Posted Mar 9, 2015 by Martin Armstrong
It is only a matter of time until the Euro collapses sinking into the abyss. The French presidential election could be the straw that starts the disintegration of the Euro. The reason is very clear. The economic abyss with youth unemployment over 60% warns there is the complete failure to create new jobs and overall 20% unemployment in Euroland would mean the end of the single currency with massive civil unrest. The problem is NOT Greece. Greece is illustrating the problem. Brussels is holding on for dear life, but the end-game was began in 2008. That was the fateful year the Euro peaked. It was the end of times for Europe. The mindless people still think that a strong currency is like a stock and it is strength rather than weakness. This stems from the entire mixed up idea of inflation and deflation. The higher a currency in price, the more deflation one sees rather than inflation for assets are on the OPPOSITE side of a currency. Those touting a return to a gold standard are wishing for deflation where assets decline along with wages.
Just from a technical perspective, the Euro closed 2014 beneath the upward channel which stood at 122. The Euro closed 2014 at 120.99. The rally in the DAX is reflecting that the smart money is starting to bet against the survival of the Euro itself. From a timing perspective, the earliest target for the end of the Euro will be 2018. The latest appears to be 2020/2021 on a normal trading cycle. If we were to extend by summary law, since European leaders are so eager to end democratic elections when they know they are dead wrong, that the maximum extension would be to the next half cycle after the ECM peak in 2023 bringing us to 17.2 years from 2008 into 2025.
The economics behind the Euro are a total disaster. The fatal flaw was the refusal to consolidate the debts of members as completing the requirement for a single currency to be a single debt. This is what we get when lawyers run the state. They know how to write laws and punish people who do not comply. They do not understand the economy or human nature.
German debt is soon to explode. Then we have the implosion of the banking system for their entire reserves are based upon politically correct investment into government debt of all members. This is a Greek Tragedy mixed with a comedy of errors and people in Brussels refusing to admit they screwed up big time. They are refusing to concede the ship is sinking.