DEMOLISHING THE EURO CURRENCY

Dear Readers

Hope you all had an amazing weekend.

As talks progress with Brussels, Frankfurt & Athens... The Greek economy is presented with now 2 options :

- Leave the Euro, defaulting on it's debt & starting again with the Drachma;

OR

- Find a new "bailout" agreement from the ECB (heavily supported by German Euros) & continue operating with their high level of debts.

If Greece do leave the Euro, The markets will ask who is next?  As this event could create a cascade of defaults across the EU. Spain, Ireland, Portugal or even Italy... Causing mass scale crashes in the EU banking systems - possibly bankrupting Governments.

In reality... will the ECB let this happen?.... Maybe so....

Draghi reduced interest rates back in 2012 to prevent this very occurrence. However, Unemployment rates still remain at peaks greater than the recession.. Spain at 24%, Greece 26%, France 10.5%... To me this is not a Crisis but verging onto a depression..

Looking at the EU as a whole... many economic disparities are noticeable... For example, Ireland's main trading partners are the UK & the USA... Vs. Finland's main trading partner being Sweden. The formation of the Euro was based on a Political foundation rather than an Economic one.

This structural formation of the Eurozone has been the main creator of the issues faced within the EU. Outsourcing ones monetary policies to Brussels have left countries like Ireland, Portugal, Greece & Spain totally incapable of controlling their economies & promoting internal recoveries.... Then what happens? ... FDI drops... Foreign Investors start pulling out their money and start investing in developing nations, where yields over time are more promising.

Just today, Norway's biggest hedge fund announced a new tranche of investment into South Asian property.

Ladies & Gentlemen - we have now a Currency crisis.

For years now, Frankfurt & Brussels have been trying to counter-act this by currency devaluation in certain countries - so you have lower wages & internal devaluations - but the countries debt is still priced the same.

What happens now?

Theoretically, Greece can escape their debt burden... A possible sequence :
1. They default on all their debts;
2. Forces Greek banks to buy Greek bonds;
3. It has Greek banks sell their bonds back to the ECB - therefore putting the ECB in line for paying back Greek debt...

If the ECB agrees to this, it means the Greeks have escaped their debt burdens..

But why would the ECB buy Greek debt?

Would it not be economically cheaper for them to #Grexit?

More fiscal support is not supported by the Northern EU nations....

Keep it fresh guys

- Peace & Love
Anish