The Euro and Europe , Which will last?

A good day to all.
The debauchery of this week foretells the story of a possible burn up in the re-entering of the euro into uncharted waters. The UK government delvers its budget and Iraq is seen as the place not to do oil business. Also old news, we have new executive pope for the Vatican bank.

The Drop Ultimatum 

Cyprus has now joined the PIIGS (Porturagal, Ireland, Italy, Greece and Spain), to become the sixth country to need emergency funds to support its crumbling financial system. Germany is leaving the terms melt into Cyprus for time being as the emergency funds run low. German pins lay sealed against the collars of the ECB & IMF as no room is left for breathing.

The idea of a leaving of the Euro is more likely than maybe dear readers may imagine... Cyprus is in a few good corners for this to work. Firstly it is a small country and second Russia is a big backer in Cypriot infrastructure, though the last thing the oligarchs want is their back-door into the EU being lost. Still it seems that the church, being the largest landowner in Cyprus has agreed to help out the Cypriot government. At the same time Cyprus losing it's trading advantage from having the increased cost of currency exchange transactions will not be a pleasant move.

Cyprus wants to stay part of the euro, though the only current options at its disposal are to take a percentage of deposit holders reserves, which by far will fuel a bank run. Or try and lipo out any money that is in the economy. This evening from the democratic side of the government, mentioned the ability to raise at least funds from the nationalisation of the state pension scheme, though this is not reassurance to safety. Neither in the same interview conducted on Monday's BBC 'Newsnight' program that they are also looking at a Euro zone exit and going back to the Cyprus pound.

The stickier ends of Black Gold

Ten years after the invasion of Iraq by British and US forces, there have been many rumours that it was not for weapons of mass destruction but for the sweet blood of the world that everyone is desperate for. Well the truth of ten years on Iraq can possibly be one of the worst places to buy a lease to drill.
FT interactive map of Iraq Oil ten years on

Iraq has only seen production levels hit similar sums before the war. a few years ago oil firms were running to buy up leases, but with the low margins and excessive problems with payments by government, bad infrastructure and continuing unrest, many have chosen to pull out.

In the other view it has shown that iraq is unafraid of playing hardball over its resources and despite what many think. Iraq is incharge of its oil and many would rather face other countries beaucreacy than Iraq's.

The Endpoint

So time for the monthly forecast from Mr Gothic Economist...

http://youtu.be/-LSxpxjMQ9c?t=1m5s (a bit of music for the mood)

We may see the first ever exit of a country from the euro-zone. It could be a marvellous move, or spell continuing economic black areas for the euro. My guess is with the tiredness of Germany and it's direct position on Cyprus, the currency exit looks very possible.

Negative growth is forecast for the next two months of the year with a continuing rise in inflation and maybe an increase interest rates soon to combat this, regardless of what Mark Carney (New bank of England head) is known for. It would be a bold move; maybe bold enough to reduce the ongoing increase in the cost of living.

A continued increase in the cost of the barrel of oil. Barak Obama may have visited the middle east to cool tensions, but the only thing that is possible from that is stagnation as the best outcome.

And the new Argentinian pope will keep on watching & Playing from the Vatican Bank.

Good Evening!
http://www.youtube.com/watch?v=F0PLZzi2JJo

Germany vs Greece... The Epitaph of the Euro-Zone

Western Europe has experienced a rough spell of weather, the cold wind spitting up snow where the sand meets the seas in Portugal. The same cold bitter winds engulf Greece; and they have had enough of it.

As much as the snow for many has only been a cause for depressed thoughts and feelings. Most dark people will tell you, winter is our summer. Even as a Gothic-economist, the snow gets buried in the financial section of the newspapers still^^The words of default have loomed in the cracks of the euro-zone, though they stay there, freezing further and widening the cracks. The thaw then happens every time new bailout funds are given, only to expand the deepening debt more and more into Europe.

With €130bn up for Greek grabs again plus €200bn debt restructuring plan, default is still going to be there. The German Bund rate fell to one it's lowest levels following the yearn for safe-havens away from Greece, as investors struggle to see why they should still leave financial risk in Greek hands. With €14.5bn due in bond repayments next month, it is only inevitable that Greece is staying frozen. The forces of euro paper expressing their emotions have grown now to the AAA+ & A1 remaining european countries as they lose patience with the delayed default.

Looking towards my main opinion, it is hard to see why Greece has not defaulted yet? Yes there is the thoughts of it turning into a systemic plague with the other debt ridden countries. Though the longer they keep giving free money to Greece, the less money the other Eurostar countries have for their own safety.

With the occurrence now also turning into euro member hatred expressed in Greece, as protesters in Athens burn the German flag. How long will it be until Germany realises they have been saving their neighbour that won't repay the favour?

The other options that have to be considered are the strategic implications of a Greek default, with regards to political and civil backlash. The look of the Greek people can be seen to bestow civil unrest for the long term and how these unfavourable emotions could spill into the other member states. Avoidance of civil unrest after all the inorganic alterations in the economic foundations of Greece will only occur naturally, even if that means we have to leave Greece crumble so it can slowly rebuild itself back.

The worry for me does not lie with Greece, but the rest of Europe, more and more can it be seen that the european nations slowly copy the recovery phase similar to that of Japan's 1990 years? If so...The deed comes nearer and nearer.

This is monetarist and positive economic thought... Do not tamper with money in sovereign areas, it will only deepen the blade. 

Adiós