Euro is Doomed

[airboy]

The Euro is doomed.  Interest rates on Spanish and Italian bonds are hitting 7%.  At that level, the expense to keep covering the existing debt becomes prohibitive.

The only thing that could save the Euro at this point is if Germany (Denmark and a couple of others) decides to spend all of its treasure bailing out the rest of Europe.  Don't think that is going to happen.

You can only spend way more than your income if someone will loan you money.  When you spend a lot more than you make, you are existing on the forebarance of your creditors.  The public will to bail out lots of countries is not there.

The only thing I could see is if China decided to step in and buy huge amounts of Euro debt.

The US day of doom is also approaching.  The Feds cannot continue to borrow $0.43 of every dollar spent.  Eventually your creditors wise up.

[0kult13]

Well the Greeks go to the polls vsoon, reports say its neck and neck between the lefist guys who wants to bail from the euro and ton con guys who wont. Either way lots more rioting to come me thinks. If the Greeks leave it could be the start of another round of big falls. As you say Spain Italy on the verge as well.

[LongBlade]

I agree with you, Airboy, the Euro is doomed. The question is only whether this coming Monday will be the bell tolling or if it will be pushed a little further into the future.

[Staggerwing]

Personally, I think that Germany, France, and the Benelux countries should consider forming a 'Euro-Redoubt' that is firewalled (as best they can) from the rest of the Eurozone. Time to rethink the Open Border idea.

[bayonetbrant]

A few thoughts...

1.  I like Foreign Affairs headline:  "Greece Votes Itself in the Foot"  Didn't read the article, but the headline made me chuckle.  Clever.

2.  A long article from Reuters that starts with the excerpt below.  I'd be curious to hear (a) Europeans' perspectives on what's happening over there right now and how things are feeling on the ground, and (b) Airboy's thoughts on the article, as he's got a better understanding of the arcane aspects of this.  Heck, it's all Greek to me ;)

Whether the euro lives or dies, the chaotic way Europe has tackled the crisis could undermine the region's geopolitical clout for years to come and leave it at a distinct disadvantage in a rapidly changing world.
With an apparently never-ending series of last-minute summits and telephone calls, Europe's leaders and finance ministers have held the bloc together in the face of growing strains between states, a rising political backlash and market alarm.
But with hindsight, outsiders say each measure proved too little, too late. US officials in particular complain European leaders have either failed to grasp the scale of the problem or proved unwilling to countenance the awkward political decisions necessary to fix it.
As a result, they say, what should have been one of the most stable parts of the world has now become one of the most unpredictable.
At one extreme, the euro area might be about to embark on a journey towards further fiscal and political union as an almost totally unitary "super state". At the other, it could unravel and collapse into an unstable mess of regional rivalry.

[Mr. Bigglesworth]

http://www.youtube.com/watch?v=lTSWdHY9Ny4
:P

[meadbelly]

I suspect if I were a european politician, I wouldn't give much truck to any U.S. officials complaining about others' inability to countenance the awkward political decisions to fix massive financial problems.

At a fairly basic level, it's our inclination to insist that others do what we say and not what we do that informs the sentiment behind David Letterman's running "this is why the rest of the world hates us" joke.

(jersey shore, charlie sheen, eurodisney, and hawaiian shirts on overstuffed american tourists don't help a lot either. Which is why I only wear my hawaiian shirts locally. And sometimes in Canada, because I like the idea that windigo might be horrified. ;))

[LongBlade]

I suspect if I were a european politician, I wouldn't give much truck to any U.S. officials complaining about others' inability to countenance the awkward political decisions to fix massive financial problems.

No kidding.

[Keunert]

Germany lead the Euro rescue team, but their ideas were not shared by some of the bigger other nations.
i guess this is a dilemma based in the whole european union thing: strong economical partnership vs. sovereignity.

a greek friend of mine hoped that europe would leave greece alone and let it crash completely as he thinks the system is unrepairable
fruckeld up.

[Mr. Bigglesworth]

Yes, the vote has the news all worked into a lather. It doesn't matter. The real debt problem is the same for each country whatever the politicians say, whatever the vote. It's all theatre. The best thing is probably to let the weak countries leave to inflate their own money supply. They will then be competitive again in their pesos. They can win business again. That refers to Italy and Spain too.

[0kult13]

Yes, the vote has the news all worked into a lather. It doesn't matter. The real debt problem is the same for each country whatever the politicians say, whatever the vote. It's all theatre. The best thing is probably to let the weak countries leave to inflate their own money supply. They will then be competitive again in their pesos. They can win business again. That refers to Italy and Spain too.

100% agree there , Iceland shows that

http://online.wsj.com/article/SB10001424052702304203604577396171007652042.html

"Iceland has a significant advantage over stressed euro-zone countries—a currency that could be devalued. That has turned its trade deficit into a surplus and smoothed its recovery."

[meadbelly]

A devalued drachma would likely make a heck of an exchange rate with the dollar. And the greek economy sure could use a massive boost in tourism.

[Mr. Bigglesworth]

I'd visit Greece at 20 cents on the dollar.  8)  Twice even!

[GDS_Starfury]

^^^ do you know how I know you'r gay?

[GDS_Starfury]

Greece is one of those countries that you can look at and ask, " exactly what the fuck have you contributed in the last 2000 years?"
really.....
even France has given us wine, cheese and about 4 STD's in the same time frame.