Dissolving The Euro

YouKnowWhatIMeanLike

Well-known member
Joined
Apr 13, 2011
Messages
7,171
The current economic development in the Eurozone is rather sobering. It's survival heavily dependent on the counter intuitive and exceptional monetary policy by the ECB. Loading up significant privat and governmental bonds in its portfolio to socialize debt across the Eurozone hasn't (with Mario Draghi's) words achieved full potential but at least kept the trend to deflation successfully at bay. As we can observe in the markets this isn't good enough to stop the fragmentation and the decline in confidence in some Eurozone countries. Brexit might have been just the beginning of the end, but it certain that the exponential growth in global financial markets in the last decades is now followed by a period of decay.

What will happen to the debt the ECB has bought and will continue to buy until the inevitable is happening.




Let's say the ECB ends up with 5 to 10 trillion toxic euro debt in its balance sheet but the time it will be dissolved. Who is going to pick up the tab? Will the debt be allocated to source national central banks or will it be spread equally among all Eurozone members? Or by using the ESM key for example?
 


blinding

Well-known member
Joined
Jul 1, 2008
Messages
17,399
Ireland can surely pay more of the EUs debts.....Our political and financial elite will volunteer us...........
 

Nermal

Well-known member
Joined
Apr 9, 2010
Messages
1,320
Who is going to pick up the tab? Will the debt be allocated to source national central banks or will it be spread equally among all Eurozone members? Or by using the ESM key for example?
It could just be cancelled. Asset holders would pick up the tab via inflation.
 

Mrwoody

Well-known member
Joined
Jan 24, 2011
Messages
1,853
Hit the pub here any weekend night and you will see your euro dissolve pretty fast ouch!
 

Truth.ie

Well-known member
Joined
Oct 5, 2008
Messages
27,354
In 1990 I was earning 400 punts a week as a brickie in the Dublin area.
I was paying 35 punts rent perweek.
Using inflation and the currency rate, can someone calculate what I would be earning today if a similar trajectory continued.
 

stopdoingstuff

Well-known member
Joined
Feb 26, 2011
Messages
22,399
A longer term chart, just so we can see how debauched they have become.

 

runwiththewind

Well-known member
Joined
Apr 12, 2012
Messages
12,579
Wholesale debt write down for everyone. Dissolve the rogue banks, set up new banks, separate investment from ordinary banks.

With all the money pumped into the banks already, if they had done the above already, EU citizens would be debt free, speculators finished and we could have started again with no debt, or affordable debt, ie mortgages, etc, have clean banks and speculative banking permanently removed from ordinary banking.

The vast majority of us only need banking for certain things like salaries being paid in, mortgages or small loans.

A banking system for huge national infrastructural needs and/or government borrowings also separate or something different.

Speculative banking kept totally separate again. This is what caused the crisis. A tiny percentage of the world's richest have brought us to this state. Finish them off.
 

gleeful

Well-known member
Joined
Feb 7, 2016
Messages
7,520
Same thing was done in US dollars and is currently done in UK pounds. And in yen.

When are those currencies disolving?
 

YouKnowWhatIMeanLike

Well-known member
Joined
Apr 13, 2011
Messages
7,171
Wholesale debt write down for everyone. Dissolve the rogue banks, set up new banks, separate investment from ordinary banks.

With all the money pumped into the banks already, if they had done the above already, EU citizens would be debt free, speculators finished and we could have started again with no debt, or affordable debt, ie mortgages, etc, have clean banks and speculative banking permanently removed from ordinary banking.

The vast majority of us only need banking for certain things like salaries being paid in, mortgages or small loans.

A banking system for huge national infrastructural needs and/or government borrowings also separate or something different.

Speculative banking kept totally separate again. This is what caused the crisis. A tiny percentage of the world's richest have brought us to this state. Finish them off.
so who paid out on the bonds, the national central banks? will they be hit big time? what about the cash that went into the real economy? Will the banks and governments that just have felt the warm shower of QE run for the hills with it?
 

Feckkit

Well-known member
Joined
Sep 6, 2011
Messages
5,795
Amazing, all the same, how some people can work themselves into a right oul tizzy over figures in a computer somewhere.
 

Dame_Enda

Well-known member
Joined
Dec 14, 2011
Messages
53,644
The Eurozone needs to adapt the Gold Standard to control inflation.
 

stopdoingstuff

Well-known member
Joined
Feb 26, 2011
Messages
22,399
Is there an economic reason why that matters?
Moral hazard is one. Then there is the risk that one country will get bored paying for another country and either leave or force the other country out, thus calling into question the status of Euro instruments issued by either country, causing more chaos, and requiring even more money printing.
 

runwiththewind

Well-known member
Joined
Apr 12, 2012
Messages
12,579
so who paid out on the bonds, the national central banks? will they be hit big time? what about the cash that went into the real economy? Will the banks and governments that just have felt the warm shower of QE run for the hills with it?
I've no idea, but then, neither does anyone else.

But we all know that the system needs to be totally cleansed before it brings the whole world economy down.


Whatever needs to be done, needs to be done before the US defaults on its debt and default it will as it's utterly unrepayable.
 


New Threads

Most Replies

Top