Euro is "credible," not in crisis: Trichet

Source: AFP

"I think that we have to see that we have a currency that is credible," Trichet told RTL radio a day after the ECB backed an extension in special measures to tackle eurozone debt pressures. "There is no crisis for the euro as a currency. We have problems of financial instability that are the result of budget crises in certain European countries," he added.

The bank on Thursday left its key interest rate at a record low of 1.0 percent but said it would extend cheap emergency funding for the commercial banks through the first quarter of 2011.

Crucially, the ECB also said it would continue to buy government bonds to help ease pressure on a growing list of financially vulnerable eurozone countries -- Belgium, Greece, Ireland, Italy, Portugal and Spain -- but gave no indication it would increase its purchases.

Read more: http://news.yahoo.com/s/afp/20101203/bs_afp/eurozonebankeconomyfinancetrichet_20101203073633

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M. Trichet has always appeared to have a steady hand on the tiller, whatever the financial weather. The €uro really is a mutual rock of strength, a common anchor that provides security and solidarity for all.

Mixed metaphor. Or is it? As any sailor will tell you, when a really heavy storm blows up, the last thing you want to do is lie at anchor, and you want plenty of sea room, as far away from any rocks as possible. This would be akin to the UK's approach with its independent pound sterling.

Thing is, though, the financial storm is not (yet) that bad in Europe or beyond, in Asia. It certainly is very bad, though, in the USA, or so I understand from reading DU, where the storm is also deeply political, even constitutional and perhaps indeed, potentially, revolutionary. And the dollar is, everywhere, losing ground as an international trading and reserve currency.

Just a few thoughts off the top of my head this cold morning in W. Europe.

The same rot that hit the USA first will hit everywhere else soon, especially if the Koreas decide they want to fight again.

Do the bankers want the Euro, or not? If they do, then they have to stop attacking it. If they don't, they are doing a good job of fomenting the destruction of the EU.

If chaos is the goal, to facilitate looting, that's a destructive policy that will guarantee an end to looting and hoarding. It's a short term gain, not a long-term plan.

Something about the financialists.

The only currency that could unseat the american greenback as a global reserve currency is the Euro.

I think the threat on the US dollar is very real. What better way to gain stability of THAT currency than to undermine its one main competitor?

I also think it should come to little surprise that shortly after the Fed's announce quantitative easing and the predictable dollar's slide....suddenly Ireland is in default and courted by the IMF, and rattling the confidence of the euro.

The euro is safe as long as the american greenback reigns supreme....but if it doesn't - then all bets are off. It is war of another nature...but war, just the same. Those who hold billions in American dollars want to ensure that the value does not go down.

Why bother taking an actual risk with your investments when you can short sell a stock or bond & then have your friends in the media talk it down to a point where you can make a massive profit?

It isn't about long term gain, pension funds and trusts buy bonds as long term investments, the short sellers are simply in there for a short term killing. If they can't crash a currency they'll turn to a listed company instead.