All Entries Tagged With: "Germany"
Time to Prepare for the End of the Euro?
Last week, reports surfaced that banks and brokerages in the U.K. were preparing for the day when the euro no longer exists. While the move may be merely a precautionary measure, it could highlight a grim fact of reality—that the euro may truly be in danger of breaking up. A disorderly breakup could wreak havoc [...]
Greece Bankruptcy Assured?
Speculation over the possibility of a Greek bailout has raged for the entirety of the summer. Many market commentators have stated that the Mediterranean country would be forced to default, as its debt levels had far succeeded the country’s ability to pay. Some critics alleged that embracing the painful austerity measures designed to get Greece’s [...]
IMF Predicts Slower Growth, Lower Inflation, and a Weak Housing Market
On Tuesday, the International Monetary Fund (IMF) released a report regarding the global economy. The report was particularly bearish. “The global economy has entered a dangerous new phase,” stated the IMF’s chief economist Oliver Blanchard. “Markets have clearly become more skeptical about the ability of many countries to stabilize their public debt. Fear of the [...]
Fed’s Doves Willing to Do Work
Last week, Charles Evans—governor of the Federal Reserve of Chicago—gave a speech in which he outlined his beliefs about monetary policy going forward in the short-term. Evans may be considered an inflation dove, relatively speaking, as he made clear in his willingness to endorse action despite possible inflationary consequences. “Conditions still aren’t much different from [...]
German High Court Rules in Favor of Bailouts
On Wednesday morning, in a move widely anticipated, the German high court approved the eurozone bailouts as being consistent with the German constitution. German euro-skeptics had challenged the constitutionality of the bailouts in court, perhaps hoping for a decision that would prevent German lawmakers from continuing to bail out troubled eurozone members. If the high [...]
The Race to Debase Flounders
Following the global financial crisis in 2008, a currency war has erupted. The Economist covered the topic last October, when it quoted Brazil’s Finance Minister Guido Mantega as stating that an “international currency war” had broken out. GDP, by definition, is composed of a few factors—consumer spending, government spending, investment and net exports. If central [...]
Germany Struggles Over Euro Bailouts
On Wednesday, German Chancellor Angela Merkel spoke about the future of the eurozone. In her remarks, she spoke about her commitment to keep the eurozone intact, yet, at the same time, she dismissed a major proposed solution. Does Merkel believe that the eurozone’s problems are overstated? Or is she merely playing politics and posturing for [...]
Will the Sarkozy-Merkel Meeting Lead to Inflation In the Eurozone?
On Tuesday, French Prime Minister Nicolas Sarkozy and German Chancellor Angela Merkel met to discuss possible solutions to the ongoing eurozone crisis. It seemed the meeting ruled out more solutions than it proposed new ones though. As a result, shares on stock exchanges around the world plunged. The Dow Jones closed down over 70 points. The [...]
German Economy Grinds To a Halt
On Tuesday, German GDP was reported to have increased by only a paltry 0.1% in the second quarter. Analysts had an anticipated an increase five times greater, expecting GDP growth of 0.5%. This may have come as a shock to Eurozone bulls, many of which may have been banking on a powerful Germany to rescue [...]
Germany Split Over The Creation of Eurobonds
Over the previous two weeks, speculation has been mounting over the creation of European bonds backed by all members of the eurozone. In theory, this could solve the ongoing European debt crisis: PIIGS would have their debt obligations tied to the more powerful, fiscally sound “core” members. Under this scenario, the ongoing attack on the [...]
