In its current structure, the Euro has some major flaws. IMO the Euro should have never been valued higher than the USD due to these flaws. However, perception is reality and the market simply didn't/doesn't understand these flaws yet. Some excerpts below: http://www.telegraph.co.uk/business/2016/10/16/euro-house-of-cards-to-collapse-warns-ecb-prophet/ The European Central Bank is becoming dangerously over-extended and the whole euro project is unworkable in its current form, the founding architect of the monetary union has warned. "One day, the house of cards will collapse,” said Professor Otmar Issing, the ECB's first chief economist and a towering figure in the construction of the single currency. The ECB has "crossed the Rubicon" and is now in an untenable position, trying to reconcile conflicting roles as banking regulator, Troika enforcer in rescue missions and agent of monetary policy. Its own financial integrity is increasingly in jeopardy. "The ECB is now buying corporate bonds that are close to junk, and the haircuts can barely deal with a one-notch credit downgrade"
If the Euro collapses it will drag other currencies and countries down with it, it will be a giant mess.
Old news. What people tend to forget is that ECB doesn't have to care about paper losses. They can hold the bonds until maturity and get paid back the initial amount... unless the bondwriter goes bankrupt, then it's a real loss...
One of the flaws I was referring to is mentioned in the article. I didn't mean to infer that MTM losses were a structural flaw of the design of the fiat currency. From the article: "Yet there is no chance of political union or the creation of an EU treasury in the forseeable future, which would in any case require a sweeping change to the German constitution - an impossible proposition in the current political climate." That quote mentions one of the primary flaws of the structure of the Euro, i.e., no EU treasury.
Lord Rothschild made a £130m bet that the Euro will fail. I wonder if this was a hedge though. The idea that sleepy mediterranean countries can have the same currency as northern europe industrial nations is completely absurd. It will all fall over soon enough. I really do feel for the Greek people, they should have left instead of the 1st bailout and they would now have devalued and be back functioning properly. Instead they are staring down the barrel of a 4th bailout. Tsipras has already asked Putin if they will print the new Drachmas, I guess now the UK is leaving the EU our own De le Rue could take that business.
The Euro is too complex and it's not suitable for all of the economies in the EU. I don't know why the countries like Spain and Portugal are still in the game.
They are still in the game because their populations are not awake enough to vote out the establishment yet. The politicians are in the bankers pockets. It's sad to watch. The tide has turned now and it a matter of when not if the Euro is scrapped. Maybe it will cause a war.
Soviet union collapsed in socialism while communism could not yet come true for all exept few. Do some countries live under communism in eu? What is the beautiful lie for eu?