Will Donald Trump’s America seek to kill the Euro?


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The views expressed below are solely those of the author.

Maurizio Giuliani is an Italy-based Financial Advisor. He founded M. Giuliani & Co., an investment advisory firm, in 1994 in Torino. Giuliani is a seasoned expert in world and Europe's macro-finance.

This has been an interesting year-end with the attack on Germany by US President-elect Donald Trump who denounced one more currency manipulation: the Euro (EUR) has in fact done what the Deutsche Mark couldn’t and if the current situation doesn’t end, the United States could be willing to impose heavy duties. Is this how the final attack on Europe and the Euro in particular has officially started? One can say yes.

In opting for a much devalued euro, Germany has benefited from a huge competitive advantage that has made it one of the largest exporters of manufactured goods, and it is the main reason why the US trade deficit with Germany has increased in recent years. New Year eve’s fireworks seem to have started earlier. Now there can be only one geopolitical game that is a new international agreement to redefine the areas of influence, something like a “new Yalta” or Europe’s destiny may be doomed.

Germany, a geopolitical dwarf, could be the ideal target to bury definitively the castle of the European Union (EU). And if Berlin is the main target, then one can assume that a speculative attack on Deutsche Bank (DB) will be the key to victory. Without forgetting the Italian banking system where the need for capitalization almost doubled for Monte Paschi di Siena (BMPS), one can now assume that the situation is probably similar for all other Italian banks.

McKinsey said that the next four years will be a very critical time for the banking industry because of weak economic growth and low interest rates that will continue to erode the revenues of European banks, threatening profits up to 35 billion dollars. Combined with the effects of the digital revolution in the EU and the UK, Blockchain in particular, this trend could reduce profits from 110 billion to 50 billion dollars by 2020.

So pay attention to 2017 which will certainly be an interesting year in every aspect. Happy New Year!

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