Market Currents
Marc Faber thinks the final outcome of the Greek elections will be that the Greeks will decide...
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Friday, June 15, 2012, 7:56 PM ETMarc Faber thinks the final outcome of the Greek elections will be that the Greeks will decide not to leave the eurozone, and the problems will just be postponed because they won't implement the austerity measures expected of them. There will be a breakup over time, but, more than likely, it will be Germany that will become frustrated and eventually exit the eurozone themselves. (video)
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This news story has 29 comments:
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the way current Market reacts to bad news, Greece exit => SP to 1400
German exit => SP is hi for ever
And no I didn't forget Slovenia!
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1. Germany leaves.
2. The new Deutsche Mark skyrockets in value on day one.
3. German exports plunge.
4. Germany slips into a deep recession (which would disgust them).
No...Germany is stuck.
I think Germany leaving would be the best for all involved as the Euro would fall, but I just can't see it happening. I hope the communist guy wins in Greece, so we can get this over sooner rather then later.
Like one commenter above stop acting like Obama by delaying the inevitable by throwing billions at it trying to keep it out of insolvency, but in the end like GM, it won't. Work.
Rather if you look at how Europe has evolved since WW II or the cold war, their realization that a "United States" of Europe was the only way to compete and trade with the USA. Our country comprises the union of 50 individual states, many of which are larger than those in Europe. So all the unilateral and bilateral trade agreements only benefited the US, because it was the US who could dictate the unfair terms of the agreement. We still do this to Latin America.
Germany, historically, has always been the strongest with in Europe. Spain and France always floating around on the periphery, successful, but over reaching as always. So when the EU was created and these smaller countries realized that they could benefit on the backs of the huge countries, they took advantage due to the EU being over-liberalized, the "fair share" rule may apply to them. So in essence they dug their own grave. They did not move to integrate into the country of Europe, rather they created an ad-hoc, pseudo country of loose money and free trade. This is why it will fail, its not a union with enforceable rules and no centralized government or constitution. No common language or culture, just a loose conglomerate that is not capable of holding offending countries to account for their policies. Greece is such a perfect example of how a little piss ant country can bankrupt everyone else just because it raked in billions on the backs of the Germans.
Now its become western culture, to keep something that has already failed, alive! As if bankruptcy is the demise of a company or country. A company may cease to exist, however a country such as Greece will never cease to exist. By allowing it to go bankrupt, it will restructure with protections in place and emerge stronger than it was. This whole too big to fail, throw money at hit hoping it will suddenly turn 180 degrees is so ridiculous!
The break up of the EU will BENEFIT the United States, we can resume unfair trade with individual states and reassert our world hegemony over it. Yes it will bankrupt some of our banks but that is life. Another bank will pick through the remains and take its place.
In this case, Germany then will go in devaluation depression and recession and they will finally eat their own austerity medicine.
Regrettably this is improbable as the Euro is the new EU religion. A compromise will be found.
The EU survives by their good graces.