[Mercenary]

I think the politics & war section needs a thread focusing soley on the Euro € currency and the European Central Bank (ECB) and the enormous unelected, undemocratic power they now wield.


First though, a quick recap of the current situation:


At present there are 19 official countries using the euro

1. Austria
2. Belgium
3. Cyprus
4. Estonia
5. Finland
6. France
7. Germany
8. Greece
9. Ireland
10. Italy
11. Latvia
12. Lithuania
13. Luxembourg
14. Malta
15. Netherlands
16. Portugal
17. Slovakia
18. Slovenia
19. Spain

and 2 countries who "unofficially" use it

1. Montenegro
2. Kosovo


Only 2 countries have had referendums to decide if they wanted the euro or not.
In all other 19 countries the people were not given a choice.
In both below cases the people voted NO and kept their own currencies.

1. Denmark
2. Sweden

One European country's government decided on its own it didn't want the euro before it was introduced in 2002

1. United Kingdom


A further 6 countries are "obliged" to start using the euro but either don't qualify yet or have been secretly (but deliberately) using various tactics to avoid qualifying and thereby avoid having their economies controlled by the European central bank.

1. Poland
2. Hungary
3. Czech Republic
4. Croatia
5. Romania
6. Bulgaria


As this forum has of some of the smartest men in the world contributing their excellent political and financial analysis, I would like to get other members views on the future of this currency and the undemocratic centralized power of the European central bank.

I firmly believe that the euro has caused rampant price rises across Europe since 2002, not brought the benefits of cross border competition in goods and services as was promised, and has removed a lot of sovereign power from individual nations over to the ECB in Frankfurt

What does the future of this monetary arrangement look like to you ?

[PowerGame]

I'm no finance expert, but like to learn and contribute what I know +nice thread idea.

Right now other countries also accept the € for example if you are a tourist in Turkey or Poland it's easy to pay with €, I also heard it gets more acceptable in Brittain, too, after the crash of the pound.

The € is holding down all weaker countries, Poland for example only is doing well right now because all the Polish people willing to work who can't get higher education or a good job in Poland work in other European countries. Many Polish businesses consist of selling Polish goods to cities where the Polish immigrants live, because they miss the Polish stuff.

Some things like drugstores are not as equipped as in Germany and things like coffee don't have the same Standard, or clothes from Germany are second hand sold there.

So there is a lot of export and import bound to countries like Poland.

Not having the € also makes it easier for them to export, the € is too high for the EU, even after the crash and the lowest conversion to us dollar ever. South European countries who took the € are doing a lot worse like Spain or Greece, but to be true, every southern country is doing worse.
It even damages Germany itself as strongest € economy.

Noone can compete in a situation like this especially if for example cheap markets like the Chinese are fixing their own yuan. European countries are blocked from regulating their economy and the self healing effect of the markets can't take place because the trust is finally broken in Europe, the believe in the Union only exists in the heads of politicians and financial Elite groups or companies.

I say the € only dies a quick death if the whole of Europe breaks down in to single states again in reaching the point of no return of right wing parties being elected.

But they would need to keep the travel and trade free between the old European members, not new ones like turkey.

Spain for example is doing really bad, forces their part countries like the basque lands or catalonia to stay in their country and cannot elect a majority that can rule.. Because many young people in southern Europe don't have a job.. And learn to be politically correct, are brainwashed so they start to vote for the left.. That promises free money. But where does that money come from?

That means the paying European countries need the right wing parties to break the EU down. (or civil disobedience)

If that does not happen the € dies a very slow death and one day will result in an American-European dollar,as ceta and ttip are being ordered by the EU and not by vote or single nations.

But I'm 100% sure the € will loose worth in the long run, in the short run new European members and a new financial bubble could make the worth rise (or instantly destroy the worth, for example I know that a joining turkey would fuck up a lot, but couldn't say how the markets would react)

The European Central Bank has too much power and is controlled by unknown forces, not the politicians or the people.
Many useless politicians get into positions for Europe and a free and rich lifestyle.

[DamienCasanova]

And then you've got Switzerland

They use their own currency as well, the Swiss Franc (CHF). It's one of the main alternatives to the Euro available to Europeans, as the Swiss are traditionally known for being bankers and money changers, and they have always played their part as sort of a black market for hiding the world's money.

In a movement to eliminate Large denomination bills and leave citizens with less options outside of parking their money in Euro banks charging negative interest, the 500 note Euro was recently abolished, leaving the Swiss Franc 1000 note as the highest denomination bill in Europe. This will lead to massive influx of money from Euros to Swiss Francs, as people will be desperate to store their money outside the banking system in the near future, and hoard large bills (and other hard commodities such as metals)

http://www.zerohedge.com/news/2016-02-15...-euro-bill

Switzerland voted against joining the EU in 1992, and they voted down joining the EU once again in 2001....and their history of neutrality still persists to this day.

[Mercenary]

also...

Norway

and

Iceland


are not part of the European Union at all and therefore don't have the euro either, and still have their own currencies...but they are part of the Schengen open border agreement and the European Economic Area (EEA)....a sort of "EU light" or "Diet EU" depending on how you look at it.

Switzerland isn't even part of the EEA, but it did join Schengen very "late" in 2008.

[Mercenary]

Very dark clouds on the near horizon.

We might soon have a situation in Italy that will be a repeat of what happened in 2012–2013 on the island of Cyprus and what happened again in Greece in 2015 when they shut banks and limited withdrawals to less than 100 euro per day. Those were probably just secret test-runs so the EU and ECB could prepare for the big shakeups that are coming next, like this one:



http://www.express.co.uk/finance/city/68...rn-experts

Quote:

Italy's deepening banking crisis could RIP the eurozone apart, warn experts

Italy's banking crisis threatens to collapse the eurozone's financial system and bankrupt the entire bloc, experts have warned.

By Lana Clements

PUBLISHED: 13:54, Wed, Jul 6, 2016 |
UPDATED: 14:14, Wed, Jul 6, 2016

Fears for both the Mediterranean country and Europe’s entire financial infrastructure have increased dramatically since Britain's vote to leave the European Union (EU). International finance experts believe Italy's problems could spread across the single market in a domino effect that would cripple the EU. Milan's top stock market is still down by a massive 12 per cent from its pre-referendum high, after the result prompted investors to dump stocks at alarming speed. The biggest concern is the stability of Italian banks, which hold around £270billion of bad loans that could end up defaulting.

Brexit has thrown the problem into the spotlight as economic growth prospects for the eurozone have plunged. Britain’s vote to leave the EU also meant interest rates are set to stay lower for longer and returns - or yields - on government debts have moved lower - all of which hurt banks' profitability. Michael Hewson, chief market analyst at CMC Markets UK, told Express.co.uk: "Now that Brexit is in rear view mirror it has shone a light in the significant problems in the European banking system. "EU leaders are experiencing a “rabbit in the headlights” moment." He said: "At the beginning of this year European banks were already facing a host of problems, including falling profits, a slowing global economy and negative rates reducing their ability to boost their profitability, at a time when a lot of them were being encouraged to boost lending to the wider economy as well as improve their capital buffers. "Quite simply it isn’t possible to do all of them at the same time. "You have a poisonous cocktail that has the potential to bring Europe’s banking system to its knees, and for now it would seem that policymakers have no idea as to what can be done to deal with it." The director-general at the Italian Treasury Lorenzo Codogno has also raised his concerns. He told the Wall Street Journal: "Brexit could lead to a full-blown banking crisis in Italy. "The risk of a eurozone meltdown is clearly there is Brexit concerns are not immediately addressed."

The European Central Bank is running out of measures it can take to deal with the escalating financial problems of the bloc. The institution has slashed interest rates to negative levels this year in a bid to kickstart economic growth - even though this puts further pressure on Europe's banks. And announced an extension of its money printing programme. The Bank's chief Mario Draghi has called on political leaders to help fix the underlying economic problems.

The Italian prime minister Matteo Renzi reportedly now wants to inject around £35billion pounds worth of cash into the banks in his country in a bid to restore confidence. But such a move would mean breaking EU rules and German chancellor Angela Merkel has ruled against allowing the Italian leader to do so. Mr Hewson added: "Italy is the third biggest eurozone economy with the linkages between government and the banks well known. "If Italy bails in its bond and deposit holders under new EU rules it will wipe out a host of Italian pensioners and savers savings, political suicide for any Italian leader."

[Foolsgo1d]

In Cyprus they took money out of Russian bank accounts based in Cyprus, just a FYI to any Americans with cash in European bank accounts.

These problems are also coming when they are still printing money since last year.

[Dan Woolf]

Deutsche Bank is on the verge of a collapse. If it collapses, it would lead to a world crisis never seen before. (((They))) can't let that happen, can they? But what can they do?

[NewMeta]

(07-07-2016 04:58 AM)Dan Woolf Wrote:  

Deutsche Bank is on the verge of a collapse. If it collapses, it would lead to a world crisis never seen before. (((They))) can't let that happen, can they? But what can they do?

They can't do anything that is what makes this worse than 2008, the debt they have is several times more than German GDP, so no bail outs, they have ties to loads of global international banks world wide, settings off a fucked up domino affect of failing banks.

They talked about it in Keiser report recently, as crazy as this dude comes across, credit where it's due he has a lot of correct predictions under his belt. He like me advocates for buying into cryptocurrency (or gold/silver) now as it will likely be the least affected by a banking collapse as it has no ties to the banks at all.

It is hard to predict what exactly will happen when this goes down, lots of people will lose their homes, jobs, etc... but the biggest issue I think will be what happens to stuff like social welfare in Western Euro countries, if they were to for instance, cut back or even completely eliminate it altogether, then hell will hit the streets if this happens, especially in multicultural cities where social cohesion isn't exactly strong.

[Mercenary]

Super rich billionaire, George Soros bet on Deutsche Bank shares going down the morning the results of the Brexit referendum came out when the UK voted to leave the EU.


Also, from yesterday's news:

http://www.bbc.co.uk/news/business-36723034

Quote:

Deutsche Bank: World's most dangerous bank ?

Simon Jack - Business editor
6 July 2016

Deutsche Bank shares hit a new record low today. Its value has halved since the beginning of the year. So is it now the most dangerous bank in the world? According to the International Monetary Fund - yes. Last week, the IMF said that, of the banks big enough to bring the financial system crashing down, Deutsche Bank was the riskiest. Not only that, Deutsche Bank's US unit was one of only two of 33 big banks to fail tests of financial strength set by the US central bank earlier this year. It's not hard to get scared when you look at a few numbers. Bear with me.

In simple terms any bank is worth the difference between what it's owed and what it owes. In the case of Deutsche Bank that means the difference between assets of 1.64 trillion euros (yes, trillion) and liabilities of 1.58 trillion euros. Its net value is 60 billion euros. Sounds like a lot. BUT the value of what its owed doesn't need to move by much to wipe out its value completely. The IMF and the US central bank aren't the only ones who think Deutsche Bank is risky. The share price has fallen early 70% in the last year. In fact, you can buy the whole bank for 20bn euros - a third of what it's worth on paper. Other banks trade at a discount to their net worth but Deutsche Bank is by far the biggest. For that reason, many people fear Deutsche Bank could be the first horseman of a new financial apocalypse.

This is a strange position for the one-time financial muscleman of European banking to find itself in. There are few German companies more associated with the post-war economic miracle than Deutsche Bank. Long before the European Central Bank existed, it worked hand in glove with the seemingly infallible Bundesbank to provide rock solid non-inflationary growth for decades. It went truly global in the 1990s when it took the fight to the big US investment banks like JP Morgan and Goldman Sachs and was "around the hoop" (a US basketball metaphor beloved by investment bankers) wherever big deals were being done. That in a way is part of the bank's problem. Deutsche Bank, the parent company, is considered reasonably solid by the odd rules of banking regulation.

The key score of a bank is its capital ratio. (I won't bore you with this but it's a calculation that divides the bank's own money (capital), plus anything you can convert into capital, by your assets, adjusted for how risky they are). The bare minimum is 7%. Deutsche Bank scores 11% - not great, but not terrible. Roughly the same as Barclays. The problem with Deutsche is that it doesn't have big retail banking and credit card businesses (both seen as reasonably safe and boring) to balance its bigger and riskier investment banking operations. There are two people standing in the way of Deutsche Bank and panic. The first is the current chief executive John Cryan. He is no swashbuckling Fred Goodwin (RBS) or Bob Diamond (Barclays) of pre-crisis notoriety. He is a very conservative, feet on the ground pragmatist. He's already managed to reduce the debt of the bank and has plans to do more. The other is even more important. German Finance Minister Wolfgang Schaeuble. He has said this year that he considers Deutsche Bank "rock solid". That is not only reassuring in itself, but indicates there is no way on earth that a rich German government would let the most important bank in Germany - and by extension Europe - come to any harm.

At the time of writing, the Italian government is considering ignoring state aid rules to shore up its own fragile banks. If there was a similar need in Germany, you can be sure, say my banking sources, that Germany would do the same. Just to be clear - we are nowhere near that point now. However, as we learnt in the crisis of 2008, when governments do get involved investors can end up with next to nothing and that is why the shares are so cheap.