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The last one of comparable percentage of world GDP was I think the Mississippi scheme/South Sea Bubble. That lit the fuse on three unofficial world wars: the seven years war, the American revolution and the revolutionary/Napoleonic wars.Currency crises are bad. If we get into one with the euro, all bets are off.
The eurozone has to have a functional lender of last resort. Structural changes would help, but the ECB should just do the job of every other central bank in the world. In general you need the perception that the ECB provides a backstop for rates to drop. Then you need lower spending in the GIIPS countries and higher spending in northern europe, mostly germany. And then you need slightly higher overall inflation, because slow overall inflation means deflation in the periphery, and deflation will cause a recession.
This debt crisis is at least one magnitude greater than the meltdown and they will not solve it.If they don't solve the euro debt crisis, it will effect the our economy as well. Here is the OECD economic outlook report for those of you that are interested: Economic Outlook
These Europeans like to spen and give out billions on social programs, but they don't like paying higher
Taxes to fund all their social programs. Economic policies like that, spending more than they take in,
are bound to end in economic catastrophe.!Which is what we are seeing now unfolding in Europe.
Of course they can save it. And the banks loosening up liquidity was a great first start. They are going to have to re-structure debt..and the rich are going to have to take a hair cut.
Simple as that.
The ECB isnt willing to print euros even to lend to solvent but illiquid companies. So i dont think it will just print euros.
The ECB isnt willing to print euros even to lend to solvent but illiquid companies. So i dont think it will just print euros.
This is true, Europe is better off because Germany won't bail out Greece; so now Greece has to become at least somewhat more responsible.
In the USA our central bank will bail out or print dollars to save the USA so our situation gets worse while Europe's improves. We are merely enabling addictive liberal irresponsibility while Europe is confronting it.
While I disagree with your political analysis I strongly agree with your economic read. Merkel and Sarkozcy are going to extend and pretend come Dec. 9 and that could be all she wrote.Europes situation is improving? Really?
Because since the crisis started the only thing thats happened is the debt to GDP ratios have gotten worse while the economies have slowed down.
I dont know how many times i have to explain this, but this isnt the result of over spending. The governments in the north, the ones that are supposedly the examples of fiscal discipline, arguable have more expansive welfare states than southern europe, the part with debt issues.
The model that over spending caused the crisis only really fits greece anyways. Spain, for example: ran a budget surplus before the recession.
In reality: italy and spain were decreasing their debt rather than increasing it before this crisis started.
The Problem is that the creation of the euro allowed investors to treat every euro country the same. That caused massive amounts of capital to flow into the country, you can see this in the form of trade deficits. In 2008, that flow abruptly stopped:
This increased capital had the effect of increasing prices and wages and making the periphery economies less competitive:
This is the problem that needs to be unwound. Its not the problem of over spending, its a trade problem caused by the half-assed structure of the euro. Stronger treaties will fix this, thats what Merkel and Sarkozy are doing now.
The periphery needs to spend less, this is true. But Germany and the other northern countries need to spend more to offset, otherwise youll just see the euro as a whole plunge into a recession. You also need slightly higher inflation overall, or else you have deflation in the periphery. Thats why the ECB said over the weekend that it would allow higher inflation overall so that the periphery didnt deflate.
So in case you cant follow: this is not a spending problem, its a trade problem. Conservatives are just giant propaganda machines....
While I disagree with your political analysis I strongly agree with your economic read. Merkel and Sarkozcy are going to extend and pretend come Dec. 9 and that could be all she wrote.Europes situation is improving? Really?
Because since the crisis started the only thing thats happened is the debt to GDP ratios have gotten worse while the economies have slowed down.
I dont know how many times i have to explain this, but this isnt the result of over spending. The governments in the north, the ones that are supposedly the examples of fiscal discipline, arguable have more expansive welfare states than southern europe, the part with debt issues.
The model that over spending caused the crisis only really fits greece anyways. Spain, for example: ran a budget surplus before the recession.
In reality: italy and spain were decreasing their debt rather than increasing it before this crisis started.
The Problem is that the creation of the euro allowed investors to treat every euro country the same. That caused massive amounts of capital to flow into the country, you can see this in the form of trade deficits. In 2008, that flow abruptly stopped:
This increased capital had the effect of increasing prices and wages and making the periphery economies less competitive:
This is the problem that needs to be unwound. Its not the problem of over spending, its a trade problem caused by the half-assed structure of the euro. Stronger treaties will fix this, thats what Merkel and Sarkozy are doing now.
The periphery needs to spend less, this is true. But Germany and the other northern countries need to spend more to offset, otherwise youll just see the euro as a whole plunge into a recession. You also need slightly higher inflation overall, or else you have deflation in the periphery. Thats why the ECB said over the weekend that it would allow higher inflation overall so that the periphery didnt deflate.
So in case you cant follow: this is not a spending problem, its a trade problem. Conservatives are just giant propaganda machines....
While I disagree with your political analysis I strongly agree with your economic read. Merkel and Sarkozcy are going to extend and pretend come Dec. 9 and that could be all she wrote.Europes situation is improving? Really?
Because since the crisis started the only thing thats happened is the debt to GDP ratios have gotten worse while the economies have slowed down.
I dont know how many times i have to explain this, but this isnt the result of over spending. The governments in the north, the ones that are supposedly the examples of fiscal discipline, arguable have more expansive welfare states than southern europe, the part with debt issues.
The model that over spending caused the crisis only really fits greece anyways. Spain, for example: ran a budget surplus before the recession.
In reality: italy and spain were decreasing their debt rather than increasing it before this crisis started.
The Problem is that the creation of the euro allowed investors to treat every euro country the same. That caused massive amounts of capital to flow into the country, you can see this in the form of trade deficits. In 2008, that flow abruptly stopped:
This increased capital had the effect of increasing prices and wages and making the periphery economies less competitive:
This is the problem that needs to be unwound. Its not the problem of over spending, its a trade problem caused by the half-assed structure of the euro. Stronger treaties will fix this, thats what Merkel and Sarkozy are doing now.
The periphery needs to spend less, this is true. But Germany and the other northern countries need to spend more to offset, otherwise youll just see the euro as a whole plunge into a recession. You also need slightly higher inflation overall, or else you have deflation in the periphery. Thats why the ECB said over the weekend that it would allow higher inflation overall so that the periphery didnt deflate.
So in case you cant follow: this is not a spending problem, its a trade problem. Conservatives are just giant propaganda machines....
My hopes are that the EU can move towards a legitimate federation that prevents these trade imbalances from occurring. Thats what the treaties need to accomplish. At least in my view.
Europe needs to more resemble the US, where some transfers of wealth occur. In the US, liberal states fund conservative states. Interesting but true:
The banks want the EU taxpayers to bail them out and the Germans (and Chinese) have said no.
Germany could not sell all their bonds last week and they are the best credit on the Continent.
The recent "bail out" is just window dressing and a delaying tactic to let the last rats flee the sinking ship
The banks want the EU taxpayers to bail them out and the Germans (and Chinese) have said no.
Germany could not sell all their bonds last week and they are the best credit on the Continent.
The recent "bail out" is just window dressing and a delaying tactic to let the last rats flee the sinking ship
While I disagree with your political analysis I strongly agree with your economic read. Merkel and Sarkozcy are going to extend and pretend come Dec. 9 and that could be all she wrote.
My hopes are that the EU can move towards a legitimate federation that prevents these trade imbalances from occurring. Thats what the treaties need to accomplish. At least in my view.
Europe needs to more resemble the US, where some transfers of wealth occur. In the US, liberal states fund conservative states. Interesting but true:
Yes, Liberal states like CA, NY, NJ and IL are known for their fiscal discipline.
You must be the smartest kid on the short bus
For the last time you ignorant fucktard, germany had to pay a premium on its bonds because the markets were preparing to be repaid in deustchmarks.
omfg you dont understand shit. you ignore ever fact someone posts and then pop back in to make some bullshit uneducated claim.
loser.
For the last time you ignorant fucktard, germany had to pay a premium on its bonds because the markets were preparing to be repaid in deustchmarks.
omfg you dont understand shit. you ignore ever fact someone posts and then pop back in to make some bullshit uneducated claim.
loser.
Ever get anything right? Even one thing?
12/2/11 WSJ: Some fund managers and market strategists say[German bonds] bunds are in a lose-lose situation. To resolve the euro-zone debt crisis, a move toward tighter fiscal union may be needed. But that would mean a bigger bailout tab being paid by Germany, potentially threatening its triple-A credit rating. Alternatively, the crisis could worsen, which could result in the collapse of the euro bloc and Germany having to shore up its banks. Both events could hurt bunds at a time when some investors already fret about the yields, which are trading near historic lows.