Is the end nigh for the Euro? [vol. 3]

[DJRC]

? Steffan Why the hell would you think anything other than that in the first place???

[Steffan]

DJRC said:

? Steffan Why the hell would you think anything other than that in the first place???

Because with an Archdeacon as a father and a Headteacher of strong evangelical views as a mother I was brought up to believe that the Meek shall inherit the Earth. Sixty Eight years of subsequent real world experience have made me realise that Religion is a wonderful thing, just so long as you never let it influence or affect your way of life in any way. I know realise that the Meek may inherit the Earth, but they will only do so when everybody else as finished with it. . Hence my realisation that it is down to each individual to make eveything they can from the opportunities that life presents.

[DJRC]

No, I meant why on earth would your default attitude be to believe or rely govt? Surely the default is that they are incompetent muppets who should be ignored?

I must admit my default stance is generally that anybody in authority should probably be ignored if at all possible and if not possible to process your dealings with them in the quickest way so as to get rid of them be it by fair means, foul, truth or lies. Whichever is most expedient. To be honest I take the same approach with my wife and family!

[anonymous-user]

Steffan said:

As it happens FBLM seems to have taken his ball in because he cannot reply to the many helpful posts advising him of the actuality of the real risk in modern banking.

No, I'm simply not prepared to continue the conversation with you due to your infuriating inability not to twist every damn thing I say and invent the most ridiculous straw men. I have not once said banking is safe or that there are no risks in banking, I dare say I'm more aware of the risks banks run considerably better than you. I have, repeatedly, said deposits in UK high street banks are safe because they will be rescued by the government. You keep bleating about recent events, yeah remember those? Tax payers bailed out depositors. Get it yet? I have not once said this is the right thing to do, thats debateable, I'm 50/50 on it. I haven't once said banks or the system is safe, they arn't. All I have said is that the government has and IMO will continue to bailout depositors when banks lose money. It is almost certainly cheaper, in the short term, for government to save the bank than it is to try and rescue the depositors months later. RBS ring a bell? Moral hazard can hang, thats the next governments problem. Now twist away and make up some more st I supposedly think. Have fun.

Steffan said:

We will also not be able to discuss the dangers of Zero rate interest rates as an academic point, which is presumably where this matter would have lead.

I asked you by what metrics you could ascertain that zirp was unsustainable, a point you have repeated half a dozen times, and you replied with a page of repetitive waffle. If that is the level of discussion you want you can have it with someone else.

Edited by anonymous-user on Monday 25th August 01:21

[Andy Zarse]

Draghi meets Renzi....
Merkel meets Rahoy...
Hollande's sacks his lefty Economics minister and others...
Draghi gives speech at Jackson Hole, talks down the Euro...

Stage being set for QE, no question. Markets poised....

[Steffan]

Andy Zarse said:

Draghi meets Renzi....
Merkel meets Rahoy...
Hollande's sacks his lefty Economics minister and others...
Draghi gives speech at Jackson Hole, talks down the Euro...

Stage being set for QE, no question. Markets poised....

I agree the signs are all there for QE to be applied. IMO the position of France is hopeless as DJRC has reminded us time after time. Real Question must be what can Draghi actually do? He cannot resolve or indeed address any of the fundamental problems of the failing states within the Euro locked into an unaffordable currency.

Real question must be has the balls and the tools to at least apparently massage this mess away? He has no means of addressing the actual problems but money can talk and QE could be effective short term. Draghi lives for short term solutions IMO. Nothing that Draghi or the EU can actually do anything can address the mess that the failing states are sinking towards steadily. But QE might work short term if Draghi creates enough QE to support the EURO.

Longer term I am still convinced that collapse of the failing states is inevitable. It would seem the devil take the hindmost should be the EU mantra.

[Beati Dogu]

Andy Zarse said:

Draghi meets Renzi....
Merkel meets Rahoy...
Hollande's sacks his lefty Economics minister and others...
Draghi gives speech at Jackson Hole, talks down the Euro...

Stage being set for QE, no question. Markets poised....

If looks could kill, they probably will
In games without frontiers-war without tears

[Mermaid]

Steffan said:

I agree the signs are all there for QE to be applied. IMO the position of France is hopeless as DJRC has reminded us time after time. Real Question must be what can Draghi actually do? He cannot resolve or indeed address any of the fundamental problems of the failing states within the Euro locked into an unaffordable currency.

Real question must be has the balls and the tools to at least apparently massage this mess away? He has no means of addressing the actual problems but money can talk and QE could be effective short term. Draghi lives for short term solutions IMO. Nothing that Draghi or the EU can actually do anything can address the mess that the failing states are sinking towards steadily. But QE might work short term if Draghi creates enough QE to support the EURO.

Longer term I am still convinced that collapse of the failing states is inevitable. It would seem the devil take the hindmost should be the EU mantra.

In volume 1, we agreed that they will fudge and then fudge some more.

[Driller]

Steffan said:

IMO the position of France is hopeless.

Oh for God's sake, enough of your nonesense already!

Tell us exactly what you mean by "hopeless".

For example you must surely mean that my business will fail and I will lose my house and have all my possessions seized and my daughter will be put in a home!

[DJRC]

For the record I don't believe I have said the position of France is hopeless. I believe I have made the point several times that the French banks are severally exposed to the Spanish and Italian economies and that the Italian banks exposed to the Greek. My phrase has always been "France is toast" if Italy or Spain fall. That remains my position. I have absolutely no desire to see France toasted or ruined having had a home there for over twenty yes, worked there and many good friends and neighbours. The one thing you can depends upon in the French economy though is that nobody in rural France gives a damn what happens in Paris. Life will go on.

[Steffan]

Mermaid said:

Steffan said:

I agree the signs are all there for QE to be applied. IMO the position of France is hopeless as DJRC has reminded us time after time. Real Question must be what can Draghi actually do? He cannot resolve or indeed address any of the fundamental problems of the failing states within the Euro locked into an unaffordable currency.

Real question must be has the balls and the tools to at least apparently massage this mess away? He has no means of addressing the actual problems but money can talk and QE could be effective short term. Draghi lives for short term solutions IMO. Nothing that Draghi or the EU can actually do anything can address the mess that the failing states are sinking towards steadily. But QE might work short term if Draghi creates enough QE to support the EURO.

Longer term I am still convinced that collapse of the failing states is inevitable. It would seem the devil take the hindmost should be the EU mantra.

In volume 1, we agreed that they will fudge and then fudge some more.

Indeed we did.

Estimating the length of time that this could continue has been a very tricky matter which is no easy thing to actually gauge. What does seems certain to me is that the rubbish that Hollande is making of leading France headlong into abject penury. The failure of France compared to the failure of Greece and the other currently insolvent failed states within the EU is way beyond the ability or accessible resources available to the EU.

France is a core nation within the EU and France is heading for a real crash. There is no permanence in any of the supposed recovery of any of the failing states who clearly are not recovering. Indeed by any economic measurement they are already staring abject insolvency straight in the face.

The fact that the EU can fool the markets partly by abusing the German strengths to cover the weakness in the Euro caused by the concerns over failure in the insolvent states therin, is neither a solution nor permanent. Nor is printing unsupported currency and lending it to insolvent members of the EU. The collapse of France must come. Germany steadfastly refuses to accept the liabilities. As do all the other solvent northern EU states. There can be no permanence in this cobbled "solution". It is a question of time.

Perhaps Draghi and the EU leaders can do a Tony Blair and ruin the economies of the member states whilst feathering their own nests and resign in time to move into other roles in world politics. Sadly I think Tony Blair, who is a very clever man, utterly ruthless and self serving, has shown them the way and the other politicians in Europe are following his example. There can be no permanence in this economic fiasco.

One of the tragedies in modern politics is the meteoric rise of the self serving apparatchiks who enter politics with the sole intention of feathering their own nests and are singularly successful in that endeavour. They slither up to the top, proffering any policies that will get them on the gravy train. The only principle in their lives is me first.

Tony Blair, Gordon Brown and the vast majority of that set are motivated solely by what they could get out of being on government and powerful and charismatic. Sadly utilising disastrous and unsustainable economic policies that ruin the country are perfectly acceptable to these weasels. And for those individuals this has been highly successful. Their position is secure and unassailable and out of mainstream UK politics.

I regret to say that I do believe the EU politicians are following that philosophy. Their plan is to be on the World stage before the crash comes. The are not the least concerned that economic chaos is coming in Europe. Because it will not be their problem. but the fundamentals of the Euro are cobbled together and hiding the reality of the insolvency of a number of failed states within the Euro cannot be easy. The truth will out.

[Gargamel]

France is in the same boat as the rest of the club med euro zone. It needs to structurally reform the economy, but would need to borrow heavily to do it.

Already in debt the austerity measures have slowed and stalled growth and of course will continue to do so.

The uk turned on the money tap, and has growth at 3.5 %. France has made substantial tax hikes and cut spending, funnily enough it is going nowhere.

Increase spending, cut taxes.... that is the way out, but it is a bold play when the EZ is already calling time on their overspend.

[Digga]

Driller said:

Oh for God's sake, enough of your nonesense already!

Tell us exactly what you mean by "hopeless".

For example you must surely mean that my business will fail and I will lose my house and have all my possessions seized and my daughter will be put in a home!

I don't know what your business is, but I hope that is not the case. If you're running a good business, in a decent market position and you have luck on your side, you might not only survive but actually prosper. Recession is never total.

However, it is widely recognised (though impossible to actually quantify) that there is a tipping point of taxation, legislation and size of public sector above which an economy cannot grow and businesses cannot thrive. France is most definitely there. Without serious reform, there may be a lot of unnecessary pain and waste. I think that much is clear. Which recession is not total - generally only single figure regression of an economy - it can hit certain business sectors or geographic areas with disproportionate results.

[smifffymoto]

I would say that France is heading into uncharted waters as Hollande has got rid of his cabinet for a second time and school goes back soon,so we have the prospect of strikes in the coming months.

There is open talk on TV and in the press of the sixth republic. In other words a dissolution of the national assembly and a new government coming to power.

The French have had enough of Hollande and his pals and are looking for a change,the National Front have a very real chance of being in power if the established parties keep fking up.

[Steffan]

smifffymoto said:

I would say that France is heading into uncharted waters as Hollande has got rid of his cabinet for a second time and school goes back soon,so we have the prospect of strikes in the coming months.

There is open talk on TV and in the press of the sixth republic. In other words a dissolution of the national assembly and a new government coming to power.

The French have had enough of Hollande and his pals and are looking for a change,the National Front have a very real chance of being in power if the established parties keep fking up.

Regrettably extremist parties do find support in economic recessions. The real problem in France is that years of Sociailist nitwitterry have as the UK discovered under Blair and Brown royally ruined the economy. In the case of France there are further underlying economic problems that make matters even worse. Once recognised as being in a serious recessionary spiral France may never recover. Decades of living off the fat of the EU Farming policies have enabled France to appear productive whilst relying on fiddling the EU support money. Once serious cracks start to appear in the French economy, which they undoubtedly wll in due course, the spotlight will be thrown on the reality that France is toast to quote DJRC.

What then for the rest of the EU and the Euro? Unless the northern EU states, in which I include Germany, undertake to bail out the southern EU states permanently which every one has rejected out of hand, what then I wonder? That has been my concern since the start of the thread. I do not believe that the EU leaders can or will actually address such major economic problems and I do not believe the EU leaders will be able to address those problems. Fiddling the figures and defrauding the EU taxpayers they can manage.

But the likes of the French economy in serious recession require real action and structural reform which is bound to be unpopular in France because the French are used to not having to face reality. They have been led for years by the daydreaming Socialists who promise an easy life and raise taxes to a totally unaffordable level to pay for this. Which is one of the fundamental problems in France and the French economy. With the EU leaders calling the shots this never going to happen. Therefore collapse of France is far more probable. Once France goes the EU is in real trouble. That is where I see this developing.

Edited by Steffan on Tuesday 26th August 18:53

[Digga]

The further France steps politically from where Germany and the EU are comfortable - and far fight is not that - the less their underlying economic weaknesses will be tolerated or assisted.

[TLandCruiser]

from my non existent economics understandings, could a country not have the balls to lower taxes and VAT to increase public spending? or does that not work?

I guess its going to be rough time for Europe as they try and keep it together, How much support is this women getting?

http://www.telegraph.co.uk/news/worldnews/europe/e...

Its from last year.

Edited by TLandCruiser on Wednesday 27th August 10:59

[Cunning Punt]

TLandCruiser said:

How much support is this women getting?

Quite a lot. Her party received 25% of French votes (4.7m, which was more than any of the others) in the EU Parliament elections last May.

Whether that's attributable to extremist parties gaining more support in times of economic difficulty, as suggested by Steffan, a perception of the current mainstream alternatives as hopeless incompetents, a simple protest vote against the incumbent government, or a genuine desire to reform the entire French political system, is open to debate. Most likely a bit of each.

TLandCruiser said:

from my non existent economics understandings, could a country not have the balls to lower taxes and VAT to increase public spending? or does that not work?

I don't understand economics either, but the government in question would have to find some way to make up the shortfall in its income, and have to cut things like social services spending, which is the sort of policy that loses votes. So yes, it would indeed take balls, and it would mean caring more about the good of the country than one does about one's ministerial job security. Don't think many politicians, especially in France, would have the stomach for it. They'll talk the talk all day long though.

[London424]

Germany are trying to put a stop to benefit tourism...not just us struggling with this.

http://www.bbc.com/news/world-europe-28955443

[Driller]

Steffan said:

They have been led for years by the daydreaming Socialists who promise an easy life and raise taxes to a totally unaffordable level to pay for this. Which is one of the fundamental problems in France and the French economy

This I agree with wholeheartedly.

I'm still waiting for a definition of "hopeless" though. You can't just bandy about words like hopeless and "toast", delivered in your typically casual and dispassionate fashion when talking about any country except the UK, without qualifying them.