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All eyes on europe

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loopy:
Denny - If this post is out of line, please PM me and I will delete and self moderate myself in the future.  I have posted on economic issues many times over "at the other board" over the last two years and while most have ran their course for a few days eventually they all got deleted.  I do not know if this forum is friendly to economic talks, or if this post is welcome.  If this line of discussion is not disired just let me know I and I wont do it anymore.

I work in the financial industry and have been watching the ups and downs for many years and sometimes post my thoughts on what I see and what concerns me.  Right now, as in tonight, there is an absolute disaster in the making over in Europe going on.  Tonight there are some huge fireworks underway, and the net affect is a clear reversal in the us dollar. 

Basically the story is relatively simple, Greece is about to default on its' sovereign debt.  But along with Greece is Ireland, Spain, Portugal, and Italy in the same boat.  They all share a common currency in the euro and all of them are running out of options.  Today some 1.47trillion in ECB/Bankof England covered bonds were also downgraded which questions the cashflow of ECB banks.  The dollar in turn has been rocketing - absoutely shot north tonight.  The front month futures being at 77.66 last I saw. 

This is a key reversal, well, anything north of mid 76 was key, but this is on heavy volume and strong.  When Europe opens in a few hours I expect it to continue the watershed. 

In a few decades, we will read about this in history books, but for the observant - tonight is the start of the death of the Euro.  Think of revisiting 1930s world to watch the CreditAnsctatz collapse if you had a time machine.  A key moment in history.   If you are short us dollars tonights futures markets would be the place to get out of such a thing.  Expect fireworks.  I do. 

a10t2:
:o

Euros is money, right?

NorthernIke:
I was expecting a climate change thread...which would be locked quickly I bet.

I see nothing wrong with you post. Thanks for the heads up.  Looking forward to a cheap Oktoberfest!!!

glitterbug:

--- Quote from: loopy on December 16, 2009, 08:22:51 PM ---In a few decades, we will read about this in history books, but for the observant - tonight is the start of the death of the Euro.  Think of revisiting 1930s world to watch the CreditAnsctatz collapse if you had a time machine.  A key moment in history.   If you are short us dollars tonights futures markets would be the place to get out of such a thing.  Expect fireworks.  I do. 

--- End quote ---

There seems to be a lot of people who don't really understand the basic "boom and bust" nature of the economic cycle. Right now we are in a really bad "bust" but it will "boom" again. Things will change but it may not be doom and gloom. Look at history:

Late 2000s - Sub prime mortgage crisis - We will probably live
Early 2000s Dot com bubble - We lived
1990's - Oil price fluctuation - We lived
1980's - S & L crisis - We lived
1979 - Iran crisis - We lived
1970's - Stagflation and other bad stuff - We lived
etc

Seems like we should prepare for a world ending financial crisis every 10 years or so  :o

loopy:
glitter, I think you misunderstood the context I was posting in.  I never said we were all going to die.  I assure you I have absolutely no plans or intentions of dieing anytime soon.

What I am saying is that this is a key moment in history, and that those who believe the us dollar is trash and doomed to failure are in for a huge surprise.  The gold to 2000 crowd, the were all going to push wheelbarrows of money around to buy a loaf of bread and the like.  The case for any of that hogwash is out the window right now. 

As for preparing for world ending financial crises every ten years?  not likely, although that was exactly the case during the 1700s and 1800s here in the United States.  Luckily some controls were put in place to have the business cycle you spoke about and general boom bust instead of hypergrowth-utterdevastation.  Some of those controls were removed in the last decade, others were simply criminally and fraudulently ignored.  The net afect being where we are now, you cannot be serious if you are trying to complare the events of the past 2 years with the dotcom or s&l events. 

I dont recall the dotcom bubble blowing up currencies and countries.  And none of those "crises" you mentioned destroyed the private credit markets.  That is the real issue here.  Money and credit are generally interchangable.  While people talk about the "printing presses" - the reality is that far more has been destroyed than can be printed.  And to note, they dont print money; they print debt.  The point at which additional debt can be created has reached saturation, which is why we see the soverign debt defaults in Europe, Middle East and Latin America on the horizon.  Yes the US is in bad shape, but they are far far worse in this regard and the reversal is a key part of history as that unwinds. 

Credit contraction - look at the past decades you noted above. 





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