England's White Dragon

England's White Dragon
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Saturday, 26 November 2011

EU, Euro conspiracy; Bleak Doomed Euro Christmas ahead

EU, Euro conspiracy;  Bleak Doomed Euro Christmas ahead

It’s a very bleak Christmas outlook for the Euro as it tumbles losing stretch in the past 18 Months as the doomed Euro Debt Crisis worsens and keeps on spreading

The euro slidern for a fourth week, its longest losing streak versus the dollar in 18 months, as Germany’s struggle with a bond auction signalled Europe’s debt crisis is touching the region’s once most fiscally sound nations it to now been bitten by its own doomed Euro hand.

The 17-nation’s doomed currency fell for a third week in a row against the yen as Belgium’s credit rating was downgraded and before the nation auctions securities next week, including 10-year debt. Italy and France will also sell bonds next week. The dollar gained against all of its most-traded peers after Congress’s budget super committee failed to reach agreement on cutting the U.S. deficit, sending investors to the safety of Treasuries and the English pounds stands strong, but for how much longer under a British government that are uncultivable who cannot make the big boys hard but right decisions, but the wrong decisions which is cutting the very sole out of England and not it rot?

“The conditions in the foreign-exchange market caught up this week with the conditions in the credit market,” Stephen Gallo, head of market analysis at Schneider Foreign Exchange in London (England), said yesterday. “Before, there was a lot of selling of periphery paper for core paper. But if Germany goes, there’s no more core paper to buy -- the capital leaves the euro area.” ( It’s not a case of IF Germany’s goes it’s a case of  “When” it goes, has it back door underhand deals haven’t saved it)

The Euro dropped another 2.1 per cent to $1.3239 yesterday in New York, from $1.3525 on Nov. 18. It last fell for four weeks in May 2010. The shared currency sank 1.1 per cent to 102.91 yen. The greenback gained for the first time in three weeks against the Japanese currency, appreciating 1.1 per cent to 77.73 yen.

Benchmark U.S. 10-year note yields fell five basis points, or 0.05 percentage point, to 1.96 per cent, their first close below 2 per cent in eight weeks, as investors sought refuge.
Seven-Week Low

The Euro touched a seven-week low against the dollar yesterday after panicking Italy sold 8 billion euros ($10.6 billion) of 183-day bills at a rate of 6.504 per cent, the highest since August 1997. The auction came two days after Germany, Europe’s biggest economy, missed its 6 billion-euro maximum sales target at a 10-year bond auction by 35 per cent many counties in the Euro can’t sell them fast enough making the dollar of the English pound the best buy (Getting more for your money).

With a hidden ad-gender the German Chancellor Angela Merkel again rejected calls for joint euro-area borrowing and an expanded role for the European Central Bank in fighting the debt crisis. Merkel, who spoke Nov. 24 at a press conference with Italian Prime Minister Mario Monti and French President Nicolas Sarkozy in Strasbourg, France, said euro bonds would lead to a convergence of interest rates in the region. German 10-year debt yielded 2.26 per cent yesterday, while comparable Italian government bonds yielded 7.26 per cent.

Sir Michael Black-Feather the English first minister said; “This Euro crisis isn’t specific to the periphery any more, and there is this constant reminder that the EU officials don’t have any real solution on the table, Sir Michael, said yesterday. “There is mounting concerns from the people about officials and their inability to get a handle on the crisis.” I had warned of this over five years ago, and over ten years ago the Euro maths could never work because none of the countries in it, they couldn’t actually work together in common policies

The cost for European banks to fund in the U.S. currency reached the most expensive level since October 2008. The three- month cross-currency basis swap, the rate banks pay to convert euro payments into dollars, swelled to as much as 1.61 percentage points below the euro interbank offered rate.

Goldman Sachs Group Inc. recommended on Nov. 23 that investors end a money-losing bet that the euro would gain against the dollar after Greece and Italy got new governments.

The close of the recommendation translated to a potential loss of about 2.3 per cent, Thomas Stolper, Goldman’s London- based chief foreign-exchange strategist, wrote in a client note.

Belgium had its credit rating lowered one step to AA by S&P, which said bank guarantees, political instability and slowing economic growth will make it difficult to reduce the nation’s debt load. The action by S&P is the first downgrade for Belgium in almost 13 years.

“Selling the euro on rallies is the ultimate fundamental trade you want to have before we get a real resolution,” Greg Salvaggio, senior vice president of capital markets at the currency-trading firm Tempus Consulting Inc. in Washington, said on Nov. 22.
Yen Performance

The yen was the third-best performer among the dollar’s 16 most-traded counterparts tracked by Bloomberg, after the Taiwanese dollar and Singapore’s dollar.

The Japanese currency had its biggest five-day loss against the dollar since Nov. 4, the week the Bank of Japan intervened and sold yen to curb gains that were hurting exporters. The dollar may strengthen more than 20 per cent to as high as 94 yen should it climb above key resistance levels, where sell orders may be clustered, at 83.30 and 85.50, Neuchatel, Switzerland- based MIG Bank said, citing trading patterns.

The congressional super committee’s failure to reach an accord on budget-deficit reductions extended partisan gridlock into the 2012 election year and set the stage for $1.2 trillion in automatic spending cuts.

The U.S.’s credit ratings and outlook weren’t affected by the panel’s failure, Standard & Poor’s said. The company stripped the U.S. of its top AAA credit rating Aug. 5, cutting the rating to AA+ after political gridlock on deficit cuts.
Krona Biggest Loser

The dollar surged 2.3 per cent this week against nine developed-nation counterparts tracked by Bloomberg Correlation- Weighted Currency Indexes. Japan’s currency rose 1.1 per cent, the euro slipped 0.1 per cent and Sweden’s krona was the biggest loser, falling 1.3 per cent.

The Swedish currency sank after central-bank Deputy Governor Barbro Wickman-Parak said Nov. 22 at a seminar the nation’s policy makers may cut interest rates if Europe’s debt crisis persists. Two days later, the Riksbank announced Sweden’s biggest banks will need to target tougher capital standards than those set by international regulators.

The krona depreciated 3.2 per cent to 7.0063 versus the dollar in its biggest weekly loss since Sept. 23. It declined 1.1 per cent against the euro to 9.2747.

Currencies of commodity-producing nations tumbled after the HSBC Flash Manufacturing purchasing-manager index for China declined to 48 this month, predicting the biggest contraction since March 2009. The Australian dollar fell for a fourth week, losing 3 per cent to 97.11 U.S. cents. China is Australia’s biggest trading partner. (The conclusion is and can only be, is the world’s debt and rescissions were all started by the EU and its Euro in some conspiracy to bring down the worlds governments not by war by chaos in debt?)

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