European Crisis

Discussion in 'Economy' started by The Rabbi, Jul 12, 2011.

  1. The Rabbi
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    The Rabbi Diamond Member

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    What will the European crisis mean for the US? It looks like Italy and Spain are going the way of Greece, which is essentially bankrupt. I doubt the Germans will be able to bail out the whole continent. Personally I think the Euro is toast, and the union teetering.
    But I suspect many US banks hold sovereign paper. Given the hits they took on mortgage backed securities, can they survive another hit to their assets?
     
  2. expat_panama
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    expat_panama Silver Member

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    It's easier to believe what's happened before will happen again than to expect the unprecedented. Doom'n'gloomers are not only morons, they're wrong and things will be better even if we have to wait a couple decades.
    Of course they'll 'survive'. It's amazing how much pain people and societies can live with, but in this case how much pain are we really talking about --more riots in Greece? They riot when governments cut back and they riot when governments don't.
     
  3. waltky
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    waltky Wise ol' monkey Supporting Member

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    Now Italy `bout to go belly up, Granny says look for the EU to fall apart...
    :eusa_eh:
    Italy Plunge Brings Debt Crisis to EU's Biggest Borrower
    July 12, 2011, The plunge in Italian markets overshadowed policy makers’ efforts to fix Greek finances as the euro-region’s debt crisis infected Europe’s largest borrower.
    See also:

    Europe banks hit as Italy stokes contagion fears
    Tue Jul 12, 2011 - European banks were battered by mounting fears Greece is heading for a disorderly default and the debt crisis could spread to Italy, sending shares skidding more than 3 percent Tuesday to a two-year low.
     
  4. Toro
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    Toro Diamond Member

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    From a practical standpoint, it doesn't mean much but because the world is interconnected, liquidity problems bleed into America, which causes sell-offs here. Problems in Italy really have little to do with America since most Italian government debt is held by Italian banks. Italy is different than the other European countries. They have high levels of debt, low growth and productivity, but the deficit isn't high (relatively) and there was no housing bubble in Italy which infected Italian banks. The politics are a joke.
     
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  5. The Rabbi
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    The Rabbi Diamond Member

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    Things will almost certtainly be better in a couple of decades. I'm concerned about the next 24 months. Major government defaults are big problems. It is unprecedented because the interconnectedness of the world is unprecedented.
     
  6. expat_panama
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    expat_panama Silver Member

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    Exactly, and the world's interconnections have been unprecedented since the days of the Roman Empire.

    The current increase in inter-connectivity is not as big as previous ones and most 2-year time frames have seen improvements --including the one we've just had. OK, the 2008-2010 block was bad but it included a huge anti-wealth hate fest. So everyone got what they wanted (less wealth) and now we can go back to preferring wealth.
     
  7. Toro
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    Toro Diamond Member

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    I disagree. I think we've never been as connected as before. When you can move billions of dollars in milliseconds, and you have a myriad of derivatives in a financial system that is unfathomably complex and highly dependent on wholesale funding, it does not take much to unwind a tightly wound system.
     
  8. Trajan
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    Trajan conscientia mille testes

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    they need a Caesar;)

    one along the lines of Aurelian who restored and revamped the mints and financial aspects of the empire.
     
  9. Baruch Menachem
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    Baruch Menachem '

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    Rabbi's point is a good one. Germany is the one stuck with the bill for this, and they can't even afford the income transfers in country from west to east.
     
  10. Moonglow
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    Moonglow Diamond Member

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    the US holds 12 trillion in gold alone.
    Italy, Spain and Greece are traditionally poor nations, they started out behind, I dobt the US will get o their status anytime soon. but you shaudenfreudians have your fun screaming about how the sky is falling. I'll go on living my life one struggle at a time. Getting high after the struggle and laughing at you anxiety wretched humans.

    Notice how Portugal, another traditionally poor nation decrimminlaized drugs and has yet to fall into the ocean.
     
    Last edited: Jul 12, 2011

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