Welcome To The Currency War, Part 2: Massive Euro Devaluation!

• Let me assure you that eventually the Illuminist banksters will QE to infinity. This is of course massive currency debasement. Not only will the Euro collapse, it will trigger a global currency meltdown!
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  Welcome to the Currency War, Part 2: Massive Euro Devaluation! 
  by John Rubino, http://dollarcollapse.com/ 
  As everyone knows by now, Greece, Spain and the rest of the PIIGS countries can’t fix their economies because they can’t devalue. If they were still using their old national fiat currencies, so goes the conventional wisdom, they could just mark them down by 30% and instantly see their exports surge and their deficits shrink. Et voilà, they’d once again be fully-functioning members of the global economy.
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  But the euro is beyond their control, leaving them with only austerity, which in this context is another word for Depression. Hence all the speculation over radical-but-suddenly-conceivable ideas like a Greek or Spanish exit, fiscal integration with Germany in charge, and eurobonds guaranteed by the eurozone as a whole.
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  This is all wasted effort, however, without the final piece of the puzzle: The ECB will have to flood the system with newly-created currency, which is another way of saying that the euro itself will have to be devalued.
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  Acknowledging this inevitability, Martin Feldstein, Harvard professor and former chairman of Ronald Reagan’s Council of Economic Advisers, calls explicitly for a euro devaluation in today’s Street Journal: 
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  A Weaker Euro Could Rescue Europe  Devaluation is the only way to save the single currency. The only way to prevent the dissolution of the euro zone might be a sharp decline in the value of the euro relative to the dollar and to other currencies. European politicians’ dreams of political union and permanent fiscal transfers are not realistic solutions to the multiple problems of the euro zone’s peripheral countries—especially on the tight schedule needed to halt the collapse of the single currency. The European Central Bank (ECB) may continue to provide additional liquidity, but experience has already shown that it cannot reduce sovereign bond yields to sustainable levels.
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  The peripheral countries—Italy and Spain, as well as Portugal, Ireland, Greece, Cyprus and perhaps others—can only remain in the euro zone if they solve four difficult problems. First, fiscal deficits must be permanently lowered to reduce the interest rates on sovereign bonds to levels that can be financed in the long run. Second, economic growth must be revived to create employment and sustain political support for that fiscal consolidation. Third, commercial banks must be recapitalized to stop the deposit runs and preserve lending capacity. Finally, large trade deficits must be eliminated so that these countries are not permanently seeking transfers or loans from foreign creditors.
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  Politically difficult decisions could solve the first three of these problems. Less government spending and higher taxes could reduce fiscal deficits. Changes in labor laws and other institutional barriers to productivity could produce stronger economic growth. And sufficient growth would give governments the fiscal capacity to recapitalize their commercial banks.
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  read more!

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