Fw: [endthefed] The eurozone really has only days to avoid collapse - Wolfgang Münchau
From: Aaron Krowne Sent: Sunday, November 27, 2011 4:31 PM To: [email protected] Subject: [endthefed] The eurozone really has only days to avoid collapse - Wolfgang Münchau This pretty much wraps it up. The European countries are going to have to agree to a pan-European Treasury and purse, as well as limitless printing, if the euro is going to survive. Side note: it sure is interesting how gold and silver seem downright agnostic to this level of crisis in the euro. I'm sure that's just free market forces at work, though! LOL! http://www.ft.com/intl/cms/s/0/d9a299a8-1760-11e1-b00e-00144feabdc0.html#axz... Unless something very drastic happens, the eurozone could break up very soon. Technically, one can solve the problem even now, but the options are becoming more limited. The eurozone needs to take three decisions very shortly, with very little potential for the usual fudges. First, the European Central Bank must agree a backstop of some kind, either an unlimited guarantee of a maximum bond spread, a backstop to the EFSF, in addition to dramatic measures to increase short-term liquidity for the banking sector. That would take care of the immediate bankruptcy threat. The second measure is a firm timetable for a eurozone bond. The European Commission calls it a “stability bond”, surely a candidate for euphemism of the year. There are several proposals on the table. It does not matter what you call it. What matters is that it will be a joint-and-several liability of credible size. The insanity of cross-border national guarantees must come to an end. They are not a solution to the crisis. Those guarantees are now the main crisis propagator. The third decision is a fiscal union. This would involve a partial loss of national sovereignty, and the creation of a credible institutional framework to deal with fiscal policy, and hopefully wider economic policy issues as well. The eurozone needs a treasury, properly staffed, not ad hoc co-ordination by the European Council over coffee and desert. ... [Merkel's] own very public opposition to eurobonds has now become a real obstacle to a deal. I cannot quite see how the German chancellor is going to extricate herself from these self-inflicted constraints. If she had been more circumspect, she could have travelled to the summit with the proposal of the German Council of Economic Advisers, who produced a clever, albeit limited and not yet fully worked-out-plan. They are a proposing a “debt redemption” bond – another candidate for this year’s top euphemism award. The idea is to have a strictly temporary eurobond, which member states would pay off over an agreed time period. At least this proposal would be in line with the more restrictive interpretation of German constitutional law. ... Italy’s disastrous bond auction on Friday tells us time is running out. The eurozone has 10 days at most. -- Please Note: If you hit "REPLY", your message will be sent to everyone on this mailing list ([email protected]) This message was sent by Aaron Krowne ([email protected]) from National Ron Paul End The Fed Meetup Group. To learn more about Aaron Krowne, visit his/her member profile To unsubscribe or to update your mailing list settings, click here Meetup, PO Box 4668 #37895 New York, New York 10163-4668 | [email protected]
Interestingly, this all sounds strangely familiar with the putting together that became the united states in america. I wonder if anyone else sees the bizarre reflection....? marcos Santa Fe, NM On Sun, Nov 27, 2011 at 6:15 PM, Natalie Golovin <[email protected]> wrote:
From: Aaron Krowne Sent: Sunday, November 27, 2011 4:31 PM To: [email protected] Subject: [endthefed] The eurozone really has only days to avoid collapse - Wolfgang Münchau
This pretty much wraps it up. The European countries are going to have to agree to a pan-European Treasury and purse, as well as limitless printing, if the euro is going to survive.
Side note: it sure is interesting how gold and silver seem downright agnostic to this level of crisis in the euro. I'm sure that's just free market forces at work, though! LOL!
http://www.ft.com/intl/cms/s/0/d9a299a8-1760-11e1-b00e-00144feabdc0.html#axz...
Unless something very drastic happens, the eurozone could break up very soon.
Technically, one can solve the problem even now, but the options are becoming more limited. The eurozone needs to take three decisions very shortly, with very little potential for the usual fudges.
First, the European Central Bank must agree a backstop of some kind, either an unlimited guarantee of a maximum bond spread, a backstop to the EFSF, in addition to dramatic measures to increase short-term liquidity for the banking sector. That would take care of the immediate bankruptcy threat.
The second measure is a firm timetable for a eurozone bond. The European Commission calls it a “stability bond”, surely a candidate for euphemism of the year. There are several proposals on the table. It does not matter what you call it. What matters is that it will be a joint-and-several liability of credible size. The insanity of cross-border national guarantees must come to an end. They are not a solution to the crisis. Those guarantees are now the main crisis propagator.
The third decision is a fiscal union. This would involve a partial loss of national sovereignty, and the creation of a credible institutional framework to deal with fiscal policy, and hopefully wider economic policy issues as well. The eurozone needs a treasury, properly staffed, not ad hoc co-ordination by the European Council over coffee and desert. ... [Merkel's] own very public opposition to eurobonds has now become a real obstacle to a deal. I cannot quite see how the German chancellor is going to extricate herself from these self-inflicted constraints. If she had been more circumspect, she could have travelled to the summit with the proposal of the German Council of Economic Advisers, who produced a clever, albeit limited and not yet fully worked-out-plan. They are a proposing a “debt redemption” bond – another candidate for this year’s top euphemism award. The idea is to have a strictly temporary eurobond, which member states would pay off over an agreed time period. At least this proposal would be in line with the more restrictive interpretation of German constitutional law. ... Italy’s disastrous bond auction on Friday tells us time is running out. The eurozone has 10 days at most.
-- Please Note: If you hit "REPLY", your message will be sent to everyone on this mailing list ([email protected]) This message was sent by Aaron Krowne ([email protected]) from National Ron Paul End The Fed Meetup Group. To learn more about Aaron Krowne, visit his/her member profile To unsubscribe or to update your mailing list settings, click here
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participants (2)
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Mark Janssen -
Natalie Golovin