The Eurozone crisis/break-up may crash the system?

Lord Beria3 · Post by **Lord Beria3** » 05 Jun 2012, 22:47

Sorry snowhope, thought I was starting a new thread...

Back on topic...

http://www.marketoracle.co.uk/Article34978.html

Bottom Line - All Euro-zone citizens should pile into German Bund's ahead of Euro Collapse because they would make a huge profit when their new currency collapses against the Deutschmark and even if by some miracle the Euro-zone does not collapse, at least you can sleep easy knowing that your money is relatively safe.

So Where Does that leave Britain?

Britain continues to benefit hugely at the Eurozone's expense despite on many measures being just as bankrupt as states on near triple the interest rates. Britain is a very temporary safe haven that will have now choice but the ramp up the inflationary money printing presses again to meet the immediate consequences of Financial Armageddon as the UK desperately attempts to prevent it's big banks from collapsing from the hundreds of billions that would be defaulted on owed to British banks from across the euro-zone.

A sub 2% bond yield on an 3% inflation rate is not a sign of health it is a sign that any resolution to the eurozone crisis either good or bad could result in the evaporation of much of Britians safe haven status and the problem for bond investors is that during financial armageddon this switch in market sentiment could literally take place within a matter of hours, so rather than a safe-haven British government bonds are more akin to people jumping from sinking euro-zone life boats onto the British Titanic.

In reality Britain at best should be on par with France in terms of bond yields, so whilst the gap between UK and French bonds has narrowed, there remains a significant risk of the gap evaporating (falling UK bonds) on euro-zone breakup.

The Inflationary Depression

The bottom line is that all roads lead to only one solution as voiced at length in the Inflation Mega-trend ebook of near 2.5 years ago, in that at the end of the day governments have only one choice which is to print money and inflate and that is exactly what all the countries outside of the euro-zone

A inflationary depression appears to be our future.

Oh dear.

UndercoverElephant · Post by **UndercoverElephant** » 06 Jun 2012, 00:16

http://www.marketoracle.co.uk/Article34978.html

Very good. See section on Ireland...

SleeperService · Post by **SleeperService** » 06 Jun 2012, 07:55

Never seen that before but I find little to disagree with in it except his faith in the Euro to New DeutscheMark conversion. Germany made that error with the Ostmark and I don't think it'll be repeated.

In answer to snow hope's question I'd suggest that the collapse we all thought would be caused by Peak Oil is happening NOW, it's manifesting itself in the banking sector first. So my thoughts on extra (Stage 2?) preparations FWIW are

If there's a special exotic holiday you've always wanted to take DO IT THIS YEAR. It won't make much difference in the long run but you'll feel a lot better for it.

If you have 'stuff' around that you've always thought about selling DO IT NOW.

To reinforce emordnilap's post get as far out of the banking system as you can.

Stock up on over the counter medicines especially those you use regularily bearing in mind expiry dates. In many cases all of a particular type are made using components that originate at a single source. If they fail Oops.

If you plan on investing in government bonds DON'T. Gold is now in a bubble of it's own so would need to be a VERY long term investment. I suspect demand will fall faster than supply for quite some time yet. I still believe that a bit of land in an out of the way spot with a water source is the only good investment.

Make no mistake the Euro Crisis is very serious indeed, it really could crash the whole system. Remember fractional reserve banking and attack anybody who suggests you get involved in anything like it again.

biffvernon · Post by **biffvernon** » 06 Jun 2012, 11:01

SleeperService wrote: If there's a special exotic holiday you've always wanted to take DO IT THIS YEAR. It won't make much difference in the long run but you'll feel a lot better for it.

Are you sure it will make you feel better to know you are part of the problem rather than part of the solution?

emordnilap · Post by **emordnilap** » 06 Jun 2012, 11:14

UndercoverElephant wrote:http://www.marketoracle.co.uk/Article34978.html

Very good. See section on Ireland...

A succinct summing-up of a species of sleepwalking.

SleeperService · Post by **SleeperService** » 06 Jun 2012, 13:39

biffvernon wrote:
SleeperService wrote: If there's a special exotic holiday you've always wanted to take DO IT THIS YEAR. It won't make much difference in the long run but you'll feel a lot better for it.
Are you sure it will make you feel better to know you are part of the problem rather than part of the solution?

The emphasis should be on special. If people didn't demand the exceptional on a daily basis we'd all be better. Otherwise I take your point.

woodburner · Post by **woodburner** » 06 Jun 2012, 15:49

Hmmm, do people demand the exceptional on a daily basis then?

emordnilap · Post by **emordnilap** » 06 Jun 2012, 15:58

woodburner wrote:Hmmm, do people demand the exceptional on a daily basis then?

I think they do, they just don't consider it exceptional. 22 billion slaves working away day and night for a relatively small number of people, remember.

emordnilap · Post by **emordnilap** » 06 Jun 2012, 16:09

Heh heh. Imagine the Chinese economy crumbling.

The Chinese production economy cannot be seen in isolation from the consumption economies of the West; debt based consumption provided the umbrella under which the Chinese miracle grew. When the GFC collapsed Western debt based consumption reacted by providing the last line of Minsky Ponzi financing via government bail-outs. Governments faced with banking collapse chose keep the system going by transferring debt from private hands to those of the taxpayers.

RenewableCandy · Post by **RenewableCandy** » 06 Jun 2012, 16:24

woodburner wrote:Hmmm, do people demand the exceptional on a daily basis then?

A lot seem to. "Make every day special" or "Treat yourself every time" are common currency in advertising, and people seem to fall for it...as in, if they didn't, those type of adverts would not continue to exist.

emordnilap · Post by **emordnilap** » 06 Jun 2012, 16:58

Being able to post this is exceptional, looked at over historical timescales.

Tarrel · Post by **Tarrel** » 06 Jun 2012, 18:11

woodburner wrote:Hmmm, do people demand the exceptional on a daily basis then?

Yes, I think they do. We are experiencing "expectation inflation", and even "sensory inflation". I remember having a conversation with the headmaster of my boys' school a few years ago. He was saying how difficult it is to engage and "wow" the children against the backdrop of a constant diet of electronic entertainment. Even high-impact science experiments, such as putting sodium in water, no longer seemed to grab their attention.

we live lifestyles that require "the system" to perform flawlessly 100 percent of the time, and therefore it becomes high drama when it doesn't. Witness the media coverage when things break down, such as Heathrow closing in the snow, or Blackberry's email system crashing a few months ago, or of course even the mere threat of a fuel shortage

biffvernon · Post by **biffvernon** » 06 Jun 2012, 18:26

Tarrel wrote: We are experiencing "expectation inflation", and even "sensory inflation".

I think there is a lot of that to the demand for foreign holidays. People are always wanting to go further and to more exotic places in search of the next high. If one concentrates hard one can overcome this effect and still find joy in, say, Yorkshire, with a trip on a ferry to Belgium counting as an adventure of the decade.

JohnB · Post by **JohnB** » 06 Jun 2012, 18:45

biffvernon wrote:If one concentrates hard one can overcome this effect and still find joy in, say, Yorkshire, with a trip on a ferry to Belgium counting as an adventure of the decade.

I went nearly as far as Aberaeron yesterday, a breathtaking 18 miles, and I might go to Cardigan tomorrow, although that's not quite as far. It's a really adventurous week for me

.

Lord Beria3 · Post by **Lord Beria3** » 06 Jun 2012, 19:08

biffvernon wrote:
Tarrel wrote: We are experiencing "expectation inflation", and even "sensory inflation".
I think there is a lot of that to the demand for foreign holidays. People are always wanting to go further and to more exotic places in search of the next high. If one concentrates hard one can overcome this effect and still find joy in, say, Yorkshire, with a trip on a ferry to Belgium counting as an adventure of the decade.

Completely disagree.

One of the best things about the era of cheap oil is for millions of people to discover different countries and cultures. It has done wonders.

One of the things I will miss most once we transition into Scarcity Industrialism is the end of mass tourism.