Don’t believe the hype, the Euro has about a 0.1% chance of being abandoned, not 14%. And if it is to be abandoned, it will be by one or all of the PIIGS hence making it a stronger not a weaker.
– Germany for all the news paper articles will not leave, will governments fall/change ‘yes!’ But German politics is so fragmented with power between all the parties that it is highly unlikely it could pull it off.
– Germany lived through it once when it absorbed East Germany paying a massive price updating what was basically a 3rd world country. Now, if you look at Germany they are not afraid to take their medicine because they are now reaping the benefits of that pain..
– They are use to having a brutally tough independent central bank, who in the last 30 years has done them right. They have terrible banks and commercial banks, but their central bankers are tough.
Does it hurt with what is happening, ‘yes!’ but the currency has not received any of the anger of any of the countries..
The most interesting point for us, regardless of the currency is what logans chart showed; don’t forget banks can borrow and have been borrowing from the ECB at .5% and as we see the Euribor has gotten to 2% so in the middle of that, banks make 1,5% on about 70% of all mortgages. And if that back window lending by the ECB stays open, banks will start to get healthier without even selling their housing stock. So don’t expect that fire sale..