Why is the Euro not completely tanking against the dollar because of the PIGS?

[William Gaatjes]

My cousin is stationed at a US Air Force Base in Spain. He says most large transactions for goods in Europe are being conducted in US Dollars. I think the Dollar is actually holding up the economy of Europe because it is the international Currency of Choice for many large ticket items. In other words many countries are biggybacking on top of the USA economy.

So it is possible if the USA Dollar or economy would collapse, that we would take the rest of the world with us. Europe should be paying the USA not to default.

I doubt that the EU is going to let the US fall apart but paying ? No...

 

[KAZANI]

Pragmatic action to me is Greece defaulting and leaving the Euro. It wasn't the end of the world for other countries who did the same, and in the long run they're better off for it.

There is no such precedent with a country that was in a political union, such as the EU. I think you are wrong in underestimating the weight of the european project and regard it as something casual. It began as a common market but half a century later it has grown into a huge political investment for the countries in the continent. Opting out of it is not a decision that is as easy to take as in other parts of the world.

 

[DucatiMonster696]

Yeah right. The one estimate I've seen is that some 44 states will be in the red next year, California is about to sink into the pacific, the federal government is 13 trillion dollars in debt and going down the toilet, and you can't understand how a bunch of socialistic commies are beating the pants off us.

Well I guess they didn't need those evil capitalist Americans basically propping up their banks back into 2010 right? Or do you think the US Federal Reserve handed trillions to EU banks for shits and giggles?


http://www.huffingtonpost.com/2010/12/01/fed-opens-books-revealing_n_790529.html

 

[Trianon]

Good review of topic at hand:

http://seekingalpha.com/article/276...eece-is-a-drop-in-the-bucket-compared-with-us

As I said, Greece is nothing but a distraction and thank goodness for it or we'd all be focused on these numbers every day and then everyone would be REALLY depressed but, as we reach the end game on Greece (and the EU HAS to give them money, whether they want it or not so it will come on Greece's terms, not the EU's) we need to get ahead of the crowd and focus on the beginning of the end game for America, and that game does not look like it's going to end well. The ONLY possible way for us to avoid default is to grow our way out of debt but the only plans Congress is willing to vote on involve cutting back and (insane as this may sound) collecting LESS money to pay our bills.

Anyone who looks at the above numbers can plainly see how ridiculous that is. We either have to spend MORE money to grow the economy, putting more people to work and increasing our TAX Revenue base to close the spending gap, or we have to just print so much money that inflation devalues the $75Tn in national assets (was $100Tn before QE1 & 2) to extend and pretend this scam for another year or two. So far, our Government has consistently chosen option number 2 - and $25Tn of lost asset value later we still have not filled the gaping hole in the balance sheets of the banks. Can we survive another round of Quantitative Easing?

We could, if the Fed gave the next $16Tn to 110M families instead of the IBanks - that would wipe out all family debt and then we could raise taxes 10% and collect another $400Bn a year ($200Bn from citizens and $200Bn from corporations) and then we would at least be on a rational road to recovery. But that's never going to happen. Instead we can expect more extending and pretending until collecting $400Bn will be nothing more than a drop in the bucket (and it's not much now, is it) so there will be no point - just as there is no point for Greece to try to repay their impossible debt load.

The only difference is, when Greece defaults, it will cause a ripple in the Global pond, but when the US defaults, it's very likely the whole world will go down the drain with it.

 

[Munky]

There is no such precedent with a country that was in a political union, such as the EU. I think you are wrong in underestimating the weight of the european project and regard it as something casual. It began as a common market but half a century later it has grown into a huge political investment for the countries in the continent. Opting out of it is not a decision that is as easy to take as in other parts of the world.

I would argue that that joining the EU in the first place was a huge mistake for PIIGS. They lose the right to control their own currency, and what did they gain in return? Prosperity? Quite the opposite. The fact that now the EU bankers demand the Greek government sell Greece down the river is nothing short of financial enslavement straight by the books of economic hitmen.

What the banksters seem to forget is that they damn well knew Greece was in no shape to pay them back the loans, and that by any reasonable measure, the Greek bonds were high risk. They just assumed they'd rig the game as usual, and the powers that be will see to it that the banksters don't lose.

If the Greek government truly had the interest of its constituents in first place, they'd give the EU the big finger, and tell em to shove that "bailout" right back where it came from.