Tag: Eurozone crisis

The Euro’s Existential Crisis

Extract from Chapter 11, ‘The Euro’s Existential Crisis’, in ‘The Golden Guinea. The International Financial Crisis, 2007-2014: Causes, Consequences and Cures’ (2012). Final section, ‘The Long Goodbye: Requiem for the Euro’. “The inevitable conclusion is that the Euro cannot survive indefinitely in its current form…..Rigidly fixing national currencies to a single currency at an overvalued …

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Chronicle of a death foretold. Five prophecies fulfilled and one yet to come to pass.

“The only relevant test of the validity of an hypothesis is comparison of its prediction with experience.” [Milton Friedman “The Methodology of Positive Economics” (1953)]. Five predictions of The Golden Guinea: Prediction 1: The Euro will inflict great economic damage on the nations that adopt it. “The case put by supporters of the Euro for …

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How long can Cyprus stay in the Eurozone?

The decision of the Government of Cyprus to impose a one-off levy of up to 10% on Cypriot bank deposits has sent shock waves across Europe. When Mario Draghi announced last year that the European Central Bank was committed to do everything in its power to stabilise the single currency, it was widely assumed that …

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Eurozone sovereign debt – dancing in a room where the clocks have no hands

The strong rally in world stock markets in January 2013 appears to be based on three premises. Firstly, that the Chinese economy has successfully avoided a “hard landing”. Secondly, the threat of a fiscal cliff in the USA has been averted. And thirdly, that the Eurozone crisis is now behind us. With these three impediments …

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How long will Mr Market’s Euphoria Last?

Mr Market has started 2013 in euphoric mood. The FTSE 100 has soared above 6100 for the first time in almost five years. The Dow Jones Industrial Average is also close to a five-year high at 13,500. And elsewhere across the world stock markets are rising. So is Mr Market’s optimism justified? Only if you …

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The International Economic Outlook for 2013

As 2012 draws to a close, the financial press is dominated by the impending US “fiscal cliff”.  What seems remarkable in this age of 24/7 rolling news is that the crisis seems to have crept up on us without warning. Yet it was completely foreseeable. What is even more remarkable is that I have yet to read …

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Suspicious Minds – Is Mario Draghi leading the ECB into a Trap?

We’re caught in a trap I can’t walk out – Because I love you too much baby.   Elvis singing an anguished melody to a beloved partner with whom he is entangled in a difficult relationship? Or Mario Draghi serenading the euro? I was reminded about the lyrics of the classic Number One by an …

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City Book Fair November 13th 2012 – Preview of My Presentation on the International Financial Crisis

The international financial crisis is evolving very much as foreseen in The Golden Guinea.  The International Financial Crisis 2007-2014: Causes, Consequences and Cures, I am grateful to the organisers of next week’s City Book Fair at the Bishopsgate Institute, London EC2, for giving me the opportunity to present my analysis and proposed strategy for how it might be …

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Central Bankruptcy. Why Quantitative Easing could threaten the solvency of the central banks

The news this week that the US Federal Reserve is recommencing its quantitative easing programme on an open-ended basis, and that the European Central Bank is going to start buying the bonds of the peripheral Eurozone States to fulfil Mario Draghi’s commitment “to do whatever it takes” to save the Euro, call to mind an incident in my own investment career …

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