16 Comments
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KC's avatar

I feel this is the reason Europe is pushing for a war with Russia. First and foremost, it’s their only option. It addresses most of the financial problems of the EU countries. France alone has frozen 70 billion of Russian assets. That would buy France some time.

Blair's avatar

I'll just leave this here: WisdomTree Long USD Short EUR 5x

pierito's avatar

Great work as always Arthur! Thanks

Mark Tetreault's avatar

Thank you.

Keep up the good work.

Joni's avatar

Thanks for the help thinking Arthur! Mucho appreciated.

Benjrieder's avatar

Very interesting article and a definite must read for all euro-poor-eans. But don't you think the zero-sum doom loop you're describing will be backstopped by the inherent catch 22 that has allowed the EU dream to continue to "muddle-through"?

In this catch-22, Germany (Lux, NL and Finland in addition as other surplus countries) need deficit countries like France to keep their exports cheap. And in a world with Trump tariffs, they crave access to the open market of the EU to continue to sell their products.

Historically the surplus veto countries have compromised a lot to maintain the "currency anchor nations" within their sphere of influence, so why wouldn't they allow this years 3th (or 4th?) French government to break the Maastricht Treaty and break through the 3% GDP spending benchmark?

Tom Trowbridge's avatar

Agree with all of this ..but what happens when Russia attacks Eruope? ECB then has easy excuse to print, and France has excuse for austerity. Doesn’t chnage the inevitablee but does delay it another 5 (?) years.

RS's avatar

Another fine essay. Thank you for putting this out there!

Javi's avatar

Panama Hat 👒 Stays On!!!

Andre's avatar

"teacher-fucker pet" goes way too far. I something wrong with you?

Jim Garner's avatar

There is only one thing I don’t understand. Why is Lagarde a crocodile. I hate not getting a good joke.

Herrsosa's avatar

Always a highlight.

jerome de tychey's avatar

Damn those blurry charts :-{

Duo Nine⚡YCC's avatar

Bitcoin is a great escape, but buying at current prices is a bit risky too. The fiat ponzi has been ongoing for decades, it can take a while to collapse.

Blair's avatar

I believe there is a strong chance this thesis plays out next year in a recession. The contagion will be too big and the EUR will collapse against the strength of the dollar which is like adding NOS to this Peugeot 508 SW