Posts by "qiman"

It most certainly is NOT sensationalism to pose this question, I've been posing it to myself over the last year! And though I have much education in international economics and international relations, I could see it going any number of ways, partially depending on the international situation. In other words, if there is severe international tension, say with a blow up in the Middle East or Far East or an energy crisis, this might cause the Euro zone to pull together more tightly, just as an arguing wife and husband pull together when a dangerous external threat appears. But I will be surprised if the monetary union survives in its current form, something will have to change. The biggest danger to European citizens is that the power of the ruling class/bureaucrats will become even stronger in order to hold it all together. If it were left up to a democratic vote in each country, starting with Germany, well . . .

Good arrticle in the wall street journal:

"So far during the euro's months-long descent, attention has been focused on hedge-fund selling of European assets but central banks and large managers have a much-larger influence on foreign-exchange markets. Even if they don't dump euro assets, a mere pause in their buying could weigh heavily on the currency..."

"South Korea's central bank, which has about $270 billion in foreign-currency reserves, among the biggest in the world, said this month that the euro zone's sovereign debt problems make the euro, used by 16 nations, less attractive as a reserve currency. Iran's central bank chief this week said that country may rethink its reserves, which the Central Intelligence Agency estimates around $81 billion. And Russia, with $400 billion in foreign-currency reserves, said it shifted its mix of reserves away from the euro last year."
http://online.wsj.com/article/SB10001424052748704691304575254683361456058.html?mod=mktw

Euro Rally May Prove Short-Lived on Rates, Asset-Purchase Bets


It will probably decline toward $1.20, according to UBS AG and Barclays Plc, ranked by Euromoney Institutional Investor Plc as the worlds second- and third-largest currency traders. Schneider Foreign Exchange, the third-most-accurate forecaster of the euro against the dollar in the first quarter, also cut its prediction.

Traders are betting the currency will resume its decline as Europes economic recovery trails behind that in the U.S., prompting the European Central Bank to keep its main refinancing rate at 1 percent this year while the Federal Reserve starts raising rates. The ECBs decision to buy bonds may prompt investors to question its independence and demand a higher risk or credibility premium, Kenneth Broux, a senior market economist at Lloyds Banking Group Plc in London, wrote in a client note.
http://www.bloomberg.com/apps/news?pid=20601087&sid=apEs5KHZq620&pos=3

Britain said on Sunday that it will refuse to underwrite a European Union bailout fund worth some 60 billion euros that finance ministers want to agree at emergency talks in Brussels.

"We wouldn't participate in a European bailout fund," a British diplomat told AFP of moves for all 27 EU member states to guarantee borrowings destined to bailout troubled economies in the crisis-hit 16-nation eurozone.
http://www.google.com/hostednews/afp/article/ALeqM5iv8bxssdRfLb54PyKfnISxuhQoNw

A lawsuit over the fudging of the true level of Greek debt would indeed be interesting, and wouldn't shock me. Here is another article regarding how European banks were hurt by Goldman and the possible ramifications of the latest developments:
http://blogs.reuters.com/columns/2010/04/16/europeans-wont-be-amused-by-alleged-goldman-scam/