Quote
Euro 'will be dead in five years'
The euro will have broken up before the end of this Parliamentary term, according to the bulk of economists taking part in a wide-ranging economic survey for The Sunday Telegraph.
The single currency is in its death throes and may not survive in its current membership for a week, let alone the next five years, according to a selection of responses to the survey – the first major wide-ranging litmus test of economic opinion in the City since the election. The findings underline suspicions that the new Chancellor, George Osborne, will have to firefight a full-blown crisis in Britain's biggest trading partner in his first years in office.
Unquote
Continued here.
Quote
EU 'to vet British Budget before Parliament'
The European Union will vet the Chancellor's Budget before it is debated by MPs in the House of Commons or seen by the public, under plans agreed last night.
David Cameron faces a major row over the “budgetary surveillance” demand when the Prime Minister attends his first EU summit next Thursday.
Britain was isolated during a meeting of an “economic government taskforce”, chaired by Herman Van Rompuy, the EU President, last night.
Mr Van Rompuy and the European Commission have tabled plans that will require all of Europe’s governments to discuss their budget plans with other EU finance ministers and officials before they presented to national parliaments.
“A government presenting a budget plan with a high deficit would have to justify itself in front of its peers, among finance ministers,” said Mr Van Rompuy.
“There would still be time to adjust plans before the final budget plans are presented.”
Unquote
Continued here.
The Swiss National Bank intervened for the last 6 weeks or so, they bought about 100 billions of Euro reserves.Posted by bashi (here)
[SIZE="3"][COLOR="DeepSkyBlue"]Today the Swiss National Bank intervened into the Euro market and bought "heaps" of Euro in order to stabilize the ongoing devaluation. The effect lasted for a mere three hours...
Quote
Gold reclaims its currency status as the global system unravels
We already know that the eurozone money markets seized up violently in early May as incipient bank runs spread from Greece to Portugal and Spain, threatening the first big sovereign default of our era. Jean-ClaudeTrichet, the president of the European Central Bank (ECB), talked days later of "the most difficult situation since the Second World War, and perhaps the First".
Last week gold surged to an all-time high of $1,258 an ounce Photo: Alamy
The ECB’s latest monthly bulletin gives us some startling details. It reveals that the bank’s "systemic risk indicator" surged suddenly to an all-time high on May 7 as measured by EURIBOR derivatives and stress in the EONIA swaps market, exceeding the strains at the height of the Lehman Brothers crisis in September 2008. "The probability of a simultaneous default of two or more euro-area large and complex banking groups rose sharply," it said.
This is a unsettling admission. Which two "large and complex banking groups" were on the brink of collapse? We may find out in late July when the stress test results are published, a move described by Deutsche Bank chief Josef Ackermann as "very, very dangerous".
And are we any safer now that the EU has failed to restore full confidence with its €750bn (£505bn) "shock and awe" shield, that is to say after throwing everything it can credibly muster under the political constraints of monetary union? This is the deep angst that lies behind last week's surge in gold to an all-time high of $1,258 an ounce.
The World Gold Council said on Friday that the central banks of Russia, the Philippines, Kazakhstan and Venezuela have been buying gold, and Saudi Arabia’s monetary authority has "restated" its reserves upwards from 143m to 323m tonnes. If there is any theme to the bullion rush, it is fear that the global currency system is unravelling. Or, put another way, gold itself is reclaiming its historic role as the ultimate safe haven and benchmark currency.
It is certainly not inflation as such that is worrying big investors, though inflation may be the default response before this is all over. Core CPI in the US has fallen to the lowest level since the mid-1960s. Unlike the blow-off gold spike of the Nixon-Carter era, this rally has echoes of the 1930s. It is a harbinger of deflation stress.
Unquote
Continued here.
Quote
Germany could cause euro collapse: Soros
German’s budget savings policy risks destroying the European project and a collapse of the euro cannot be ruled out, billionaire investor George Soros said in a newspaper interview released on Wednesday.
“German policy is a danger for Europe, it could destroy the European project,” he told German weekly Die Zeit.
Mr. Soros, who earned $1-billion in 1992 by betting against the British pound, added that he “could not rule out a collapse of the euro.”
“If the Germans don’t change their policy, their exit from the currency union would be helpful for the rest of Europe,” he said.
Chancellor Angela Merkel unveiled plans earlier this month for €80-billion ($107-billion) in budget cuts over the next four years – a package she hopes will bring Germany’s structural deficit within European Union limits by 2013.
“Right now the Germans are dragging their neighbours into deflation, which threatens a long phase of stagnation. And that leads to nationalism, social unrest and xenophobia. Democracy itself could be at risk,” Mr. Soros said.
“Germany is globally isolated ... Why don’t they let their salaries rise? That would help other EU states to pick up.”
Ms. Merkel on Monday defended her budget cut plans after U.S. President Barack Obama preached patience in clamping down on public spending. A German government official said on Tuesday Berlin did not expect to come under pressure at a G20 summit in Toronto this weekend to provide fresh stimulus measures.
Unquote
Source