Posted on 11/26/2011 1:40:29 PM PST by SeekAndFind
I really don't know but wonder what the day to day effect on the average citizen would be, and most of all, why. Any insights anyone?
I can imagine Europe being pretty much doomed. But what does that mean for the United States? A collapse of a bunch of our banks?
Any bailout these countries will just go to financing the status quo—nothing will change. Which, in turn, means that they’ll fritter it away and be back for another one within the year.
Modern politicians seem incapable of solving problems because to REALLY solve these problems means that they’ll pi$$ people off and won’t get re-elected. Frankly, I expect the charade until the foolishness is wrung out of the electorte. Unfortunately, that won’t happen until the social order starts to break down.
And that especially goes for the US too.
I had a rabbi tell me not long after the intro of the Euro that it would not last. How he knew I don’t know but he must have seen some fundamentals that weren’t put into place before it was rolled out.
This is always true of the inevitable collapse of socialism.
All systems break down eventually.
>>I can imagine Europe being pretty much doomed.<<
.
If that also gets rid of the muzzies it will be a resurrection for Europe.
“My gut says something is looming on the horizon but what would it actually mean for the Euro to “collapse?” Money would no longer buy anything? Prices would go astronomical?” Governments would no longer pay employees, pensions, etc?
I really don’t know but wonder what the day to day effect on the average citizen would be, and most of all, why. Any insights anyone? “
I suspect that they will have to immediately devalue the currency by some ratio. So, in effect, prices for everything will go up by some factor, maybe double or triple...that’s what they’ll see. At the same time, their wages will not budge much, and their savings will not change at all - so they’ll have a good chunk of their wealth wiped out. That’s the end-result.
The part that Britain is worried about is the transition to that new-normal. If done in a collapse, there will be some period of time where the currency may be worthless and that people will have to barter, use dollars, or use gold. For people without resources, they will get desperate.
By the way, I expect the same here, given our debt level. In our case, the key is to be prepped up, to get through those very difficult transition weeks.
Look where Europe is now. Yet we have a “president” advocating those same socialistic policies. What a moron.
The reaction to a breakdown of the USA should be different than other countries because the citizens here are armed. - Tom
He is not a moron. This is all intentional.
Now Europe, and the stakes are far higher. Can economic cooperation, the "collectivizing" of risk, and the judicious printing of paper money ease the fall? We saw what happened when Bush tried it and the answer is that there probably isn't enough surplus left in the system to do that even as poorly as his administration did. We can, however, make things worse. Perhaps allowing a hard failure is worse, but whether it is or not, we're running out of options.
Seriously, I think there will be a rush to the dollar that will ease things here. That being said, the derivatives thingy is a sword over the "too big to fail" banks - unless the Euros says the collapse is "voluntary" (cough), which would negate paying off the defaults, as they did with Greece.
My gut says something is looming on the horizon but what would it actually mean for the Euro to “collapse?” Money would no longer buy anything? Prices would go astronomical?” Governments would no longer pay employees, pensions, etc?
My guess is to look at the most selfish thing a nation could do. ie. The Euro is dead! Long live the ‘Drachma, Deutschmark, Franc,’ etc.
Another way of looking at it is all debts made under the Euro are null and void. Only new debt will be acknowledged and as for you holders of Euro debt, So sorry but stuff happens. Just ask the Shareholders and Bond Holders of a Bankrupt company a la General Motors.
Has the Euro even fallen to the exchange rate at which it was introduced in 1999, which was par with the US dollar?
If not, this is hyperbole. If it has, take it seriously.
Too many blogsters need to generate hits and the surest way to do so is to hit the panic button, again and again and again. Is the situation bad? Yes it is. Is it as bad as this? Exchange rate with the dollar, please, then the picture will be a little clearer through all the fog of blog.
Not this one:
Matthew 6
25 Therefore I say to you, do not worry about your life, what you will eat or what you will drink; nor about your body, what you will put on. Is not life more than food and the body more than clothing? 26 Look at the birds of the air, for they neither sow nor reap nor gather into barns; yet your heavenly Father feeds them. Are you not of more value than they? 27 Which of you by worrying can add one cubit to his stature?
28 So why do you worry about clothing? Consider the lilies of the field, how they grow: they neither toil nor spin; 29 and yet I say to you that even Solomon in all his glory was not arrayed like one of these. 30 Now if God so clothes the grass of the field, which today is, and tomorrow is thrown into the oven, will He not much more clothe you, O you of little faith?
31 Therefore do not worry, saying, What shall we eat? or What shall we drink? or What shall we wear? 32 For after all these things the Gentiles seek. For your heavenly Father knows that you need all these things. 33 But seek first the kingdom of God and His righteousness, and all these things shall be added to you. 34 Therefore do not worry about tomorrow, for tomorrow will worry about its own things. Sufficient for the day is its own trouble.
Europe now faces twin perils: financial collapse in the short term and demographic collapse in the longer term. Once again Europe has become fertile ground for a tough-talking despot to restore immediate order and then begin the deportation and slaughter of a scapegoat population. In this case, Europe's new enemy truly is a threat -- its hostile, non-assimilated Muslim immigrants.
A 50% Debt Deflation combined with Sovereign Default.
That makes for very, very hard times.
For currencies that survive, they will increase in "value" enormously.
Very hard times.
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