The euro graph of doom
By Jeremy Warner
July 17th, 2012
Graphics can often tell a story better than words. For those who think the euro already doomed, the following graphic, drawn from the International Monetary Fund’s latest Global Financial Stability Report, tells it all.
What it shows is the now extreme flight of foreign capital from Spain and Italy. As you can see, the graph only goes up to the end of January, but we know that the phenomenon has got, much, much worse since then. This Credit Suisse graphic (below) tells much the same story. Anyone who can has been getting their money out. Likewise, any foreign company doing business in Spain and Italy removes the money as soon as they get paid, driven both by concern over the safety of the domestic banking system and the possibility that these countries might end up leaving the euro. This has been pretty much one way traffic.