Topic: UBS Sez The Euro Is Doomed...Hints Germany Will Pull Out

[trapeze]

Any time a major bank releases a report saying a given course of action is too costly, too prohibitive, too blonde, or simply too impossible, it is nearly guaranteed that that is precisely the course of action about to be undertaken. Which is why all non-euro skeptics are advised to shield their eyes and look away from the just released report by UBS (of surging 3 Month USD Libor rate fame) titled "Euro Break Up - The Consequences." UBS conveniently sets up the straw man as follows: "Under the current structure and with the current membership, the Euro does not work. Either the current structure will have to change, or the current membership will have to change." So far so good. Yet where it gets scary is when UBS quantifies the actual opportunity cost to one or more countries leaving the Euro. Notably Germany. "Were a stronger country such as Germany to leave the Euro, the consequences would include corporate default, recapitalisation of the banking system and collapse of international trade.

LINK

The economic cost is, in many ways, the least of the concerns investors should have about a break-up. Fragmentation of the Euro would incur political costs. Europe’s “soft power” influence internationally would cease (as the concept of “Europe” as an integrated polity becomes meaningless). It is also worth observing that almost no modern fiat currency monetary unions have broken up without some form of authoritarian or military government, or civil war.

I sure hope this is wrong but I am afraid that there is more than a little truth to it.

[IronDioPriest]

The entire European Union Utopian scheme was so doomed to failure from the very beginning, it could only have been orchestrated by Leftists.

Looking at how our own Leftists have orchestrated economic disaster here at home, I wonder no small bit whether the EU was devised in order to uniformly orchestrate the decline of Europe in the service of the very same Socialist ideals. They don't want a redistributive nanny state because they believe in benevolence for all. They want it so they can be in control. First, they require dependence, which first requires economic hardship leading to desperation. Europe has been led down the path of economic decline, just as we are now.

[Glock32]

Looking at how our own Leftists have orchestrated economic disaster here at home, I wonder no small bit whether the EU was devised in order to uniformly orchestrate the decline of Europe in the service of the very same Socialist ideals. They don't want a redistributive nanny state because they believe in benevolence for all. They want it so they can be in control. First, they require dependence, which first requires economic hardship leading to desperation. Europe has been led down the path of economic decline, just as we are now.

And at some point you inevitably start to wonder what could possibly motivate such destructive, nihilistic designs? Why are these Leftists so eager to rip up the foundations of the West, a civilization that has raised the human condition to its highest point? Every day there is a new example, including what must be the most egregious recent one: the kindergarten "sex training" in Switzerland.

Honestly, the only conclusion I can draw is that they are, quite simply, agents of evil. The pawns of Satan, whatever you want to call it. Even just a few years ago I would have thought a conclusion like that to be the ramblings of "some snake-handler or something like that" but it's the only answer that seems to fit. The mask started coming off in 2008 and all I can say is, their designs are even more sinister than I had ever previously imagined.

[Libertas]

Just read that ZH article.  Even the optimistic outlook looks bleak.  A Euro collapse could be the spark to a wider economic conflagration that circles the globe...where this all could lead too boggles the mind...

[charlesoakwood]

India's not to wrapped up in all this, they are doing business with our friends and not so much friends, they are straddling the
line comfortably.  They are also accumulating all the things a successful nation needs: the rule of law, intelligence and learning, technical skill, scientific skill, and manufacturing skill.  If everything goes as has been suggested I look forward to them blowing Pakistan into soot and glass.

 

[IronDioPriest]

India's not to wrapped up in all this, they are doing business with our friends and not so much friends, they are straddling the
line comfortably.  They are also accumulating all the things a successful nation needs: the rule of law, intelligence and learning, technical skill, scientific skill, and manufacturing skill.  If everything goes as has been suggested I look forward to them blowing Pakistan into soot and glass.

 

Gooooooooo India!

[trapeze]

India's not to wrapped up in all this, they are doing business with our friends and not so much friends, they are straddling the
line comfortably.  They are also accumulating all the things a successful nation needs: the rule of law, intelligence and learning, technical skill, scientific skill, and manufacturing skill.  If everything goes as has been suggested I look forward to them blowing Pakistan into soot and glass.

 

But that scenario leaves out the big (wannabe) player in the region, China. Both India and China have regional military dominance ambitions.

And, oh yeah, where does Russia fit into that picture?

This is a pretty darn unstable world we find ourselves in.

[charlesoakwood]

India's not to wrapped up in all this, they are doing business with our friends and not so much friends, they are straddling the
line comfortably.  They are also accumulating all the things a successful nation needs: the rule of law, intelligence and learning, technical skill, scientific skill, and manufacturing skill.  If everything goes as has been suggested I look forward to them blowing Pakistan into soot and glass.

 

But that scenario leaves out the big (wannabe) player in the region, China. Both India and China have regional military dominance ambitions.

And, oh yeah, where does Russia fit into that picture?

This is a pretty darn unstable world we find ourselves in.

At the moment Russia has more guts than anything else.  Her navy is rotting and her men do not receive adequate sea time to properly learn to do their assignment.  Their planes are third rate and again the airmen don't put enough hours in to be proficient.  Their ground equipment is archaic.  They have ground personnel and fodder.

A sooty Pakistan would be an engarde to China that they are willing to engage in more than harsh rhetoric.  And the Chinese being a practical people and who are actually technically subordinate to India, they are still mastering the technique of reverse engineering,  may rattle their sabers but will not engage India directly and their proxy the little CS Korea will not step out let they be turned to soot also.  The Indians seem to have taken the best from their master/teachers and are adapting it to the new era.

[Libertas]

India & China have an odd relationship...they can oscillate between cozy and crabby.  My big fear is if friendliness gets the upper hand and a full-blown military/economic partnership ensues...those two could control a lot of territory and more importantly a hell of a lot of vital sea lanes to Japan and us, both heavily dependent on Middle East oil.  The Chinese naval buildup alone is aiming to check our dominance of the seas in these areas and India is not without a credible navy.   And the Pak's would likely respond with their own salvo if attacked by India, not sure India has the capability to decapitate the Pak threat in total and without warning.  If everybody starts tossing nukes around what's to stop others from getting sucked into the game?  The India-Pakistan theater is either a stalemate or a nuclear wasteland, I just don't see anything in between.  Which brings me back to the Chinese, the real strategic threat we need to worry about.  And the Rookies may have rotting equipment, but they still have nukes and the mentality of a bully, so who knows what advantages they would seek if Europe started cracking.  That we are in an unstable world is beyond doubt.

[charlesoakwood]

That's a well reasoned probability.

May only contrary is if: " friendliness gets the upper hand and a full-blown military/economic partnership ensues...those two could control a lot of territory and more importantly a hell of a lot of vital sea lanes to Japan and us, both heavily dependent on Middle East oil."

I have an optimism that India has learned its history lessons better than that and unlike us are not so gullible to sucker themselves into a suicidal long term relationship.

[Libertas]

We can make that a reality if we get a new POTUS who will court India and build up alliances with them.  And someone who will not leave Taiwan to be devoured.

 

[jpatrickham]

European History states this was an acorn ready to fall from the tree. We screwed up royal getting involved in 1918. They are bound and determined to destroy themselves. Let them, then, we can make a huge Ginormous Smithsonian Institute out of it!