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Update on the Euro Zone Crisis


Update on the Euro Zone Crisis

 

In my humble opinion, and as I have written over 1 year ago, there must be meaningful structural changes to the ECB. I would think and hope that as the big banks in France and especially Germany slowly deleverage out of the Euro Zone and it’s debt, and as China likely continues to implement a slow diversification of it’s sovereign wealth from US Dollars to Euros, necessary ECB reform will become more of a reality.

I think the biggest threat to the Euro is whether it can sufficiently implement enough debt restructuring, institutional changes to the EU governing body and especially structural changes to the ECB before the next global financial & economic crisis / recession hits ( later rather than sooner for all of our sakes. )

Rest assured that the next global recession crisis is likely to hit us all sooner that the historical average for recessions. If the EU can not get it’s house in order within the next 3 years or so, it will be tempting the possibility of the collapse of the Euro and the European Union itself. But I believe that a three-year window of time is sufficient, as long as there are no large, global, unforseen financial & economic crises in the meantime. One of the first tests we will all face will be how the U.S. Fed will handle the challenge of deleveraging the toxic U.S. mortgages off of its balance sheet.

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About Neven's Blog

My blog focuses on FINANCIAL MARKET ANALYSIS & INSIGHT from a macro as well as a micro - level point of view. The information is straight forward, honest, simplifies complex matters, questions some oversimplified matters, all while being as easy as possible for readers to understand. I primarily focus on capital and currency markets by combining insights, analysis & ideas from the fields of finance, economics and geopolitics.

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