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Soros Vs Sinn: To 'Eurobond' Or To Save The Euro
The debate rages... Soros: "The euro crisis has already transformed the European Union from a voluntary association of equal states into a creditor-debtor relationship from which there is no easy escape. The creditors stand to lose large sums should a member state exit the monetary union, yet debtors are subjected to policies that deepen their depression, aggravate their debt burden, and perpetuate their subordinate position. As a result, the crisis is now threatening to destroy the EU itself. That would be a tragedy of historic proportions, which only German leadership can prevent." Sinn: "Soros is playing with fire... Many investors echo Soros. They want to cut and run – to unload their toxic paper onto intergovernmental rescuers, who should pay for it with the proceeds of Eurobond sales, and put their money in safer havens... Soros does not recognize the real nature of the eurozone’s problems. The ongoing financial crisis is merely a symptom of the monetary union’s underlying malady: its southern members’ loss of competitiveness... His accusation that Germany is imposing austerity is unfair. Austerity is imposed by the markets, not by those countries providing the funds to mitigate the crisis."
Via Project Syndicate:
"Germany's Choice" by George Soros
The euro crisis has already transformed the European Union from a voluntary association of equal states into a creditor-debtor relationship from which there is no easy escape. The creditors stand to lose large sums should a member state exit the monetary union, yet debtors are subjected to policies that deepen their depression, aggravate their debt burden, and perpetuate their subordinate position. As a result, the crisis is now threatening to destroy the EU itself. That would be a tragedy of historic proportions, which only German leadership can prevent.
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Once this is understood, the solution practically suggests itself. It can be summed up in one word: Eurobonds.
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Germany has the right to reject Eurobonds. But it has no right to prevent the heavily indebted countries from escaping their misery by banding together and issuing them. If Germany is opposed to Eurobonds, it should consider leaving the euro.
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There is a strong case for Germany to decide whether to accept Eurobonds or leave the eurozone, but it is less obvious which of the two alternatives would be better for the country. Only the German electorate is qualified to decide.
If a referendum in Germany were held today, the supporters of a eurozone exit would win hands down.
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Europe would be infinitely better off if Germany made a definitive choice between Eurobonds and a eurozone exit, regardless of the outcome; indeed, Germany would be better off as well. The situation is deteriorating, and, in the longer term, it is bound to become unsustainable. A disorderly disintegration resulting in mutual recriminations and unsettled claims would leave Europe worse off than it was when it embarked on the bold experiment of unification. Surely that is not in Germany’s interest.
"Should Germany Exit the Euro?" by Hans-Werner Sinn
Last summer, the financier George Soros urged Germany to agree to the establishment of the European Stability Mechanism, calling on the country to “lead or leave.” Now he says that Germany should exit the euro if it continues to block the introduction of Eurobonds.
Soros is playing with fire. Leaving the eurozone is precisely what the newly founded “Alternative for Germany” party, which draws support from a wide swath of society, is demanding.
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Many investors echo Soros. They want to cut and run – to unload their toxic paper onto intergovernmental rescuers, who should pay for it with the proceeds of Eurobond sales, and put their money in safer havens. The public already is being misused in an effort to mop up junk securities and support feeble banks, with taxpayer-funded institutions such as the ECB and the bailout programs having by now provided €1.2 trillion ($1.6 trillion) in international credit.
If Soros were right, and Germany had to choose between Eurobonds and the euro, many Germans would surely prefer to leave the euro. The new German political party would attract much more support, and sentiment might shift. The euro itself would be finished; after all, its primary task was to break the Bundesbank’s dominance in monetary policy.
But Soros is wrong.
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Worst of all, Soros does not recognize the real nature of the eurozone’s problems. The ongoing financial crisis is merely a symptom of the monetary union’s underlying malady: its southern members’ loss of competitiveness.
The euro gave these countries access to cheap credit, which was used to finance wage increases that were not underpinned by productivity gains. This led to a price explosion and massive external deficits.
Maintaining these countries’ excessive prices and nominal incomes with artificially cheap credit guaranteed by other countries would only make the loss of competitiveness permanent.
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Thus, the only remaining option, as unpleasant as it may be for some countries, is to tighten budget constraints in the eurozone. After years of easy money, a way back to reality must be found. If a country is bankrupt, it must let its creditors know that it cannot repay its debts. And speculators must take responsibility for their decisions, and stop clamoring for taxpayer money whenever their investments turn bad.
George Soros responds:
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Allowing the bulk of outstanding national debts to be converted into Eurobonds would work wonders. It would greatly facilitate the creation of an effective banking union, and it would allow member states to undertake their own structural reforms in a more benign environment.
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If Germany and other creditor countries are unwilling to accept the contingent liabilities that Eurobonds entail, as they are today, they should step aside, leave the euro by amicable agreement, and allow the rest of the eurozone to issue Eurobonds.
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Whether Germany agrees to Eurobonds or leaves the euro, either choice would be infinitely preferable to the current state of affairs. The current arrangements allow Germany to pursue its narrowly conceived national interests but are pushing the eurozone as a whole into a long-lasting depression that will affect Germany as well.
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There is no escaping the conclusion that current policies are ill-conceived.
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The heavily indebted countries must channel the rising their citizens’ discontent into a more constructive channel by coming together and calling on Germany to make the choice.
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All of Europe would benefit if Germany assumed the role of a benevolent leader that takes into account not only its narrow self-interest, but also the interests of the rest of Europe – a role similar to that played by the US in the global financial system after World War II, and by Germany itself prior to its reunification.
Hans-Werner Sinn responds:
Germany will not accept Eurobonds. The exclusion of debt mutualisation schemes was its main condition for giving up the deutschmark and signing the Maastricht Treaty (article 125 TFEU). Moreover, the German Supreme Court has indicated that Germany will require a referendum before Eurobonds can be introduced.
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His accusation that Germany is imposing austerity is unfair. Austerity is imposed by the markets, not by those countries providing the funds to mitigate the crisis.
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Should the euro break up and the GIPSIC countries default, Germany alone would lose about €545 billion euros, nearly half of the aggregate sum mentioned, since the Bundesbank has carried out most of the net payments on behalf of the GIPSIC countries that are reflected in the Target balances.
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George Soros underestimates the risks that debt mutualisation would pose for the future of the eurozone. When Alexander Hamilton, the first US finance minister, mutualised state debts in 1791, he thought this would cement the new American nation. But the mutualisation of debt gave rise to huge moral hazard effects, inducing the states to borrow excessively. A credit bubble emerged that burst in 1838 and drove most of the US states into bankruptcy. Nothing but animosity and strife resulted.
The euro crisis arose because investors have mispriced the risks of investing in southern Europe.
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Soros says that Germany will suffer from exiting the eurozone, because of the revaluation of the deutschmark. This is not true. First, Germany is currently undervalued and would benefit from a limited appreciation via the terms-of-trade effect. The advantage of imports becoming cheaper more than outweighs the losses in export revenue.
George Soros responds:
Hans-Werner Sinn’s response confirms my fear that the euro will eventually destroy the European Union. The longer it takes, the greater the political damage and the human suffering – and it may take a long time.
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I do not agree with all of Sinn’s arguments, but there is no point in getting bogged down in the details. The point is that the current state of affairs is intolerable. Sinn claims that the root cause of the euro crisis is that the Mediterranean countries are not competitive. If he represents German public opinion correctly, a mutually agreed breakup of the eurozone into two currency blocs would be preferable to preserving the status quo.
The division of the euro into two blocs would cause serious dislocations. Germany assuming the role of a benign hegemon would benefit everyone, but that seems to be unattainable.
Source: Project Syndicate
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I VOTE YOU OFF THE ISLAND!!!
or better yet...
you stay on the island... I'm taking the last boat out.
All in good time.
Paging Ghordius.
Don't forget what a BOND is. It is GOVERNMENT BONDAGE. Anyone who owns a BOND owns the future income generated by someone else, in other words BOND = SLAVERY.
Most people never stop to think about where the INTEREST comes from, and BONDS are just used as a financial tool without any thought as to what it is doing to our society or the fact that he who owns BONDS is in fact a slave owner.
...and they teach us that slavery was abolished.... pffft!
"Don't forget what a BOND is. It is GOVERNMENT BONDAGE. Anyone who owns a BOND owns the future income generated by someone else, in other words BOND = SLAVERY."
Thanks for your comment, since in spirit I am on your side, and my emotional side wants to cheer by you. The reality is more complex, but not a lot more and you inspired me to come up with a simple analogy that I hope will help place the blame where it belongs: Megalomaniac economists with PhDs that don't really understand what the consequences are of what they are doing, but believe they do.
The problem is not "interest" or bonds. Historians have researched the origin of interest and amount charged on loans from the Babylonian times to today. What they have found is that the amount ranges from 5 to 10% with an average that is incredibly close to the reproductive rate of most herds of animals used for milk, meat, etc. Further research strongly suggests that this originated in the question of who owned the animals that were in the bellies of pregnant females when the heard was lent to a debtor. It was thought that the fair answer was that they were owned by the lender. This started with fathers lending animals to their sons to kick start them forming their own family.
My conclusion is that there is nothing wrong with interest, the problem lies squarely with the way we are abusing the concept today. First governments are creating and allowing environments of very high, obscenely high MORAL HAZARD in the microeconomic sense and in the common moral sense. This environment and the absolute lack of effective checks and balances in the control systems are encouraging, to the point of making it a lack of fiduciary duty, the concentration of fiat wealth and forcing the payment of interest on that fiat wealth. Think about the old analogy, we are today asking through interest the payment of the produce of herds that DO NO EXIST, they are a figment of imagination on Dr. Bernanke's head, and nothing more. Obviously if you own a real herd (real productive capital) and somebody comes and tries to borrow it from you, but tells you that he wont return to you the animals in the bellies of your pregnant females? Why in hell would you lend to him what so much cost you to create on the first place?
In a very simple analogy, I tried to explain the crux of the problem today. What is inmoral, even for the PdD economists, and that is what they have been all taught in College, is the MORAL HAZARD of the decisions that are being made. And the herd analogy explains why this fiat money is having trouble going into the real productive economy.
In a nutshell, Dr. Bernanke is destroying the mechanisms that evolution created and allowed us to prosper from the mass starvations of the stone age to today.
Until next time,
Engineer
PFT, a so called engineer doesnt have a problem with interest. fool, the compounding nature of interest is the fundamental opression of lenders of money over others. Interest is what is going to blow up the finanical system. Only linear real money loaned and borrowed without compounding interest will create a stable and fair monetary system. You can loan money for flat fee without usuary.
Who the hell thinks its ok to buy a house for $200k and end up paying $400k after 30 years beacuse of interest. Fools!
What I gathered from this article is this:
"George, please die already, kthxbye"
Compound interest just reflects the duration of the time the loan was extended. You'd expect to pay more for a longer loan - the compound interest reflects this.
The real issue is banks being able to create deposits to lend out - this is where the our present misallocation of capital originates (plus government interference in true price discovery elsewhere in the economy)
Correct, the true problem is the creation of capital that is not creating any value. The only sense of creating capital is to finance productive projects that increase the wealth of the society. The distribution of that wealth is another matter, a political one. But capital existance for itself makes no sense whatsoever, it is only justified by its ability to facilitate the creation of wealth. My previous example with the herd is very simplistic but still valid analogy. We can argue until hell freezes over about the fair distribution of that wealth created by the herd that reproduces itself, without any further intervention of capital. The analogy of that natural growth is funding projects with positive net present value = creation of wealth. Interest again is only what was produced by the capital, if nothing is produced nothing should be distributed and interest should be zero!!! But then capital has no meaning whatsoever, since its only function is to finance the creation of wealth. If something is produced, then we can argue what percentage of the wealth created to distribute back to the creator or back to the people that had accumulated the original wealth (through hard work in any fair system). The basic reproductive value of the capital, i.e. the growth rate without doing nothing of the herd, is what we decided through thousands of years of evolution to distribute back as a minimum to the provider of the original wealth. For a house for example, the creation of wealth is the protection it provides to its inhabitants from climate changes, animals, etc. And the capital is the effort or accumulated wealth that was used to create it. He/she who lives there is not paying rent and gettins something of value that they can not afford, how much should they pay for that? Again, I don't want to get into the political discussion but into the technical side of things. In the end for somebody to provide the capital or weal previously created (always assuming that he/she who has the wealt, the wealth comes from hard work and effort, otherwise the system is destroyed as it is happening today) by them, the receiver of that capital needs to pay the minimum self reproductive rate of interest that that group of people would have obtained if they had kept their wealth is a simple herd. Without that there is NO incentive whatsoever for anybody to accumulate welth and we couldn't fund wealth creating projects.
What happens when you introduce unbounded amounts off fiat money into the system is that it can not find places to be used to produce wealth since its growth is not accompanied of the growth of low risk projects with positive NPV or what is most important, management teams capable of managing those projects even if they existed. As a result the total produced / total amount of money in the system goes down exponentially, since it will only become zero when the total amount of money is infinite. The Federal Reserve is already in the asymptotic part of the relationship, and larger and larger increases in the amount of money are having less and less of an effect in decreasing this relationship. At the same time, those who own value creating assets that are able to create wealth, are able to price those assets higher and higher in proportion to the increase in the monetary base. Thus the market goes up and up and PMs since they don't produce anything, only preserve wealth, stay behind. But they only stay behind in relationship to wealth creating assets that are priced up disproportionately by the increase in monetary base. PMs don't go down in real value, their intrinsic value as we all know stays constance. Meaning how much is one ounce of gold worth, simple, one ounce of gold. But the name of the game today is wealth creation assets price, which goes up in inverse proportion to the decrease in yield produced by the above ratio (total produced/monetary base). Please remember that in a deflation and depression scenario, many assets believed to be wealth producing assets will fail and their paper value may become zero, that is the conundrum of the stock market getting priced way beyond its reasonable price for the associated risk.
What is the discussion between holding PMs or wealth producing assets, well the endgame, depending on what your view is of the endgame you will choose one or the other. What I have been trying to advise everybody in zerohedge is that NOBODY can know the endgame, because the economic system is a chaotic system in the mathematical sense and therefore you can not predict its trajectory once it destabilizes from its current attractor, since with all the computing power of the world you can only go forward a few seconds. Therefore the best you can do to try to place yourself in a good safe place is to accept that you will loose 30 to 40% of your paper wealth whatever you do and hedge for all conceivable scenarios, since all have equal probability today. Once you destabilize this kind of system you loose control, and the system is completely non-stationary... That is why Grosss is so pist off, he can't hedge. Soros knew this when he closed his fund years ago and decided to manage only his and his family's money, preserving that was going to be a challenge on its own.
I am not making any political statements only stating technical facts.
Until next time,
Engineer
I find both sides of the conversation quite disingenuos. Soros wants EuroBonds because then he would have a new instrument to play with, and Sinn blames all other europeans for not enacting the neoliberal labour reforms that Germany did
both lie from both sides of their mouths, and both neglect to mention the real reasons why EuroBonds would be a bad idea indeed, including small matters like sovereignty
why don't they propose that the "Printer's Bloc" pool together their Bonds? how about a US/UK/Japanese common bond since we are there?
Eurobonds? thanks, no, thanks. If this idea was genuinely from the eurozone instead of originating from Wall Street and The City, the French and the Italians would already be talking about merging their banking systems and their bonds together
He doesn't mention labour reforms, 'neoliberal' (oooh!) or otherwise.
Southern Europe's relative lack of productivity stems from many factors, most of which are cultural.
The NWO dream is melting before Mephisto's eyes. It might be a bad idea for the EU, but whatever Georgi advocates is good for him.
FORWARD SOVIET!
No easy escape.... Just the way Soros and Co. likes it.
The division of the euro into two blocs would cause serious dislocations.
No, George, it would reveal the ones that already exist.
Ain't gonna happen! Don't make a fool of yourself, Soros. There is no plan B. Period!
I have traveled and done business, mostly research, in all EU Countries since 1989. The differences are stark and very large in contrast between the Countries in the South and those in the North. Most of the differences comes from the early Spanish Empire, the rule of Civil code law versus common law law in the North. All administration systems, political and judiciary systems were derived from the need to distribute plundered wealth from the Americas and Africa. Whils in the North, most of the systems were developed to enhance trade, financing of productive projects and value adding industrial activities. This was not done because they were smarter or anything like that, but because they were the systems that maximized the wealth and power of the ruling classes of the different Countries of the time.
The difference between what Soros says today and the other argument is that Soros is thinking about the shorter term and the other view focuses more on the longer term. The only solution of the EU problem is to mutualize the debt, there is no doubt about that and the foundation of the USA proves that. But this is only the shorter term view, for the long term for that mutualization of debt, like in the USA you must have some level of centralization of the ability of the "receivers" of the benefit of mutualization to have a significant cost when they abuse it. This simple paragraph and the resolution of this quandry in a politically pallatable manner is what is at the core of the EU problem and you are not hearing the half of it yet. And you probably will never hear it for another 30 years or so, until all the secret documents are declasified by whomever won in the future, which sadly history also tells us that you will only hear their side of the true story.
Until next time,
Engineer
The article is incorrect...............
Soros does not recognize the real nature of the eurozone’s problems. The ongoing financial crisis is merely a symptom of the monetary union’s underlying malady: its southern members’ loss of competitiveness... His accusation that Germany is imposing austerity is unfair. Austerity is imposed by the markets, not by those countries providing the funds to mitigate the crisis."
The problem with the eurozone is quite simple.
The loss of primary and basic secondary industry so that the now mainly German entrepot economy can be sustained.
If you look at european capital (energy) flows you can see the european banking system pushing resource ration cards from the entire european hinterland into the German Industrial system (which is a black hole) and to a lesser extent France and the UK (which then receive much of the German exports)
If PIig countries break from the euro there best bet is to inflate (with real state issued money) - then oil capital will flow from Germany back into the PIigs again as only they are capable of primary production over and above German secondary "added value" goods - (see useless production.)
For example despite population & intermediate consumption rises France & Ireland remain major net food producers.
Eurobonds would however be a disaster for the common man as resources would be pushed even further upwards beyond any rational resource use that can be used on a local or nation state level.
Irish energy balance figures for 2012 illustrate the problem
They are quite shocking.
In particular Irish Indigenous production.
Y1995 :4,105ktoe Peak (because of Kinsale gas field peak and good peat production during that hot summer)
But the recent figures point to a crisis of the Irish peat industry because of both European carbon policy , the wet summer last year and a general long term attack on domestic labour value since 1980~
Y2011 :1,801
Y2012 :1,413
In particular look at peat production
Y1995 :1,697
Y2011 : 760
Y2012 : 316
Its really is eat the peach (or peat) time me thinks.
http://www.heartland.ie/sites/default/files/PEATLAND%20UTILISATION%20AND%20RESEARCH%20IN%20IRELAND%202006.pdf
Capital should be pushed into these areas but Euro carbon & energy policy + the destruction of local labour value since 1980~ has destroyed Irelands basic ability to not buy energy from abroad. Because of the euro it cannot engage in local industry and it now cannot buy external energy.crisis of capitalism and its surrogate offshoot; crisis of euro now become crisis of eurozone; all part of crisis of civilization.
Its like those russian dolls you have to get to the inner one to find resolution.
In the meantime we are in limbo, as between Cathay and Montezuma the price of manpower as of energy does not have the same scale.
One world? It is to the ecologists, but not to the politicians; nor to the people.
When an economy has a socialised monetary system, it cannot be described as 'capitalist'
The problem with the eurozone is quite simple.......
nothing is simple.......
kito ~ the EURO [currency] & the EUROZONE are two, intermingled, but SEPARATE issues...
~~~
The EURO [currency] is/[was] the 'poster child', devised by the arrogant TPTB [two decades ago], in thinking they had clear sailing to a ONE WORLD CURRENCY 'ponzi scheme' in the palm of their hands... [which is result of a 'non-direct', but nonetheless 'blueprinted' &/or 'napkin sketched' course that started as far back as the fall of the Hapbburgs & Bourbons who were systematically usurped by the Red Shield]...
It FAILED [& is now on life support]...
The 'process' [illustrated BY it's failure] is that the arrogance displayed by TPTB-ers are completely out of touch with human nature [as were the Hapsburgs themselves as they were being ousted]... They've always thought that they could promote homogenization of 'society' [whilst reserving a sliver of space, AT THE TOP, to centrally overlord over everything themselves]... The visible 'keystone cops', 'Benny Hill Show', illustration of this failure is the exodus of physical gold eastward... [because Snake Plissken doesn't give a fuck about your war or your President]...
We're only at the point now where it's obvious to 'some', but still 'hidden' to many... These illusions, in due time, will fall...
I don't disagree......but human nature is not simple....nor are the problems and solutions that come with them.....
I'd actually disagree with characterizing human nature as being 'NOT SIMPLE'... IMO - It IS simple... It morphs over time periods... But those time periods happen to carry distinct punctuation marks within themselves, & therefore, are incomprehensible to a single human life, in a single human timeline... Besides that... It's hardly possible, [without a great deal of effort, discipline, & determination] to pass characteristics on, by elderly generations & by modern timeline standards, beyond a few generations... Furthermore ~ TECHNOLOGY is complicating that transferrence to measures beyond comprehension, because TECHNOLOGY = INFORMATION OVERLOAD to a human brain that has not evolved at the equivalent speed of the technology itself, & ESPECIALLY illustrated, in practice, by the willingness on the part of humans... to transfer, [into the hands of technological AI algos], all the powers of decision making [which, formerly, were peppered with, & were the proprietary & sole domains of the characteristics of HUMAN NATURE itself]...
And, of course, that's LEAVING OUT all the numerous 'ethnic' distinctions' which can [& always do] occur...
~~~
Note: To all you 'WOULD BE' PhD candidates out there... Feel free to 'plagarize' that comment at will... I will warn you... HOWEVER... That doing so will most likely AUTOMATICALLY PREVENT you from receiving your desired 'paper certificate' [because it does NOT conform to the STATIST & INDOCTRINATED LOGIC that your certificate requires from you]... Instead ~ It'll only put you on a 'drone hit list' in some air conditioned underground computer in Utah...
Bon chance!
if we had the ONE WORLD CURRENCY in mind, then why did we give it a regional name? there is currently a nearly OWC on this globe, and it's called... USD
Aaaah yes... Another one who is incapable of thinking beyond his morning box of 'Cheerios'...
~~~
Actually people ~ based on that comment I've re-configured my ENTIRE thesis...
THEY ARE ~ ACTUALLY ~ #WINNING...
Life has taught me that things are really simple for the very smart, and the very 'simple'. Everyone else has to actually 'work' at it, to figure things out.
It comes down to how smart the 'smart' guys are. Even so, when you got two or more 'smart' guys competing, the winner is declared only at the finish line.
One of the ZH ironies is, that we can't even agree on the year or season of the Finish Line, much less the date, time or location.
Hedge accordingly. I do. They do.
Sure it is.
Why ?
Its a market fucking state -a union - much like the UK in the 18th & 19th century.
"Unions" always push resources from energy surplus hinterlands into giant industrial consumption engines.
This is how they work - indeed how they have always worked.
a old trick – in fact perhaps its the oldest trick in the book.
NORMAN TRADE BETWEEN DINGLE AND THE CONTINENT
When the Normans settled in Dingle, the harbour began to evolve as a major trading point in the South West of Ireland. The principal exports from the town were wool, hides, salt meat, fish and butter. The chief imports were wine, salt, coal and articles of clothing. An Act of Parliament was passed in 1569 which limited the number of ports through which wines could be imported. Dingle was listed among the towns in this Act and is referred to as “Dingle Husey otherwise called Dingle I Couch”
SPANISH INFLUENCE IN DINGLE
Dingle reached the highest point of its importance in the course of the sixteenth century. It was one of the great trading ports of the south. Continental wine ships and other merchant vessels plied in and out of the harbour, tying up at the Spanish pier, (presently Dingle Marina). Dingle was the main embarkation port for the great pilgrimage to the shrine of St. James at Compostella in Spain.
Strong commercial links developed between Dingle and Spain throughout the sixteenth century. Several of the Houses in Dingle were built in the Spanish fashion, with ranges of stone balconies and marble door and window frames. Inserted in the walls of houses in Green Street are stones with curious carvings which are still well preserved. One of these has the date 1586 prominent on it. The others are more ornate and depict birds. It is believed that these stones are survivals from a bygone age and the houses of the Spanish merchants who settled in Dingle at that time.
The parish church of St. James is said to have been built by the Spaniards around the time of the great medieval pilgrimage to the shrine of St. James of Compostella, and was dedicated to St. James the patron Saint of Spain. When the Reformation reached Dingle in the 16th century, the church passed into Protestant hands.
In 1529 Charles V, King of Spain and Emperor of the Holy Roman Empire, sent his personal envoy, Gonzalo Fernandes to Dingle to parley with the Earl of Desmond. An account of this meeting shows that the Earl wished to forge a political and military alliance with Spain and to have weapons and aid sent over from Spain to help the Earl rebel against England
The Tudor objective was quite clear.
Stop balanced trade.
Extract a net surplus from the colonies. (prevent the Irish from drinking continental wine and indeed burning scottish coal in the 1500s !)
Use the surplus to industrialize
http://www.dinglename.com/history_printer_friendly.htm
umm this was before the attempt by the spanish to invade england in 1588? wasn't some of the armada swept around the north of scotland and wrecked/beached on the west cast of ireland..(not Dingle, I guess).
Is there an army(s) in the EU and who does it belong to?
The EU does not have an army of their own, but the member-states have national armies to which the EU could resort to.
Actually the EU has an army of a whopping 4000 soldiers, with 2 battalions ready to be deployed at all times. Tremble, nations of the world.
I agree with you, that the EU has troops of their own. But that doesn't equal an army. As far as I know, an army is a military formation superior to a corps, while a battalion is beneath a brigade. The typical size of a field-army would be at least 80k soldiers. Typical commanders of battalions are colonels - those of armies are generals. In military forces size matters. ;-)
last time I looked into this mighty army can't be deployed without a nod from their national Commanders in Chief
yesterday I watched CNN and they had a nice interview with a representative of EuroPol. same thing, it's not really a police force, but they sure talk as if they were our federal police instead of a glorified coordination center
btw, don't forget NATO, what it is and what it is for
The EU needs to impose a universal draft so they can rebuild the EU Army to millions of troops. This will eliminate youth unemployment and prevent secession. They need a 4th Reich so they can invade Russia and get Lebensbraum.
There is an Army: It wears US color. About 100K strong based on German soil. Germany has no problem with it.
The UK forces will shortly be 101K with all of the cuts. French troops are never counted. I don't want search for the German Army strength but it's probably on par with the British.
The problem with EU is no air lift or refueling capability. AWACS and C&C forget it.
than
drone wars are coming?
good idea
issue euro bonds, ecb buys all euro bonds -> economy saved
wtf this scam has to stop!!!!!
but this is Bernanke's and Krugman's idea of saving the economy. they might get mad at us for stealing it
That's right, Soros ... ignore the bothersome details and just pump for Eurobonds. Evil fucker.
Eurobonds... Another paper abstraction used by the illusionist to deflect your eye from what the other hand is doing.
"3 shells in the shell game is not enough- the ball keeps ending up under Gernamy's shell- not fair!"
"ummm, ok, let's just add one more shell to the game."
Remarkable in its elemental stupidity.
Soros: "As a result, the crisis is now threatening to destroy the EU itself. That would be a tragedy of historic proportions, which only German leadership can prevent."
Really? a tragedy for whom? Spaniards?
I don't think so.
If Germany takes one for the team this time, not only will they not be hailed as heroes but everyone else will resent them because they will now have to be subordinates to Germany.
I agree with George on one thing: shit or get off the pot already.
It would only be a tradgedy for all those crooked bankers who profit from the aful thing.
What the discussion regarding Eurobonds disguises is the fact that interest on Eurobonds will be much higher than the current rate on Bunds. Instead of paying less then 1.5 pct, Germany will probably have to pay minimum 3 pct when issuing Eurobonds.
Europe is a dog chasing its tail, and to damage pigs economies means damage the eurozone as a whole, germany included.
Germany have stolen for years with their "smart" rules and austerity shits, now the game is near the end, the only way to save it is to go for a total unification, so yes they will have to pay higher interest and the pigs will have lower interests, it's time to do something good for this euro-project, time to give and not take. Otherwise the whole euro-project will finish and nobody is going to pay any debt anymore.
Soros is leveraged on the wrong side.
Soros could care less about much of anything except himself.
The louder Soros squawks, the more leveraged on the wrong side he is.
He's getting pretty vocal.
Just what I was thinking. Soros probably has a hedge against a euro breakup, but the old bastard is otherwise all-in on the European Union.
Why would anyone listen to one of the tribe?
Soros always talks for his own profit. Sounds to me he is stuck with some terrible investment and doesn't sees the euro drop below the 1.3000 anytime soon with Japan buying it. Long EURUSD.
I have been closely associated with a German manufacturer of industrial process machinery for more than 30 years. With exception of Italy and to a lesser extent Holland, there are no other countries in Europe capable of supplying such process equipment. France has lost its manufacturing know-how. Spain, Portugal and most of Benelux never had any. Austerity will not recreate know-how. You can put the populations on a 2,000 daily calorie allowance, turn all thermostats back to 50 degrees, turn off all a/c, and ration fuel, shelter, clothing and hospital supplies - but those measures will not make anyone smart enough to build quality machines or cars. If Germany leaves the Euro, the re-introduced Deutsche Mark will soar in value against the Yen and US Dollar. The Japanese and Americans will eat the German exporters alive with cheaper prices and competitive quality high tech goods. The Germans require Euro pricing to maintain export market share. If a European country abandons the Euro, their replacement currency will not have the purchasing power to buy these goods. Yes, these nations will be in charge of their own destiny. But, I do not think that they want to go back to ox carts and hand saws. Eurobonds will just give the bankers an new bond game. Eventually, the bonds will sink in value to reflect the capital quality of the underwriters. It just seems to me that Euro nations are stuck with each other - only anarchy or civil war can change the status quo.
Re " If a European country abandons the Euro, their replacement currency will not have the purchasing power to buy these goods." and that, sir, would be a very, very good thing.
Just ask the people in Vietnam or India or those who lived in Brazil in the 1980s and 90s if its a good thing to have to use currency, which is declining in purchasing power. I was in Argentina in February - everyone wants the US$. I got Pesos exchanged at 7:1. Now, its 9:1. The status quo in Europe is bad now. But, it will take anarchy to force a nation out of the Euro.
Prior to 1913, the Fed reserve system idea was in the paper. Grandpa J6P, said "fuck that" en masse. Then the money whore banker master's cartel came out AGAINST it, too. Suddenly, Grandpa J6P says "not a bad idea if the bankers hate it". Soros wants to short Euro bonds before he (unfortunately for him) retires to the lake of fire, my guess.
Mk 8:36 For what shall it profit a man, if he shall gain the whole world, and lose his own soul?
I'm glad we don't do debt mutualisation here in the US. Sounds like it could become a problem.
We once did do "debt mutualization" here in the US. Hamilton and Jefferson, as virulently opposite as they come in politics, struck just such a deal.
Sinn's an idiot. Austerity is imposed by the markets? Sinn's ass it is. The little group of elite private bankers are pulling their strings, tightening the noose on non-German European countries. They were all idiots for joining up in teh first place, trading a little easier travel and business transactions for their monetary and political sovereignty. Soros, whether you like him or not (and who gives a sh*t), is spot on. The Greeks and Italians and ... all put their heads into the noose, and are now begging Germany not to tighten it too much.
what I disagree with old Soros about is that the dissolution of the European Economic union would be a tragedy. It would only be so for the few crooked bankers who own all the debt that never should have been issued in the first place.
the debt would be there even if all members of the 17-strong eurozone would revert to their currencies
except that they'd be more flexible about devaluing, of course, which is nothing else than a covert default
this has nothing to do with the 27-soon-28-strong European Union trade zone
In this case the term, "market", is a euphemism for predatory lender. But don't tell the Eurosheep.
Oh and ehhhh
http://www.citywire.co.uk/global/soros-and-sinn-in-war-of-words-over-germany-euro-exit-debate/a677292
Soros is spot on, just read the following book: "The great rebalancing" by Michael Pettis, and I think it makes a very lucid case for Germany having to step up to the plate and make some kind of consensus and stop blaming debtor countries.
Germany would exit the euro if they could maintain their trade advantages. The minute Germany brings back the D-Mark the Asians/Brics wipe them out with the export input cost advantage. Germany wants their cake, and to eat it to. Soros is a delusional socialist conniving POS, that's out for himself. Soros is so rotten even a starving Greek wouldn't eat him.
Yen Cross,
You are being generous.
Make no mistakes: Soros is a Council of Foreign Relations' man.
Waiting for Soros to invite millions of third world immigrants to live in his mansions and estates, so he can live amongst them and pay for them.
Sinn rightfully sights the American "1838" experience but is a fool for not understanding it. It too was a speculative bubble, just as sovereign debt is now. It too came about from the dalliances of a "central bank" that Jackson rightfully dismembered but had to pay short term consequences for.
But the reality of "1838" is that creditors were given haircuts - something Germany, the ECB and IMF and other crony parties steadfastly refuse.
Sinn plays the role of a court jester in a monarchy. Shoot the messenger or tarnish him, but don't engage in a meaningful discussion just legitimizing the issue and show a willingness to address it.
Soros is talking his book.
Without Germany, Eurobonds are worth about the same as sub prime mortage bonds were worth in 2007.
Even with Germany they wouldn't stay afloat for long once Soros started shorting the hell out of them.
the only 'fix' is a one world currency. while you can put a basket together of all the erusjpynaussieruskiemozambique paper things, that takes too much effort. the relativity game of strong vs weak currency is on its inevitable last legs...everybody can print zeros and ones so over time that becomes meaningless from a competitive standpoint. that's just sloshing back and forth.
if all cbs just pooled their printing in my wmm bank of last resort, and then withdrew wmm bucks in the amount they put into the pool...problem solved....
steady state harmonics.
an inevitability, either at some level or no level...
:)
Sorass has purchased cheap, worthless PIIGs sovereign debt that he hopes to swap into newly formed monetized Eurobonds. His motive is profit-he could care less about the peoples of Europe.
Sinn won by far.
Which is unavoidable, since Soros is a raving anti German racist whose recommendations are perfect counterindicators.
For Germany, that is.
The following 1.38 hour talk by Hans-Werner Sinn in Brussels on Eurocrisis and Cyprus. March 28th 2013 is some of the best i have seen on the Eurocrisis. He advocates a US state target (gold) payments system to replace the openended unlimited bill target balance system currently ruining Europe. And a lot more.Thesis ~ Antithesis ~ Synthesis
Is really that difficult to grasp George's Hegelian solution. It's like a cafeteria with a single entree. You know, a prison cafeteria. Hmmm dilemma? What's for dinner? I choose the entree.
www.tradewithdave.com
Soros! Fuck the hell out of this country and go back where you came from. Nobody should take advice from a sleazebag that brought a country's currency down (that would be the BP) and is proud ot it. Now this A-hole wants to impose his vision of a liberal Europe (where the rich of course stay rich) onto us.
perhaps an oversimplification..but..switching people from government jobs that produce no results and onto unemployment benefits saves the government (the people) a lot of money (say salary plus benefits of 30,000 a year down to 7,500 a year).
of course, keynsians and soros think that borrowing the funds to pay the 30,000 salaries is better for the economy than the 7,500 a year..
truth is..governments are too large and interfere too much, preventing those on 7,500 a year moving out of their parents houses and getting a job that pays 40,000 a year (and more tax).
europe, uk, japan, usa problems vae structural problems because they encourage people to live off the state and NOT contribute to the area in which they live.
let people keep their own money and spend the money as they wish, (reduce government spending by 2/3 and taxes by 1/3) and the structural deficits in the G7 will disappear and trade can recommence without use of excess credit.
time taken..just a few years..see NZ's "big bang" before, during and after after the crash of 1987 and the "shape" of economic activity now..it went from failed "think big projects", regulated interest rates (like the Fed now) misallocation of employment with u/e at 5% to u/e of 12% then down to 5% in five years..also.. FIRE went down to 10% of the economy from 50%, despite earthquakes..pity that the RE part took off when NZ borught in 1 million (mainly asian) migrants over twenty years to increase the population through 4 million (i think produtivity technology brought the sheep population down to 36 million from 43 million over the same time period though!).
don't worry. rather like the drug pusher, Draghi will do "whatever it takes" to save his job as ecb prez...
until horse/crack cocaine/heroin is declared illegal..he will have a job.
Soros is a responsible citizen and acts on our best behalf.