MO:Collapse of the euro is 'inevitable': Bailing out the Greek economy futile, says FRENCH banking chief

[JMS]

I never thought I'd see the day when zoony was using the "gold and guns" line in response to freakin' JMS. :munchout:

That's Mr. "freakin" JMS if you please.

Haven't used that title since my errotic movie days.

[JMS]

Buy gold?

About 3 years too late buddy.

I got in at $600 an ounce. :cool:

I got in at $240 an ounce shortly after Bush was first elected. I bought American eagles, which I'm kicking myself for. I paid a little more for the neusmatic value of the coins; moving forward I've only paid for the gold value.

India diversified about 2% of their foreign reserves what six months ago and bought a few tons of gold and prices jumped up from $1000 to $1100 an ounce. I could see India and China doing that again.

Today both have way too much of their reserves in international currencies, which are looking shakier and shakier every day.

[zoony]

I bought mine in 1980 at the recommendation of alarmists who warned me that inflation was out of control and that Carter had wrecked the economy and Reagan was going to make it worse.

I got it for $675! Wasn't I smart! Someone else told me I was being silly and should have bought stocks or treasuries. I showed them

[JMS]

I bought mine in 1980 at the recommendation of alarmists who warned me that inflation was out of control and that Carter had wrecked the economy and Reagan was going to make it worse.

I got it for $675! Wasn't I smart! Someone else told me I was being silly and should have bought stocks or treasuries. I showed them

Gold hit $850 an ounce in Jan 1980. Coarse you didn't have two billion newly affluent Chinese and Indian's buying gold up in 1980.

My investment days have been marked by notable sucesses, and equally notable failures. My sucesses have included Chrysler, Snapple, Marvel Commic Books and Gold; My failures have included Chrysler, IncolMed, Piezo Electronics, and Silver.

I'm not claiming I know what I'm doing.

I do think it's ominous that the Euro is about to take a major hit. If that happens gold will go up again significantly. France is one of the two countries in a position to stop it from tanking. The head of Frances national bank saying trying to help Greece is futile, is pretty big news.

[Thiebear]

Euro is going down the toilet.

China/Bejing going to be covered in Sand.

who is going to take over the ruling of America? we can't be left to our own...

[JMS]

Dow Jones dropped 1000 pts... currently down more than 400.... All because of the Greek economy.... Wonder what the Euro is going to do.

[ABQCOWBOY]

Krugman has been banging that drum for 3 more years.

Japan tried it in the 90s.

[Larry]

Just assuming (as a hypothetical) that it's true, . . . .

Wouldn't a collapse of the Euro be a competitive advantage for the US? Wouldn't this teach all those people who said that the Dollar wasn't the best reserve currency, any more?

[Hubbs]

Just assuming (as a hypothetical) that it's true, . . . .

Wouldn't a collapse of the Euro be a competitive advantage for the US? Wouldn't this teach all those people who said that the Dollar wasn't the best reserve currency, any more?

The juice ain't worth the squeeze.

[haithman]

Just assuming (as a hypothetical) that it's true, . . . .

Wouldn't a collapse of the Euro be a competitive advantage for the US? Wouldn't this teach all those people who said that the Dollar wasn't the best reserve currency, any more?

The Euro and Eurozone are a joke. The people who were talking about the Euro taking the place of the Dollar as the reserve currency were talking out of their asses.

[Kilmer17]

Just assuming (as a hypothetical) that it's true, . . . .

Wouldn't a collapse of the Euro be a competitive advantage for the US? Wouldn't this teach all those people who said that the Dollar wasn't the best reserve currency, any more?

Yes and no. It would do that, but it would also take away some of the buying power for EU. Which is okay because I would argue its been a fake power since it began, and would just be correcting.

But ona personal level, Id travel cheap and love it.

[JMS]

Japan tried it in the 90s.

Japan tried to treat the symtom and leave the festering wound alone. That was their problem.... Their banks were fundimentally corrupt, and rather than force a reconing they just gave the banks more money.

whooops.... never mind, I see your point now.

[Johnny Punani]

Another epic failure for socialist based economies....

[Larry]

The juice ain't worth the squeeze.

Wasn't thinking that everything would be great, short term.

Just wondering, if that were to happen, wouldn't the US come out with a bigger "market share" of an admittedly (but hopefully temporarily) smaller market?

[ABQCOWBOY]

Just assuming (as a hypothetical) that it's true, . . . .

Wouldn't a collapse of the Euro be a competitive advantage for the US? Wouldn't this teach all those people who said that the Dollar wasn't the best reserve currency, any more?

Short term it would and it is. Long term, unless we can control our own spending, it's probably a look into our own economic future.

[JMS]

Just assuming (as a hypothetical) that it's true, . . . .

Wouldn't a collapse of the Euro be a competitive advantage for the US? Wouldn't this teach all those people who said that the Dollar wasn't the best reserve currency, any more?

No. all instability is bad when the global economy is linked like it is.

It would allow us to stick out out chests and proclaim we are #1. Not because of national achievement or sound fiscal policy, but because our cheif compeditor died...

This would likely mean the dollar would go up against the Euroe, Yen, and kwon?. Which would mean our exports would be more expensive... which would mean jobs, production and capital would continue to run off shore.

On a brighter note, home loans would likely stay low.

[techboy]

Another epic failure for socialist based economies....

Actually, the real problem is that the standard approach in a case like this is to devalue one's currency, and Greece can't do it like the UK is currently doing.

Apparently a lot of economists were sounding this alarm before the Euro was formed, and I'm personally guessing that countries might start pulling out, as annoying as that would be for me as a traveller.

[Larry]

It would allow us to stick out out chests and proclaim we are #1. Not because of national achievement but because our cheif compeditor died...

This would likely mean the dollar would go up against the Euroe, Yen, and whatever the hell the chinese use. Which would mean our exports would be more expensive... which would mean jobs, production and capital would continue to run off shore.

On a brighter note, home loans would likely stay low.

Actually, my nightmare scenario would be:

Euro collapses.

International currency once again flees to the US, and T-bills, as the currency of refuge.

US politicians observe the inflow of foreign capital and announce "See! Deficits don't hurt us!"

[JMS]

Short term it would and it is. Long term, unless we can control our own spending, it's probably a look into our own economic future.

Can you believe that some European countries have a bigger deficite to gdp ratio than we do? Holly Cow what were they thinking?

Spain and the UK are both top 4 economomies in Europe...

[Hubbs]

Wasn't thinking that everything would be great, short term.

Just wondering, if that were to happen, wouldn't the US come out with a bigger "market share" of an admittedly (but hopefully temporarily) smaller market?

If you're strictly speaking in terms of buying power, one of two things would happen.

In scenario one, the Euro collapses, those countries go back to their individual currencies, and, yes, the value of the dollar should go up.

In scenario two, the Euro's collapse sparks enough doubt in all major currencies that we'd see hyperinflation everywhere.

Scenario one is obviously more likely. But scenario two is scary as ****.

[Corcaigh]

The Euro and Eurozone are a joke.

Why?

Is it a joke to

1. Avoid currency exchange costs.
   
2. Avoid currency exchange risks.
   
3. Lower costs of doing business across borders.
   

[Burgundy Burner]

props to JMS. give the man a standing o.

The dollar hit a 14 month high against the euro today. greece is a mess. portugal is next. spain is not far behind. gold and silver had a stellar day. oil and gas tanked - and has been tanking all week.

[JMS]

Actually, my nightmare scenario would be:

Euro collapses.

International currency once again flees to the US, and T-bills, as the currency of refuge.

US politicians observe the inflow of foreign capital and announce "See! Deficits don't hurt us!"

Well that's already happenned... T-Bills for a while during the collapse actually were running bellow zero percent interest when you included all the serviec fees.

2 year T-bills are currently running at about 1% interest... 90 day T bills at .16%.

And that's with the Euro in tact.

[techboy]

Why?

There are definitely benefits, but as we're seeing now, there are also some serious downsides. One is the inability to devalue the currency in response to a crisis, and another has to do with optimum currency areas (like is to a paper by Nobel winner Robert Mundell of Columbia).

The short version is that an optimal currency area has capital and labor mobility at the margin. If an auto plant closes in Michigan, a worker can move to Tennessee and get a job.

It's much more difficult for an unemployed Pole to move to France. That causes real problems.

[JMS]

Why?

Is it a joke to

1. Avoid currency exchange costs.
   
2. Avoid currency exchange risks.
   
3. Lower costs of doing business across borders.
   

It's not a "joke". But the Euro has huge problems... It's hard to have a unified currency when you have 27 sovergn states who all have independant monitary policies.

They had to sign an agreement to keep their debt/gdp ratio down when they signed up, and everybody just ignored it...

you guys could use an Alexander Hamilton over there.