In an op-ed piece in today’s Financial Times, George Soros predicts the path by which the Euro will break up. While the first half reads like dire warning, the second half offers some options for managing through the problem. Perhaps most interesting is his observation that the “crisis has entered what may be a less volatile but more lethal phase” on account of debt being reoriented from across border to much more in tune with national lines.
Soros notes some interesting observations such as noting that
“the Bundesbank has seen the danger…once the Bundesbank starts guarding against a break-up, everyone will have to do the same. Markets are beginning to reflect this.”
To me, this raises the danger level for investors, but George disagrees.
I’m not doing the essay justice here, so read it for yourself:
Iran announced way back around 2006 that it would sell more oil for Euro’s and transition away from U.S. Dollars. This was of course ammo for the “collapse of the dollar” crowd. After all, the U.S. imports enormous quantities of crude and so the dollar must be losing its reserve status if we can’t even buy oil with dollars right?
Well, Iran has just announced a giant about face. You see, they are curtailing oil sales in Euros and going back to the Dollar. Turns out the Euro isn’t so great afterall. Oh, how sentiment changes fast! As I’ve argued before, the Dollar may be an unattractive currency, except for all the rest!
“Speculators” are an old scapegoat standby. Those with fiduciary responsibility always like to blame someone else for their mistakes. I suppose it’s a natural human reaction that it must be someone else’s fault. The most recent nonsensical iteration of this phenomenon is currently being played out in Europe as officials there seek someone to blame for Greece’s woes. Continue reading
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