Is the Euro really the German D-Mark in disguise

In 1999, the Euro currency started trading in world financial markets. The Euro coins & banknotes replaced German marks and fifteen other EU member states currencies on January 1, 2002. The euro zone includes almost 300 million people. Outside of the EU, 23 countries peg their currencies to the Euro (175 million people). The Euro currency's highest rate against the dollar was in 2008 at $1.599 and the lowest was in 2000 at $.8252.

In 2008, Germany, France & the UK accounted for almost 60% of the total GDP of the EU countries ( the UK is a member of the EU without adapting the euro currency). Germany's share of GDP of Euro currency countries is over 30%.

The German government has approved a EU Greek rescue package of 110 billion euros and a plan to be unveiled tomorrow that will help support the euro currency. It is clear that the citizens of Germany are wondering what happened to their strong currency, the D-Mark. The results from elections held in Germany today point to rejection of support for the Greek rescue. What will happen next?

Contagion erupted in American markets last week and will probably continue into this week. Gold is hitting all time highs as speculators are broadcasting doomsday forecasts. It is up to the German government to stop this speculation immediately.

German chancellor Angela Merkel must take the leadership role in the EU or face the end of the Euro currency. Time is running out for Europe and it will spread to the rest of the world within hours.

Random thoughts....Obama, Bernanke and Geitner realize that the problem is the EU and not Goldman Sachs....it is time to focus on the global sovereign debt problem...Spain could be next and that will not be pretty....

We Want Our Money Back

President Obama has told US Banks, "We want our money back and we are going to get it". This new tax which will total about $90 billion will be collected from the top 50 banks over ten years. It will impact the top six financial institutions (JPM, Bank of America, Citigroup, Goldman Sachs, Morgan Stanley and Wells Fargo) the most. The tax which is based on liabilities will cost each bank about 15 basis points on every loan that is written. Why isn't the goverment asking General Motors, Chrysler, Freddie Mac, and Fannie- Mae to pay this tax?

It seems to me that the Democratic President & Congress are trying to win votes by blaming Wall Street for the Great Recession of 2008-9. I can remember that all of these banks borrowed money from TARP and repaid it in full with interest prior to the end of 2009. The President feels that if the banks have enough money to pay huge bonuses, then they should pay this new tax. Are we going to tax Exxon for making too money on oil? I believe that populist laws like this will lead to a slower economy and potential disaster. I thought we were worried about banks' loaning more money and unemployment. This new bank tax program will not get us there.

Random thoughts...The January indicator for 2010 market performance is doing extremely well ...Earnings from Intel and JPM were excellent and will lead to higher prices later this year for those stocks...next week other financial companies like Goldman Sachs, Citi, Morgan Stanley & Bank of America report on 4Th Quarter 2009 Earnings.....the Big event next week may be the surprise election of a Republican Senator in Mass. to take the late Ted Kennedy's senate seat....