Portugese bonds over 7%. Euro teetering. History.

spotty

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The bailout here was supposed to calm the markets. Instead, they're going nuts. Portugese Bonds are now at 7.2%, and unlike Ireland, it needs to enter the market soon.

We're witnessing a spectacular failure of European policy here, folks. At this rate, the Euro will not survive 2011.

If this most critical of European policy initiatives fails, where then for the "European Project"?

Ironically, 20 years ago this week Mrs. Thatcher left office. The speech that brought her down was her declaration after the Rome summit that the UK would never join a single currency - No! No! No!.

Could it be that the decision that brought down Maggie will be the decision that saves the UK, while the rest of us drown?

They'll write books about this. Spotty will have to have them read to him in his nursing home bed, so he can complain about the accuracy, and remind the young rapscallions how tough times were in 2010.
 


'orebel

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Would the Govt stepping down today make any difference at this stage?
IMO for what it's worth, i think the passing of this budget would be an act of treason.
A bailout on IMF/EU terms will sink us.
 

Astral Peaks

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@Spotty

Nursing home?

We will be lucky to have barns, let alone homes or nursing homes!
 

seabhcan

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I still don't see how the euro itself can fail, regardless of how bad things get.

Even if Portugal somehow left the euro - they would still owe euros in debt. Leaving the euro would make it harder, not easier, to repay their debt. If they are going to default, there is no advantage in defaulting simultaneously to leaving the euro. It would be better for them to default and stay in the euro.

If an indebted country tried to leave the euro they would find that savers in their own country retained their euros, and their own banks would still demand repayment of loans in euro.

Proposing that countries leave the euro as a solution to debt is like saying the solution to a car crash is to shoot the survivors.
 

HarshBuzz

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the question facing policymakers is stark;

'would you rather have banks go down...or entire countries?'
 

firefly123

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Back to the supermarket I go for more tins of beans and batteries for the upcoming end of days! I am suffering from doomsday fatigue:(
 

CorkHurler

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The stock markets are soaring across Europe this morning, risk is back on. Spotty should have invested and looks like he has missed out badly.
 

johnfás

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I still don't see how the euro itself can fail, regardless of how bad things get.

Even if Portugal somehow left the euro - they would still owe euros in debt. Leaving the euro would make it harder, not easier, to repay their debt. If they are going to default, there is no advantage in defaulting simultaneously to leaving the euro. It would be better for them to default and stay in the euro.

Proposing that countries leave the euro as a solution to debt is like saying the solution to a car crash is to shoot the survivors.
Not necessarily true. Leaving the Euro is just the same as a currency devaluation. We devalued in 1993. While it the short term it will definately multiply debt it can also make the repayment of debt more affordable owing to increases in trade. If your trade volumes are falling, you can afford your debt to increase so long as you experience a rapid increase in trade (and presumably then also margin). The reality is of course that if Portugal or Ireland were to leave the Euro they would do it in combination with a default on a significant percentage of their debt.
 

sic transit

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Portugal hasn't passed a budget yet. AFAIK it will happen on Friday. Their issue is their public deficit. They're also being hit by Chinese competition in textiles and shoes. Seeing as there is no real point punting on Irish bonds at present markets are speculating/hoping that Portugal will be next.
 
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Sorry Spotty but in the 4 year plan all Nursing homes patients will have to move to the New Nursing home Tent on Craggy Island.
 

An Gilladaker

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Back to the supermarket I go for more tins of beans and batteries for the upcoming end of days! I am suffering from doomsday fatigue:(
Its gloomy alright the end is nigh :lol:


Revelation 13:16–17 (NIV)
16 He also forced everyone, small and great, rich and poor, free and slave, to receive a mark on his right hand or on his forehead, 17 so that no one could buy or sell unless he had the mark, which is the name of the beast or the number of his name.
 

Riadach

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Not necessarily true. Leaving the Euro is just the same as a currency devaluation. We devalued in 1993. While it the short term it will definately multiply debt it can also make the repayment of debt more affordable owing to increases in trade. If your trade volumes are falling, you can afford your debt to increase so long as you experience a rapid increase in trade (and presumably then also margin). The reality is of course that if Portugal or Ireland were to leave the Euro they would do it in combination with a default on a significant percentage of their debt.
When you devalue your own currency, aren't you also devaluing your own debt?
 

Astral Peaks

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Not necessarily true. Leaving the Euro is just the same as a currency devaluation. We devalued in 1993. While it the short term it will definately multiply debt it can also make the repayment of debt more affordable owing to increases in trade. If your trade volumes are falling, you can afford your debt to increase so long as you experience a rapid increase in trade (and presumably then also margin). The reality is of course that if Portugal or Ireland were to leave the Euro they would do it in combination with a default on a significant percentage of their debt.
Does anybody believe that our Govt has the cop on to have a back channel open to Lisbon?
 

spotty

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Sorry Spotty but in the 4 year plan all Nursing homes patients will have to move to the New Nursing home Tent on Craggy Island.
Not to worry. Spotty will have fun periodically scaring his grandchildren by pretending to be drunk, and shouting "Is Spotty still on that feckin' island??"

Good times.
 

Clanrickard

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Lord Wellington

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I still don't see how the euro itself can fail, regardless of how bad things get.

Even if Portugal somehow left the euro - they would still owe euros in debt. Leaving the euro would make it harder, not easier, to repay their debt. If they are going to default, there is no advantage in defaulting simultaneously to leaving the euro. It would be better for them to default and stay in the euro.

If an indebted country tried to leave the euro they would find that savers in their own country retained their euros, and their own banks would still demand repayment of loans in euro.

Proposing that countries leave the euro as a solution to debt is like saying the solution to a car crash is to shoot the survivors.
Wrong I think.

All bank balances would be converted at parity to the new currency.

All external Euro denominated debt would be converted at parity.

Then devalue.

Regarding people "holding on to their Euros".

Euro notes only account for about 3% of the money supply.
 

johnfás

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Regarding people "holding on to their Euros".

Euro notes only account for about 3% of the money supply.
That's why I have said from a personal finance point of view one would be advised not to stash their cash in Rabo (which has no clearing facility anyway so requires you to use another bank) but rather to buy very strong European shares - primarily food and pharma sectors. Then you lock your currency into whatever the French or Germans are using and would multiply your local currency value if the end game were to occur. I don't think it will, but it is maybe 15% likely over the next two years. Rising though.
 


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