The Beginning of ‘The End for the Euro’?
Posted on June 12th, 2008 in Daily Stock Market / Economic News - The Real Story
A friend and market veteran Bill King just shot this off and I think the story speaks for itself. if I am not mistaken, there was nota word of this on bubblevision today other than a quick mention by ‘the man’ Santelli’ midday. Bill, himself, may come by to chat about it later. -Best, Mr Mortgage
Germans begin rejecting euros from Latin bloc
Submitted by cpowell on 07:29PM ET Thursday, June 12, 2008. Section: Daily Dispatches
By Ambrose Evans-Pritchard
The Telegraph, London
Friday, June 13, 2008
Notes printed in Berlin have more currency for bank customers who fear a “value crisis.”
Ordinary Germans have begun to reject euro bank notes with serial numbers from Italy, Spain, Greece, and Portugal, raising concerns that public support for monetary union may be waning in the eurozone’s anchor country.
Germany’s Handelsblatt newspaper says bankers have detected a curious pattern where customers are withdrawing cash directly from branches, screening the notes to determine the origin of issue. They ask for paper from the southern states to be exchanged for German notes.
Each country prints its own notes according to its economic weight, under strict guidelines from the European Central Bank in Frankfurt. The German notes have an “X” at the start of the serial numbers, showing that they come from the Bundesdruckerei in Berlin.
People clearly suspect that southern notes may lose value in a crisis, or if the eurozone breaks apart. This is what happened in the US in the Jackson era of the 1840s when dollar notes from different regions traded at different values.
“The scurrilous idea behind this is that if the eurozone should succumb to growing divergences, then it is best to cling to most stable countries,” said the Handelsblatt.
“There are no grounds for panic. The Italian state is not Bear Stearns,” it said.
Read the rest at http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/13/cneuro113.xml
June 13th, 2008 12:53 am
No Italy is far worse than Bear Stearns. The ex president of Italy was a Romano Prodi. He was Goldman Sach’s CEO in Italy. The new/old boss is now Sylvio Berlusconi; a serial tax evader. One of his main partner is in prison for nine years for 300 milion money laundering charges. Germans are intelligent. Italy is like Bear Stearns. This country is bankrupted.
June 13th, 2008 2:04 am
Hay, wasn’t the Germany that have been breaching Mastricht agremeent by having too big budget deficit?
Anyway, the root cause of Euro problem is the fact, that 200 German marks or 100000 Italian Lira was exchanged for 100 Euros.
Merchant silently made their own conversion rate of 1:1.
There is simple fact, some goods in Europe costs to much.
I have just listen to the news stating that cars will cost $3000 more, because ESP should be mandatory.
Common, $3000 for ESP.
At the end of day, we will all drive US cars, and buy US, Indian and Chinese goods until our merchants will start to become reasonable.
I have stoped buying bread at supermarkets. It costs $6 per 2 pounds. I am starting baking it at home.
June 13th, 2008 5:05 am
‘“There are no grounds for panic. The Italian state is not Bear Stearns,” it said.’
does that not have a sort of ‘coming back to haunt you’ air about it?
June 13th, 2008 8:27 am
As someone says, dont believe the hype. Everybody knows the Telegraph is anti-europe, anti-euro. i think they wrote this article for British internal affairs. With the gbp sliding towards parity, some debate might occur about loosing it to get the euro. They dont want to loose the pound and get the euro, as simple as that.
This is not a new issue to say that there is a big disparity among euro members. However, we are far from any bankruptcy from any countries yet! check at the sovereign cds market.
June 13th, 2008 9:31 am
You mean japaneeses and chineese cars. With the way things are going for Ford, GM and Chrysler now, I think that eventually the USA will be going the british way. As for the Euro, it’s a question of maybe 10 years before everything implodes.
June 13th, 2008 1:18 pm
Marc, GM and Ford have some great models made for European market coupled with high efficient diesel engines. These cars can make as much as 50 miles per gallon. And they are way cheaper than Volkswagen. With gallon priced at $8, we have no trucks here.
Don’t know why people are so negative regarding Evro? It’s make sense to have common currency. It make business so much easier.
And Economy is growing, for example here are some gdp growth numbers for 2008(forecast):
Bulgaria 5.8%
Poland 5.3%
Check Rep. 4.7%
Slovenia 4.2%
Slovakia 7.0%
Romunia 6.2%
Germany 1.8%
Italy 0.5%
June 13th, 2008 1:45 pm
This is tripe. Varying notes are printed in a dozen different countries. Each country, except Germany, prints only two denominations that are then sent to Belgium for distribution. Germany’s designation is “R” not “X”. They are ALL equal in value. If one fails, they all do. There is no way for a “backdoor” printing operation as each mint has representatives from at least four other countries monitoring printing. The printing plates are at least six parts with each part being in control of one of the representatives + two from the respective mint.
As it is in the U.S. failure to accept a particular banknote for payment is a crime (subject to exact change and bulk rules).
While Italy may certainly fail economically, the Italian Central Bank has virtually no control over money creation. Italy would have to drop out of the EU and go back to the Lira. The Italian populace would not use the Lira, they would stick to a stong currency like the Euro. Much like many readers of this blog have bought the Yen, Euro and gold in the past as the dollar declined.
June 13th, 2008 2:55 pm
Yeah. Still. GM is going bankrupt. The stock last year was at 43$. And now ? 15,61$. I don’t buy the prevalent Baron’s bullshit about GM. The debts are crushing them and the oil barrel is goins to 200$. Sorry.
June 14th, 2008 11:19 am
Okay… this not true. I am currently living in Germany and NOBODY even knows that the bills have unique serial numbers. The only people that MIGHT be speculating about this are big time currency speculators. Take this with less than a grain of salt. Another World War (God forbid) is more likely than what this post insinuates.
June 14th, 2008 11:28 am
Thanks Falcon.