Germany must be forced out of the Euro Monetary Union.

[Tsing Tao]

I have only made it so far in this thread. I bet you were shocked at reading responses to this very post of yours. Yes, not everyone looks at facts and takes them as such. There are people with a vested interest at nuking Germany and the very same people look for a German fault in every mishap under the sun. I am excited to read ahead now...I am sure its gonna be funny with Sheda and TsingTao in the middle of the pack...

I don't disagree with anything he said. Sorry if that isn't "funny enough" for you, but it's the truth.

If Germany leaves, the Euro is toast.

 

[volpunter]

Then let's devalue the Euro, after all all European countries are broke anyway, so why a strong euro, right?

That's kinda the whole point of the argument. The significant drop in the Euro would be just what the doctor ordered for the remaining countries.

 

[volpunter]

If Germany could just do that, then I would buy all of you guys a beer.

I hadn't seen this so thank you. Bernanke is naturally one of the Central bank experts, so his opinion will carry great weight.

The first time I heard it suggested that Germany should either agree to the eurobond or leave the EU was the Soros speech in Frankfurt. It made complete sense according to my understanding of the way modern monetary policy should be handled in a world of fiat currencies. I have been an advocate of that idea ever since. I hope it comes to pass, and I think it will eventually, as more and more European Heads of State realize how essential it is to their country's economic well-being that a common bond be adopted. Of course this would be somewhat of a mixed bag for Germany, whether they eventually agree to a eurobond and remain in the union, or exit. They will be OK in any case, but with a eurobond in place and a thoroughly integrated monetary system they would no longer be able to borrow at much lower interest rates than their neighbors.

 

[volpunter]

hear hear, our British friend and neighbor is speaking, the one who is holding the financial district of London tightly in between his left and right nut. Oh, and parts of Argentina, oh wait, a lot of interests in the Middle East, too. Oh wait, Gibraltar, oh no, Scottland, and wait, bending over backward to the Chinese to get a nice axx rape in the holy name of more trade. Hail Merry to the Queen.

Germany is to selfish to do what is in the best interests of the ez and the country's that make it up as a whole, to germany the eu is about germany and germany alone, they will milk it to the fullest extent.

 

[volpunter]

that is total crap: Germany has spearheaded efforts for Greek borrow rates to be lower even at the height of the last bailout crisis than going rates for France, Spain or Italy. Yes, borrow rates for Greece were set lower than the yield on Italian on the runs. So, with all due respect your comment is entirely untrue.

Germany has been supportive with loans and debt restructuring. But they've been recalcitrant with regard to lowering interest rates to where they need to be for the PIGS to afford the level of borrowing they need to jump start their economies. High interest rates are killing Greece and Portugal. Germany, having the strongest economy is able to borrow at low rates. The PIGS desperately need the eurobond.

 

[volpunter]

well, in case you forgot, Germany was a founding member of the EU along with France and other countries. Even the UK was not part of it. Speaking of a "group of alike economies" we should look at the majority of nations in the EU that actually work hard to make ends meet, such as Germany, France, Holland, Belgium, Baltic states, most East European states, most Scandinavian nations that are part of the EMU, Luxemburg, Spain, Ireland,.... Which "group of alike economies" are you again referring to?

For the group of alike economies to flourish for the reasons already mentioned, yes, why not?

 

[volpunter]

You seriously believe France will turn its back on Germany? A much more important portion of European life is politics than economics. That is what most Brits or Americans do not understand. There will be no European union without both France and Germany in it.

It is nothing but semantics depending on who says goodby to who. What should happen, but probably won't for some time, is that France, Spain, Italy, Portugal and Greece should say goodby to Germany. This really wouldn't be forcing Germany to do anything in particular, but it is the near equivalent of forcing them out of the EMU. I believe that if the PIGS and France were to insist that if Germany does not drop their opposition to the eurobond they will all exit together and form a new monetary union with both a common currency and a common bond, that under that kind of pressure Germany would agree to the eurobond. Unless Germany agrees to a common bond, it is a virtual certainty that eventually the PIGS will leave the EMU, and quite likely France will go with them. This would not necessarily mean however that these countries would leave the EU, just the EMU.

What would result is a Germany left in the EMU together with the fledgling States that are not yet full members. That would leave Germany in a somewhat precarious position and they would obviously do something about that, but what?

I am happy to go on record as saying that the present EMU can not last much longer without a common bond. No more than a decade I would think. The PIGS will eventually tire of permanent recession and having to grovel for more high interest, German Care Packages.

The pressure is going to continue to build in favor of a common bond.

 

[volpunter]

All hell is breaking loose Tsingtao agrees on one small little part of what volly has been saying. I am truly flabberghasted.

Can't argue with any of this, except your implied solution. I know you think Greece should spend it's way out of the funk it's currently in, but the one thing that I've always agreed with volpunter on is that the Greeks are in this situation because of the reckless spending, not in spite of it.

Greeks need serious reforms, or else they need their own currency to print and inflate away all the debt.

 

[sheda]

What is it with you and the city, germans are obsessed with it

 

[volpunter]

oh sorry, is there anything else noteworthy in the old Kingdom? I must have missed it.

What is it with you and the city, germans are obsessed with it