Pegging a currency leads down a road that ends the same way as the euro, repegging and mickey mouse currency repricing, it happened here and all over south america during the economic crisis there.

Euro is still good, the problem is the countries using it including ireland greece germany france et al

Michael, I hope it doesn’t take 2 years, we have suffered enough of this Ponzi scheme. If we stay with the euro the Eu will Demand and already has demanded closer fiscal union to allow the creation of Euro bonds. A kick the can even further down the road exercise which will mean every country in the euro zone giving up its sovereignty. The plans for this have been happening for quite some time with the end goal of total control from one place. Check out eurogendfor.eu to see the future of policing in Europe. The only real way out of this for everyone is a debt jubilee worldwide. All of the markets together have a lien or bet on the futures of several generations to come with lots more tightening of budgets to try to pay even the interest on it. It is time that our governments took power away from the banks before it is too late.

you can peg a currency at whatever you like, it’s what others value it at that counts.

One word: ICELAND 2.5% growth next year, Independent, defaulted and going places.

I think it would want to be slightly weaker than stg

could weaker or stronger than sterling, but the issue will be what will be for example what wil we pay out to to somebody with E1000 on deposit at the moment, We will also have to repay our debts to the same value as at present, pay for imports such as oil at the same rate as present, and most importantly what will cuurent rates of pay be in the new currency

@Frank. The Euro is not a Ponzi scheme. The entire financial markets are one big Ponzi scheme and national governments are now devoted to serving it.

I’d be surprised if the euro lasted beyond Q1 2012. We don’t need a new currency tied to sterling. We need a new value-based currency issued interest-free to replace the interest-bearing, debt-based currency we are currently lumbered with.

So who did you hear that from? Urban myth…

There is no smoke without fire

http://www.independent.ie/national-news/state-denies-rumour-it-is-printing-the-punt-again-2886886.html

Always the worst possible form of journalism…………..Minister Denies He’s An Alien!

@ Kitalpha That article is from September. A lot has changed in these few months. I am not sure what other peoples opinions on printing the punt secretly but I can tell you, in my opinion, I think it would be a very prudent thing to do and it would be almost negligent not to do so, given the great uncertainty surrounding the single currency. I would see it as a sign of good leadership if the Irish Government was quietly printing punts as a precautionary measure.
We don’t want to be the idiots of Europe who do not have a plan B.

I am aware of the date of the article :/ But I agree with the rest of your points. I was merely pointing out it wasnt an ‘urban myth’

Internationally borrowing has increased by 12%/year while output has increased by4%/year.
This is no longer sustainable and a correction is underway.
Europe is at the centre of this storm.
Governments are choosing to protect insolvent banks by socialising there losses.
The government should be trying to prepare this nation for the storm that is descending not heaping debt on households.

Ah the good old gold standard debate, never really ended.

Its a good thing they didnt have economic crisis before the twentieth century when everyone lived in a commoditized utopia

more bad news from s&p
http://mobile.bloomberg.com/news/2011-11-25/s-p-500-has-worst-thanksgiving-week-since-32-amid-europe-crisis.html

The problem with fiat currency explained.
http://m.washingtontimes.com/news/2011/nov/21/making-money-disappear/

Completely agree Conor but take our domestic situation, Roscommon hospital, a fecking barracks only recently had politicians resigning left right and centre cause both they and the people in these areas can’t see bigger pictures. If politicians in Ireland are looking for leaders in Europe it’s slightly hypocritical cause they can’t even lead themselves on much smaller issues! I’m sick and tired of parish politics and all the rubbish that goes with it. No one is seeing the bigger picture, even in Europe. I’m beginning to think that a criteria of being elected is you have to be an absolute moron.

Diarmuid, i believe that most of our national politicians are utterly incapable of acting in the national interest when it may be against their local interest as so ably demonstrated recently.

One of the biggest problems we have is that we have no real form of local government, It has been undermined by successive governments to the point where our so called national leaders are by and large of the calibre one would expect of local councilors and waste time dealing with local issues that local government should be addressing whilst national leaders focus on the bigger picture.

It works in the States.

But every person in the states regards themselves as an American, first and foremost. Not many people here call themselves European, we identify as Irish or German or Polish etc.
They all speak one languge and share a common history for the most part. Much different is the EU with a multitude of different languages and cultures that have little commonality.

Hi Sean. My point was that within the US there are about nine quite different economies with varying strengths and weaknesses. Compare California with Missisippi as two extremes. They both have totally opposing financial policy needs but have to exist under a single Federal Reserve policy. They deal with the differing needs by internal funding transfers. California is a net contributer to the Treasury and Missisipi is a net recipient.

This is the fundamental weakness of the euro. Each member is on it’s own and has to survive within a monetary policy regime designed to meet the Franco German economic requirements. This isn’t a bias, it’s just that policy is designed to meet the average and France and Germany make up the majority of the eurozone economy

Strongly agree with Peter on this one. I think the fact that we all got together under the umbrella of one currency, but still insist on individual states having to fend for themselves and raise their own funding meant that our current crisis was always destined to happen, it was only a question of when it would happen. Now that it’s happened everyone seems to be acting surprised, as if there was no way the euro should ever have been capable of ending up this way, when some of the more learned of us always saw that this was where we’d end up from the start.

I understand what you’re saying Peter, that there are different types of economies and even different types of people in the US. But they’re all comfortable to hold each other up, which isn’t really something we have here in Europe. We want to be autonomous, but be part of a union at the same time. The only way I see that is by keeping our unity in free passage and other benifits we had before the eurozone, but put the euro aside until we all feel to be one single solid entity, rather than 27 different parts, all bickering over how to arrange our finances. Maybe in the future we could have a Eurozone, but not until we act like one union.

The states has also a massive transfer union in place, from the more powerful states to the poorer ones, as compensation for them being stuck in an overly strong currency. That is not going to happen.

If the south in the States, was independent and had a currency of its won, it would be significantly weaker than the dollar, it would suck in investment from all over the world and the rest of the states.

Policy in Europe is designed to meet German needs, the Euro interest rates were excessively low, the Germans kept breaking the rules on deficits, but they weren’t called up on it.

The story of the dollar and the Euro have no comparisons, the time frame, the history, the needs are vastly different.

O would’nt it be LO-VE-LY.

Is there any confirmation on that? Up until now I thought that was wishful thinking and rumours.

The UK is one of our biggest export markets. Of course there is going to be parity with sterling.

Exactly, we export nearly as much to Belgium as the UK, we have a bit of a nostalgic blind spot for our dependancy on England

@ Sean The reason we “seem” to export so much to Belgium is for tax reasons. The population of Belgium is 10million, the UK is 60 million. Do the maths.

I have actually, the reason we export so much to belgium is because its a great land hub for physical freight to the benelux group of countries. The pop of mainland europe is much bigger than the UK also.

Also my point is that irish people have an obsession with trade being dependantoin the UK and a cursory glance at the economic history of ireland proves that this is fallacy

@Sean, you’ve just disproved your point. A hub does not an export market make.

It’s not the value of the Euro against any other currency that makes it vulnerable. It’s the cost of financing the currency that’s the problem. And you can blame the system of central banking for that…

Oh please.

Oh Please what?

Would you like to address any points he made in the video or are you just reacting to the quote?

So we can have another crash at the end of it again. There was no Celtic Tiger 4 us, it was all 4 the elite. It was all bullshit with fake money.

We need to distinguish between sustainable growth and unsustainable growth and what brings about each.

I never benefited from this so-called Celtic Tiger and neither did anybody else I know. As Derek Durkin said, it was all for the elite and look what they did then when they got too greedy, ruined the country AGAIN.

A boy from the black stuff Yosser.. Giz a job….go on I could do that…

Yes absolutely… another crash should be expected, everything related to economics be it a small business a company, a conglomerate, a country, a monetary union has always proved to be cyclical. GDP growth occurs in cycles, not a straight line up. But consider this, you’re lucky, this is probably your one lifetimes period on the downswing and it’s almost over.

Because you chose complacency and not to take advantage of the Celtic tiger doesn’t mean it did not exist. Far be it from me to suggest as to why you didn’t benefit as greatly as others… but someone who studied ‘at the university of life’ and whose work history is listed as ‘too many shitholes to mention’ seems to be a self fulfilling prophecy for failure in the 21st century job market.

@ Andrew Telford, and your comments about the “University of Life” and “Too many shitholes to mention”… I know you’re referring to me, although for some reason you omitted to mention my name (perhaps because of cowardice on your part?). You said, “far be it for me to suggest why you didn’t benefit from the Celtic Tiger as greatly as others…” The fact of the matter is I didn’t benefit from it at all, PERIOD, and neither did anybody else I know, as I’m sure many thousands of other workers didn’t, for the very simple reason that it only existed for the elite, i.e politicians, the banks and the greedy rich etc., who once again got TOO GREEDY and drove our country down the Swanee… and who’s paying to clean up this mess? Why, of course the very people who never saw the benefits of this invisible Tiger. Which, incidentally, answers your outrageous suggestion that because I “chose complacency and not to take advantage of the Celtic Tiger doesn’t mean it did not exist…” It wasn’t complacency, the tiger just wasn’t there for me to benefit from.

As for my being lucky that this is probably my one time to be on the downswing and it’s “almost over” let me tell you something, I worked for over 40 years and on at least three occasions the country was in the shits… I still remember being hammered for tax back in the 1980s to help get the country get back on it’s feet, for which I got no thanks from the Government (not even during your precious Celtic Tiger) so don’t try to tell me I’m lucky. As for my work history, that is none of your business and for you to say I have a “self fulfilling for failure in the 21st century jobs market” is a slur on my good character. You don’t even KNOW me and yet you can pass judgement on me? Methinks you have a hell of a lot to learn about life.

Well the average income doubled… and income disparity didn’t increase
The proportion of income paid as taxes declined…
And government and EU spending per capita increased…

I don’t know you… but I know the facts and figures, unlike people they don’t lie

and a saying I through experience have found to be true

A fool defines everyone as himself and one other person

The only fool here is yourself Telford, with your blinkered and self-righteous views and also your judgement of people you don’t know, and circumstances you couldn’t even begin to understand. What began as a simple debate about the Euro has descended into personal attacks from you on me which has no relevance at all to the matter in hand. So I will leave it there; you can continue to pass comments as much as you want, or not as the case may be, but I couldn’t be bothered with you.

Good man, Peter…at last, someone speaking common sense

And for those of you pontificating about printing more money go back to your basic economics and study the equation…

MV = PY

and not one little bit of evidence for either. Too many people pushing this story, many I suspect who will profit if it were to collapse.

I hope you are right. But remember, politicians are only interested in one thing – the next election.

Across the Eurozone, in the faster developing economies, prices shot be 30% on average. Countries like France and Italy, who ran surpluses up to 10 years ago, are not on the path to default.

The pound sterling has been going down the tubes for the last 8 years. In that time it as lost 7% of it’s value aainst the euro. The UK has a gross national debt of 148% of GDP and a fiscal deficit of 11% of GDP. Growth s about to go negative and inflation has reached 5.5%. Unemployment is stil rising and on top of that they have a balance of trade deficit of £100 billion. They do, however, enjoy excellent access to bond markets, primarily as a result of a tough austerity programme which is about to get tougher.
I believe the UK is taking the correct actions to get it’s house in order but a currency link to sterling is by no means an easier option than making the euro work.

That should read “has lost 23% of it’s value”

Sterling has dropped because the English have devalued it, no doubt the British economy is a basket case and if it was in the Euro, it would now have the IMF in. It is that much of a basket case. It has its own currency so it will survive.

As money flees Europe, it will go to Sterling, as is they are being lent money on very favourable rates, when one considers how indebted they are.

The wisest thing they ever did was staying out of the Euro.

So you think that the Euro is being attacked and degraded by most commentators, investors and economists because of nationalism. Gary, you are a European Jingoist. Europe – Right or Wrong, What What?

You are passionate in defending the concept of the Euro and a United Europe, but looking past your own nationalist view, how can it be saved, and please don’t mention treaties and reform, they don’t pay debt.

No one doubts that the Euro collapse will be brutal but that is what happens when sanity departs and group think ideas like a single currency come in to place.

You can’t run from the No’s.

Collapse means collapse. Meaning the currency will fall apart and we’ll have a regression to old currencies, and single state fiscal systems. If they wanted to talk about devaluation of the Euro, they would have phrased the question in that fashion.

Collapse, as in fall apart. A question that the Financial Times, Wall St. Journal, and The economist, have all asked.

All say that it is as things stand, Probable.

The EU/ECB can’t even manage Greece, what hope have they with Italy and Spain, which are 14 times the size of Greece. France will also be downgraded in the next 6 months. It is only political pressure that has prevented the agencies from rightly adjusting its status.

food in your attic? some advice- that’s a bad place to store food, because the temperature fluctuates so much.

Go back to sterling? You say that as if we were using sterling only last week. In fact, Sterling was never used in Ireland. For centuries whatever currency circulated here had parity with it’s sterling equivalent, or had a fixed exchange rate. However even that ended before the 1980′s so your flippant comment about returning to Sterling makes no sense. The Irish people would rebel against using the actual sterling currency, and even printing punts and setting them equal to sterling wouldn’t do anyone any favours. I don’t see how it makes more sense than staying in the euro and our leaders just sorting this mess out instead of talking about it non stop.

Not a flippant comment. Sharing a currency with our largest trading partner makes sense. The niceties of whether we are actually locked to sterling or part of the system is syantics, the effect would be the same. Really dont care how it would be achieved. Many Irish people were unhappy we broke the link so the rebellion you talk about may be less that you think

I see this country using sterling for awhile, if the Euro collapses. It is not like we are going to go without money for weeks, while a new currency is being printed.

This is in the even of the Euro becoming a dud currency, as is, Euro investments are heading that way already.

Oh dear jebus. If have lost this magical ‘sovereignty’ it’s because we ran the country into the ground by spending big and borrowing big. If we did this and had our own currency it would now be used as toilet paper given the wiping it would have gotten on the markets. I have no idea what fairy tales you’ve been reading but if the Euro goes we are all in big financial poopie.

In case you haven’t noticed Mr Clowry… we are already in big financial poopie as you call it, it’s going to get much worse and it’s not going to get better… so if anyone is reading fairy tales it’s you.

Gary, with our own currency the European banks pouring billions into cesspits like Anglo would think twice about doing this as they would have priced in the currency risk into the lending. Secondly, with our own currency the interest rates would have been higher 2001-2005 so the property bubble would not have been so massive. Thirdly, with our own currency and central bank our lender of last resort would not be the Merkozy couple looking after the interests of French and German banks.

@Eddie Larkin. I’d love us to balance the books, since we are spending 20 billion a year on day to day spending more than we take in. But make no mistake if that 20 billion is cut overnight due to a collapse we’ll look back at how amazingly great 2011 was before it all really went wrong. And that ignores the massive currency deflation of a new Irish currency.
@Dom Morgan. Firstly people keep saying that the Europeans poured money into Anglo but no one seems to be able to prove that. I keep seeing the Basel figures which show the debt of Germans banks based here which we’re not liable for.
To accept your points I’d have to accept that our central bank had only interest rates as a tool to fix our problems and could not have accessed cheap credit elsewhere. While in reality they had several things they could have done but didn’t and they did borrow money on the open market, mainly New York and London, which they didn’t need the Euro to do.
I’ve actually asked some of the economists to prove their claim we owed the money mostly to German and French banks and not one has so far. They keep saying it though, so you’d think it would be easy to prove.

Gary, Europe had $650b exposure to Ireland in March 10. Combined UK and German banks had $88b in Irish banks. This is according to Bank for International Settlements. There is no breakdown (understandably these are commercially sensitive data) but given that the entire Irish sector is pretty much bust it matters not whether they borrowed to Anglo, AIB or BOI. And to be precise I said they borrowed money to cesspits like Anglo which epitomizes the entire Irish banking system.

Secondly, the interest rate is not the only tool but it is the most powerful tool of a central bank. Surely they should also monitor capital flows and a whole range of other obscure parameters (which they didn’t do) but the inflation is the most obvious and unavoidable criteria available to general public as well as mandarins. So when Ireland had 6% inflation in early noughties there is no way the Irish Central Bank would have held the rates at 2% like ECB did to suit Germany and France. Higher interest rates would have dampened borrowing for property and we would not be in such a deep poo-poo as we are now.

8 countries out of 17 in the Eurozone are being closely monitored as being serious credit risks, all have problems that have become unsustainable since the advent of the Euro. Many have been in worse binds before, but due to their own currency they were able to get out of it, without any talk of default. Vast swathes of Germany’s banking sector are under serious threat of insolvency.

The Euro experiment has laid devastated the economy of the continent, it is not sustainable.

The only thing that can save it is printing money, there is not enough capital otherwise to meet obligations, and disorderly defaults will occur. The problem with printing the trillions of Euro that are needed to resolve this, are 1. Given that Euro assets/currency is not in demand, that others will not absorb that liquidity, so it will cause severe inflation. The Euro becomes the peso. A few years of inflation at 10-15% and your savings and salary will be immaterial. Given the no’s needed, hyperinflation can not be ruled out, is the deflationary effects at the moment, enough to cancel it out? 2.Half the continent benefits, half the continent looses out, internally in countries it will be the same, that will lead to anger, resentment, rage. It will poison the continent’s politics.

I personally think the Euro would have worked if it started with 4-5 countries and added them in one by one over many years and at strict conditions. Germany and France threw out the rule book, and so did everyone else. This is what always happens in currency unions. Especially in one that was based on political ambition and goals, rather than economic realities, as the Euro was.

Um, the US and China are the dominant powers in the world anyway, regardless of whether the Euro collapses. And the end of the Euro wouldn’t mean the end of the EU anyway, Brussels would still be still telling us all what to do – we’d just be able to ignore them more if they didn’t own our currency any more.

That still does not mean that it will not collapse. People can say “we need the Euro” but no one, including the leaders of Europe, seem to have any plan or idea on how to preserve the Euro. Admittedly it is a big challenge but if they are all so for it, why not take charge of the situation.

The key change is that the Euro is no longer viewed as a stable currency. The threat of it collapsing will last for years, if it somehow turns around over the next few months. The problem is debt. Treaty changes and “European Solidarity” are not going to roll over Italy’s 300 bn in the next 12 months. If Italy had its own currency it would be able to manage, it has been in similar ground before, in the 90′s, and it came out fine. This time it has the Euro and the markets know that as long as it is in that straight jacket it cannot grow out of the crisis.

Hi Tim. What you say is true. But what I meant when I said Germany needs the Euro is that they won’t let it fall. They are against Eurobonds and quantitive easing simply because the current bailout program is a lucrative gravey train for them. They won’t give in to devaluation or lose control of the profits they make from lending money unless the ECB system can’t cope.
Also, Merkel is playing a smart political game domestically by going to parliament for approval for everything. She has one eye on next years elections. Once reelected there will be a more bold approach from Germany.

The view of the euro not being stable is the dangerous ingredient here. Lazy traders respond to the media rather than reading the work compiled by their own researchers. Merkel and Sarkozy have contributed some sensational and politically inept comments the have fueled this also.
At the end of the day the ECB has the ability to counter all debts through quantitive easing, as the federal reserve do. Political appetite is the barrier.

I can’t let this go, your off the wall with your comments. 50k? Get rid of everyone of the current managers… Let me guess?!? Move the farmers in to the city to run things and city professionals to the fields to work? I’ll stop there but add do you think people with valuable skills with just put up and shut up? They will leave enmasse… Your like won’t have services ranging from tv to functioning trains, hospitals to hotels…. Engineers to trades. What’s to stop people hope on the boat and get paid for the labour, we are not going that route, thank f your not in charge!

43.8% of Britain’s exports in 2010 went between Germany, France, Italy, Spain, Ireland, Holland, Belgium, Luxemburg. (can’t get data on the other EU countries). 14% to USA and 3% to China. So EU is UKs largest export market.

Iceland wasnt in the Euro though, theres a difference.

This is about currency. The other 60+% is made up of individual currencies and cannot be classed as a single trade partner. The eurozone is the UKs largest export market with over 40%. The second biggest is the USA with 14%.

Ah, Cormac, I see you mean ‘single’ partner. I’m not sure of the significance of this point. My point is the fact that most of GB’s trade is outside the eu, always has been. The eu now produces about half what it did before introducing the euro, so it looks like this trend will continue.
!0 euros to the pound, I now expect! And rising. Gold, guns, silver and seeds will soon be the best things to own. I won’t bother with the wheelbarrow.

If the Euro is saved it will be saved by printing trillions of currency. A significant devaluation of money may very well take place, and yet still only put off the inevitable.

We are dealing with a dud currency in the eyes of the world, a currency whose internal contradictions are so massive that it’s creation will go down as a prime example of group think gone mad.

If the choice is between an Irish Pesos, which will grow in strength over time, after default or the Euro Pesos which will have to inflate away its value and still be under serious threat of collapse for years to come, then I have no doubt which way to go.

Unless the EU announces a plan, involving at least 2 Trillion worth of fire power, then the show is over, and at that they are only buying time.

Fact of life 101; just as there is no such thing as a free lunch there is no such thing as debt forgiveness, somebody ultimately loses out, money will always bide it’s time…

If the Euro is a dud, why is it holding its value?

There are smaller countries that are doing that, an hours flight to any country – perfect.

People have been saying for 20 years that we have to all band together, etc etc, small countries cannot survive etc etc, yet most of the most dynamic countries in western world are our size approx. The larger countries of Europe are falling.

The Euro is in the process of laying waste to half the continent, small countries may have major challenges but the noose of the Euro and the logic that drives it, are probably going to tip the world in to a global depression.

Cíara. Countries can and should work closely but they also need to be flexible.

An “F” for economics, try another subject