Force Majeure is only tenable when the cost of force majeure is less than the assets it can achieve.
In the year 2011, under Pax Americana, we think it is unlikely that force majeure is attempted to solve any economic issue, except by the Americans. Very much unlike the years 1917 and 1941, force majeure is not likely to influence long term economic stability.
Monday, July 18, 2011
End Game for the Euro
Unfortunately, the Euro was a bad idea. The Euro is a single currency that represents the economies of many autonomous countries.
Any scale of ten countries, for example, would have a worth-rank from 1 (best) to 10 (worst) and number 1 would most likely not be happy with number 10, etc.
Also and unfortunately, the degree of socialism in the Euro block has proved to be a large economic problem so far.
In essence, the Euro is relatively worthless and will become more so with defaults.
You can call a default anything you want to call it, just as you can call printing monopoly money "quantitative easing" but the facts are the same.
Europe has fallen, again. Probably this time the US will not be shortsighted enough to pay.
This time, there is no WW3 because no one in Europe has the power to force a WW3.
There can only be world-wide European default. (Of course, that will be a problem for China and China also does not have the power to force a realistic WW3.)
Most likely, the Euro default will be in the form of monopoly money from the printing presses to the admonition of the number 1 and 2 countries in the Euro zone.
Watch out. There are not 10 years of lies left, there are only a few years max. Everyone needs to consider every aspect of investing. Gold can help you, but you need to live in China in that case.
Any scale of ten countries, for example, would have a worth-rank from 1 (best) to 10 (worst) and number 1 would most likely not be happy with number 10, etc.
Also and unfortunately, the degree of socialism in the Euro block has proved to be a large economic problem so far.
In essence, the Euro is relatively worthless and will become more so with defaults.
You can call a default anything you want to call it, just as you can call printing monopoly money "quantitative easing" but the facts are the same.
Europe has fallen, again. Probably this time the US will not be shortsighted enough to pay.
This time, there is no WW3 because no one in Europe has the power to force a WW3.
There can only be world-wide European default. (Of course, that will be a problem for China and China also does not have the power to force a realistic WW3.)
Most likely, the Euro default will be in the form of monopoly money from the printing presses to the admonition of the number 1 and 2 countries in the Euro zone.
Watch out. There are not 10 years of lies left, there are only a few years max. Everyone needs to consider every aspect of investing. Gold can help you, but you need to live in China in that case.
Banks vs. the US Economy
US banks operate on a simple principle. They are allowed to take US dollars from people in the various forms of deposit and then use the money they have accepted and invest it.
The idea is that the people who qualify to be bankers by US law are supposed to be able to invest their deposits, grow them, and then have no problem paying back their depositors.
Unfornately, bankers are sometimes kind of simple, i.e. they do not raise their capital; instead, they lose it.
There are many alternatives to the US banking system. Or for that matter, alternatives to the European banking system.
It's a brave new world with decades of trouble ahead. Sometimes we need to discard the leaches that provide no value-add and decide on a better way. Better ways are obvious and lucrative.
The idea is that the people who qualify to be bankers by US law are supposed to be able to invest their deposits, grow them, and then have no problem paying back their depositors.
Unfornately, bankers are sometimes kind of simple, i.e. they do not raise their capital; instead, they lose it.
There are many alternatives to the US banking system. Or for that matter, alternatives to the European banking system.
It's a brave new world with decades of trouble ahead. Sometimes we need to discard the leaches that provide no value-add and decide on a better way. Better ways are obvious and lucrative.
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