What IS happening to the euro?

The TV news seems to be full of the imminent collapse of the euro.


My euro seems to be quite useable where it matters & is fairly robust on the forex. I remember when it was 1.50 to the pound & Brits were on Easy Street if their income came from the UK.

Like the value of public quoted companies which can succeed or fail on the whims of the stock market, the strength of the euro seems to be measured by the belief or otherwise of the world's city bankers, & we know how unreliable THEY are! Do we really have to depend on these guys or can we believe in the euro ourselves?

I know prices are higher in France for many items but perhaps the tax system is more to blame for that!

Perhaps there are SFN members with a better grasp of economics out there who could enlighten me?

I have notes taken from authors who themselves have noted the parody of economics in the work of people back as far as Jonathan Swift and along with your one here the time would be wonderful to compile something like a blog showing the entire sad course of economics for the last three and a bit centuries.

Like Finn, in many respects I notice that we are not actually so far apart in many things, especially in what we find funny in the parodies and satires on this theme, but that I think we come from different sides of the coin with regard to our respective positions on the value and use of capitalism. Whatever, this debate is woth having. I have looked at political blogs that are increasing filling with trolls who just tell everybody they are thick and that the answer is X, usually expounding some kind of totalitarian idea. It is exactly that ideology that you, Finn and I in the last 24 hours have been attempting to discredit in our own ways and nobody wants a GOP/Tea Party Republic bible-bashing government that is about the rich and damn the poor any more than we want a new Soviet Union.

For my part, knowing that it would unbridle corruption beyond comprehension and greed beyond that, I too would like to see the end of the Chinese regime. However, if the banking and industrial hegemony who already exist but are kept behind blinds ever take over then the West is sunk. Ironically, their history is older and richer than ours but we have spent recent centuries teaching them how to run within our systems without ever really looking into how things work there. The war in Iran that you predict could help open that door, then Heaven help those who remain to pick up the pieces. I am old enough to not feel too implicated but with (again) a young family I worry big time. Enough gloom and despair, have a good Sunday!

BEARISH - song econoparody from versusplus.com about THE ECONOMY http://youtu.be/37pal-PYTUQ

Last points tonight. Ultimately we are not that far removed from each other because we agree on key issues. However, this is not a DM zone by another name and to some extent it could have been better if it was because then there would not be so much wished for potential for rescue from the Bundesbank, etc. It would automatically have been there and happened already. But as it happens they do not want to rescue anybody, including themselves if Germany goes bad too. It is simply a badly constructed common currency that needs to be sorted out when it recovers some. Devaluation can be done in terms of national reserves that are not currency, for all I care that may be olives in Greece, but the mechanisms exist and must be used sooner or later anyway.

All notes actually have numbers and the electronic strip close to the middle. It will tell where they come from and in cases of suspected forgery can be used to establish whether the issue number and data on the strip correspond down to the date and place each note was printed.

The French clearly did not believe the Euro would work and kept this strange dual pricing. Not all shops do it in fact but most large supermarkets certainly do. They could have kept the people who can tell you the inflation of perhaps a can of peas since the Euro from their checkout speeches had they dropped it. However what you see and what would emerge are very different to what one may calculate Fr to € to be on a sales receipt. It is, as you say, complicated when a currency disappears. Brazil has had it, I think Argentina too, that I know of and of course there have been regime changes that did it all over the world. It destabilises terribly which is why a transition needs to be relatively long. The British media would have had it happen in one fell swoop about two weeks ago, clearly hoping it would wipe Europe off the map and rescue them.

But Finn, above all else I agree the politicians were not clear but then for over 30 years the entire economic world has watched bankers going to increasingly high political office as we have seen with PM and Chancellor in the UK, now Italy and scattered about cabinets everywhere in senior positions. I would hazard a good guess that they knew what they were doing and now we have to foot the bill for what they have done but also benefitted from immensely. For all of that I hope the Euro survives, the politicians recover a bit of self-respect and independence from the money that tugs at their hearts and we have a stable, peaceful Europe. Me, I'll watch with sceptical interest for my few remaining years.

Catharine. OK, fair does, sceptic is far fairer, after all I said what I thought of hate. Yes, you have raised one helluva question and do we want to see the outcome? I share your methinks absolutely.

Christopher, capitalism is the allocation of resources that include finance/welath or whatever you call it as well as the means of and sources of production and the capital goods produced thereof. It has become a win all money game though. It now uses money as a scarce resource and trades it in a way that raw materials or finished goods were once the main forms of trade. Yes or no? Pillaging, well don't tell me that when Soros made his killing he did not express piratical joy and all the bad trading and PONZI schemes since, excuse me I see pillaging clear as day in there.

Finn, that is not my point at all. If we still had the pre-Euro money the malaise was already on the way to developing to what it has become. Perhaps the mismanagement of the Euro has made it happen much faster above all else. Fixed trading rates, yes and there is no alternative but the membership was not selected under correct criteria. As for complacency, the finger points at the entire western world actually. Sure some were worse than others and in economic terms just a handful of years ago Italy belonged to the northern economic group and is quite illustrative of the malaise with some extreme symptoms.

So.....lets assume for the sake of debate, that the euro vanishes and is replaced (here) by the franc.

How will the nominal value (the one we were told about for years - that one euro=0.65 francs - yeah right) work?

Will this suddenly disappear or will shops like 1.2.3 e suddenly be rebranded as 0.65 centimes.........Hmmm.

Will everything that was rounded up to one euro when the euro was introduced, suddenly drop back down to 59c or 68c or even 79c? Methinks not.

Eerm - what has being a euro 'hater' (I prefer sceptic) got to do with where you live? *scratches head and looks puzzled*

Capitalism is the allocation of resources. You were born into one of the most dramatic and possibly tragic transition periods in human history and political leaders have betrayed everyone by lying, delaying, and increasing every effect of the transition away from oil will have.

If capitalism is not pillage then I do not know what is today!

Capitalism is not pillage.

I don't actually hate capitalism, hate is such a negative emotion and wastes too much energy that can be spent thinking clearly. No, it is more that the 'leadership' of capitalism is itself unloyal to its population as were Ulyanov and Dzhugashvili to their soviet citizens. That is why they assumed names (a Siberian river and 'steel') for their role as supreme leaders. We have nobody of that ilk, just nameless bankers manipulating compliant politicians. I somehow pity them more than hate them, they share your and my mortality and die into the loneliness of the grave as you and I, for which their billions never help one iota.

I do very much agree on the poker analogy but not on the union of Europe. I would never like to see a USE but the analogy with USA could help since constitutionally and more theoretically than practically today, any state in the union could leave and become a nation state in its own right. As far as some are concerned, and Texas is prime example at present, they do it as far as they want to but stay in the union for other benefits such as defence and diplomatic representation (list is actually quite long, but those are examples).

The Germans are not, in my view, trying to dominate anybody. They are simply trying to push complacent countries where the political leadership has become the equivalent of fat and lazy, thus I called them complacent. The French, in their clumsy way, are doing the same. The UK is treating its population with absolute contempt and is probably the ticking bomb at present, but I suspect public disorder is wanted in order to be able to put greater controls on public order. That is another story.

You are missing the point that has been made by several people on this string over the last few days which is that it hardly matters whether it is the Euro or the old Francs, Marks, etc. Each country would be where they are now because it was going that way anyway. The EU has made it happen 'together' but that is hair splitting between the virtually identical outcomes.

If you are such a committed Euro hater why are you living in France? It strikes me that you are like the anti-EU people in the UK. They are not in the Eurozone but want to do everything in their power to kill it off. What has it to do with them? The people driving them know it is already more powerful than Sterling and if it recovers will totally eclipse it into oblivion. So our wonderful Daily Mail, Telegraph and various Murdoch owned media tell us about mythological uprisings within days, countries printing new paper money to replace the Euro which is due to have completely collapsed and disappeared by roughly 20 November. Oh well, perhaps being 'foreign' (not English) they are all late as one expects, so it'll turn up soon, eh mañana... A war like Yugoslavia's bloody end? We do not have the inter-ethnic tensions for a start. We do not have an uncompromising dictatorship as convinced as you may be. Sooner or later these people will be voted out of office and then the bankers will simply pull another leader in another party's strings. Blame the Germans, too easy. Look behind the obvious without going to the pathetic New World Order extreme and it is not encouraging. If anything we need a united Europe in which politicians fight back against those holding the big bucks and tax them, regulated them and keep a strict eye on them and give ordinary citizens their wider rights back so that we have some semblance of democracy. As for slaves, I used to have a very close working relationship with the Anti-Slavery Society (now called Anti-Slavery International) who were formed in the early years of the abolition of the slave trade to see a universal and complete end to it. I see debt slavery as the new version of what was once (to some extent still is) a worldwide and very immoral practice and that is what those who are pulling the real strings are doing. Hate Merkel or Sarkozy as you like but they are mere marionettes on the end of the big men's strings too.

The simile is pretty precise indeed. China then and now...

You are right, the method of the Raj was more or less to use the East India Company. That sounds vaguely similar to GoldmanSachs -- hello Mario. The Chinese peasants have a very long history of changing dynasties when things get uncomfortable to thier economic interests (1644 Quing/ Ming and Mao overthrows come to mind). China's leadership has been playing fast and loose with the peasant's savings.

Then as now it is people sitting in a symbolic 'Lloyds' building much as they did when it was Lloyd's coffee house in the City of London. They just moved the venue of the Lloyds metaphor across the Atlantic for sure. The game is, as you say, still the same and politicans are still the knights to we the pawns.

I feel very lucky, you see I'm not sure I fully understand the money markets, arrived here with very little and still got most of it left. I own my part renovated house which has something done when a bit of spare money floats about, have a paid for motor that is used in my work and for my private miles and no saving in the UK. Therefore I work with no debt and no worries about currency fluctuations just with euros.

So what will happen to me when the Euro crashes, Euro becomes world currency, franc re-emerges. I will still have very little and some will still have lots and I will still not understand why.

Hopefully like Andrew said a page or two back, bread will be still baked in the morning and I will have enough yen, Juan, Francs, or whatever we end up with to buy a loaf.

But at least I wont have to worry about my pile in the bank. :)

Christopher, now there is a bit of nonsense beyond nonsense. India was taken over by the British in 1858 who left in 1947. OK, the Raj was more or less taken over by the East India Company after the Battle of Buxar in 1764 and increasingly the Company took over the kingdoms that now comprise India plus Aden, Pakistan, Myanmar, Bangladesh and Sri Lanka plus a few other islands up until the Company somehow transformed into the Raj. So it is either 64 years or 247 years, which undoubtedly is more than century but not what you meant clearly. I think most people who have a smattering of British history know that.

If the USA try a British Dominion style takeover of Iran the sympathy of much of the Islamic world plus a few others like China, India, Indonesia, Myanmar will see the entire world completely change with untold destruction as part of that change. Even the GOP fanatics will and cannot do that to themselves. Is the USA in control of the world's resources? Not really, too many are within the boundaries of countries who would drop them like hot bricks and repossession, confiscation or whatever we might politely call it will soon change the name on the deeds of ownership of many sites where those resources are mined, welled, pumped, etc. The military and security controls are so tight that a Tianamen Square type of demonstration (which is all that actually was to begin with) is inconceivable and actually too many Chinese are doing far too well with a lot of basic freedoms now to really want to do that again. Perhaps in 20 or 30 years you may be right, now looks like the wrong time for them to destroy their own nest eggs.

Finn, yes I agree. The voting system is perverse. I can vote in communal elections and EU elections and then only general elections in the UK! But never a referendum on an EU issue! That is quite perverse if the EU is supposed to be a community and I am certain many of us will agree. I also agree entirely on the French situation where eight million people cannot afford to heat their homes. The UK is also worse. Try looking at the Joseph Rowntree Foundation's 'Grim Britain' blog and look at the reports on there. There was a time when many of us would not trust JRF because it was too pro-government, now even their limit is broken. It does not have journalistic reports but ones by bona fide academics in the LSE, Oxford, Cambridge, Manchester, etc. Then look at other EU countries, much the same. Appalling all of it. If we did not have the EU there is every chance the financial institutions who have pushed countries over the edge would have done it to all countries anyway but sooner. If we all still had pre-Euro currencies it makes no difference at all. In fact none of it is at all like the communist countries one bit. They were the stuff of nightmares but this is worse, it is capitalism bring humanity to its knees. It is the capitalist world that is lead by high finance which makes the running and out of which democracy is being strangled in order to contain us all. If that succeeds then as a species for the majority of us our future is guaranteed misery. The EU has little to do with that but I belive it could have acted earlier and as a body to stop this drain on the life blood of the European people.

Churchill always had the support of the USA and Pearl Harbour only brought them physically into it. Was Churchill standing up against evil? I think he was trying to keep the British Empire intact and keep the Axis enemies at bay. Had the Axis powers signed a peace treaty with the UK and USA can you begin to imagine how the tripartite would have ciut up the world and then got on famously. They would then have dealt with the Soviet Union as well so they would not have played a role in the picture at all. Chamberlain was in office when the war broke out and when he resigned in May 1940 offered the job to Lord Halifax. He turned it down and Churchill accepted as second choice. Had Halifax accepted things might have gone very differently given that many right wing politicians and a large part of the Lords and other aristocracy wanted an accord with Germany.

None of this looks like the 1930s though and that is the bottom line.

Well said. What you fail to realize is that the 19th century British Empire morphed from an island onto the USA. The individual players are different, but the game is still the same.

Silly boy, the USA will be in Iran before that happens, cutting off the Chinese flow of oil flow from Iran and choke its growth. The proxy/ drone war in Iran has already started. China is poised for a hard economic crash having put over 50% of its internal reserves into empty sub-par real estate developments. Further moves will push the Chinese to move to overthrow its leadership in a sucessful Tianiman Square type uprising. The GreatGame (learned at the British knee) dictates that the country that controls resources keeps its reserve currency. The USA controls the world's resourses just as the British Empire did in the 19th century. Until that changes (unlikely in the near-term) the dollar is not going anywhere. It took over 100 years for the Indian subcontinent to throw off British rule. Long live the raj.

I would never agree on that point, I do not believe it is a euro-dictatorship run by two nations, I happen to think they are the only two doing when others are sitting on their hands. I do not believe we have ever enjoyed 'democracy', only what the ruling minority ant us to belive it is and that is shrinking fast. I am of the far more left of political ideology than most people and do not like either ruling party's politics in the two countries you mention one little bit but I cannot take history and rehash the origins of the second world war into anything happening today. Churchill took a chance but was carried by the USA (remember where his mother came from?) when much of the ruling class would have thrown their lot in with Germany. He had the support, strikingly, of the then strong left which helped him do what happened. He also more or less knew the risk and consequences had he got it wrong, which is why until 1944 there was always a plane on standby for his evacuation... Know history in detail before you compare 1938/39 with 2011/12.

Cameron is on a suicide run with 26 out of 27 voting in the other direction. UK out of the EU would be economic death and he knows it, plus the City will not allow him to do that despite majority idiot (sorry, meant population) opinion in that direction. Look back a decade and several economists (plus people like Soros) warned that false economies were becoming the nrom. The Yuan is being held back until other links in the chain snap and then, many of us suspect, they will use their dollars, align with the Euro and float into the currency markets with all the elegance of a comet hitting the City. Then the fun will begin. China hasthe dollar for a fall and should they start selling the 15 trillion bucks at bargain basement prices then watch the USA go out looking for trouble (a war perhaps) to get their prestige back...