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Greece: The One Solution They All Ignore
From The Daily Capitalist
The eurozone is those countries in the EU that use the euro as their currency and have given up francs, marks, drachmas, pesos and the like. They also gave up a certain amount of independence because the money supply is now controlled by the European Central Bank (ECB), which, while representing all countries in the eurozone, are "influenced" more by the big guys: Germany, France, Italy, and Germany (not a typo).
When member governments run into economic problems, say, for example they run big deficits to fund social program, they borrow the money from banks, mostly French and German banks, to pay for it rather than raise taxes. Greece has this problem and its deficit (13.6% of GDP) and government debt (150% of GDP) is too high for a sluggish little country. Especially since its GDP declined 3% in the first quarter.
If they default on the debt, the debt is either wiped out or restructured into something more manageable for them, and they are cut off from further access to the credit markets. This is difficult, but economically better for them because it forces them to put their house in order.
Governments would rather inflate than default, that is, print money, which devalues the debt relative to the price of their currency and pay off the debt in inflated fiat money.
Greece has defaulted before and they came back. Lots of countries do this: Russia, Argentina are two that come to mind. Everyone is poor for a while, they stop inflating, and issue new money for old money, banks forget, and off they go. Unless there are fundamental economic changes, the cycle repeats itself.
I think you can see the problem here: Greece can't inflate because they use the euro and they don't control the printing presses. So they must pay the debts or default. The cost of money for Greece went up substantially: the bund spread (the premium over German debt) reached 1000 basis points and they couldn't afford to roll the debt over.
This is the flaw in the European Monetary Union: the inability to enforce fiscal discipline on member states.
The fear of default created a panic in the eurozone sovereign debt markets. Countries like Italy, Ireland, Portugal, and Spain were in the same boat as Greece (the PIIGS), just not as bad. But they too have to finance their debt and if the spreads get too high and the cost of money too great, then perhaps, investors and bankers thought, all the PIIGS could go down.
What would happen then? Banks would perhaps collapse, credit would freeze up, and the collective economies of the EU would slow down. Think riots in PIIGS streets as public servants protest wage cuts and new legions of the unemployed agitate for change they can believe in, private wages decline, and more leftist governments come to power resulting in permanent high unemployment.
The Germans reluctantly went along with the bailout and the eurozone countries and the IMF (the U.S. funds about 20% of this) decided to kick in a total package of €750 billion, plus ECB liquidity facilities and a cheap ECB funds rate (Quantitative Easing). Add to that the Fed swap window which allows the ECB to exchange an unlimited amount of euros for dollars. This swap arrangement allows the ECB to provide enough dollars to those wishing to get rid of EU debt and buy US bonds without crashing that market. As Brodsky and Quaintance said, the EU will do anything to prevent a decline of financial assets in nominal terms.
Both the ECB and the Fed will print money to cover this. All the money they are providing to prop up the debt markets is ultimately being created out of thin air and they are in effect monetizing sovereign debt and private debt. Do not believe the ECB's or the Fed's claims that they can "drain the pond," that is, suck this paper money back out of the system. In fact they want inflation to occur since that's the only way they can bail out this debt.
Everyone uses this term, so I will too: all politicians want to "kick the can down the road." Put off today that which you may be able to put off forever. The problem is that forever is getting very close.
Greece is one of the world's worst serial taxpayer abusers. Don't expect a miraculous change in behavior. They have been run by socialists and communist unions for so many years that any attempted changes will cause major disruption in their economy and society. I am especially skeptical of their attempts to raise taxes. Greeks, for good reason, are famous tax cheaters. The problem in such countries is that attempts to collect higher taxes causes greater tax evasion and drives much of the economy underground. I read that some 25% of Greece's economy is already beyond the reach of tax authorities. Furthermore, corruption is a huge problem to new business formation.
This doesn't look good for the euro or the dollar. This entire scheme is inflationary at best and very destructive to capital and future growth. My guess is that fundamental changes required of Greece won't be achieved by the several deadlines in the bailout plan (2012 and 2014). This will ultimately lead to a further bailout, which will entail more printing of money and resulting inflation. I doubt the EU will let Greece default.
I have been reading a lot of commentary on this and several things stand out:
1. The European Monetary Union (eurozone) is a mistake. It was ill conceived and poorly executed. It will survive for the near future but this bailout it engineered will be the anchor dragging on economic growth as higher taxes, slower growth, more debt, and higher inflation takes its toll.
2. Inflation can't solve everything, and it is impossible for the ECB to print enough money to bail all the PIIGS and their bankers out. This will lead to a credit contraction unless the troubled banks are quickly nationalized and reorganized. I'm not suggesting this as a policy, but it is something that they will do.
3. The world has not recovered from the current boom-bust cycle and more fiat money will only further distort economic decisions and cause more destruction of real wealth and real capital. This may be the next cycle merging into the present one which will not be met with so much of a boom as it will stagflation. Yes, you can have inflation and a sluggish economy.
4. No one involved understands economics. If they did, we would not be having all these problems. All these economists and commentators do is express their dismay that fiscal tightening (higher taxes, less spending by governments) will cause economies to slow. Nothing could be farther from the truth. Government spending does not create growth. But, a reduction of spending and lower taxes will lead to economic growth. When are they going to learn how wealth is created?
5. No politician or economist involved in the bailout, nor any major media commentator, has suggested more capitalism as a solution to their problems. Greece could liberalize its economy, end its barriers to business, reduce the power of the unions, and lower taxes. That would solve most of their problems. GDP would rise, tax receipts would rise, wealth would be created, the private sector would create jobs, wages would gradually increase, and real savings would be generated thus providing the capital necessary for more real, organic growth.
Instead our leaders are doomed to repeat their mistakes.
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My boss has said to me often: when the chips are down, the EU will turn to the left (socialist) and the US will turn to the right (capitalist). Its just a culture thing.
... the US will turn to the right (capitalist).
Yah, at some point in the future, maybe, we might enter some kind of capitalist RonPaul_DreamTime free market capitalism, but not now. Not even on the horizon. A lot of hurt has to happen first to pry free the levers of power from the fiat bankster crony death grip.
The derivatives market is a Ron Paul utopia...completely private, completely unregulated, it's just between private parties themselves to decide if the folks they are doing business with are trustworthy... no govt requirements, no govt bureaucracy...so if you want to be scientific, watch this experiment of Ron Paul's belief in financial market non-policing/anarchy.
Trick bag is, you can't have good free markets with out good checks and balances and oversight to make sure they are fair, transparent. Once trust is gone, whole system seizes up. Time was, people wanted to invest in US because our markets weren't rigged by insider manipulation, fraud, they were not corrupt. We were different, better than say Russia. That is past history. Unfortunately removing all controls, ala derivatives market, is not the solution.
M&M You make a good point, but I can see that public funds have been handed over to become private bonuses. I can see that crap collateral has been rescued at par. Would derivative-anythings be a problem if there was moral hazzard, instead of private profits and socialized losses? Would/could the ponzi take on such unchecked proportions in a non-fiat world. Would enforcement of things like Glass-Steagle, policing naked shorting and enforcing securities laws in general have contained the ponzi? I mean the SEC investigator wound up marrying Madoff's daughter.
It's like saying you need better fire insuraunce on your house next time, when instead you could replace the faulty wiring, get the oily rags out of the garage, etc.
Having said all that, there is the too-big-to-fail problem, the break up of trusts, Standard Oil and all that.
Britain understood if you give up your currency you lose control of your country. The Southern European EU members just wanted to join the EU for handouts and gave up their currency without a fight. They will now suffer the consequences. Greece, Spain, Portugal and probably Italy. The Eastern European EU members will follow closely behind. Not long ago the Europeans were so proud of how they had grown the EU to numbers larger than the U.S they just did not realize they were fielding a basket ball team with two seven footers and three three footers!
Not being U.S centric - we are already bankrupt we are just able to hide it well.
I remember traveling and living in both Greece and Ireland when they were poor countries with their own currency. This didn't affect the Greeks themselves much since they probably didn't want to vacation in Germany and Switzerland. However, Germans and Swiss flocked to Greece and Ireland due to their strong currency. The smart European nations like Denmark and Norway refused to give up their currency. The solution is simple enough, the EU must give up its illusions of economic equality and single currency allow nations like Greece, Ireland, Italy to go back to their own currencies which can be devalued to allow them to be competitive. With a weak local currency their biggest asset, tourism, will allow them to live as other poor nations must-within their means.
The illusion of "economic justice" in the face of enormous differences in talent, intelligence and human ability is the root of all these problems. There's a reason there's a fence between US and Mexico but not between the US and Canada.
The luminary heads on spikes lining that avenue of approach suggest drawbridges over crocodilian moats
on the way to storming the castle keep. Trebuchet maybe?
'The reason academic arguments are so fierce is that there's so little at stake.'
--an oddly burnt offering of heretic compliments merry prankster H. Kissinger
Claiming neanderthal inbreeding does injustice to neanderthals! and !
Thesis:
4. No one involved understands economics. If they did, we would not be having all these problems. All these economists and commentators do is express their dismay that fiscal tightening (higher taxes, less spending by governments) will cause economies to slow. Nothing could be farther from the truth. Government spending does not create growth. But, a reduction of spending and lower taxes will lead to economic growth. When are they going to learn how wealth is created?
Antithesis:
Galbraith: The danger posed by the deficit ‘is zero’James Galbraith is an economist and the Lloyd M. Bentsen Jr. chair in government and business relations at the University of Texas at Austin. He's also a skeptic of the prevailing concern over America's long-term deficit. With many people now comparing America's fiscal condition to Greece, I spoke with Galbraith to get the other side of the argument. An edited transcript of our conversation follows.
EK: You think the danger posed by the long-term deficit is overstated by most economists and economic commentators.
JG: No, I think the danger is zero. It's not overstated. It's completely misstated.
EK: Why?
JG: What is the nature of the danger? The only possible answer is that this larger deficit would cause a rise in the interest rate. Well, if the markets thought that was a serious risk, the rate on 20-year treasury bonds wouldn't be 4 percent and change now. If the markets thought that the interest rate would be forced up by funding difficulties 10 year from now, it would show up in the 20-year rate. That rate has actually been coming down in the wake of the European crisis.
So there are two possibilities here. One is the theory is wrong. The other is that the market isn't rational. And if the market isn't rational, there's no point in designing policy to accommodate the markets because you can't accommodate an irrational entity.
EK: Then why are the bulk of your colleagues so worried about this?
JG: Let's push a bit deeper on the CBO forecasts. They publish a baseline set of projections. One of those projections holds the economy will return to a normal high-employment level with low inflation over the next 10 years. If true, that would be wonderful news. Go down a few lines and they also have the short-term interest rate going up to 5 percent. It's that short-term interest rate combined with that low inflation rate that allows them to generate, quite mechanically, these enormous future deficit forecasts. And those forecasts are driven partially by the assumption that health-care costs will rise forever at a faster rate than everything else and by interest payments on the debt will hit 20 or 25 percent of GDP.
http://voices.washingtonpost.com/ezra-klein/2010/05/galbraith_the_danger_posed_by.html
So there are two possibilities here.
No, there's a third possibility, not a possibility really, but in fact what is going on, and that is that the Fed is eating it's own shit - they call it Quantative Easing and currency swap facilities.
The Feds are creating money to buy down rates.
Thanks for making my point. Keynesians don't understand economics. Neither theory nor history bear him out. But then, they believe in magic so what do you expect. Ask him if that's true, then why do countries with high deficits get into trouble? Why do their economies slow down? Why indeed.
Keynes was a printer disguised as an Economist
Junior is trying to hold up his father's wretched legacy and keep himself employed.
Unconsciously, he must be taking revenge for something. By the way, WaPo is dead meat without money funneling through the college system. Kaplan is its sole source of revenue. It makes sense that they would continue to pimp this sick bitch.
This is the land of capitalism - it's just a matter of time. Here's my take - from an advertising perspective, the old people want to feel hip, cool, and young, so they will cluster towards whatever the youth market is doing. I'm optimistic about the private sector people... public sector workers may of course go Durka Durka, of course.
"Having failed to do that, the best solution now
is to simply fold it back into Turkey and let them handle things."
Hah! What? let them fight it out and the winner gets to join the EMU?
I read today that the EMU is seeking veto rights over member
budgets. Everybody is talking about the breakup of the EMU, but
the other possibility is much greater central power. I'd bet against
it succeeding.
"This doesn't look good for the euro or the dollar. This entire scheme is inflationary at best"
This is something i keep rolling around in my head, the assumption that money printing to shore up collapsing debt will be inflationary. We've seen that the money printed during this 'crisis period' has only gone so far to slowing the deflationary forces as the weight caused by cascading velocity and collapsing asset and debt valuations. As the M3/broad money is so many multiples of the M1, how can we be sure that the central bank's ability to print can get ahead of the economies ability to collapse and thereby increase the money supply & create inflation?
Any thoughts?
Ive been thinking about this in respect to gold prices as well, right now gold is going through a flight to safety process but it'd be good to see a chart of global broadmoney supply, M1 and the gold price over the last 30 or so years to guage relative valuation.
Again, any thoughts?
Precisely, my dear "Matto": this is the conundrum faced pretty much by all western countries right now...
On one hand, you print money (or apply "Quantitative Easing", it has such a nice ring to it...) and you park the money in the big banks, to somewhat make their balance sheet look better. This is good for you, since the banks have such big holes in their accounts that the newly printed money is not going anywhere soon, and, especially, is not going to be re-injected in the economy, and make it explode under hyperinflation.
But, here is the problem: since the banks do not do anything with the new money, this also means it is not being lended out - and, therefore, it is not helping the rest of the economy escape deflationary pressures. This is compounded by the fact that individuals (and, soon, counties, cities, maybe even entire states or countries) are defaulting on their debts, in record numbers, all the time, which is inherently deflationary in nature.
At the same time, countries selling important raw materials (let's say, Saudi Arabia, for the sake of conversation) as well as major international companies are keeping an eye on the money printing and pricing their products accordingly - hence there are still some fairly important inflationary pressure at work.
The same applies to the price of precious metals: as most citizens of this world lose faith in the major paper currencies (be it the US$, the Euro, the British pound, etc...) they buy more and more Gold and Silver and drive the price of these up, despite the (fairly obvious by now) price suppression scheme organized by governments and central banks. Nothing says that your money is worthless better than to see the price of Gold go through the roof.
We are, therefore, slowly sinking into stagflation: economic stagnation (or even outright crisis) coupled with fairly high inflation. A true economic quicksand.
I think this is going to be the result for the next couple of years, until one of two things happen: (a) someone, somewhere goes batsh*t crazy and starts printing money like there is no tomorrow, in the hope that inflation will somehow erase the grotesque levels of debt and restore economic activity - this is going to be hyperinflationary or (b) politicians actually grow a pair of gonads, allow people and countries to default (or deeply restructure) on their debts and starts kicking bankers in the nuts and close banks left, right, and center - this would be deflationary.
It's highly possible that both events would be very good for the price of precious metals, (a) being better in terms of purchasing power. Given that both the USA and Europe are now sold to the idea of Q.E., scenario (a) also seems to be the most probable. And this is reflected in the Gold price.
Then again, that probably does not mean a thing, since I haven't exactly answered your question. Make of this what you will.
Thanks Anton, near term deflationary pressures leading to enough money printing to make your eyes bleed, couple with a dead economy.
Make of this what you will.
I think it's pretty spot on.
'b)' could happen, but the PTB would need a shift change first.
I am of the opinion that this talk of inflation v. deflation is useless, we are getting both. The consumer is living in a glass-ceiling'd viewing bubble at Currentsea World's giant pleb aquarium. They can look up through it and see all the liquidity sloshing back and forth as it doesn't trickle down to them so they can spend it. The multipliers won't take off until money is allowed to seep down to the consumer. Stagnant consumer spending and increasing input costs is the stagflationary margin squeeze that cements the course of action of government that refuses to understand the consequences of QE and dooms the United States to a shrinking quality of life. They will quantatively ease unto infinity apparently unaware of the damage they are doing as, like the Japanese, the US economy becomes little more than a decrepit shell, existing only in the nominal terms of its former self. (Assuming, of course, the world doesn't run out of credit first. In which case absolute deflation is the soupe du jour that will stimulate the politicos to go Weimar on our asses.)
[/ramblings of a stoned undergrad]
The simple answer is that while Money Base has exploded, money supply, say M1, has collapsed. Base is cash + bank reserves and banks are holding on to reserves while their balance sheets are being cleared up. When the bad debt is gone, bank credit will be extended, loans will increase money supply, M1 will explode, and thus, inflation. Another way to say this is that you can't have inflation until the money finds its way into the economy.
Good question.
Thanks econophile, i was mistaking M1 for the money base and M3 for the M1.
Rookie error.
As per your explanation, how can we have the "bad debts begone" in this stage of the game? From my understanding of the amount of leverage in the system, a trillion dollars here and a trillion dollars there will not come anywhere near replacing the dodgy assets and the move to print money will just damage confidence, thereby impacting productive asset valuations at the same time and rendering liabilities unsupported, hence creating a new run up in bad debts.
From my understanding the cost of bailing out the US in GFC1 was 12trillion and it was really the mark-to-myth changes that the collapsing credit and equity markets, not the bailout per se. So is there any way to remove the bad debt without money printing on the scale that will cause total social collapse?
whoops - 12trillion might be a little over the top there.
so during the bubble, consumer goods got cheap, even while commodities went up...and housing, stocks got expensive...I think opposite will happen when crashed...assets go down, everyday things expensive (relative to incomes)....but don't feel strongly about this...I'm with Mish, deflation first due to collapsing credit...then, who knows...
So assets that increased in price via the expansion of debt need to collapse due to the lack of debt to support them (as represented by the M3 expansion over the M1) while those goods/assets that dont have debt attached to them gain in price as the unleveraged M1 increases? And the whole process is muddied along the way by the political mess's best efforts to revive the system they know and understand.
all economics has become politics, unknowable in the domain
of knowledge. ie. the known, the knowable but unknown, and
then there is the unknowable. opaque and secret, just the way
they like it. or ..one world religion with yet to be determined
dogma for the masses. be patient until such time as we will be
instructed as to what is a "market", (or make your own) and
what is of value and what is worthless.
. ?
and all emerged of the efforts of people or persons we, by nature, would
be / are inclined to call .... brother or sister, or son and daughter.
but all that is history .
it has all been recognized as politics, not economics, as elasticity (value)
and authority are fuck buddies, related and incestuous, but some have
front row seats and some sit on the porch, or in the field and see different
things. perspectives do vary. "birds that cut the airy way" w.b.
.
but m1 is increasing as a response to the inability of the credit,
shadow,(apocalyptic fraud mechanism) system to generate debt/money. as their shit is shit and not good shit but toxic legalese junk that is of the gods of leverage and does not work but for made market men, who have made their bones, anymore. see iceland, latvia and greece.
.
so, why is their shit not recycled in a compost heap or otherwise
used as raw material? time. not real time but "their"/our idea of time.
same thing transmitted and embraced by the unwitting.
they have no patience to recycle and appreciate the treasures of organic growth.
they would rather mainline cash, toxicity be damned. print to pocket,
dislocated from the cycle of the real economies. the high of high finance.
th f in finance. or fractional. or fed. whose interest? rightly?
or , if you knew there would be a sale soon would you not save, store (of grain)
up (demand bailout) for the coming sale, plague, day?
and if you screwed your sister but
could not face it and could not find it in your heart to accuse her, much, would
you not deny it and seek to be made whole by the "public" by projecting
an image of community service, public service, and needed function such
as "market making", of or for "high" finance with attended and guaranteed
systemic importance.
wave flag here. 21 gun salute too.
some thoughts.
Thanks for the thoughts ive read it 3x through.
I like it, i dig the stream.
I'll mark it junk and praise it at the same time. Nothing wrong with junk, it has uses.
- No point deciphering the tea leaves as it will be what it will be when the political mess has molded the edge until it refuses to bend anymore.
- Gold and silver will store their value agaisnt other physical goods - their acquistion being the reason for trade, regardless of the cash exchange rate at any given time (my realisation for today).
forgot this too...
.
http://www.youtube.com/watch?v=4c_YaKVj0AM&feature=related
what is growth? and why do we cheer/strive for cancer type growth?
are we a disease on this planet? don't forget, we need to destroy
much of of what was just created over the last few years to
make "room" for further growth. economic chemo. do we not smell a rat?
and don't forget the rats of burma and the population explosion
that occurs every 48 years due to the fruiting bamboo.
.
of course it all ends very rough, but the gene pool is sanctified,
mostly in starvation and burrowing. rat genes. biology.
.
and so it is.
.
following yield and reproducing accordingly. ie rat race. the creed
or religion of growth, the sacrament, is based on what? why is it so
enshrined in the thought process?
.
debt demands it. and debt is the basis of the money creation, currency,
system. all bullshit, by law. who or what entities create debt/money?
by law? fucking follow the money!
I have to wonder:
There has been much reporting by not good but great analysts blogging Zero Hedge but we have heard very little about the Nordic countries during this ongoing soap opera about what is happening and going to happen.
Are the Nordic countries in trouble? If so, what is their condition and if not, why not. Sweden had trouble some time ago but apparently none now, what did they do to solve their problem?
And, how is Russia doing? I know that people there are used to living in perminant austerity but what are their metrics?
In the mean time, I am busy making sure my Congresspersons hear for me.
Yes, Sweden had some (serious) financial trouble before, around 1990 if memory served well. There was a deep financial crisis, that happened because of real estate speculation run amok. Hmmm... Does that remind you of anything?
They solved it in the best Swedish tradition: nationalized all the banks (real nice haircut on the stock holders), sacked the upper managers, audited all accounts and closed the worst banks outright. All deposits were government guaranteed, so the public suffered minimal deposit losses.
Finally, they created the swedish equivalent of Maiden Lane and, once the crisis was over, floated the banks on the stock exchange - all at a profit for the government of Sweden. As far as I know, it was one of the toughest economic crisis in the history of Sweden, but it was rather short, something like 3 to 4 years.
And this, I believe is the real answer to the crisis we are in now: asster the powers of the state, scalp the stock-holders, sack, jail or exile the bank managers responsible, and, for countries like Greece, restructure the debt. Yes, it means many banks could fail, but it also means the financial insanity we are currently witnessing...
Banks and bankers need to be kicked in the nuts, repeatedly, until they learn how to behave (this is a metaphor, of course). Those who refuse to play nice, and give up a bit of profits for the sake of a functioning economy should be sacked. Period. Adults are necessary, and they should speak softly and carry a big stick to beat bankers over the head with. So to speak.
This, of course, is heresy to people like our dear Econophile, for which private enterprise is sacred and government intervention is always wrong and bad and misguided (despite an otherwise brilliant intelligence).
Of course, they will probably respond that I know next to nothing about economy or economic governance, so make of that what you will.
(Norway I don't discuss, since these nice scandinavians have got both tons of money and tons of valuable gas and petrol - and they manage it wisely and intelligently).
Anton,
We've had this discussion before. What you see is not free market economics or capitalism.
Econophile, we have had this discussion before.
What you see is the logical conclusion of free market economics and capitalism: it's called "corporatism" (or even, in some countries "fascism") - the control of the state by private interest.
Whenever citizens stop caring about the political process (which is pretty much whenever wealth sets in and complacency starts to rise), large corporations - or, more precisely, those who control these large corporations - step in to fill a political void. They act with money, at first to pursue limited objectives and, later, to simply funnel money and power from the state to their own side.
Again, this is the logical conclusion of capitalism. In a democracy, and this is something ancient Athens taught us, the balance of power can be easily tipped by men with large sum of money at their disposal. How interesting, for instance, that these same men (and corporations) also control large media conglomerates...
Yes, I am a fool, feel free to ignore me.
agreed...only way to keep economic, financial gangs from taking over our economy is for people to exercise their power and place nacent trusts, cartels, etc under democractic control. Corrupt govt solution is not no govt.
By they way, I meant Sweden in presest tense, even tho I said it in past...their banks are now swimming with crap loans to East Europe and they want bailouts just like Wall Street.
Sweden banks were to East Europe as Wall Street was to subprime homeowners....
"The Germans reluctantly went along with the bailout"
The German caused the RUN! The Germans who will now be bought at the FED Swap window, ain't exchanges rates a BITCH? for a song!
Austerity Bitches!!!
Fed, gazillion... Austerity, 0!
The European Project including monetary union works in ivory tower theory but not in practice. Advances in genetic engineering to alter tribalism, the hallmark of (ir) rational upright hominids since upright hominids (well maybe a little before. See: Galapogos sea turtles, any old ant hill or the island of Japan including the remnant Ainu.) would be a requisite precursor to project success. A Kentuckian or Virginian was a Kentuckian or Virgianian first and mostly last before an horrificly bloody Civil War settled the issue with any finality, allowing for transference of resources through the central powers to things like GoM hurricanes, oil spills or a collapsed (so-called) domestic auto industry.
And that's with people(s) of common language, customs, traditions and observances, stripped of prior Old World affinities and affiliations allowing absence of the shadows of history spilling into the present.
Latest Volk poll reveals the majority of German men want the ECB's queasing sterilized as soon as possible. The frauleins are less queasy, demanding Trichet be sterilized immediately with a rusty spoon. It actually takes poison ivy league PhD economystics to be so rash, educated beyond ability, devising monetary schemes to aft gang a'gley, ignoring practice on which to impose theory rather than couching theory in observance of practice.
For example, Jefferson's codifying the silver content of the dollar at the rate Spanish pieces of eight were circulating (here's a quarter, call someone who cares.) But I digress and forget what it was that was wished to say. Oh yeah, now I remember, why do they call it an adult beverage when imbibing it makes one increasing less so. That's like jumbo shrimp or President Bush or President anybody. And that recent market hiccup everyone is frantically trying to forget, that's a feature not a bug, a full length creature feature, amazing what they can do with CG these days. There's always a sequel to unexpected box office hits (blackbox/dark pool), invariably B-grade (C, D-) absent the stars in the original, they don't want to be typecast, tend to leverage their success into bigger and better roles and often switch agents. Good luck trading to all.
a bit random, but some good stuff in there!
nice.
One small nit:
"All these economists and commentators do is express their dismay that fiscal tightening (higher taxes, less spending by governments) will cause economies to slow. Nothing could be farther from the truth."
Higher taxes DO cause economies to slow, so that half of the equation is correct. To address the deficit without stifling the economy, we need to lower taxes . . . and lower government spending even further.
... and lower government spending even further.
LOL, lower Gov't spending? You need to chop Gov't in 1/2 at least 4 times in order to have a chance at starting over otherwise the backs of the those productive few who carry the weight of the world will not only break, but fail to come out of a coma.
When the reality sets in by those who gamed the system to give or receive entitlements for votes or food that the last joke is on them they will die a mortal death of shame for they will have their first glimpse in the their uselessness, juxtapositioned against the Laws of the Universe and Darwinian's natural selection theories. Those remaining few entitlementees will be too weak to dare beg or take what they did not earn and it will be some time before generosity finds its way to their plate. Learn to produce or find an empty warehouse - we will come for you if we make it but don't get in our way.
The productive few, the entrepreneur, the self-employed, the backbone of the U.S., currently in protest of contributing new ideas, new hires, new production will wait until the day he is aided and respected, not criticized, for his contributions, skills and worth.
But then again maybe if you circumvent Gov't, Bankers and MSM you will be more prosperous than you could imagine. Certainly, there is a way without "waiting" for them to disappear.
+100
disengage. it's not as scary as you've been led to believe.
amen, brother.
Shame is not a concept understood by the sociopath. Your moral values are quite quaint when observed through their eyes.
Brilliant reply, LiquidBrick. Not that you should give 2 shits, but well done just the same.
This is the only sensible thing I've read. The problem is that it would benefit the people of Greece and the World, which the mobsters and the government with their thirst for votes & power will never allow.
The correct answer would have been to allow Greece to gracefully exit the Eurozone "temporarily" so it could put its house in order.
Having failed to do that, the best solution now is to simply fold it back into Turkey and let them handle things.
As for riots in the streets of the PIIGS, who cares? It's not like they are going to march on Germany, are they?
I thought this was a great article! What I still don't understand, though, is WHY the Fed wants those useless, depreciating Euros and is swapping dollars for them. Isn't it like giving away money?
It also dovetails with the mercantilist fallacy that debasing the currency is good for the economy because it stimulates exports. The currency swaps have the twofold effect of deflating the Euro and inflating the dollar. Dunno if it will have any significant effect to that end but, there's just one more incentive to jizz fiat all over the planet.
The Fed believes that a collapsing euro = a collapsing EU and that would be bad for everyone. So, they believe printing money is justified.
Econo - no need to appologize for them. US banks stuffed European banks to the gills with triple A rated swamp gas. Goldman conned the EMU entry criteria.
that would be bad for everyone.
What the Fed is doing is bad for everyone. I mean, I don't think you know what the Fed believes.
Q: How do you know when Ben's lying?
A: His lips are moving.
The Fed is all f..ked up. It is incapable and should be dismantled after a real and full audit. But since the Senate & Congress are in cahoots with them they will end up creating the collpase of America and with that the world. Other countries who follow the Fed and the dollar deserve what will happen.
Cannot for the life of me understand why any country would want to use the US$ , keep their savings in it and use it for trading.No one knows where the bailout money has gone- no one knows who owes whom how much.No one knows what is the real worth of all that worthless junk bought by the Fed at full value.
In the final analsysis they will have to answer their citizens.
The members who own the USA Federal Reserve are international players. They want to own it all of course. See who owns the Federal Reserve at:
www.save-a-patriot.org/files/view/whofed.html