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Thursday, 02 February 2017

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Surely expenses aren't a problem? Just play the Lagarde defence?

Christ, another freak joins the circus.

SoD

Hmmm......... likes older women, eh?
Tell me more.

Steady as she goes, Andra, you nearly spilled your 'Chardy'!

Twenty four years means she has raised him as she wanted?

If she's 24 years older than him, at least she'll be able to remember Thatcher.

His Mrs - Brigitte Trogneaux - is easy on the eye.

Whitewell that is cruel - probably true but still cruel. SWMBO has been trying to train me for 54 years and still trying. One of SWMBO's favourite sayings is "Nice Lad. Just not very bright".

Brigitte probably worked on that Jesuit theory of give me the child at seven and I'll give you the adult.

AussieD, your Mrs must have the patience of Job!

She has Whitewall. Though she reckons if she hasn't succeeded by the time we get to 60 years married she may just give up on it and put up with me as I am. I just cannot see how you can improve on perfect. :-)

The French might be getting there, though, albeit in that "you can rely on them to do the right thing - after trying each and every wrong thing" sort of way.

Fillon the Thatcherite was all for sacking 500,000 state "workers".

Hamon the Corbynite wants an income for life for all citizens.

If only Macron the social democrat would put the two together.

And what's with this "on" suffix? Trying to elucidate their progressive credos?

Duffon? Nah.

SoD

From the UK's point of view it doesn't matter which one of them wins. They will all have the same primary policy - maintain the EU as a Franco-German racket to keep the French in the style they think they are entitled to.

BOE,

I don't think the Germans have been keeping the French in the style they think they are entitled to by running the Euro currency system as it is, far from it ...

http://www.telegraph.co.uk/business/2017/01/31/trump-right-germany-running-illegal-currency-racket/

The mercantilist French fked up when they said to the Jerries "You can re-unite, but only if you do a common currency with us and the others".

Nothing could better describe the failed ideology of mercantilism than what happened next to France and the others.

Only Germany understood that there would be winners and losers inside the system. The ones for whom the Euro was to weak would be thrust into an eternal boom driven by exports. The ones for whom the Euro was too strong would be in permanent recession, denuded of labour, capital, investment.

The Jerries knew mercantilism fails. And they also knew how to survive inside a mercantilist union. Get your state's productivity and labour costs lower than the others and let the undervalued (for you) currency do the rest.

I don't actually think the Euro implosion will be that catastrophic an event, in and of itself. Strong statement, I know. But think about even what perceived wisdom has as the worst train crash: an un-negotiated disintegration.

All the Euros in German banks will be redenominated as Deutschmarks. The sassy peripheral folks will have transferred their savings to Jerry banks. But, the Target2 system will have transferred an equal amount of cash back to the central banks of the peripheral states. That's what Target2 does: It maintains the money supply in each state as a counter-current to market flows in the currency between states.

So the Jerry banks will be stuffed full of high value DM's. The Jerry central bank will be minus whatever their share of the Target2 balance is. Problem solved by a netting off adjustment .

The peripheral banks will be empty of any currency, but their central banks will be stuffed full of what were Target2 transferred Euros and are now Lira, Drachma, whatever. Problem solved by netting off adjustment.

Now anyone, including banks and central banks, that has investments denominated in Euros will find the peripheral Euro denominated investment become Drachma investments. I had a 10 Euro share in a factory in Athens, becomes a 10 Drachma share. And I had a 10 Euro share in a German factory, becomes a 10 DM share. And the Jerry share's value went up by 50%, and the Greek one went down by 50%, due to the valuations of the DM and Drachma against the old Euro. What I made in Germany, I lost in Greece. It's zero sum to me.

So I can't see why balanced investors will suffer, and let's face it, it's not as though they haven't had enough time to adjust their investment spreads, so if they do fail because of a Euro termination, they bloody well deserve it!

In conclusion: If currency investors and fiscal investors net off or experience a zero sum game outcome, there are no intrinsic losers.

Also, with the Euro off the scene, and free floating currencies again in EU, and so long as the single market persists, the markets might well revalue all states upwards, knowing that the whole and parts are in a better place - the whole being dead and the parts in a single market and floating currency system.

So, for example, the Drachma might only go down 25%, not 50% (I mean, all those cheap shares in factories in Athens, they still produce grommets just like the Jerry ones), and the Jerries, free of the threat and uncertainty of a dysfunctional system, well their currency might go up by 100% rather than just 50%.

So anyone in currency and investments, which is everyone, will make a profit.

The problem will not be economics. It'll be political and social.

And that's where Blighty might have been in a position to forge a new EU of its own making, if we had been inside the EU, but not the Euro, we could dominate the politics and social as an operator independent of the economics of the Euro reversion to currencies.

That was always my position, as you know.

But maybe even outside the EU, combined with Trump America, we might be able to forge the post-Euro EU into something more to our liking also.

In which case we've been arguing about nothing!

SoD

From over here, it seems that who ever wins, the French will still be French. They have only "interests". Until somebody comes forward and throws a wrench into the whole set up of Leftist, Unionist, redistributionist gridlock...and then overcomes the social tumult to follow, nothing will really change. If this could happen, the streets will be flooded with Frenchman against Frenchman. The Muzzies will have to wait.

I think SoD your rosy optimism regarding the benign outcomes of the impending euro implosion is ... well, optimistic.

Your exposition of the French German trade-off looks perfect, the frogs really shot themselves in the foot there, and at the same time managed to f@ck over the wops, spics and all the rest who perhaps do less well out of the CAP and so effectively suffer even more in the Euro.

I think our ktaut friends have a very nasty shock coming their way as their rather old fashioned economy has been allowed to cruise along untroubled by the de-industrialisation that has characterised all other 1st world economies as a result as you rightly imply of the Hartz IV labour reforms which have tended to exert downward pressure on wages in exchange for full employment (not stupid by any means) and the EUR (not stupid either, but it will turn around and bite them in the arse eventually).

So once the euro wheels come off and their exchange rate goes through the roof they will have to adapt very quickly and it will not be pretty.

Herman doesn't like to be separated from his sausages, and I predict major upheaval and quite possibly violence against those perceived as being responsible. An ugly form of racism lurks below the ubane surface of the German psyche (as it does to some extent under most) and, well, let's see and hope for the best.

Thank you David, for an explanation of his best assets....

To continue with Andra's theme - so there are men out there who appreciate the ageing of a fine spirit!

Missred- Oh yes :)! I'm a tad younger than my wife. A trophy husband I am!

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