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Nov 28, 2011

How to Make Euro Collapse

Believe your eyes! The title reads “How to Make Euro Collapse”.  They are on the way, if nothing is done to buck the trend, to collapse. Greece is seriously sick; Germany’s bonds auction was a mess, Portugal’s credit rating was reduced to Junk status and that of France still hangs in the balance. To make that happens; they need to redouble their efforts on initiating Euro-stability bonds and sticking to the old role played by European Central Bank.
Euro bonds would only make the situation worse at this time. They failed (again and again) to reach a consensus on what measures should be taken to get Europe back on track. The bonds will not only prove to be effective unless they first solve political crisis at all costs.
If the troubled countries don’t grow, it will only add fuel on the fire. Just solve political crisis first, both within each country and within Eurozone member, and everything will be attacked. There has been speculation the Two Technocrats in Italy and Greece will make different. It still makes on different if they still subscribe to Germany’s advice.
Structural adjustment programs, spending cut, and competitiveness are words I usually come across once reading news related to Europe.  I once put those are not counterproductive. Time is ripe for them to reverse it. If things are to stay the same, they have to change. It will be counterproductive, if they are still doing what they are doing.
Spending cut means higher unemployment, less investment, less spending and fewer taxes for Government. Spending cut doesn’t mean cut in defects. What they really gain is competitiveness through tructural adjustment programs.  Things are turning worse and it may offset the gain.
Euro bonds at this time will only bring down creditworthiness of countries blessed with AAA rating. Unfortunately, France and Germany blocked it.  No one is interested in helping Europe and they are of course capable of helping themselves.  Europe is not running out of ammunitions. But it won’t be long.
God bless, they are not working on a plan how to grow Europe. And Germany is not going to soften her position easily. Germany is not willing to solve the problems. Weak Euro is weakening competitors in both Eurozone and outside countries. It also creates more export opportunity for Germany’s companies, especially within the zone. Crises are striking back. Merkel may give it a second though.
Redefining the role of ECB will takes years to get it done.  I don’t think there’s a notable different between Euro bonds and disaster bonds, in case political crisis is not fixed. Euro bonds, supposed they agree on how to grow, will helps buying time as they are trying to expand the role of Central Bank.
My goodness, they overlooked it. Let us hope that they never take it account, let alone approve it. Hey, email me when you learn they succeed in making Euro collapse. My email is on your right side. Thanks in advance.  Somehow, I’m praying I don’t get any mail.