Is the end nigh for the Euro? [vol. 2]
Discussion
Mermaid said:
Andy Zarse said:
..Still, turn the question round, can you tell us why if the Euro is doing so well on the exchange markets are the EZ economies doing so utterly appallingly?
and why stock markets doing well when economies are not doing so well.Digga said:
HundredthIdiot said:
Digga said:
In essence, once fully integrated, the infrastructure and welfare of, say, Greece within the EU, would be as secure as is that of, say, Middlesborough in the UK. It no longer has to pay for it's own upkeep, but the broader pot pays for it. Inevetably, this must result in higher tax takes, or lower standards of PS spending elsewhere than was previously the case. Or massive debt.
But how does a *banking* union secure Greek welfare and infrastructure?But this does assume that the solvent nations within the Euro agree to permanently bail out the insolvent nations within the EU in perpetuity. Because cannot be any recovery by the insolvent nations themselves as all the economic indicators confirm. The failing states are hopelessly insolvent, are being encouraged to borrow more and more debt which they cannot repay and cannot return to solvency within an unaffordable currency.
I cannot believe that the EU can achieve this outcome. If they do, they will need to permanently underwrite more than a third of the Euro area including Italy which is the real killer in this policy. Italy is a country that contains some 85 million people. As recent posts on here have confirmed Italy is quite happy to continue with a big black market economy and put two fingers up top the rest of the generally prudent Northern European states which are underwriting this. That is their choice. I cannot see any of the Northern EU states accepting responsibility for that choice.
I cannot therefore see this as a realistic outcome, It is theoretically possible but I just do not think that the NE states will play patsy to this extent. Bailing out Greece is a minor matter. Bailing out Italy means underwriting the third largest economy in Europe. Draghi and his cohorts may be prepared to agree to save their powerbase and the massive pay deals they have achieved within the EU. Equally the EU leaders may agree to protect their fabulous earnings from the EU.
But I cannot believe that the taxpayers and electorate in the countries who will be responsible for paying for the continuing largess in the EU will actually agree to the "solution". For that reason I think the status quo within The EU will stagger on for a while held up by massive waste of unwitting taxpayers funds from the solvent countries. But the recession is still biting all over Europe and the pressure is intensify in every economic difficulty that this is creating. In the end these states are going to fail.
turbobloke said:
Mermaid said:
Andy Zarse said:
..Still, turn the question round, can you tell us why if the Euro is doing so well on the exchange markets are the EZ economies doing so utterly appallingly?
and why stock markets doing well when economies are not doing so well.Mermaid said:
Andy Zarse said:
..Still, turn the question round, can you tell us why if the Euro is doing so well on the exchange markets are the EZ economies doing so utterly appallingly?
and why stock markets doing well when economies are not doing so well.There has been a clear message that governments generally are more than willing to raid savings and pension funds to keep the ship afloat for as long as possible. Governments (or rather the ECB) can be held to their 'promises' to some extent. The markets can hedge for either success or failure. What's to lose? Only the savers lose.
One way of overcoming the early retirement of state workers (as in Greece and France for example) is to make retirement history.
LongQ said:
Mermaid said:
Andy Zarse said:
..Still, turn the question round, can you tell us why if the Euro is doing so well on the exchange markets are the EZ economies doing so utterly appallingly?
and why stock markets doing well when economies are not doing so well.There has been a clear message that governments generally are more than willing to raid savings and pension funds to keep the ship afloat for as long as possible
Reading this page, the answer to every flippin' question seems to be QE...
From today's MPC minutes:-
"Three members of the Committee (the Governor, Paul Fisher and David Miles) voted against the proposition, preferring to increase the size of the asset purchase programme by a further £25 billion to a total of £400 billion."
So Merv and the Magictones are desperate for more QE! This trio of clots don't see to see any link with QE in the following statement, from later on in the same minutes:
"Inflation was still above the target, and was likely to rise further in the first half of the year,and to remain above the target for the next two years. There was a risk that the prospect of continued above-target inflation could result in a rise in inflation expectations which could affect wage and price-setting behaviour."
Real wages are depressed and indeed falling against inflation, which they are deliberatly seeking to stoke up! QE is a failed policy which has done the most to prevent the UK economy recovering than anything else you could mention. And the siren calls for "more more more" are coming from those most responsible for containing inflation!
The sooner the idiot King is on his gold-plated inflation-proofed bike the better if you ask me.
From today's MPC minutes:-
"Three members of the Committee (the Governor, Paul Fisher and David Miles) voted against the proposition, preferring to increase the size of the asset purchase programme by a further £25 billion to a total of £400 billion."
So Merv and the Magictones are desperate for more QE! This trio of clots don't see to see any link with QE in the following statement, from later on in the same minutes:
"Inflation was still above the target, and was likely to rise further in the first half of the year,and to remain above the target for the next two years. There was a risk that the prospect of continued above-target inflation could result in a rise in inflation expectations which could affect wage and price-setting behaviour."
Real wages are depressed and indeed falling against inflation, which they are deliberatly seeking to stoke up! QE is a failed policy which has done the most to prevent the UK economy recovering than anything else you could mention. And the siren calls for "more more more" are coming from those most responsible for containing inflation!
The sooner the idiot King is on his gold-plated inflation-proofed bike the better if you ask me.
Andy Zarse said:
JensenA said:
The Euro won't fail, it can't. Basically the Euro is a 'Deutsch Mark'. All the major EU Financial institutions are in Germany. Germany controls the Euro, will ensure the Euro survives, and will control the EU.
If the Euro really is in crisis why is it doing so well on the exchange markets?
Easy; the false paradigm created by SuperMario and his big gob, writing cheques he hasn't yet been asked to present. He's played a great game tactically, but the test of his commitment will come when peripheral bond yields start rising again...If the Euro really is in crisis why is it doing so well on the exchange markets?
Still, turn the question round, can you tell us why if the Euro is doing so well on the exchange markets are the EZ economies doing so utterly appallingly?
Maybe the bet is that the weak will have to leave, leaving a strong core Euro remaining?
Alternatively, it could be because we are printing money through QE to write down our debts by the back door, with the consequence of a devalued currency.
After all, the game is currently competitive devaluation, and we're winning...
Art0ir said:
Read about how the US works. That's what Brussells is pushing for. An EU Federal Superstate.
I think I understand how the US works, and I'm also sure that there are some in Brussels who want more integration, but conflating banking supervision with fiscal union doesn't make sense when we have Germans pushing back hard on anything that looks like monetary financing (e.g. fuss made about Irish promissory note "deal").HundredthIdiot said:
Art0ir said:
Read about how the US works. That's what Brussells is pushing for. An EU Federal Superstate.
I think I understand how the US works, and I'm also sure that there are some in Brussels who want more integration, but conflating banking supervision with fiscal union doesn't make sense when we have Germans pushing back hard on anything that looks like monetary financing (e.g. fuss made about Irish promissory note "deal").What's happening in America with this week shows exactly what is wrong with not only the European economy, but the Western hemisphere as a whole, maybe even globally.
On March 1st a "sequester" will kick in, immediately triggering $85 Billion in cuts for this year and $1.2 Trillion over the next 10 years. Now that sounds like a lot, but even if they allow that (which they won't) they'll still end up with another $4 Trillion of debt by 2016.
If ever there was concrete evidence that no one has any interest in cutting deficits, or even god forbid getting out of the red, this is it.
On March 1st a "sequester" will kick in, immediately triggering $85 Billion in cuts for this year and $1.2 Trillion over the next 10 years. Now that sounds like a lot, but even if they allow that (which they won't) they'll still end up with another $4 Trillion of debt by 2016.
If ever there was concrete evidence that no one has any interest in cutting deficits, or even god forbid getting out of the red, this is it.
Art0ir said:
What's happening in America with this week shows exactly what is wrong with not only the European economy, but the Western hemisphere as a whole, maybe even globally.
On March 1st a "sequester" will kick in, immediately triggering $85 Billion in cuts for this year and $1.2 Trillion over the next 10 years. Now that sounds like a lot, but even if they allow that (which they won't) they'll still end up with another $4 Trillion of debt by 2016.
If ever there was concrete evidence that no one has any interest in cutting deficits, or even god forbid getting out of the red, this is it.
Even they are questioning more QE:On March 1st a "sequester" will kick in, immediately triggering $85 Billion in cuts for this year and $1.2 Trillion over the next 10 years. Now that sounds like a lot, but even if they allow that (which they won't) they'll still end up with another $4 Trillion of debt by 2016.
If ever there was concrete evidence that no one has any interest in cutting deficits, or even god forbid getting out of the red, this is it.
Wednesday 20:10 GMT. Global stocks are falling, with the S&P 500 retreating from a fresh five-year high, as minutes from the Federal Reserve’s last meeting showed policy makers are debating whether to slow or continue with its asset purchases.
In the minutes from the latest rate-setting meeting, policy makers were divided over the central bank’s “need to taper or end” its bond-buying programme before it sees a substantial improvement in the outlook for the labour markets.
The release hit the US bond markets, with most Treasury prices briefly paring gains or turning lower after the release of the document. After an earlier drop, the yield on the 10-year note was back up at 2.04 per cent, 2 basis points higher on the day.
Art0ir said:
£ slips further as Mervyn and Co. squabble
Personally, my position hasn't changed since I started watching this thread. Enough of the Q.E., enough of the manipulated interest rates. Let the housing market correct itself now or watch it all crash again.
wise advice Personally, my position hasn't changed since I started watching this thread. Enough of the Q.E., enough of the manipulated interest rates. Let the housing market correct itself now or watch it all crash again.
stop protecting those that can't be protected at the expense of the majority.
allow house prices to fall so that people can start to buy their own again.
allow the bad businesses to fail so taht good ones can come and offer better employment.
yes it will be hard, but not so hard as the slow painful death we arecurrently suffering.
PugwasHDJ80 said:
wise advice
stop protecting those that can't be protected at the expense of the majority.
allow house prices to fall so that people can start to buy their own again.
allow the bad businesses to fail so taht good ones can come and offer better employment.
yes it will be hard, but not so hard as the slow painful death we arecurrently suffering.
I would add that IMHO dropping both PS spending and business taxes (chiefly CT) is necessary.stop protecting those that can't be protected at the expense of the majority.
allow house prices to fall so that people can start to buy their own again.
allow the bad businesses to fail so taht good ones can come and offer better employment.
yes it will be hard, but not so hard as the slow painful death we arecurrently suffering.
I'd agree that a decisive move in this regard would be painful but eminently wiser and more likely to create a real recovery than the perpetual 'something will turn up" (if we pump enough QE into the economy) Micawberism we've seen since 2009.
Digga said:
PugwasHDJ80 said:
wise advice
stop protecting those that can't be protected at the expense of the majority.
allow house prices to fall so that people can start to buy their own again.
allow the bad businesses to fail so taht good ones can come and offer better employment.
yes it will be hard, but not so hard as the slow painful death we arecurrently suffering.
I would add that IMHO dropping both PS spending and business taxes (chiefly CT) is necessary.stop protecting those that can't be protected at the expense of the majority.
allow house prices to fall so that people can start to buy their own again.
allow the bad businesses to fail so taht good ones can come and offer better employment.
yes it will be hard, but not so hard as the slow painful death we arecurrently suffering.
I'd agree that a decisive move in this regard would be painful but eminently wiser and more likely to create a real recovery than the perpetual 'something will turn up" (if we pump enough QE into the economy) Micawberism we've seen since 2009.
Osborne is proving to be a consumate ditherer. Serious-looking and strident sounding, but a waffler nonetheless. He has wasted a golden opportunity to make real cuts. And wasted the chance of funding massive projects at interest rates of sub-2.5% over 20-30 years. History will judge him harshly IMO.
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