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Tyler Durden and Paul Krugman agree! – The EU is toast!
A rare occurrence in journalism happened today. Tyler Durden of Zero Hedge is in agreement with – hold on – Paul Krugman of the NY Times.
Both writers point readers to the FAQ from S&P on the downgrades in Europe on Friday. Both hone in on one particular section. I’ll repeat it:
We believe that a reform process based on a pillar of fiscal austerity alone risks becoming self-defeating, as domestic demand falls in line with consumers’ rising concerns about job security and disposable incomes, eroding national tax revenues.
There is absolutely no way to achieve economic growth while pursuing fiscal austerity. It just doesn’t work like that. The only other possibility is for Italy and Spain to re-establish their legacy currencies. That is S&P's unwritten, but clear message.
Boom!
The point on legacy currencies made by S&P is actually an old one. Many have insisted that monetary union between north and south was a mistake. But for S&P to have put it on the table is very confrontational to existing EU thinking regarding the need for a breakup. European leaders have all along ignored the blogs and various MSM commentators. Their line has always been, “A breakup is unthinkable”. Not any longer.
I don’t expect “Merkozy” to change their stance on the single currency issue anytime soon. But others will. The message in the S&P FAQ will not be ignored. We’re going to see it in the MSM, and we’re going to hear about it from both the political and the financial sides of governments (and of course, the blogs).
The thought process of a resumption of legacy currencies won't start on Monday. Before this can be accepted as a viable option, things have to first get worse. Much worse. Liquidity has to dry up further. Bond spreads for Italy and Spain have to widen. Funding conditions for the banks have to get worse. Equities (especially bank stocks) have to be broadly declining. The economies of the region need to be in recession coupled with very high rates of unemployment. Declines would be most severe in Spain and Italy. Social disturbance would be on the rise.
Reading the S&P FAQ, you have to conclude that the conditions that would force a return of the legacy currencies will happen, and they will happen in the next twelve months.
There are some very substantial currency implications built into this line of reasoning. If you believe, as I do, that things have to get (much) worse before we see Pesetas and Liras again, then you might logically conclude that the Euro is first headed south against the crosses. EURUSD at 1.100 would not be out of the cards in this scenario.
But consider the end game for this. What's the value of a Euro if Spain, Italy, Ireland and Portugal were no longer part of the monetary union?
That price starts at EURUSD 1.6000.
I look at this and wonder if the currency trade of the new millennium is taking shape.
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I think it is a reflection of how bad and intractable things are in Europe that Durden and Krugman can agree. If you want to see something really scary, just look at the notional value of OTC derivatives. They increased from $601 trillion to $707 trillion in the first half of 2011. Interest rate contracts make up the bulk, then FX. See: bit.ly/b2ogwB
What everyone always ignores is the crucial question:
What do you mean by AUSTERITY.
If austerity means "fire and lower salaries and benefits of boatloads of government workers", then AUSTERITY IS GOOD, and AUSTERITY IS A SOLUTION.
If austerity means "dump more debt and obligations on the ever smaller group of people stupid enough to continue to be producers in the private economy", then AUSTERITY IS BAD and AUSTERITY CANNOT WORK.
As usual, the predators-that-be and predator-class and mainstream media ignore the central question, and fail to define their terms.
The austerity that could work and one that might be indeed forced is the one forcing less consumption.
And consumption includes the human activity known as production.
Krugman's ecomomic prognostications are keynesian and have no predictive value, but as a mouthpiece of the marxist establishment, his views are of some interest as an indicator of current liberal thought. So, are the libs giving up on the euro? I find that hard to believe.
What is the value of the Euro if Germany and Bennelux leave and you get just the F-PIIGS? Id say you start at 1.6 (EUR per USD) and go up from there.
PIIGS have no reason to leave Euro. They are getting free $ from Germany & Bennelux. The people that should leave are the ones that are having their wealth stolen.
Made me laugh.
In case of insolvent economies, the consolidation of debt is always performed at the expense of the largest indebted economy.
Small countries get nothing because no European country can bail another out. It is just an illusion.
But all the big players, by sharing their big debt with the small players and their small debt, make sure the small players has not other future but the one of insolvent debt.
It makes me laugh because US citizens with their imbued sense of elitism on this site full of US citizens claiming to run the numbers, are actually trying to sell that kind of cheap propaganda
guy A owes $10,000
guy B owes $10
A adds $5 to his debt and transfers them to B in exchange of debt mutualization.
A helps B out of B's debt.
Of course, anyone who underlines that A now owes $10,015 (compared to 10,000) and B owes $10,015 (compared to $10) is once again somebody who must hate US citizens.
Because it can no be otherwise but through sheer hate than one pierces the very thin veil of propaganda one has to submit to be tolerated in a US citizen group.
Those big banks in Europe and the US should be nationalized. They are private corporations and have absolutely no right to make the public pay for their greed and corruption. Those are odious debts and it is the shareholders and bondholders who should pay the price, not the public. Why can't the public fathom this?
Why can't you fathom the fact government and banking interests are one and the same?
It's not the public who can't see that a bank's shareholders and bondholders should bear the responsibility for the bank's incompetance. It's the political elites who advocate "to big to fail" so bail them out.
"The EU is toast!"
Clearly there is an incompetent headline writer at ZH.
The EU is the standard abbreviation for the European Union (an intergovernental organization of most European countries). The Euro is a currency (like the dollar is a currency). Most of the countries in the EU use the Euro for a currency, but several (such as Great Britain with the pound) don't. While there have been several discussions that the Euro might break up, or one or more countries leave--and go back to separate currencies for individual countries--no one has suggested the European Union will break up (the only discussions about that have either been an increase or decrease in what that organization does).
that was obvious when if first started so, it's not news, just history unfolding.
http://expose2.wordpress.com
Without a euro there is no eurozone and the EU would be toast. try to fill in the gaps for yourself. heres a starting point:
look at the competitiveness of italy and France - declining compared to Germany, with trade deficits to boot. the cracks would appear across the core, not north/south.
Ireland, Greece spain regaining competitiveness.
Unravelling institutions to accommodate different currencies doesnt happen overnight, the uncertainty, defaults, recalculation of asset values, etc etc wouldn't leave a lot of room for growth in the foreseeable future..
The EU preceeded the Euro. I don't think one equals the other.
yeah and rome the republic preceded rome the empire. they tried many times to get rid of the emperor to get back to a republic...... of course theyre not equal!
this isnt an xbox gamey - oh dear i got shot lets go back to my last save point....... get real
Subscribe to the conventional view all you like, it´s your loss. But the reality behind the EU and the Euro is far, far different. The idea is to pursue the European superstate sought by different people throughout history, from Alexander the Great to Josef Stalin, passing through Julius Caesar, Napoleon Bonapart and Adolf Hitler.
The endgame isn´t, has never been and will never be "an intergovernental organization of most European countries". If you believe that, go back to waching CNBC. The idea is a large state with a thight grip on the citizenry and the economy.
First commenter blows Tyler out of the water!
For starters, pasttense's post did know the difference between bruce krasting and tyler durden, as well as the difference between the frontpage and the contributor section..... something which you're too retarded for.
Secondly, pasttense's post wasn't the first post - but the last post.
Then again, you've been here for years, wtb, so either you're even more retarded than i expected (quite an achievement), or you didn't even care but just wanted to get one post closer to the daily quota you're paid for, while investing as little effort as possible.
The EU is toast. Correct! But now comes the United Staes of Europe.
Thats the next big thing one has to be prepared for. One can hear it more and more but the public is not realizing it. The EU (except the UK) is on its way to a fiscal union. And this means a common budget. Not more and not less. Imagine a bunch of students moving in one big appartement. This was the EU as its is now. But now these students throw the money they earn (or not) in one bag and decide together what to buy next or what not to buy. Thats the common budget thats what is the main characteristic of a fiscal union. And this is on the way. No doubt.
In addition there is increased money production by the ECB to finance the European banking system which is financing the governments of the EU. But thats not a big problem till now. Simply for the fact, that the Europeans have learned from the US, that one can print money as long its spreaded all over the world and is not coming home to increase the money in circulation within the Eurozone. As long as the newly created Euros do find counterparties (governments, companies, savers, investors) in this world willing to accept this money by increasing their reserves or savings it does not harm the Eurozone as far as inflation is concerned. This is exactly the game the US was playing so succesfull in the last 20 or thirty years.
Of course the Euro is not the US Dollar. That means the Euro is only then accepted as a currency reserve as long its a trusted money. Its not backed by a military which can enforce the use of the EU currency. This means the EU can not play this game to a similar extent as the US did in the past. But till now the EU is still very far away to have reached a level comparable to the US and it never will. However its a fact, that he Euro is nowadays accepted everywhere on this globe simply for the reason, that one can buy something of value, such as products "Made in Europe"
Interesting thinking. But my experience when in Europe has been that, on a purchasing power parity basis, the Euro was just plain overpriced at the $1.50 and up level, I would guess by 20-30%. In the end, I think major currencies will converge at something like PPP levels, so I would not be a buyer.
Maybe we should lower the tax rate on carried interest for all the private equity guys, from 15% to 0%. Then they could dismantle more companies, pocket more cash by juicing the books and proceed to ship more jobs overseas. Wouldn't that be more work in the right direction of making the US more productive again? Forget austerity, how about wholesale destruction.
Mitt the Destroyer is ready and willing (Bain = Bane = "destroyer", Old English, killer, slayer, murderer).
Corporate profits would rise. The unemployment rate would fall because people would simply stop looking and the participation would drop off of a cliff.
With all their spare time, the un-never to be again-employed could then breed like rabbits and we could have a renaissance of manufacturing, little factory workers pedaling bicycles to their jobs every day! (wait, where have I seen this before ...)
Or as Swift suggested with the Irish not too long ago in his "A Modest Proposal", if there are too many and not enough jobs, we could eat them.
”I have been assured by a very knowing American of my acquaintance in London, that a young healthy child well nursed is at a year old a most delicious, nourishing, and wholesome food, whether stewed, roasted, baked, or boiled ...”
Does not matter what the Euro is worth when one of the Euro mouth pieces are spouting that no one is allowed to sell their holdings so the question remains.
How hard will people pound on the sell button tonight.
Nobody wants to be trapped in position to neither buy or sell. The ECB and it's collective fart catching crew has made it clear that they ARE NOT open for business. Ever.
So let us ignore Europe for the next hundred years and maybe..just maybe they'll smarten up because we all see the same problem. A bunch of adults that weren't given enough trips around behind the wood shed for corrective action as children.
This is a very unusual thread, full of people making predictions on very little information and painting themselves into a corner. Come on, you should know better than that! We can come back to this article in a few months and we'll see a few red faces.
First, the political EU and the Eurozone currency union are two different animals. You can't just ignore EU members outside the Eurozone, and that is what you are doing when you keep saying that the "EU is toast". The Euro might be, but the political union is far from it.
Second, it ain't just the Euro bud. Britain, Japan, USA, Italy -- let's face it, most of the G20 countries are all in serious trouble with their fiat currencies. The level of public and private debt means that the indebted countries must have growth in order to service their debts. These economies cannot survive without growth, and that is the crux of the problem. There is no foreseeable, meaningful growth for the next 2-3 yrs on the most optimistic time scales, and the countries that need the backstop of borrowing in the interim are doubly damned by the recent downgrades in their credit ratings. As someone above already posted, decreases in government spending will not lead to growth, and coversely imo, increases in government spending will not lead to growth either. Not in this century. It is time to put that Keynsian fallacy to bed once and for all. That unfortunately leaves just two options to maintain growth for the next couple of years: Work harder, or Steal someone else's wealth. (Make investments more attractive for your country, or make war respectively.)
Third, I truly cannot fathom the thought processes of someone who makes predictions on exchange rates between indebted nations after predicting devolution, without calculating its consequences. If/When one or more of the PIIGS leave the Eurozone and revert back to their legacy currency, it is GAME OVER. I don't have a clue what the rates could be after it automatically triggers the biggest bank and insurance collapse on both sides of the Atlantic, do you? Oh apparently some do.
You know, after bartering, the concept of money used to mean something. A vague measurement of human effort and ingenuity perhaps. Then it became a promise of future human effort, and now it is as meaningless as using Autumn leaves to pay for goods. It is, in essence the perpetual obligation of enslavement to support the fantasy lifestyles of the few who make trillions appear out of thin air on a whim. As convenient as it is to use, I want nothing to do with it anymore.
PS. Get some sleep, Tyler, you looked tired when I saw you the other day.
You can have all the growth you want the world over, if that growth is not taxed, then there won't be any debt paid off, and none of this really matters.
Which supports the basic argument that everyone here has an opinion on: How many giant rolls of paper will it take to get the face of Reagan on a bizillion dollar bill enough times to make it all good again.
And I'm with you on wanting nothing to do with it anymore.
I've gone back to my plow, ain't no rates affecting it's value, just rust and a mule with a shitty disposition that matches my own.
I don't paint myself in a corner. I write about my interpretation of events and what it might mean.
I wrote about my thoughts on FX on 11/7. I've been right so far.....
http://www.zerohedge.com/contributed/fx
Rather well-timed of late.
Remarkable.
Some may even say spooky...
what you quote at 1.6 is not euro bruce..it is the initial value of dm, probably around 2, before it gets thrashed as germany will be bankrupt too at that stage....i see parity with usd before that of course....qe3 would result in alittle jump from 1.15-1.2 before the fall resumes again...
The latest report 12.15 CET 15.1.2012 in the German Handelsblatt www.handelblatt.com quotes the DAX Chief on plans for a possible German Euro-Exit.
That event alone would directly affect the 17 single currency nations in the EU, and will change the basis of the political union as well.
A comparison with Krugman diminishes your analysis.
So you're saying short now at 1.26/27 and buy at 1.00
Bruce,
The Chief Economist of the IMF, Oliver Blanchard, agrees with you. He said in his end of the year speech, at IMFdirect.com, that continued spending scares away bond purchasers, but fiscal austerity kills growth and also scares them away. Catch 22, you are bankrupt.
He also says that if government leaders come to agreement on policy objectives, and actually follow through on their initiatives, it would still take 20 years to grow out of this!!! How likely is this? They can't agree for 20 seconds.
It's over. We have to devalue, it's their only remaining alternative.
there is one more way - to write off the debts and wipe out the banks in the massive defaults. Once the system is wiped out it can be restarted
I'm gonna get egged, and I am the dumbest fucker here, but the last time I looked the IMF and most of the righty-tighty goverments around the globe were loaded up with Chicago schooled Friedman economists (tongue in cheek, eyes roll), which is nothing more than privitizing everything, looting countries and making sure the puppets you put in charge had at least one hand from the CIA up their ass, and that the puppets and their friends and enforcers kept the unemployed and pissed off masses scared shitless of their overlords carrying off the booty.
Where did Keynes advocate currency debasement and perpetual David Stockman / Ronnie Raygun style strategic deficit spending? I guess I missed something in the seventies when Uncle Milty had his first happy finish for his perpetual boner by implementing his brand of economics in Chile on 9/11/1973.
What do we have here: Proto-Keynesianism, Virtual-Keynesianism, Pseudo-Keynesianism, or Keynesianism al-la-carte?
Seems strange to me to bash something that nobody has actually practiced or nor actually completely used for forty years. Pick-a-part, a Keynesian does not make.
Anyway, I've been busier than a three legged cat covering shit on a frozen pond trying to figure all this shit out, but when your nose is blowing bubbles in the bullshit, I suppose it's time to grab a snorkel. I have to say as well that I've had more than a little time around some asshat billionaires that advocate for the abolishment of the Fed. Since I ain't one, and have no real desire to be an asshat, I've taken the postition of keep, the Fed, rebuild the fucking firewall, and let the asshats figure out how to ponzi with the SOB in place. Simple answer is, a CDO behind a firewall is more useless than it is free on the American investor. As a disclaimer, I have no aspirations for wealth, period. I have no children. I decided thirty years ago that I wouldn't add another like me to the mix. This part of the family tree ends with me. I digress.
Beyond that, it looks to me like zero government, no tax base, austerity, gold standards, and all that shit, is nothing more than a way to hand over what little bit of power and wealth most of us cling to, to the fuckers that already own most of it anyway. Because let's face it, when all government is officaily fucking crippled for good, there will exist one more son of a bitch than you counted on, that had you in their sites when gold was cheap. For instance, If I was a awash in wealth in all of this shit, I would keep pushing a portion of my gold onto the table, sell big chunks to bring prices down and force those that couldn't afford to be there, out, buy it back on the cheap plus more, and repeat until the cycle flattened out. I know exactly shit about how to do that, so it's just a daydream. All I want is to pay my bills, and give whats left to my worthless cousins that vote for republicans and bitch about welfare and gun control, and love Lew Rockwell and Youtube.
Somebody splain it to me - s l o w l y, because virtually every macro economics major i've met or known in the last forty years spent most of their time kicking Keynes in the nuts, and doing the Rosary in front of an Uncle Milty shrine.
Thus I'm really fucking confused. As Molly Ivins used to say "You either is or you ain't."
How many of you rat bastards think you can outthink Krugman?
Had a lady at a truck stop in Arkansas the other day that told me she would listen to her dog before Krugman; I asked her how the dog did in sorting out economics the last couple of years.
She just smiled a three-tooth grin and fed the dog another biscuit.
Fuck I hate being this stupid.
nice one......
It is not really about Krugman being stupid - it is about his being conflicted by self-interest in defense on the status quo. For me his rep hinges on the priciple that it is right and necessary to use the assets of the populace to fund the banks - he is worse than stupid he is selfish and arrogant and indifferent. He represents the failure of the US as a free -market economy. He is public enemy numero onu.
Which is exectly why he ain't been hired to advise inside the Beltway where the man is widely despised. It's pathetic that we can call out Krugman, and old ladies with lapdogs can listen to said dogs advice, over someone that has spent a little more time thinking about it than the dog.
You ain't gonna find a hell of a lot of nations practicing what Krugman preaches, so if he's public enemy number one, then I suppose Milton Friedman is a god.
Krugman has zero influence on global economics as a whole, period.
My old boss used to breakfast with a guy named Henry Paulson, the one thing those two had in common was a hatred of Krugman, which is strange in and of itself. Because if you hate him and my old billionaire boss hates him, then someone has had one too many glasses of scotch.
The disconnect for me is the fact that my dirt poor redneck friends and the high wealth asshats I've been around for the last forty years feel exactly the same way about bailouts, central banks, socialism (like any of them actually know what the fuck it is), liberals, black presidents, and any thing else the asshats tell the rednecks about what's wrong with our world.
One side is buying the bullshit and wanting more, while the other side lights fat cigars with hundred dollar bills.
If I'm in common agreement with the asshats, when I'm a redneck, then something is fucking wrong.
There is no such thing as a free-market economy, never has been, never will be. Only markets manipulated over time to pay out higher end slugs to the folks making sure the wheels fall correctly for the asshats with the special rings pulling the levers.
If you can find yourself a special ring, go for it. The public funding of banks is missing one key thing everyone seems to be willfully overlooking; the banks keep blowing up economies, then someone builds an electric fence around them, then the asshats convince we stupid rednecks that the central bank is the problem, then sneak back to the electric fence and tear the fucker down, while we dumbass rednecks cheer them on.
I suppose we can once again revoke the charter and cheer for the 29,000 banks that ended up carrying off our cash, and pretend like it's the magic salve, but if the asshats are the ones wanting that, then it makes me suspicious.
But of course if I were an asshat, the whole thing is looking pretty peachy.
Those fukcers are making out like bandits while I'm shining up my AK, stacking canned beans and Spam in the shed, and waiting for the apocalypse, or at least the next financial mushroom cloud.
Just like I did in the seventies. Back then I gave a shit, now not so much. The next thing these fuckers carry off will be my cold dead body.
All Krugman is to me, is a bunch of words scattered over an electronic screen, who's right more than he's wrong.
My public enemy numero uno is the faceless fuckers that have to have all of my dead presidents, when all I wanted or needed was enough to get by. So my mantra right now is this: They can have it, I'll use lead and tin to trade for my work, and I'll do it till they burn what's left of me in a furnace somewhere for those left standing to scatter in the garden. It's all always struck me as odd that working a shitty job for forty years while stacking paper or gold put my redneck friends in one place. Dead. Then what's left of the stacks is handed back out to all of the folks it was isolatedd from for forty years, only to end up in another rednecks bank of Sealy, Simmons, and Kerr, for another round trip and another dead redneck that never got a chance to light a fat cigar with it.
So fuck a bunch of free-markets, the biggest bunch of bullshit of all, and have fun hating Krugman, just another huge waste of time.
I'll send you a post card from Costa Rica, where if I make it before I die, I'll be drinking cheap rum and running my bikini and jet ski rental hut on the beach.
Friedman was and still is a disgrace for the Chicago school! Hayek never supported that kind of austerity that the IMF and all this fuckers use to annihilate nations.
Hayek may have taught at the University of Chicago, but he was not a member of the "Chicago School." He along with von Mises, Rothbard and others were part of the "Austrian School." I know next to nothing about economics, but Tyler posted a YouTube over the New Year weekend of a Prof. Israel Kizner who lectured for about two hours on the history of the Austrian school of economics and that's the little I know about it. I'm reading Hayek's book The Constitution of Liberty, but that is about the historical development of personal freedom in various countries of the West, and not specifically about economic theory.
Amen, brother.
What do we have here: Proto-Keynesianism, Virtual-Keynesianism, Pseudo-Keynesianism, or Keynesianism al-la-carte?
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It does not matter.
US citizens are duplicitous. They perfectly know that this story of Keyniasism is dull and thin but keep clinging to it for profitable reasons.
US citizens who are feeling they are falling on the wrong side ofUS citizenism, have their own flavour of propaganda:a mythical, fabled past thatshould be restored.
So they will try to sell the idea something got corrupted along the way.
Yet US citizens nature is eternal, the US has not changed since 1776,July, 4th.
The state of the world is the result of US citizenism applied on the world scale.
US citizens built their nineteenth century on the Ponzi there would always be more Indian land to rob.
When this fallacy was physically dismissed, it gave to the world two world wars and a great depression.
Now that the escape to space (the new Indian frontier to pionneer) has been revealed for what it is: a pipe dream for US citizens, they are trapped on Earth, and the general conclusion is known.
Useless to try to discuss stuff US citizens already know, they know that the US has not changed, that the US is still the same but they do not want to slip on thewrong side of the US world order.
Those cheap lies are their life buoy.
If you go and read up on Keynes, you will find that his system was what he felt was needed for the time of depression between WW1 and WW2. He told other economists that when things were back to normal, he wouldn't advocate what we call Keneysian Economics. And if you really want to know what's been going on, read Naomi Klein's book, Shock Doctrine.
And if you really want to know what's been going on, read Naomi Klein's book, Shock Doctrine
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USeless.
What is coming on is US citizenism applied on world scale.
You are completely off target here.
The point is not that Krugman is stupid, but that is he using all his intelligence to tell (less and less) convincing lies to the people.
Now you only have to ask yourself if you prefer the harsh reality or sweet lies (which one day will blow up in your face bigtime.)
If Krugman is telling convincing lies, and nobody believes them, then whose face is going to get melted off?
The last time I looked, there ain't a hell of a lot of people following Krugmans advice.
My harsh reality is that I'm a member in good standing of the "Decline Of Peak Spenders."
My cereal comes in a white box with "Cereal, Oat, Rings, with something that taste like honey slathered on it." printed in black on the front of it.
I shop for bargains at the Salvation Army, and pick up fresh parts for my truck at the wrecking yard.
I did however make a few bucks of Recovery money that Krugman lied about by doing a few government jobs, whereas I paid said useless cash out to other contractors for their work, then listened to a bunch of political hacks on motel TVs tell me what a bunch of shit that Recovery money really was.
Getting really fucking hard to sort out the bullshit, don't you think?
The point is not that Krugman is stupid, but that is he using all his intelligence to tell (less and less) convincing lies to the people.
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Krugman is a US citizen. As such, he is trapped in the US citizenism paradigm.
Krugman just behaves like any US citizen does when not providing contrarian token for US citizen buddies (good cop, bad cop business)
They sink in cheap propaganda.
No discontinuity between the elite and the base. US citizens are dealers in cheap propaganda.
Making a special case out of US citizen Krugman is simple (and casual in this US driven world ) injustice.
And do not worry, all this pseudo fearmongering is just a joint effort to help US citizens living in Europe to blob up.
Still quite funny to claim that the only solution for the 'crisis' is countries to leave the EMU when Europeans have set themselves ostensibly on the path of blobbing up.
But yep, US citizens are trapped in US citizenism and when it is plain for all to see, they will still keep their US citizenism ways, which includes cheap propaganda.
Which sells and is profitable in US world order contrary to plain statements of facts.
Agreed. Krugman is a one-sided story board. If you review is writings over many years, what will emerge is a notion that the economic cycle should be softened, to the greatest extent possible, at each downturn. This has led to a dramatic mis-pricing of risk, very low savings rates and the always hearty American consumer.
Krugman's ideas (basically fiscal and monetary stimulus) appear to work, even great lengths of time. The problem is, when you reach the end (ZIRP, 10 year treasuries below 10%, and debt saturation), the scheme is exposed for what it is: a Ponzi.
Fuck Krugman & Friedman!
Krugman
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The Euro zone has a decreasing number of still-functioning economies
Europe debates about the cost to the Germans and French over more bailouts to the troubled PIIGS. The Euro union is not in the PIIGS favor. They will start the default and depart from the Euro zone. Countries could leave (run) or be forced out of the Union leading to a stronger more stable coalitions of Euro's.
The US foreign policy needs a chaotic and unstable Europe and a stronger Euro (paradox). Strong support for Europe banks over the last 2 years! Russia may take this trouble times and force a reunification of the Balkans (war).
The competitive rate for the US dollar should be lower. The world needs a healthy American dollar to compete near 1.56 Euro and 5.6 Yuan.
Central Europe could be divided along Poland, Romania and Bulgaria?
Poland Not using the Euro (Invest here)
Poland has good position to repeat older history and rise as a regional power. Joining NATO appears to have given Poland a level of security long lost in its history. Polish debt costs are falling below Spain’s for the first time in at least 12 years
Poland is the geographical junction of the East-West and North-South communication route.
Poland exposure to the global financial crisis was limited:
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Industrial output up by 2% y-o-y in June
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PPI eases to 5.6% y-o-y in June
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PLN 20.4bn central budget deficit at the end of June
·
Employment up by 3.6% y-o-y in June
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Wage growth quickens to 5.8% y-o-y in June
·
Foreign trade deficit shrinks to €5.3bn in January-May
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Government approves new law to cut red tape for business
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Current account balance at zero in May
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Inflation slows to 4.2% y-o-y in June
lol
Everything rosy in Poland.
Wake up please.
I'd rather invest in Poland than the UK. Better work ethic. Schools also seem to be very good.