By Dan O’Brien
ECONOMICS: It was once unthinkable that post-1945 Germany would ever turn its back on Europe
AT THE beginning of each year, this newspaper publishes a preview of the coming 12 months. In the 2011 preview, I put the probability of the euro breaking up at 15 per cent. One year later, in the 2012 preview, it seemed close to – but still below – 50 per cent.
Now, more than halfway through 2012, I find it impossible to avoid the conclusion that the probability of break-up has gone above the 50 per cent threshold. In other words, the single currency project is more likely to collapse than to survive in its current form. Financial, economic and political problems appear too great to be overcome by a group of 17 countries that have proved unable to end the crisis.
Most developments so far this year have been negative. Spain and Cyprus have joined the bailout club and Slovenia is about to bring to six the number of euro zone countries that cannot sustain themselves unaided.
A €1 trillion liquidity injection into the financial system by the ECB failed to bring lasting calm. Banks across the continent are now more fragile than ever and the system’s impairment is a major contributing factor to renewed recession in the euro zone. Yet again yesterday, Frankfurt under-delivered, having over-promised in the days leading up to its monthly meeting.
The bifurcation of the euro zone sovereign bond market has reached new extremes, with some countries able to borrow almost for free, while a growing number are unable to borrow at all.
The potentially very important agreement among euro zone leaders on June 29th to move towards a banking union has yet to live up to any of its potential. Big questions remain about how fast and how comprehensive
full article at source: http://www.irishtimes.com/business/opinionandanalysis/dan-obrien
Yesterday’s non event press conference by the liars, running the ECB has yet again been exposed. With Mario Draghi’s president of the European Central Bank words still ringing in our ears “Within our mandate, the ECB is ready to do whatever it takes to preserve the euro,” “And believe me, it will be enough.” has turned out to be worthless and a waste of everybody’s time. This toothless and clueless politician/banker has yet again been exposed to be a puppet in the hands of the real masters of our universe the Deutsche Bundesbank. His personal credibility is now shattered. The real bosses have again made it clear its Germanys way or no way .
This can only mean one thing and that is Germany is now working quietly on a breakup of the euro zone currency, and it is preparing for the possibility of the reintroduction of the Deutsche Mark! Germany has now convinced itself that if it is to continue with the Euro It will be left with the debts of the rest of Europe .Having already pumped up to 3.75 Trillion of its citizens savings into this half-baked currency it is now time for the big moneymen to yet again to cash in on their bets and win, win, win again!
They have been bailed out in the bank bust ups and now they have had enough time to place their bets the other way round and a breakup of this currency will be a mega lottery will for the well established hedge funds and bondholders who have only benefited from this financial meltdown. These hidden moneymen only need to engineer volatility into the markets to make money.
- Bonds weaker amid bullish euro zone talk (news.theage.com.au)
- $A higher on hopeful comments from Europe (news.theage.com.au)
- ECB to buy eurozone bonds soon, under conditions (ekathimerini.com)
- Soaring Euro Zone Joblessness Pressures ECB For Stimulus Action (ibtimes.com)