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Pippa Malmgren | Commodity Online: Germany may in fact be preparing to abandon the Euro

So an 'insider', Pippa Malmgren, who is on the board of Deutch Bank among others, says that Germany has started printing the Deutsch Mark in a hurry. This is backed by public opinion in Germany where 71% see no future for the Euro.

Pippa Malmgren | Commodity Online: Germany may in fact be preparing to abandon the Euro:

I was surprised at first by the concept, but on second thought it makes huge sense: Germany strength IS Euro's main problem (lack of discipline by governments in peripheral countries obviously not far behind) and their removal would increase competitiveness of weaker European economies via corrective devaluation.

The widely discussed scenario of marginal countries such as Greece and Ireland dropping out of the Euro presented a serious issue: once their currency dropped in value, relative debt would increase proportionally because they were issued in the stronger currency. This would trigger mass defaults by the countries that left, and further destabilize the system (a.k.a. contagion).

The Germans most probably see their exit as the logical solution, and they are most probably right. Now, for people holding reserves (savings) in Euro, the question would be: how do I avoid my savings depreciating too badly if this occurs? I see two options, either opening a bank account in Germany in Euros, which should then be converted to DM after Germany's exit, or buy gold. However, gold carries significant risks.

Last time I checked, it was almost impossible for a non-resident to open an account in Germany. I wonder if this has changed?

Comment 10 Nov 2011: The International Business Editor of the Telegraph suggests Germany's departure as the best option for the Euro: http://goo.gl/0Afsq


Comment on  27 Jun 2012: Anatole Kaletsky, Reuters journalist now suggests Germany may have to be booted out http://blogs.reuters.com/anatole-kaletsky/2012/06/27/a-german-exit-from-the-euro-could-be-relatively-easy/

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