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Doomsdays Loom For Euro, Dollar

July 9, 2012 by  

Doomsdays Loom For Euro, Dollar
PHOTOS.COM
A euro collapse could lead to dollar devaluation.

The European Union is, and has been for some time, in the midst of economic calamity. Matters are only getting worse, and Americans should be worried.

British politician Nigel Farage pointed out last week while speaking to the European Parliament that through 19 economic crises summits, Eurozone leaders have yet to make progress in saving the sinking euro ship.

Farage likened the latest summit to The Rolling Stones’ famous tune “19th Nervous Breakdown.”

The British lawmaker contends that the European Union has proven insoluble and suggests that its separate member nations leave the Eurozone, go back to original currencies and “get back their democracy and identity.”

But that isn’t likely to happen.

At the latest — “19th Euro Breakdown” — summit last month, European leaders moved to halt the economic crises that have taken hold in Spain and Italy by agreeing to a radical bailout package. As a part of the package, Eurozone leaders have committed to European Central Bank-led oversight for banks, hence allowing a rescue fund — the European Stability Mechanism (ESM) — to recapitalize banks directly. Traditionally, the taxpayer-provided bailout funds would have been lent to governments.

The leaders of the 17 Eurozone countries are expected to meet today to clarify bailout details, but say it will be months before they finalize the plan.

Farage said in a recent interview that the plan essentially creates a European debt union controlled by the economically solvent Germany. He predicts that political disagreement about allowing one European country to gain too much control will hamper any European bailout efforts and posits European leaders’ efforts to “kick the can down the road” and prolong the European economic collapse will ultimately fail as financial markets force a collapse.

 

 

As the United States is facing its own economic difficulties, a Eurozone collapse would have definite negative financial implications stateside. Longstanding economic cooperation between the European Union and the United States has led to a healthy trade relationship that would likely collapse along with the euro. The result will be higher consumer prices on some goods for Americans.

Actions that may be taken to aid the Eurozone by the International Monetary Fund should also raise concerns with Americans. Because of the United States’ involvement in the IMF — contributing about 18 percent of the IMF’s funding via American taxpayers — any attempt by the fund to rescue a collapsing euro would come in part from Americans’ pockets despite the fact that the IMF has no direct accountability to the American populace.

Another problem the U.S. economy faces in the event of a euro collapse is the Federal Reserve’s willingness to engage in the same tactics that have failed Europe to attempt to stimulate the economy both at home and globally. The Fed already moved last month to continue “Operation Twist” — a program designed to lower long-term interest rates in an effort to promote borrowing — until the end of the year, and is prepared to further intervene in markets if the euro fails.

“We are hoping for the best … but we are prepared in case things get worse to protect the U.S. economy and the U.S. financial system,” Fed Chairman Ben Bernanke told reporters last month.

Bernanke’s preparations include the prospect of another round of quantitative easing (money printing), which could lead to massive dollar devaluation if Fed policy fails.

Sam Rolley

Staff writer Sam Rolley began a career in journalism working for a small town newspaper while seeking a B.A. in English. After learning about many of the biases present in most modern newsrooms, Rolley became determined to find a position in journalism that would allow him to combat the unsavory image that the news industry has gained. He is dedicated to seeking the truth and exposing the lies disseminated by the mainstream media at the behest of their corporate masters, special interest groups and information gatekeepers.

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  • GALT

    Free market unregulated capitalism fails, the producers eat gold…….film at eleven!

    • Ted Crawford

      Man it must be a very spooky place, between your ears ! Resembling a warehouse with large numbers of disjointed, incomplete, largely irrelevant thoughts. Arranged in random order and at odd angles. Having no clear entrances or exits. You must need to sleep with the lights on to keep the ghouls away !
      I guess we can be grateful you can’t seem to express a complete thought, if you did they would just be longer immaterial rants !

      • GALT

        w.i.A.L.F…….of no consequence. ( just because you are ignorant I didn’t want you to FEEL
        ignored. )

      • Steve E

        I believe Galt means “unregulated socialism”.

      • GALT

        Please Steve, your faith in the ability to comprehend what you READ…….is as capitivating
        as your ignorant attempt to be sarcastic. ( ah the sound bite mind…….crying to be heard, ignoring both the lessons of democracy and inflation……and that money = speech?
        Damn that new math.)

      • Steve E

        Galt, i believe most people on this site are aware that you are an example of unregulated ignorance.

      • GALT

        Cooooollllllll………..and most of them, eventually learn otherwise……..welcome to the world of the e.i.P.L.F………..where are the rest of the P.L.F.’s are smarter than you, including your dog……they at least KNOW what they are doing and WHY!

    • fish

      Federal regulated capitalism is Fascism. Free markets have worked for thousands of years . We have not had freemarkets for 40 years. We failed capitalism , it did not fail us.We abandoned it. But if you do not have gold & silver for this collapse you will not eat. The term (capitalism) is a communist term used to degrade the free market idea. Don’t believe what you are told, read history- gold & silver in the Constitution as the only legal money-gold & silver is misqoted from the bible -read EZEKIEL 7:19–DANIEL 11:43.

      • GALT

        Missed who caused the CRASH? Missed who got bailed OUT? Not a victim YET? Think YOU are going to BE a WINNER?

      • Steve E

        The Founding Fathers used gold and silver for money because they were smart enough to know the fallacy of fiat money.

      • GALT

        You have no concept of what a free market is………..or what those thousands of years was all about……….but you can learn.

        Debt: The First 5000 Years

        http://www.youtube.com/watch?v=BhbTMB6ehZY&feature=related

        or you can remain the w.i.A.L.F. you are now?

      • boyscout

        Without regulation we get corporatism (unfair trade). With regulation we get corporatism, crony regulators and unfair trade. Of course, we can regulate the regulators and widen the web of deceit – or we can cut the loop holes, rein in the banksters and prosecute the guilty and corrupt, eliminate professional politics, use a line item to flay the pork from legislation, and use the media to expose the trash dealings in DC. We just can’t do it the way things are presently arranged. I would like to think that a better mind than mine could concoct a non violent solution that would accomplish this. That is what I would LIKE.

  • Warrior

    As usual, we the people, ben, are “hoping for the best” right along with ya! Anyone ever think they would see the day, when a return on a saved dollar was actually negative without inflation?

    • don

      the euro is turning out to be a total failure. i think europe would have been better off separate. one piece fails and the rest will come tumbling. clinton pushed for globalization. the same thing will probly happen for a lot of the world if a euro country fails. i think this country would have stayed with isolationism. our own money and our own markets undffectd by the rest of the world. bernanke needs to keep his quantam easing. printing more money will do no good if the rest of the world has no faith in it. hyperinflation is around the corner.

      • Steve E

        Bernanke is going to make the hoarders of gold and silver rich one day. Precious metals always go up when he prints more money.

  • http://www.cindynel.co.za pete

    Of course Nigel is right. He has an alternative to the solutions of the euro union whom, with the exception of Germany, insist on ‘ kicking the can further down the road ‘, but of course, he is considered radical and probably insane by some. Returning to their own identities and establishing their own ‘ economies’ and values is the way to go. Bernanke is now firmly in the Obama ‘hopey changey’ mode and is completely lost in France as is Obama. If the devaluation of the dollar is imminent, then the sooner the better, so that the chaff can be sorted from the wheat and a new beginning can be achieved with the emphasis on sustainability instead of growth, quality instead of junk and preservation instead of reckless annihilation. Maybe when the horse ( resources ) is put before the cart ( capitalism ) – Apologies to Krugman , sanity will ensue and mankind will find better ways to live. Of course I must be either dreaming, insane or on life support to even think such stupid things.

  • mark

    Yeah, Doomsday is always looming for you guys. It is always just about to happen. But it just never does. Hey, at least it sells some online articles and books and keeps sales at the survivalist shops humming.

    • Dale left coast

      The Euro difficulties are a result of decades of Socialism . . .
      US Progressives and Socialists are trying the same failed pollicies here . . . they are so clueless that they expect a different outcome . . . LOL
      Collectivism has always failed everywhere in the world it has been tried . . . but the left soldiers on . . . like lemmings heading for the cliff ! ! !

      • SJJolly

        You believe that the opposite of “sociaism” — unregulated free-market capitalism — will do a better job of creating national prosperity? By allowing the “producers” to grab all they can grab of whatever they produce, with their workers getting whatever the “producers” care to give them, and the rest of society getting TS. (Don’t want to burden the “producers” with taxes, even when they benefit from the protections and services government provides, no?) Isn’t this a prescription for a USA version of the banana republics of Central America, where-in a few families own or control everything of value, and the rest of the populations struggle to survuve?

    • my 2¢ worth

      @Mark.. Not to mention that one day… One day they can say, “I told you so!!” But on that day, they too will be caught up in it and to utter those words would be little more than a waa! waa!..

  • RichE

    Man created the EURO.

  • Dale left coast

    Euro . . . example of “Unintended Liberal Consequences” . . . did anyone ask . . . back in the day . . . when they were building the european union to compete with the USA . . . “What would happen if one of these countries FAILED?” . . . of course not . . . the left is not bright enough to look that far down the road . . . a mere decade . . . laughable !

    • RichE

      Dale,
      Why do you allow the left to live?

    • SJJolly

      Aside from the bunch of “far leftists” that a significant portion of conservative Republicans believe conspired to fake Obama Hawaian birth certificate, so that he coulld become POTUS fifty years latter, does anyone much, leftist or rightist, look a decade down the road?

      • RichE

        It’s not a common practice now, but Germans used to think fifty years down the road. When a couple got married they’d go to the bank and borrow and buy now what they’d need in twenty-thirty years.

  • ONTIME

    It’s not just the Euro, the Dollar and the Pound, you may as well throw in the Ruple and the Yen, we are in a world wide economic crisis and a great depression is decending as these great markets get weaker with lack of co-ordinated free trade and balance. There is plenty of energy available but government is standing in the way, it is interfering with livelihood, medical care and using goofy words like environment, CO2, carbon foot print as ways to decriminalize their behavior as the government works at controlling all aspects of human kind……When economics go sour, War is on the horizon and blame is every where, little credit is given to real thought becuse panic is about to ensue…..hold on folks, if you do not get a grip and put real leadership in office, throw out the communist Fraud and reorganize this government….then do not plan to sing America the Beautiful again.

    • my 2¢ worth

      If your going to go that far (on time) then you may as well toss in the (false) savior who you consider will take us away from all this.. The GOP has no interest in our future nor does the DEMS.. If your willing to get rid of all leftists then to really cleanse the air you should also concentrate on eradicating all the Rightest, then (with threat of their phony baloney jobs and the perks that go with them) elect real patriots that have documentation of their political successes and failures.. And for chrissakes, stay away from voting in lawyers!!

  • http://www.facebook.com/jerry.fournier.9 Jerry Fournier

    How could Gerard Fournier testify in Vancouver BC Canada in July of 1986 about the economic meltdown of the Euro and that of the US and all the individua;s involved and how and when it would all begin and even warned Israel through the Jerusalem Post of the blame they would also receive for the Newest Pogrom that would begin and that gold per ounze would reach a specific price before the US and Euro collapses and testified about it in detail. He warned about what Israel would have to face in a Middle East imcluding makig a you tube video anout North Korea’s assistance to Syria in it’s nuclear facoly in 2007n warning Israel to strike Syria and Iran before the pogrom would be aloud to foster helping forge the hyper-inflation that would be created by the US Federal Goverment by 2008 due to the delation of the US dollar by 2012. This was testified in 1986 and with the courage of worldwide political leaers stop the theft that would take place and whom would be responsible.

  • gunner689AI

    The EU is just Hitler’s dream without the Panzers. I was in Ireland the spring before they voted to join. The average person I spoke with didn’t want to join the EU. Their economy was healthy and they’d fought the British for hundreds of years to gain their independence. But the banks and corporations wanted it so it was voted in. Ireland then became a dumping ground for unemployed Europeans. Irish kids couldn’t find a job. Crime and drug usage climbed radically. Their economy went in the dumper. When I went back over a couple of years later Ireland was losing it’s character. Walmart and Lowes were trying to move in and strip malls were starting to kill the small town stores. Change and progress is not always for the best.

  • middleman @2012

    Galt where do you come up with your opinions,and your facts??????You Bud,are just out right rude,to people.People like you should not have the right to comment on web-sites like this,if you are going to be so rude!!!!!

  • What?Me Worrie? @2012

    Thats okay,Middleman,Like i’ve been told many times in my life, “: it takes all kinds of people to make the world go round.!!!” To bad it has to inclued people that feel they have to insult others,just so they can get their point across!!!!

  • Gangbusters@2012

    I Have to Agree!!!It just goes to show,their real I.Q.I!!!Funny how some people get-off subject!!!!How about staying on the subject!!!

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