is the euro going to collapse

Get-real-buy-real

purch wrote: »

Bretton Woods lasted 27 years at best, and the period from the end of the Gold Standard to the Bretton Woods agreement was 30 years.

The every 30-40 years nonsense is just hyperbole, and will soon need to be extended to 40- 50 years, as we move into 2012.

The Gold Standard ended in 1914. Ever since then we have had 7 or 8 failed attempts to control the monetary system.

As Keynes said after the Bretton Woods conference.

"What we have agreed to, is the exact opposite of a Gold Standard"

It's not the description of the BW agreement that is necessarily wrong, (even though I don't think you really understand how it worked) it's the every 30 to 40 years nonsense, and the implication that the monetary system will collapse soon, because it always has every 30 years, which it hasn't.

Utter nonsense.

The monetary system might well collapse, but it won't be just because of the date.

Ok so its the dates you disagree with me on, well I may well have been incorrect to say every 30 or 40 years new monetary system, but I did say very roughly and I think you are being a little picky.

But you agree with my simplified explanation here?

Get-real-buy-real wrote: »

After WW2 the world agreed to back all their currencies by the US dollar because they thought the US dollar was backed by gold bullion. This started a new monetary system called the Bretton Woods system.

Nixon stated in 1971 that from now on the US dollar was not backed by gold any more. Thus going back on the agreement. From now on the US dollar was fiat (unbacked) and since every currency was backed by gold through the dollar now every currency has been fiat since 1971. Meaning they can create more units of currency than gold and silver exist.

I know its a little oversimplified but basically this is the situation.


Seriously without BS baffling brains, can you point out in the best way where you disagree with this?

purch

What would happen to all the euro denominated investment funds?

Presuming that any breakup of the EUR was orderly and agreed, then it would very much depend on where the funds holdings were domiciled. There could be big winners and big losers, as once they revert back to, or start new currencies some would devalue hugely and some get stronger than their levels at the time of the EUR creation.

pqrdef

Ultimately, one way or another, people in each region of Europe will have to pay themselves according to their collective productivity.

With separate currencies, this was more or less automatic, because excessive wages would be corrected by devaluation.

Some parts of Europe have used the euro as a way to overpay themselves. This can never work. But breaking up the euro won't help. Common fiscal policy won;t help either. What's needed is pay cuts.

If people would accept the necessity of that, the euro could survive. Since they probably won't, the economy of Europe will fall apart and real wages will fall anyway.

Cleaver

Get-real-buy-real wrote: »

Whats the difference between the Zimbarbwe dollar and the US dollar? No difference

There are massive differences in the circumstances around these currencies and countries. It really concerns me how you give out such seemingly confident financial advice on this site when you think along these lines.

Linton

Clearly the stock market doesnt believe the Euro is heading for a catastrophic collapse, otherwise it would have fallen a lot more than 20%. Likewise the foreign exchange market - the price of the Euro against other currencies hasnt changed much.

paulmapp8306

i really hope it collapses. bloody stupid idea in the first place. Thank god the UK didnt enter is all I can say. Its bad now - but it would have been so much worse.

vivatifosi

According to the very funny spoof Angela_D_Merkel twitter account, she's proofing the new Deutschmarks and they are on nice paper.

michaels

Whereas the new drachmas are being printed on quilted double velvet?

vivatifosi wrote: »

According to the very funny spoof Angela_D_Merkel twitter account, she's proofing the new Deutschmarks and they are on nice paper.

ILW

michaels wrote: »

Whereas the new drachmas are being printed on quilted double velvet?

Have you seen the price of quilted double velvet?

It would be cheaper to flush Drachma away.

zorro10

i think that there is a chance that it will collapse and i did read something about this... so yeh maybe