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The European Central Bank (ECB) is instructing banks to restrict the conversion of Euros to dollars. The Euro has fallen to 1.13006 US Dollars per EURO.

The drop in value of the EURO is not significant.  Previously, it has traded as high as 1.25 Dollars per EURO.  A twelve cent change in value over the course of many months is not a big deal in the real world.  But in the world of currency, it is a very significant change and it tells European Bankers that "the folks who know are getting OUT of the EURO."

Once again, the dangerous game here is when we cross that line of demarcation between CONFIDENCE in government and the REALIZATION that there is nobody in control but the free markets.

The Free Markets see the games being played by the government of Turkey with respect to the United States, and the market knows the US is going to slam Turkey economically unless is releases a US Pastor it is holding for two years on bogus charges.  As the United States tightens its economic grip on Turkey, the Turkish currency (Lira) will lose enough value to cripple that nation.

When that happens it will cause the Turkish government and most Turkish Corporations to DEFAULT on loans.   Those loans - from European Banks, are contractually required to be repaid in US Dollars. 

Once the Turkish Lira falls in value to over 7.1 Lira to each US Dollar, there won't be enough Lira in existence for Turkey to pay off the loans . . . . which will take out several VERY large European Banks. 

Once the European Banks start going down, that will take a couple LARGE US banks down too, causing a massive currency crisis which ONLY the US Dollar can withstand. Hence, the smart money is moving OUT of EUROS and IN to Dollars.  That's why the ECB just told banks to restrict conversion to Dollars; they see the writing on the wall for the EURO.

 

Once all the talk and all the promises are no longer considered to be worth listening to, that is when the monetary crisis begins to really shake the foundations. We are moving closer to that point of no return.

The truth always comes from the mouths of babes. In the case of politicians, it is the new one who comes to power and has not yet learned the tricks of the trade. In this respect, Italy has spoken the truth.

Italy says the ECB has had the Eurozone on life-support. They cannot pull the plug without the collapse of the Euro and with that, lies the jobs in Brussels. This is why they will become draconian and attempt to outlaw selling the Euro all to maintain their jobs. They will lose. The free markets ALWAYS win!

 

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  • Comment held for moderation.
    candice99 · 15:54 08/15/2018
    relax
  • Comment held for moderation.
    GetReally · 14:58 08/15/2018
    Hal, I read the Turkey Central Bank is allowing their banks to restructure their dollar-denominated loans to other FOREX currencies.

    First, have you read this (Bloomberg, WSJ)? And two, wouldn't that make the above scenario unlikely?

    Not being sarcastic, I just really would like to know if you have other info. Thanks!
  • Comment held for moderation.
    Sammy Jew · 14:51 08/15/2018
    I am perplexed by this news.
  • Comment held for moderation.
    Guy Aul · 14:48 08/15/2018
    Just something I've noticed around 2008-early 2009 time frame. Just before everything tanked worldwide, the price of gold and silver was taken down hard. After that, gold went to around $2K per ounce and silver to about $50 per ounce. We'll see if the same things happens again? Gold and silver bottomed out back then about 6-7 months before the stock market bottomed in March of 2009.
  • Comment held for moderation.
    deli · 13:52 08/15/2018
    relax....just checked xe.com for turkey rates...the USD is at about 6- even per. so now worries....as they say.... but my local supermarket was selling sliced trukey at $6.02 per pound...good deal there!
  • Comment held for moderation.
    Rabbi Bitberg · 13:48 08/15/2018
    >Hence, the smart money is moving OUT of EUROS and IN to Dollars.
    >IN to Dollars
    lmao
    oy vey, goy
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