Diversified? Yes, 27 member states, 23 languages. Inherent trust? Hardly. Only 12 of them have replaced their national currency with the Euro. In '05 both French and Dutch voted against the draft EU constitution and this time around it was the Irish with a lopsided public NO vote to the Lisbon treaty. I highly doubt the EU would collectively chip-in to bailout, say Deutsche Bank, with an exposure that is around 80% of Germany's GDP.
Politicians are already blaming the US for the crisis. When it gets worse EU politicians will have the perfect scapegoat on the EUR
Milton Friedman said that first real and big recession will definitely put EU to a test, and it could break it.
I think the opposite will happen. I think Europe and the Euro will continue to strengthen. All the financial troubles center around the United States and how the people and government borrow too much. The European Union has rules limiting any member's debt to gdp at 60%. Bush and his cronies have taken the US to about 70% debt to gdp so they wouldn't even qualify to join. Here is evidence for further growth of the European Union, Canada is setting up to join right in the middle of the financial crisis: http://www.jbs.org/index.php/jbs-news-feed/3389
Certainly possible. But I think Ireland will be the first go since it started violating many EU laws. But yes, this is a very possible senario. Bring back the DM!!
jprad, the trust is exactly that they don't turn to totalitarian socialism like in the US, but keep their sovereignty and control. They collaborate on the important issues, and keep separate other national issues. That is less socialism than the federal system when it comes to the economy. Sam McGee, also - in most over Europe, the mortgage debt is not stuck on the house but follows the person. So if a foreclosure happens, the person is not off the hook - but will be stuck with the difference. Therefore there is much more accountability than in the US for excessive spending. That is one very fundamental difference, and a control mechanism that people understand and trust. In the US, consumers were duped into believing in castles in the sky... through the smoke and mirrors of corrupt, biased systems that favoured funnelling resources from around the world to inflate their sphere of economic control - their bigger share of the world economy. That is now being corrected in this current crisis, affecting the US the strongest - short and long term.
Quote from TraderZones: your prediction was completely uninteresting. Subprime crisis, $600 trillion in insane leveraging worldwide Everyone knew we were in trouble. But somehow, you dazzle yourself because you have a keen grasp of the obvious Secondly, if it did not, you would have said nothing. These kinds of predictions is what newbie trader wannabes keep polluting ET with. Quote from KINGOFSHORTS: Loosen your tie. Maybe you got burned going long but you should relax before you get a heart attack. I have been out of the market all year, except for one day directional trades. the market's futures has been obvious since last fall. You and your papertrading account should be put back into your padded cell. You are a loss, not a prophet
It might seem silly, what does television have to do with this but in my opinion, television survives on commercials. Commercials tell people to buy. If Americans are watching TV for 8 hours a day, they're going to end up buying far more than they need. You can see in the chart, the rest of the world only watches half as much TV as Americans. The other problem in the US is that their mortgages are tax deductible. Basically the US government ends up subsidizing excessive borrowing with money that they don't have. Most of this excess borrowing comes from China. The US has to stop making mortgages tax deductible but no politician could do that and live to tell about it. Basically it's an economic war that's being won by China. Most Americans don't even realize it. I think a lot of them are distracted because they're in pain from having to wear those ill fitting shoes sent over from China.