Can The Euro Still Be Saved?

[geriatrickid]

Mrs. Thatcher's reticence on the Euro has once again been vindicated.

[churchill]

EU's Bailout Fund May Be Increased, Reynders Says in a Break With Merkel

http://www.bloomberg.com/news/2010-12-04/trichet-challenges-eu-as-spain-unveils-new-budget-cuts-to-fight-contagion.html

[churchill]

Could the Chinese ride to the rescue of the Euro in return

for a greater role in Sarkozy's dream ? As he is today also courting the Indians for support /

'Weaning the global monetary system off its reliance on the dollar has eluded policy makers for decades, but the wind may now be blowing in France's favour as it seeks to build a consensus for change.

Finding ways to diversify countries' international reserves away from the US currency is a key part of French President Nicolas Sarkozy's plan to sketch out a blueprint for a more stable monetary system during France's year-long presidency of the Group of 20 nations, which began this month.'

'French officials say their agenda hinges on convincing the Chinese, whom Sarkozy has assiduously courted, to agree to a greater role for the yuan as a reserve currency. This would initially be done by having the yuan enter the Special Drawing Right, an International Monetary Fund accounting tool currently based on the values of the dollar, euro, yen and sterling'

http://www.moneycontrol.com/news/world-news/french-g20-agenda-to-push-bigger-yuan-role_501749.html

Edited December 5, 2010 by churchill

[Naam]

Could the Chinese ride to the rescue of the Euro in return for a greater role in Sarkozy's dream ? As he is today also courting the Indians for support.

your phantasy seems to be unlimited and sometimes even embarrassing Churchill. please elaborate why (many years down the road) CNY or INR in the SDR basket could have an impact on EUR or "the rescue of the EUR".

[churchill]

Like my Phantasy some months ago that the IMF would become involved in the Greek Crisis ??

The money has to come from somewhere and the US is not going to be happy contributing more via the IMF - so perhaps the Chinese could help with a promise of a greater share in any future SDR /

Euro ministers under pressure to boost rescue fund

'Dominique Strauss-Kahn, the head of the International Monetary Fund (IMF), will call on the ministers to boost the facility and urge the European Central Bank (ECB) to step up its purchases of bonds to stem the crisis, according to an IMF report obtained by Reuters'

CONTINUED .. http://www.reuters.com/article/idUSLDE6AO0HG20101206

[trogers]

Could the Chinese ride to the rescue of the Euro in return

for a greater role in Sarkozy's dream ?

You mean the Chinese dumps her IOUs from Uncle Sam onto the lap of the Euro administrators?

Seems like just switching brand of toilet paper to me...

[churchill]

Could the Chinese ride to the rescue of the Euro in return

for a greater role in Sarkozy's dream ?

You mean the Chinese dumps her IOUs from Uncle Sam onto the lap of the Euro administrators?

Seems like just switching brand of toilet paper to me...

Exactly ! but perhaps the Trichet brand is more reliable than the Bernanke brand - less printing , higher quality ?

[churchill]

I am sure the Chinese would be happy to diversify a few $ into Eurobonds /

EU's Juncker To Present Eurobond Proposal

http://www.automatedtrader.net/real-time-news/63308/eu039s-juncker-to-present-eurobond-proposal-monday-press

[churchill]

The combative Herr Schäuble

'At stake is the proposal to create a market for joint European government bonds a plan that, as the FT reports, is almost certain to be blocked by Germany.

An early taste of the likely stand-off came in the form of an opinion piece by Jean-Claude Juncker, Luxembourgs prime minister who also chairs eurozone finance ministers meetings, and Giulio Tremonti, Italys finance minister.

The pair argue in Mondays FT that the launch of a market for E-bonds would send a clear message to markets about the the irreversibility of the euro and would be as liquid as that for US Treasuries.

But Schäuble told the FT that jointly guaranteed bonds would require fundamental changes in European treaties. In other proposals that will no doubt add to his popularity, Schäuble said that eurozone governments should face sanctions when they failed to maintain discipline over finances.

Otherwise, he warned, the euro would fail, noting that Germany also feared the issuance of joint eurozone bonds would raise its borrowing costs.

The contrasting views of Messrs Schäuble, on one hand, and Juncker and Tremonti, on the other will, as the FT predicts, fuel the debate about what radical steps are needed to restore investor confidence in Europes 12-year- old monetary union.

In the FTs view, however, while many EU finance ministers have flopped with their budget plans, economic prospects, banking systems and political effectiveness under relentless scrutiny, some had the X factor the mix of talent, judgment and luck needed for stellar performances and global fame.

Schäuble, it said, topped the charts as the force behind Berlins tough stance at crucial moments in the past year. That stance, the FT acknowledged, often infuriated Germanys neighbours.'

... continued

http://ftalphaville.ft.com/blog/2010/12/06/427461/the-combative-herr-schauble/

Edited December 6, 2010 by churchill

[churchill]

Is Germany to blame for the euro crisis?

Read more: http://curiouscapitalist.blogs.time.com/2010/12/06/is-germany-to-blame-for-the-euro-crisis/#ixzz17KBdAARP

[teletiger]

Is Germany to blame for the euro crisis?

Read more: http://curiouscapitalist.blogs.time.com/2010/12/06/is-germany-to-blame-for-the-euro-crisis/#ixzz17KBdAARP

Is there a bear in your answer.....by any chance??

Regards.

[cloudhopper]

the latter of course might change one of these days when the relevant thai authorities wake up, enforce prevailing tax laws and tax retired foreigners on the amounts they transfer to Thailand (which i think is only fair).

What are the prevailing tax laws re money transfers from abroad?

[AnnyLing]

the latter of course might change one of these days when the relevant thai authorities wake up, enforce prevailing tax laws and tax retired foreigners on the amounts they transfer to Thailand (which i think is only fair).

What are the prevailing tax laws re money transfers from abroad?

If you are a resident of Thailand you are liable to pay Income Tax on any amount brought into the

country no matter when it was earned or transferred except if Income Tax has been already paid in a

country which has signed a Double Tax Agreement with Thailand.

The tax liability does not apply to pensions or social insurance payments.

[cloudhopper]

the latter of course might change one of these days when the relevant thai authorities wake up, enforce prevailing tax laws and tax retired foreigners on the amounts they transfer to Thailand (which i think is only fair).

What are the prevailing tax laws re money transfers from abroad?

If you are a resident of Thailand you are liable to pay Income Tax on any amount brought into the

country no matter when it was earned or transferred except if Income Tax has been already paid in a

country which has signed a Double Tax Agreement with Thailand.

The tax liability does not apply to pensions or social insurance payments.

YIKES! So a big wad wired to buy land, a house, car, boat or whatever could be taxed? Anyone happen to, gulp, know the rates?

[churchill]

Euro collapse 'possible' amid deepening divisions over bail-out

It is feasible that the euro will not survive the current sovereign debt crisis sweeping Europe, one of the Treasury's leading independent forecasters has said.

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/8185225/Euro-collapse-possible-amid-deepening-divisions-over-bail-out.html

[churchill]

Deutsche Bank Offers `Plan B' for ECB Crisis Fight: Euro Credit

'The European Central Bank should draft commercial lenders as allies in its fight to stem the euro-region financial crisis by giving them incentives to buy bonds of debt-swamped governments, Deutsche Bank AG says.

In his proposed “Plan B,” London-based Deutsche Bank economist Gilles Moec said the ECB would limit collateral for one-year central bank loans to investment-grade sovereign paper rated less than AAA, encouraging purchases of debt sold by Spain, Italy, Portugal and Ireland. He also suggested a “margin-call holiday,” freeing banks from providing more collateral if the value of the swapped bonds falls.

“Investors still don’t know whether to buy from the periphery,” Moec, a former Bank of France official, said in a telephone interview. “But the rates the periphery are paying should be quite tempting so it wouldn’t take much for investors to start buying their debt.”

.....http://www.bloomberg.com/news/2010-12-09/deutsche-bank-proposes-plan-b-to-help-ecb-fight-debt-turmoil-euro-credit.html

[AnnyLing]

the latter of course might change one of these days when the relevant thai authorities wake up, enforce prevailing tax laws and tax retired foreigners on the amounts they transfer to Thailand (which i think is only fair).

What are the prevailing tax laws re money transfers from abroad?

If you are a resident of Thailand you are liable to pay Income Tax on any amount brought into the

country no matter when it was earned or transferred except if Income Tax has been already paid in a

country which has signed a Double Tax Agreement with Thailand.

The tax liability does not apply to pensions or social insurance payments.

YIKES! So a big wad wired to buy land, a house, car, boat or whatever could be taxed? Anyone happen to, gulp, know the rates?

Theres no doubt about it that they 'could' be taxed.

Tax rates of the Personal Income Tax

Taxable Income

(baht) arginal Taxable income

(baht) Tax Rate (%)

0 - 150,000 (2008 onwards) 150,000 Exempt

150,001 - 500,000 350,000 10

500,001 - 1,000,000 500,000 20

1,000,001 - 4,000,000 3,000,000 30

4,000,001 and over 37

http://www.rd.go.th/...ish/6045.0.html

[churchill]

Could the Chinese ride to the rescue of the Euro in return

for a greater role in Sarkozy's dream ?

You mean the Chinese dumps her IOUs from Uncle Sam onto the lap of the Euro administrators?

Seems like just switching brand of toilet paper to me...

'China is seizing on Europe's debt problems to expand its influence on the continent with large-scale investments and purchases of government bonds issued by highly-indebted states. The strategy could push Europe into the same financial dependency on China that is posing a dilemma for the US.'

'This has recently prompted the Chinese to increasingly invest their reserve stockpile in non-dollar currencies. One of the leading proponents of this diversification is Yu Yongding, an influential economist and former advisor to the central bank, the People's Bank of China. Yu is known as "the dollar killer" in Beijing. Although he admits that other currencies "are not necessarily an ideal replacement" for US government bonds, Yu says that this will allow the People's Republic to minimize its losses should the US currency dramatically drop in value.

Last July, China spent €400 million on Spanish 10-year government bonds. During a visit to Beijing in September, Spanish Prime Minister José Luis Rodríguez Zapatero dutifully thanked the Chinese: When China increases its share of Spanish government bonds, he said, it bolsters confidence in the financial markets. He added that he hoped China would purchase even more Spanish government bonds.'

''''' cont ''' http://www.spiegel.de/international/world/0,1518,734323,00.html

[churchill]

Could the Chinese ride to the rescue of the Euro in return

for a greater role in Sarkozy's dream ?

You mean the Chinese dumps her IOUs from Uncle Sam onto the lap of the Euro administrators?

Seems like just switching brand of toilet paper to me...

[churchill]

How to save the eurozone, by JPMorgan

http://ftalphaville.ft.com/blog/2010/12/17/440661/how-to-save-the-eurozone-by-jpmorgan/

I still think that the Chinese will have a greater influence on saving the euro than most anticipate or want .

[churchill]

China supports efforts by the EU and the International Monetary Fund to calm global markets in the wake of Europe's debt crisis but is keen to see more results from the measures, Vice Premier Wang Qishan said on Tuesday.

"China supports the slew of measures by EU and IMF to stabilise financial markets, and China has taken concrete actions to help some European countries deal with their sovereign debt crisis," Wang told visiting EU trade and economic officials.'

'He said China hopes Europe can lift restrictions on hi-tech exports to China. '

and ...?

http://in.reuters.com/article/idINIndia-53695320101221

[Naam]

China is seizing on Europe's debt problems to expand its influence on the continent with large-scale investments and purchases of government bonds issued by highly-indebted states. The strategy could push Europe into the same financial dependency on China that is posing a dilemma for the US.

Last July, China spent €400 million on Spanish 10-year government bonds.

Churchill,

"Spiegel" journàsslists are since years well known to describe a mosquito as if it was an elephant. Spain's public debt exceeded € 500 billion last july. 10-Y spanish government bonds are virtually all zerobonds quoted at ~50% of nominal price.

fact: China spent ~€ 200 million equivalent to 0.039% (zero point zero three nine percent) of Spain's total debt. influence by spending peanuts?

Edited December 21, 2010 by Naam

[churchill]

China is seizing on Europe's debt problems to expand its influence on the continent with large-scale investments and purchases of government bonds issued by highly-indebted states. The strategy could push Europe into the same financial dependency on China that is posing a dilemma for the US.

Last July, China spent €400 million on Spanish 10-year government bonds.

Churchill,

"Spiegel" journàsslists are since years well known to describe a mosquito as if it was an elephant. Spain's public debt exceeded € 500 billion last july. 10-Y spanish government bonds are virtually all zerobonds quoted at ~50% of nominal price.

fact: China spent ~€ 200 million equivalent to 0.039% (zero point zero three nine percent) of Spain's total debt. influence by spending peanuts?

I am sure you're right Naam , but wonder , with the Chinese begining to air support for the Euro - if attention next year will start to shift back to the USD /but to be honest they are both in a bad state so toss a coin /

$2tn debt crisis threatens to bring down 100 US citiesOverdrawn American cities could face financial collapse in 2011, defaulting on hundreds of billions of dollars of borrowings and derailing the US economic recovery. Nor are European cities safe Florence, Barcelona, Madrid, Venice: all are in trouble

http://www.guardian.co.uk/business/2010/dec/20/debt-crisis-threatens-us-cities

PS whilst' En Suisse 'any reports of people having problems withdrawing their gold/silver from Banks ? and enjoy the piste !

Edited December 21, 2010 by churchill

[flying]

$2tn debt crisis threatens to bring down 100 US cities Overdrawn American cities could face financial collapse in 2011, defaulting on hundreds of billions of dollars of borrowings and derailing the US economic recovery.

There was a piece on the news this morning about this.

It is like dominoes sadly...Many States are already in the red & cannot pay their sub contractors/bills till next fiscal...So many subs are going under as a result.

Boston.com ran a story a couple of days ago...

http://www.boston.com/news/nation/articles/2010/12/05/crushing_debt_facing_state_governments_stokes_fear_in_financial_analysts/

Edited December 21, 2010 by flying

[Naam]

I am sure you're right Naam , but wonder , with the Chinese begining to air support for the Euro - if attention next year will start to shift back to the USD /but to be honest they are both in a bad state so toss a coin

presently it looks indeed bad for the €UR. reasons are concerted actions from across the Atlantic (e.g. Moody's) and the wishy-washy resolutions, containing nothing but lukewarm farts, European politicians excreted after exhausting discussions. the latest "decision" was supposed to ease the €U debt pain. however, the result was ridiculous and in order to be applied "all €U countries have to ratify it not later than 31. dec 2012" (two years from now... my àrse!). these people should be tarred and feathered before being kicked out of their jobs!

no wonder that the currency markets act as they please. but in the long run (when we are perhaps dead) holding €URos or €UR denominated assets will be any time more profitable than holding USD. all aforesaid as usual in my [not so] humble opinion.

:jap:

edited for addendum: as long as there are European blue chip financial corporations which pay in excess of 9% p.a. on their subordinated bonds i feel quite comfortable to hold a certain amount of them.

Edited December 21, 2010 by Naam

[churchill]

Could the Chinese ride to the rescue of the Euro in return for a greater role in Sarkozy's dream ? As he is today also courting the Indians for support.

your phantasy seems to be unlimited and sometimes even embarrassing Churchill. please elaborate why (many years down the road) CNY or INR in the SDR basket could have an impact on EUR or "the rescue of the EUR".

'Jan 6 (Reuters) - China wants to push for diversification of global reserve currencies and is ready to study ways to improve the global monetary system, state news agency Xinhua quoted a senior central bank official as saying on Thursday.

Yi Gang, deputy governor of China's central bank, was quoted as saying that China was ready to partner with Europe to study ways to form a stable reserve currency system.'

http://www.reuters.com/article/idUSBJA00240820110106

[Abrak]

I am sure you're right Naam , but wonder , with the Chinese begining to air support for the Euro - if attention next year will start to shift back to the USD /but to be honest they are both in a bad state so toss a coin

presently it looks indeed bad for the €UR. reasons are concerted actions from across the Atlantic (e.g. Moody's) and the wishy-washy resolutions, containing nothing but lukewarm farts, European politicians excreted after exhausting discussions. the latest "decision" was supposed to ease the €U debt pain. however, the result was ridiculous and in order to be applied "all €U countries have to ratify it not later than 31. dec 2012" (two years from now... my àrse!). these people should be tarred and feathered before being kicked out of their jobs!

no wonder that the currency markets act as they please. but in the long run (when we are perhaps dead) holding €URos or €UR denominated assets will be any time more profitable than holding USD. all aforesaid as usual in my [not so] humble opinion.

:jap:

edited for addendum: as long as there are European blue chip financial corporations which pay in excess of 9% p.a. on their subordinated bonds i feel quite comfortable to hold a certain amount of them.

[Jingthing]

I recently read an analyst saying if the Euro does survive it is headed rapidly towards parity with dollar. Does that sound likely? I care because I have Euro based equity investments (valued in dollars for me) so maybe now (yesterday) is a good time to dump them?!?

[Naam]

I recently read an analyst saying if the Euro does survive it is headed rapidly towards parity with dollar. Does that sound likely? I care because I have Euro based equity investments (valued in dollars for me) so maybe now (yesterday) is a good time to dump them?!?

your guess is as good as the guess of any "anal" JT. a coin toss might help you to make up your mind.

[Abrak]

I recently read an analyst saying if the Euro does survive it is headed rapidly towards parity with dollar. Does that sound likely? I care because I have Euro based equity investments (valued in dollars for me) so maybe now (yesterday) is a good time to dump them?!?

I am rather surprised that people are so bearish on the Euro. In many respects things have improved over the last 12 months. I was most worried about Germany ditching the Euro after having subsidized debt fueled growth in many Euro countries and then been asked to bail out the consequences. However, they have benefited from reverse divergence - low interest rates aimed inflating crippled EU economies and a weak Euro have boosted growth. In Jan 2010, forecasts for GDP were around 1.2% and growth actually turned out at a post unification high of about 3.7%. So Germany is not altogether unhappy.

Where Germany is very important is its massive trade surplus of US$190bn (roughly the same as China) which equates to the total deficit of all other Euro countries combined. This to some extent underwrites the Euro.

Germany has also done much to propose procedures for default and future bond holder losses that instill the financial discipline that are necessary if sovereign countries are to have independent fiscal and banking regimes. This in turn creates financial discipline in the currency itself.

I just cant see the logic of the US$ appreciating 30% against the Euro to bring them to parity. It would afterall imply a 30% appreciation of the dollar against Germany which accounts for 36% of all non-EU exports from Euro countries and which has the second largest trade surplus in the world.