All for One Euro, One Euro for All?

http://www.marketoracle.co.uk/Article28262.html

All for One Euro, One Euro for All?

I have long said that the euro is not an economic currency but a political one. The question now before the voters and politicians in Europe is whether the EU evolves into something that looks more like the US, with limited state sovereignty and market-imposed limits on sovereign debt, where states and cities can fail and bond holders are at their own risk, and where the ECB takes over regulation of all national banks and becomes the backstop, as with the Fed, or devolves into something else.

Have the powers that be in the ECB quietly decided to let Greece go, as they should never have been allowed it into the eurozone to begin with, and because Greece clearly cheated on its statements about its debt and balance sheet in order to get in? You will never hear that in public from the leaders. It is simply not politically correct in "all for one, one for all" Europe. But that may be the outcome if Trichet really means "non!"

It really is the political class all over the world we have to watch. I will be glad when we get through the Endgame and can go back to worrying about balance sheets and consumer spending. What a quaint time that now seems. Think it is interesting now? Have you watched Spanish debt spreads? Wait until the market turns on Spain. Stay tuned.

(Woody assigned me some books on political theory to read on vacation. Hope I can get them on my iPad. Seems like a good time to start reading up on what the masters have to say.)

We're Off to Europe

I leave Monday for Philadelphia and Boston, and then its on to Tuscany (where the euro is way too strong!) for a few too-short weeks, where I hope I can catch up on some reading and get my next book outlined and started. I really have to get into Schumpeter and his thoughts on change. Most of my kids (5 out of 7) will already be there when I arrive; and then when they leave Tiffani (and Ryan and Lively and the nanny) and I will stay for a working holiday, with friends dropping in to see us. I am planning on not going more than a hundred meters from the villa, except for power walks. The little village of Trequanda (pop. 1,000) has a 4-star restaurant, Il Conte Matto (http://www.contematto.it/ita/index.php), an awesome pizza place, and a bar; and you can get local chefs to bring fresh food most nights and cook, so we can eat out on the patio watching the sun set over the Tuscan hills. It hardly gets any better. This is the first place I have gone back to for a vacation in my adult life.

I do travel a lot, and work on the road, but this is kind of an experiment for Tiffani and me to see if we can work and really get things done while not in Texas. I am usually not as productive on the road as in my office, so we will see if I can move my office to Tuscany. If you see us at a large table at Il Conte Matto, come by and say hello! I can recommend some great local chardonnays!

It is time to hit the send button. But I must confess that I am not pleased with the results of the Mavericks-Thunder series so far. Somebody forgot to tell Oklahoma City they are supposed to roll over. But I will say it has been great basketball. I will miss that while I am on the road.

Have a great week. If we have a week. Once again we have some guy getting a lot of press here in the US with his prediction that the world ends tomorrow (really, why is Fox News among others covering this nut case?). I can say with some certainty that all previous such predictions have been bad bets, and since I am writing this letter late at night, I guess we can say that I am doubtful of this one as well. Now, predicting the end of the euro as we know it? Or that Greece will default? That is an "end of the world" I can believe in.

Your assuming you did not get raptured if you are reading this analyst,

John F. Mauldin
johnmauldin@investorsinsight.com

John Mauldin, Best-Selling author and recognized financial expert, is also editor of the free Thoughts From the Frontline that goes to over 1 million readers each week. For more information on John or his FREE weekly economic letter go to:http://www.frontlinethoughts.com/learnmore

All information on this website is for educational purposes only and is not intended to provide financial advise. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold MinKL Invest harmless in any and all ways.