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Must Read From the Economist
The Euro: Beware of Falling Masonry from the Economist
The prospect that one country might break its ties to the euro, voluntarily or not, would cause widespread bank runs in other weak economies. Depositors would rush to get their savings out of the country to pre-empt a forced conversion to a new, weaker currency. Governments would have to impose limits on bank withdrawals or close banks temporarily. Capital controls and even travel restrictions would be needed to stanch the bleeding of money from the economy. Such restrictions would slow the circulation of money around the economy, deepening the recession.
Sounds great.
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He's like a Faux News Chatty-Cathy doll....
No doubt things would be totally different if the puppet from the other political party was allowed to win. /s
To the extent this is a problem, it would not happen if the strong countries such as Germany left the Euro. The Euro would then be the weak currency - so pulling it out of a bank account wouldn't help the owner of the account.
Coldfire is right that this kills the savers in the individual countries. But then socialism always robs the savers, nothing new there. Its just that the socialist countries had the illusion of not robbing the savers for a while after they joined the Euro. Now that the illusion is shattered, the bleeding of the savers happens all at once.
But how do you have Banks if don't have savers? This is the part where the "logic of evil plan" doesn't stand up too well to reality. Banks themselves are savers as well are they not?
disabledvet
I doubt that we have had any savings at all over the past couple of decades.
We only have the illusion of savings in ballooning balance sheets. That is, until the balance sheets implode. Like in Housing.
After all, why do you need savings when the Fed can conjure them up on a computer screen.
sarc on/off
Nope-- banks are lenders --just like you are if you loan your money to the bank(put in deposits) a saver puts it in a mattress.
Depends on what the saver puts in the mattress. If it's FRNs, that's not saving.
Capital controls and even travel restrictions would be needed to stanch the bleeding of money from the economy individual citizens.
There. Fixed it.
new bad deal for europe? like a bad roosevelt idea.
http://covert.mypressonline.com
CF, I would find it reassuring to know that you don't work as a service technician on domestic aircraft.
Here's hoping a good dose of stern teutonic monetarism can bring the entire steaming shiteheap of interconnected debt crashing down...
Raise rates again, you pussies.
http://azizonomics.com/2011/11/28/death-by-hawkery/
I have been a zerohedge reader for 2 years and a member for 54 weeks. Admittedly, I don't understand alot of what you discuss, but I recently found investopedia and I started reading their tutorials. One thing I would like to point out is, while we live in a corrupt global financial system, the most damage will be realized by the average citizen living in a town of a medium size population that has a unionized municipal work force. State law doesn't allow for any adjustments according to lower tax revenues. In my city of 90,000, our median household income is about 46,500; our city employees average 75,000, plus benefits. I am a private sector union member and what I want to impress upon you is the fact that when my union's pension fund is underfunded the difference comes from my weekly wages. The police and firefighters union pension funds shortfall is made up by the only variable allowed by my state's constitution, which is the taxpayer. I am not going to cheer for the inevitable, because I have an elected responsibility to my ward's residents(I am an Alderman in my city), but, being that I am a debt free American, with a considerable ability to defend my homestead, I am totally with my zerohedge brethren. Let's end this charade now and rebuild a free market future. May god bless those with the initiative to get this party started.
The reason for the union imbalance is the negotiations phase.
At the table, there are three chairs. The Public union sits in one, the politician sits next to him so they can back slap and circle jerk. Across from them is an empty chair, the taxpayer's. The politician is supposed to be sitting over there to represent the taxpayer, but he only represents himself and, by default, the public union.
dupe removed
Keep in mind that its not municipal employees that got the country into this mess. Pensions shortfalls are caused by ZIRP. This depression is caused by an unregulated financial sector and the breakdown of the rule of law for the elite financiers.
IMHO, ZIRP is a symptom of the banking cartel's monopolistic control of money. ZIRP is just another symptom of the countless and contrived manipulations of what we are led to believe is money. ZIRP is the end result of a false dichotomy; switching from the honesty of gold and silver and relegating money to being risk-laden financial instruments.
Your savings are placed at risk when using financial instruments as a savings vehicle or store of wealth. That financial instruments need to chase yeilds to maintain purchasing power is a giveaway that they do not store wealth. That a financier needs to offer an inducement (interest rate yield) means that he has to make money to pay you something in return for your loan to him of your savings. You aren't saving when you deposit, you are lending. They need to put your money at risk in a market to get the principle and promised interest back to you. If you are the only creditor, where does the interest come from? Answer..... from the next dupe. Ponzi, anyone? If savings don't return interest, the foundation of their scheme (return on risk) is broken.
That the yeild on savings accounts is zero, whilst the official inflation rate is 4%, shows that the purchasing power of bank savings is negative. You are lending at a loss, not saving. Money is supposed to store wealth. Gold is a wealth storer. It doesn't need to chase yield.
When the financiers of the world hold control of the money creation, their intent is to make money from promisary notes. Their notes of late (and through their history) have been found wanting. When people demand honesty in transactions, gold will regain its mantle.
It's how they roll.
ALG, your post was worth printing out and saving. I couldn't have said it better.
ZIRP is a canary in the coal mine. In a system built on perpetual growth, the only reason you would institute ZIRP, thereby removing the penalty to leave money uninvested, is you have to do so to keep the system going. ZIRP is just a stall to halt the collapse while TPTB complete the looting and stacking of gold they will require under the new gold referrenced system that is coming.
Don't know why you got junked, but I think a better way to say what you mean to say is that there is in fact a VERY REAL cost associated with creating capital out of thin air. In a healthy system the interest is fair but important if captial is to find PRODUCTIVE paths and not simply be used to gamble so that financial fucknuts can claim large bonuses and steal real weath from the system.
TPTB would like you to know. If you are a unionized labor empoyee from Company XYZ and making 46,500 a year that is too much.
They would prefer you to make half as much to compete with Third World Employment standards.
If you receive any benefits not included in your declared 46,500 wage those must be also abolished as they are in the third world nations.
You are over paid by order of 'The Powers To Be' as only the Banksters are allowed to have contracts honored.
Even if they were paid for by your tax dollars. Lastly, TPTB want you to know you are in the overpaid class of Americans.
Most people in America earn less than 35K a year. Even thought you may have heard different.
While I agree with your premise, be careful what you are asking for.
Yes Rocker, the future system of trade cannot be based on debt laden US dollars. The standard of living in the East has to rise, and in the West, has to fall. That's why China is dragging their citizens to the gold vendors and encouraging them to put their money in gold denominated accouts, whereas here, anyone contemplating a gold purchase is called a fruit case and gold is said to be in a bubble. When this goes down, you either have your wealth in your posession or you do not.
Most people in America earn less than 35K a year.
Got a source on that? Serious question btw. I keep reading about the 'average' and the median being around 43-46K a year.
That 'median' you hear about ($45k in 2003) is a HOUSEHOLD number. On an INDIVIDUAL INCOME basis, and based on 2010 data, 66.7% of people earn less than that, and 75% of persons in the US Labour Force earn less than $50k - hell, 47% of the labour force earns less than $25k. (see http://bit.ly/vnZvy3 )
The basic standard of living that people grew up with (in my generation at least) happened with Dad at work and Mum working part-time (if the wife worked at all).
Nowadays, if BOTH parents arent' working the family has very little chance of outcomes that are in line with the breadwinner's place in the overall income distribution (i.e., a man in the bottom half of the top quintile will head a family with life outcomes in line with the bottom half of the SECOND quintile, if his wife does not also work).
It is simply the way society has been gamed by the political class: prior to WWII, with T/GDP at about 18% and debt on a relatively benign path, they were only after about 25% of gross in order to keep the parasite class getting richer. Then the parasite class decided it wasn't happy with what it could mulct from the productive classes, so it upped the ante.
As the parasite class' rapine grew, soon it became as near as dammit to 50% of gross (taking all taxes, fees, charges and so forth into account plus share of the debt)... in other words, one income in each household goes to trying to make ends meet, and the other goes to fund the parasitic vermin who live in palaces at the expense of society.
You get to know about parasitic vermin in palaces? I know the ones filling huge SUVs with colorful cardboard boxes of processed foods they've purchased with snap cards at Wally World as they flash their fingernail art and hair extensions.
10,000,000 people gaming the system for $1,000 is peanuts compared to the Wall St. Bonus pool, not to mention the tax breaks that XOM and GE and the like get... Just a little perspective, and its a lot less than 10,000,000...
You have have been fooled by the masters and have become a tool by which they further they greed....
+1 the stuff this morning is profoundly simple-- can't see the forest for the trees-- keep on teaching.
Gotta keep the soylent green crop fed. I don't worry about these folks, their lack of motivation and intellegence will make them slow moving easy targets. They know not in the slightest what it means to hedge accordingly.
On the radio this morning, the hosts were calling people asking them "how many 3 cent stamps are there in a dozen?"
NOT ONE of the four people called could answer it! And then the host tried to help and asked this one chick if she knew what a dozen was, and she said she had "no idea".
We are in SERIOUS trouble....
Their hedge is the hedge of all with nothing left to lose, the mass riot. Before that point though, there are still individual acts, such as those who are constantly showing up in the news for armed robbery of convenience stores and other easy targets (many not even worth the effort, like the guy who robbed a couple of adult stores).
The only way you can safely not worry about these people is to avoid them altogether. Something that may, or may not be practical at any given time and place.
Yes, household income means all wage earners combined within a single household. I assumed that readers would know. I should have clarified that.
Great comment. Keep 'em comin'.
It's worse than that. Median household income means the total of all wage earners within a household.
My yearly pay as a residential union carpenter was about 70,000 a year, not including our benefit package. Our customer base is the 1%. That market has dried up. That's why I am looking at filing for my pension at 58 years old. Median household income includes all wage earners within a household. Thank you for your comment
Yup...The entire 'carpentry' market dried up a long time ago* in CA... I only made a litttle more than half that as a residential union carpenter, but that was 12 years ago... I already cashed out my pitiful union pension... and I'm 40.
* but I did just score a job building my neighbor a chicken coop....Ubetcha.
Can you come to Texas and build ME one? I want a Cape Cod-style one for my upcoming flock! Chickens are all the rage right now, ya know!
YOu could develop a whole new niche, and call it "Chottages"....chicken cottages. Just sayin'....
Now I get it, you are one of those guys who bought a card and worked on a large housing subdivision project. So, what was your specialty? Did you work on the deck crew, wall crew, truss crew, interior rough crew, trim crew, etc.? I am sorry that you never developed any useful skills as a carpenter, as you were just utilized as a temporary tool, doing one specific aspect of the overall project. Get over it. If you had any personal initiative, you would have moved beyond the specialist and learned the skills that would have made you a complete tradesman.
Our pension fund in chicago is funded at 79%, currently. Anyone still working, has $6.50 deducted from their hourly rate with another increase of 1% dues checkoff, now at 4% gross. My local has lost more than half its membership. I don't think our pension fund is long for this world either. With no cartilage left in my right shoulder, I am still able to accomplish a reasonable amount of side work when I can find it. God bless, brother
Hmmmm are you the union guy that cold-called me waaay back when and told me to vote Gore. I struck up a conversation with the guy and he was a bible thumpin gun nut that was more than slightly confused as to why he was getting paid to call me... I tried to convince him that the two party system was a sham and why I was voting for NADER! (I'm a real classic Lib!)
Yes, the 'financial fucks' are the problem....but blaming the unions is just taking part in their game.
I'm Dog-less brother, but I'll get another.
Pardon me, I mistook you for a decent human being.
Nope. Not decent. How could I be!? W/out that faithy thang in jeebus!?
Yup, ur mistaken...Ubetcha.
Pardon me? really? Did you fart? There is no 'pardon me' in fight club.*
My dogs dead. And I'm way past bitter.
*Yup, I made a new rule.....Ubetcha!
So, you are a Progressive. What are you doing on this site? Shouldn't you be blogging on politico or huffpo, or wherever you people spew your lies and hate?
Way past progressive. I'm Radical.... And WTF are you calling urself a "classical lib"? U sound mor like a Classicfool.
Please point out my lies. I'm on this site to fight... & "I ain't got time for hate, barely time to wait"
You didn't answer my question, specialist. What do you do now to eek out a living? Panhandling for Occupy Oakland?
& U didn't answer mine. What makes you/wtf is a 'classical Lib'? And what are my lies?
I told u, I build chicken coops now... & I'll show up at the Occupy protests once the real fighting starts.....I guess I'll see/sight you on the other side...."brother!"
You have a computer, type classical liberal on your search engine. Or look it up in your modern dictionary. I didn't want to demean you, but you went off on an ugly tangent. Forgive me for my lack of proper demeanor. Good luck and future prosperity to you.
Relax you two. You both will get your wish as the availability of energy and resources forces all things to come to equilibrium. The only people who fear a complete collapse are paper-pushing fucknuts who know that the true value of their labor is not worth the current compensation. The sooner the whole thing implodes, the sooner compensation will return (in whatever form that may be) to people who are actually worth a shit. I welcome it, fucking bring it.
ubetcha :-)
I bet you voted for the Muslim. I bet that feels like hitting your hand with a big fu*king hammer about now huh? Old people and baby boomers who voted for the muslim and those who did not have no future.
...I bet you voted for the Muslim. I bet that feels like hitting your hand with a big fu*king hammer about now huh? Old people and baby boomers who voted for the muslim and those who did not have no future.
Always with 'the muslim' nonsense. Barry has been killing muslims like it's going out of style.... I suppose that is further evidence he's a muslim?
And let's say that McCain & Palin (gakk!) had got in instead... do you think the world would look any different? Except we'd probably have invaded Iran by now, and be paying $300 for a barrel of oil?