If you are new to this blog, you are invited to read first “The Largest Heist in History” which was accepted as evidence and published by the British Parliament, House of Commons, Treasury Committee.

"It is typically characterised by strong, compelling, logic. I loosely use the term 'pyramid selling' to describe the activities of the City but you explain in crystal clear terms why this is so." commented Dr Vincent Cable MP to the author.

This blog demonstrates that:

- the financial system was turned into a pyramid scheme in a technical, legal sense (not just proverbial);

- the current crisis was easily predictable (without any benefit of hindsight) by any competent financier, i.e. with rudimentary knowledge of mathematics, hence avoidable.

It is up to readers to draw their own conclusions. Whether this crisis is a result of a conspiracy to defraud taxpayers, or a massive negligence, or it is just a misfortune, or maybe a Swedish count, Axel Oxenstierna, was right when he said to his son in the 17th century: "Do you not know, my son, with how little wisdom the world is governed?".

Tuesday, 11 January 2011

Euro is dead

A single currency is not simply about having the same notes and coins in circulation. A key part of a single currency is having the same interest rate on all sovereign debt, in the same way as there is a single central bank's interest rate. Quite often this argument was used to sell the single currency project, Euro, to the public in some countries of somewhat lower credibility than Germany or France. At present, there is no more single sovereign debt interest rate in Euro-zone: for example, German debt attracts much lower rate than Greece's.

The governments must face the fact that the sovereign debt markets decided and Euro-zone governments confirmed it by not introducing a single Euro-zone bonds (i.e. underwritten by all Euro-zone governments collectively): the Euro is not a fully fledged currency any more. It is dead. Now we are dealing with Euro which is a fudge of a single currency. Whether the next step would be to become a single currency again or the Euro-fudge keeps disintegrating is the question for 2011. The inklings are that the latter is very likely to be the case as Germany are unlikely to guarantee debt of other Euro-zone countries such as Greece, Ireland, Spain, Portugal, Belgium, Italy. The list is quite long indeed.

However it is highly likely that European politicians will keep repeating that the Euro is safe and it is business as usual. For an experienced psychiatrist-counsellor this will not come as a surprise. It is called a denial syndrome. For example, some close relatives of a dead refuse to accept this fact for a long time. Indeed this was how the French Finance Minister, Ms Christine Lagarde, came across on the last week's BBC Newsnight.


  1. hi greg,

    if the chinese and japanese are buying euro debt is the euro really dead?


  2. Hi Reginald

    To be precise: Euro as a currency is dead. Euro is NOT a single currency any more. I hoped this was quite clear.