If anybody has an expert view of the true state of Western governments then
it's Pimco, the world's largest bond fund. When it says -- yesterday --
that the latest bail-out gimmick by the European Monetary Union (not due
until 2013!) is untenable and will lead to its break-up then this opinion
is as realistic as you can get. "Greece, Ireland and Portugal cannot get
back on their own feet without their own currency or large transfer
payments." The latter option is simply not on. The constitution of the
European Central Bank won't allow it (so far) -- and, in any case, Germany
wouldn't contemplate any higher level of subsidies than it dispenses
already. I think we'll see the first break-up of the EMU in 2011, and
probably followed soon afterwards by Spain and then, very possibly, Italy.
All this could be prevented by China coming to the rescue, just as it's now
supporting the debts of the US government. But I doubt it. I think the
Chinese see their future in a new trading bloc and a new trading currency
involving the Middle East, Russia, Africa and Brazil. This is where they
will be devoting their funds in the coming years.
Keith
Keith Hudson, Saltford, England
<http://allisstatus.wordpress.com/2010/12/>http://allisstatus.wordpress.com/2010/12/
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