly you agree with the guy? Gosh, golly gee.


Even a stopped clock is right twice a day.
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Post 18 Jan 2011, 5:18 pm

geojanes wrote:As I've said before, your notion of the Euro failing ("Death Knell") is probably very different than most people. If Greece ends up dropping the Euro and reviving the Drachma, I don't think many people would say that is evidence the Euro failed. Rather, I would think that such an event would be evidence that Greece failed and was not able to bring the Euro down with it.


George,

My best guess is that the more stable countries of northern Europe (Germany, Benelux (possibly exluding an independent Flanders), Denmark (even though it isn't currently a Euro user) and possibly Finland and one or two of the Baltic states) will end up in a currency union essentially dominated and directed by Germany. It's possible that France may somehow hang in with Germany for at least a few more years, or it may head up a second currency union (though why anyone would want to be part of it is beyond me). If that constitutes "survival" of the Euro, then I suppose the Euro will survive. It's very hard for me to see how a pan-European currency union, including the PIIGS, France and the less stable economies of the former east bloc and Germany/Benelux can possibly continue much longer.
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Post 19 Jan 2011, 2:11 am

When do you think these changes will come to pass? Can we put a wager on it?
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Post 19 Jan 2011, 3:50 am

We'll see. I doubt anyone can currently predict anything with a fair amount of certainty in the banking or currency markets. Who knows when then next quake hits and the tumbling starts.
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Post 19 Jan 2011, 4:20 am

It's not going to be the end of the Euro as far too much political effort and capital has been put into it, and disbanding it to re-introduce the Franc and D-Mark would be of even greater strain. After all, it was never set up strictly along economic lines since it was always a heavily political project, and hence cannot fail purely because of economic troubles. They would have to be significant anti-Euro political will from several of the bigger central countries for it to be truly disbanded, and there simply isn't.

What has often happened in the past is that a crisis has resulted in fixes to make sure that It (whatever It is on this particular occasion) Never Happens Again! In this case I think it highly likely that the more powerful and fiscally conservative Germans will push to set up the kind of financial institutions that the Euro really needs. Should they succeed, then the Euro may well come out of the present crisis stronger and more stable. Will they? Only time can tell. After all, no-one has ever tried to do something like the Euro before, so there are no precedents here to be examined and considered.
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Post 19 Jan 2011, 9:47 am

Pundits have been predicting the collapse of the Euro since its inception...still going!

It'll take more than a few Irelands and Greeces to bring down that reserve currency.
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Post 19 Jan 2011, 12:32 pm

Javelin wrote:Should they succeed, then the Euro may well come out of the present crisis stronger and more stable. Will they? Only time can tell. After all, no-one has ever tried to do something like the Euro before, so there are no precedents here to be examined and considered.
I was going to make a similar point. Hopefully, we won't see Goldman Sachs or their ilk helping countries lie so that they appear to be much healthier than they are as well.

I'm still waiting for the terms of a wager from Mach though. It's easy to be Cassandra when your prophesy is vague and open-ended.
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Post 19 Jan 2011, 4:40 pm

Heh. My prophecy is no more vague and open-ended than the one you appear to subscribe to, which seems to be that the Euro will be around in some form or other for the remainder of our lifetimes. As to your wager, Dan, when the Euro collapses the economies of Europe will be so devastated that you won't have anything to pay me with (and I wouldn't have the heart to enforce the bet if you did), so my conscience requires that I decline.

As for countries lying about their debt--that's what governments do. I can't imagine that they'll stop now.

And just for the record--I'm not a proponent of Euro-dissolution and I sincerely hope that I'm wrong--I'm just observing what appears to me to be unstoppable centrifugal forces that will tear the European monetary union apart.
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Post 20 Jan 2011, 2:09 am

Machiavelli wrote:Heh. My prophecy is no more vague and open-ended than the one you appear to subscribe to, which seems to be that the Euro will be around in some form or other for the remainder of our lifetimes.
You'll have to remind where I made such a prophesy. I just disagree with your doom-mongering.

As to your wager, Dan, when the Euro collapses the economies of Europe will be so devastated that you won't have anything to pay me with (and I wouldn't have the heart to enforce the bet if you did), so my conscience requires that I decline.
Well, if we set an amount in dollars, I can easily get some. I was only thinking of around 5-10, a notional bet. As long as you put yours into Sterling, lest the USA collapse once China's bubble bursts messily.

As for countries lying about their debt--that's what governments do. I can't imagine that they'll stop now.
Greece/Goldman Sachs was a pretty special case. And there's misleading on debt to the public, and lying on debt to the central banks. Very different kettles of fish.

And just for the record--I'm not a proponent of Euro-dissolution and I sincerely hope that I'm wrong--I'm just observing what appears to me to be unstoppable centrifugal forces that will tear the European monetary union apart.
Yeah, right. Just like you are sure we will be dhimmis within a generation as well. By the way, a centrifugal force is simply a reaction to the centripetal force that keeps a rotating object in orbit. What most people think of as the 'centrifugal force' is actually known as the 'ficticious force', due to the observer bias it arises from.

Which ties up neatly...
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Post 20 Jan 2011, 5:42 am

I believe what most folks think of as centrifugal force is actually just linear inertia opposing whatever is attempting to make an object move in an angular manner--which also seems to tie up pretty nicely.

As for your becoming dhimmis--it seems to me the jury is still out, though I note that Greece, on the frontier with Islam, has an estimated 2 million illegal immigrants (almost all Muslim) out of a population of less than 12 million and is adding something on the order of another 200 thousand per year. With 20% of its indiginous population over 65 and a fertility rate well below replacement rate, it appears Greece will become a majority Muslim country within the next 15 years.
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Post 20 Jan 2011, 11:51 am

Machiavelli wrote:I believe what most folks think of as centrifugal force is actually just linear inertia opposing whatever is attempting to make an object move in an angular manner--which also seems to tie up pretty nicely.
Yes, that's what a 'reaction force' is, but most people's conception of centrifugal force is different.

Anyway, as much as the diversion into mechanical physics pleases my inner geek, it's my inner gambler who wants to know if you are still crying off an actual bet with faux concern for my finances. Turns out I have about $10 in cash. I'll wager half of it, if you are actually prepared to outline what your prediction is and we can agree terms.

As for your becoming dhimmis--it seems to me the jury is still out, though I note that Greece, on the frontier with Islam, has an estimated 2 million illegal immigrants (almost all Muslim) out of a population of less than 12 million and is adding something on the order of another 200 thousand per year. With 20% of its indiginous population over 65 and a fertility rate well below replacement rate, it appears Greece will become a majority Muslim country within the next 15 years.
Who made that estimate? Is it still reflective of a country seeing economic problems? Wouldn't some of the immigrants to Greece also be likely to come from Balkan nations?

I'm not sure of your projections, either. They seem to be based on zero births, all people over 65 dying in the next 15 years, and every single one of the 200,000 immigrants being Muslim. Even so, the Greek population would be 13 million and the number of Muslims 5 million. I make than a minority, albeit a large one

Can you show us your workings?