Friday, 12 August 2011
France and the Short Sellers - a misanthropic tale
I read somewhere this morning that France believes the UK has been up to its old tricks again trying to destabilise the euro. The French are truly paranoiac if they believe that. Their state of health is though worrying if they think that banning short selling of bank shares will help their banks survive. The government tried that here in order to protect HBOS which it said was perfectly sound. Shortly thereafter HBOS had to be bailed out. Brown's government was clearly lying then and it is fair to assume that the French government and the governments of Italy, Spain and Belgium which have also banned short selling of bank shares are now trying to pull the wool over the eyes of investors. It will not work since everyone and his dog knows that the euro and not short selling is the problem and until and unless someone takes the kind of appropriate action suggested by Ambrose Evans-Pritchard more and more good money is going to be thrown after bad. Either the euroland countries have to become one country or Germany and its acolytes must leave the current eurozone. Germany and its acolytes can then if they wish set up their own monetary union leaving France and the rest to run the original euro version which will help breathe life into them all following the inevitable devaluation of the euro as we currently know it. Surely the Treasury know this and surely they will have passed their thoughts on to Merkel and Sarkozy or is it an issue that can't be spoken about for fear of giving offence or worse for fear Germany and France will simply dig their toes in because we have dared think it. The idea of the current eurozone becoming one country does not seem a likely runner since someone has pointed out that Germany has still not properly assimilated East Germany and is unlikely to do so for a rather long time. The cost to the Germany being in the same country as Greece, Portugal, Ireland, Spain, Italy, France etc would I believe be unacceptable to the German taxpayer.
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