Finance and politics are not entirely the same subject, though they are closely related. Thriving economies make politicians popular, and diving ones do the opposite. However longer term the matching of political trends to financial outcomes gets harder. Here, however, a financial expert claims he predicted the Euro's demise before it was even launched!
The European single currency, the euro, was introduced in 1999. Today its report card -- and that of the eurozone -- looks impressive:
After entering circulation in 2002, the euro has since become the world's second largest reserve currency, likewise the second most-traded (after the U.S. dollar).
This year, the total value of euro coins and banknotes surpassed that of the U.S. dollars.
A 2008 IMF estimate named the eurozone the second largest economy in the world.
These are remarkable achievements. Why, then, is the euro also quickly becoming one of the most suspect currencies in the world? Reports the October 19 New York Times (bold added):
"The euro was a political project meant to unite Europe... Instead, the euro seems to be pulling Europe apart. ...anxiety in Europe is growing, and not just about the euro. The assumptions of 60 years suddenly seem hollow, and the road ahead is unclear... ...Europe is unpopular, a local metaphor for globalization, faceless and interfering.
“'It is a financial, economic and social crisis. But also a crisis of confidence... threatening the benefits of 60 years of European integration...' 'We are confronted by the greatest challenge our union has known in its entire history.'”
Today, after the European debt crisis has dominated the headlines for a couple of years, these words don't seem so radical.
But what if you heard or read something of this kind 6 years ago, or even 12?
In 2005 -- long before the euphoria over the new union had worn off -- statements like that would be considered heresy. Yet that's exactly what our research here at EWI suggested for the future of the euro and the EU:
“During the bear market, the independent nations of Europe will rediscover their borders and rekindle the animosities that kept them apart for centuries.”
-- The Elliott Wave Financial Forecast, May 2005
Even going back to 1999, the Elliott wave patterns in European stocks were already forecasting trouble ahead for the emerging European Union:
“[The] European Union was consummated following 1,500 years of repeated conflict in the region....This multi-year pageant of apology, concession and agreement and the concurrent wonderful atmosphere of international peace and cooperation are consistent with my Elliott wave case that an uptrend of Grand Supercycle degree is ending.”
-- The Wave Principle of Human Social Behavior, 1999, by Robert Prechter
These forecasts are no reason to gloat. We don't like to see a good idea go bad any more than you do. We simply wish to point out that when trying to anticipate the EU's future, the conventional model of economic and social forecasting fell way short.
On the other hand, socionomics -- the new science of social prediction based on the Elliott Wave Principle that allowed us to make the forecasts you see above -- did help to foresee the EU's trouble, based only on the long-term Elliott wave pattern in European stocks, the measure of Europe's social mood.
If you find this ground-breaking idea fascinating, you'll probably enjoy reading EWI president Robert Prechter's pioneering book on socionomics, The Wave Principle of Human Social Behavior.
Never trust any financial forecast is my advice. Yet this one seems to be as good a one as you could find!
What he doesn't mention is what comes next. Was the Euro designed to be a deliberate failure right from the start, to draw strong nations into the web and crash them to the ground all at once? Who could possibly benefit from such events?
Why? The central bankers, of course, who are cashed out and ready to buy up Europe for nothing, when the crash comes.
comment from Paul Henri Cadier -
Thé EU's own economists versed in Prof Robert Mundell's theory of optimum currency areas predicted the eurozone's vulnerability to asymmetric shocks. Ten years on Harvard's currency guru has been proved right.
The authors of the United States of Europe project realized that " a beneficial crisis"would arrive, the "solution "to which would be "more Europe". (known as the Monnet method).
As I write the French élite are proposing a single EZ government to solve the debt crisis. They will have succeeded in getting German tax payers to underwrite undercapitalised French banks.
What the EU did not bargain for was the Lehman Bros and sub-prime crisis happening at the same time. This crisis is in no way beneficial to the USE project. It has caused it's démise
TAP nice comment. The thieves were robbing everything and everyone at once, putting the ultimate crash out of their own control.