Will Germany Walk Away from The European Union?
By Todd Harrison
Minyanville.com
Sep 06, 2011 10:10 am
When the going gets tough, the tough take care of themselves.
As I settle back into my turret after an eventful week away, I would like to highlight Ambrose Evans-Pritchard's article in The Telegraph, German Endgame for EMU Draws Ever Nearer. http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/8740389/German-endgame-for-EMU-draws-ever-nearer.html
While the entire column is a must-read, the quote below caught my attention:
"We will find out to what extent Germany’s constitutional court shares these fears when it rules this Wednesday on the legality of the EU rescue machinery, and delivers its verdict of life or death for monetary union."
I will also note the research report issued by UBS titled Euro Break Up- the Consequences, http://www.zerohedge.com/news/bring-out-your-dead-ubs-quantifies-costs-euro-break-warns-collapse-banking-system-and-civil-war , which speaks of fiscal considerations, economic costs (if either a weak or strong country drops from the EU), the political costs, and the ultimate social costs. And I quote, again:
"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."
As we've written about an unfortunate needle that points to war before http://www.minyanville.com/businessmarkets/articles/todd-harrison-economy-geopolitics-stock-market/11/10/2010/id/31025 -- and we got more than a few scrunched noses because of it -- I'm not going to belabor this evolution. I'll simply ask that you to respect the risks, as well as a potential catalyst tomorrow (the German vote).
This may be the "other side" to The Five-Step Guide to Contagion;http://www.minyanville.com/businessmarkets/articles/contagion-todd-harrison-denial-anger-bargaining/2/10/2010/id/26787?page=full taking a fire hose to the fuse, and drowning the region in the process.
Clearly this is not something one wishes for, but we must trade (and live in) the world we have, not the one we want until such time that we collectively change our forward path.
Full story (it's a MUST READ): http://www.minyanville.com/businessmarkets/articles/todd-harrison-stocks-stock-market-economy/9/6/2011/id/36722
Gold is $1,581/oz today. When it hits $2,000, it will be up 26.5%. Let's see how long that takes. - De 3/11/2013 - ANSWER: 7 Years, 5 Months
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