Market Talk – September 19, 2024
ASIA: The major Asian stock markets had a green day today: • NIKKEI 225 increased 775.16 points or 2.13% to 37,155.33 • Shanghai increased 18.74 points or 0.69% to 2,736.02 [...]
The Risks Are in the Eurozone Banks But Beware of Global Contagion
QUESTION: Sir,
Given the liquidity crisis and the problem to arrive from Europe, I have a question for us Europeans:
when you are talking about Europe and failures to come, you mean:
1. euro zone countries ONLY?
2. EU countries which still hold their currency (eg. Romania)?
3. what about the UK?
Thank you.
SM
ANSWER: The policy of a bailout will be carried out by the central bank. Those members of the EU who are NOT in the Eurozone will fair much better than the Eurozone banks. This is one reason countries should NOT join the euro at this time.
However, there will be risks for non-Eurozone banks deeply involved in derivatives. They will probably have exposure that can lead to losses emerging from the Eurozone which is rejecting a bailout policy. This could lead to a global contagion that will result in a major political backlash against the EU.
Latest Posts
Australia Prioritizing the Creation of a Wholesale CBDC
Speech by Brad Jones, Assistant Governor (Financial System), at the Intersekt Conference in Melbourne – ‘Financial Innovation and the Future of CBDC in Australia’: https://t.co/zuYTeslJhZ pic.twitter.com/3ndAbgjepq — Reserve Bank of [...]
Supplemental Poverty Measure on the Rise
The latest Supplemental Poverty Measure (SPM) found that at 12.9% of American households currently rely on government assistance, up from 12.4% one year prior. The figure was at 11.8% in [...]
Who Wants War – Raise Your Hand!
They say we live in a Democracy. That is the biggest lie and the first told to us by our Republican forms of government. Even the Pledge of Allegiance says, [...]
