Felix Zulauf interview part 6: The euro will not survive

The financial market expert Felix Zulauf expressed his opinion in an interview for Wirtschaftswoche Online that the Euro has no chance to survive and more and more people are investing their money in German banks. According to Mr. Zulauf, the longer Euro exists, the higher will be losses when it breaks appart.

The euro has absolutely no chance?

Realistically, it will not survive. It would have chance only at full fiscal union, that is common with household policies. That would be possible only in a political union. At this moment the European nations are not ready. Therefore, the politics will continue to make compromises, and that is why we remain in a permanent crisis several years.

Felix Zulauf interview part 5: The euro divides Europe, not unite it

The financial market expert Felix Zulauf expressed his opinion in an interview for Wirtschaftswoche Online that European integration is not dependent on the euro. The euro is not an integration project, but it divides Europe, thinks Mr. Zulauf.

Would it not be better if you do not let the people vote directly on this issue, as it would be in Switzerland?

The facts came to light, but that does was not due to the politics. The politics assumesthat the euro is an integration project. But European integration is not dependent on the euro. The euro is not an integration project, but it divides Europe. Originally the idea was pursued to eliminate the single currency, the currency fluctuations in the European Economic Area.

But because of the different competitiveness, we now have hard impact in the real economy. If you ask Spaniards, Greeks, Italians and Portuguese, you will come very soon to the conclusion that it was better than the exchange rate fluctuated and the economy is still fairly reliable, organized and developed.

Felix Zulauf interview part 4: Weaker Germany would be a disaster for all of EU

The financial market expert Felix Zulauf expressed his opinion in a recent interview for Wirtschaftswoche Online that a much weaker Germany would be a disaster for all of Europe as the continent fall in global competition and significantly reduces the general welfare.

Can the imbalances in the euro zone be eliminated by more inflation in Germany?

Theoretically, this would be feasible. If Germany raises unit labor costs by 20 percent to 30 percent, that will lead to a massive increase in wages, the other countries will become more competitive and could hope for more exports to Germany. But the debt problem will not be resolved. That will happen if German wage-earners, who has so far maintained a degree of frugality consume, suddenly go wild. But that does not comply with the German mentality. Germany should not go that route.

But Europe sees it differently...

Normally, each person is oriented to the major service providers and trying to emulate the successful ones. The fact that Germany is now based to the back in the rankings, is an example of wrong thinking. A much weaker Germany would be a disaster for all of Europe as the continent fall in global competition and significantly reduces the general welfare.

Felix Zulauf interview part 2: Greece is heading to the exit, Spain might withdraw from the euro zone in 2013

The financial market expert Felix Zulauf expressed his opinion in an interview for Wirtschaftswoche Online that Greece is not the only problem in the EU, but merely the beginning of the real problems. He expects the southern-European country to be the first to leave the Union, followed by Portugal, Ireland and Spain.

Is Greece heading back into bankruptcy?

The mood has changed. And I'm assuming that Greece will become insolvent for the second time later this year.

Are we just beginning a phase of state bankruptcies and exits from the monetary union?

Yes, this process is far from over. Greece alone would still not be a problem for Europe and the euro zone, but it is only the beginning of a problem that is expanding massively below the surface. Greece will probably be the first country to leave the euro zone. The next year Greece will be followed by other countries, probably Portugal and Ireland at first, but then comes Spain. The question is whether the euro zone is ready to bury the project € and go back to national currencies.

Do you think that this is possible?

I suspect that will not happen. The policy will depend on such a project, no matter what the cost is. It has brought untold suffering to Europe. The crisis is almost like a war. It destroys economic structures, businesses and livelihoods. Here is a drama being played out. Maybe Italy is still in a similar predicament as Spain, possibly even France. France is, if there the reform is denied, even at a greater risk than Italy.

Felix Zulauf interview part 1: All important banks have to be nationalized immediately

The financial market expert Felix Zulauf expressed his opinion in an interview for Wirtschaftswoche Online that the only way to prevent the global banking system from collapsing is the nationalization. Greece will not be the only country that will have to give up because of the economic depression, says Zulauf.

Mr. Zulauf, which large European banks will soon run out of air?

Felix Zulauf: In principle, several banks in Europe are already bankrupt, probably even some in the U.S. But governments are not a big bank went bankrupt.

Why not?

The failure of a large bank would lead to another failures since the first bank has been purchased credits or derivatives of the others. It would therefore be a chain reaction and ultimately come to the collapse of the financial system itself. In order to prevent that from happening, over the next two to three years more banks will be nationalized, in the peripheral countries, but also beyond.

Large nationalization will be cheaper in three to four years?

That is right. During the crisis, then all important banks would have to be nationalized immediately - at low prices. Then you would have to suspend bonus payments and maintaining and the bank moves to a stronger capital bases. In its current form, many banks will not survive.

Felix Zulauf predicts dark times for the Euro and nationalization of the credit system

The Swiss investment manager Felix Zulauf once again shared his extremely dark forecast for the future of the world as the owner and president of Zulauf Asset Management recently participated in Barron's Roundtable. Mr. Zulauf commented that the euro is a misconstruction. He reminded his January expectations, when he waited for the disintegration of this currency to begin in the second half of this year.

If that happens, it should lead the world into financial and economic chaos. The Swiss investment manager's two major themes into 2013 are euro disintegration and China weakness, due to the bursting of a real-estate boom.

Felix Zulauf considers the credit markets to be an explosive cocktail. The tower of debt is compounded by the gigantic over-the-counter derivatives market. In the past 10 years the notional value of derivatives worldwide has grown from $100 trillion to almost $800 trillion.