Is the end nigh for the Euro? [vol. 2]
Discussion
powerstroke said:
Can anyone tell me how so much debt could have been run up?? surely there are only so many dead end motorways and unconected bridges that could have been built
and one leged lesbian single mother dance troupes to sponsor !!!
Have a careful look at the red graph that bosscerbera posted: That shows an EXPONENTIAL debt growth.and one leged lesbian single mother dance troupes to sponsor !!!
Most people don't know what exponential debt growth looks like - well it looks just like that.
Funny thing, when you rent your money from a central bank, you don't need to spend a single cent to create a debt like that.
Some of the eurozone debt is overspending, but a huge chunk is simplly the currency debt compounding. That's why the eurozone, the UK and the US all have debt growth that looks just like that.
The only truely debt free places are the insides of central banks. Everyone else gets screwed.
Globs said:
DJRC said:
Not really. Its quite easy to interest them, talk to them and engage with them about science and engineering.
No you completely miss the point. The majority of youth watch the X factor and Britain's got Talent, as for science- Rory McGrath's brought science to more young people via the media than the entire Royal Society.Globs said:
Have a careful look at the red graph that bosscerbera posted: That shows an EXPONENTIAL debt growth.
Most people don't know what exponential debt growth looks like - well it looks just like that.
Funny thing, when you rent your money from a central bank, you don't need to spend a single cent to create a debt like that.
Some of the eurozone debt is overspending, but a huge chunk is simplly the currency debt compounding. That's why the eurozone, the UK and the US all have debt growth that looks just like that.
The only truely debt free places are the insides of central banks. Everyone else gets screwed.
So really Globs for us with only minor comprehension of such things with this little knowledge gleebed mainly from this forum I would add! This Euro situation is just really like a big "equity release scheme" running up compounded intrest,I hadnt thought of it that simplisticly before but beacause debt isnt getting paid down that I suppose is exactly what it is,(bearing in mind my dear late grandmother availed her self of only 2k on such a scheme which soon rocketed to over 10k)I hope the multiples dont follow the same path,we worked out in the end another 10yrs would have wiped out ALL her equity! God help the eurozone if it does.Most people don't know what exponential debt growth looks like - well it looks just like that.
Funny thing, when you rent your money from a central bank, you don't need to spend a single cent to create a debt like that.
Some of the eurozone debt is overspending, but a huge chunk is simplly the currency debt compounding. That's why the eurozone, the UK and the US all have debt growth that looks just like that.
The only truely debt free places are the insides of central banks. Everyone else gets screwed.
Again proof of the value and esteem of this thread held by politicians in that Ed Balls is referring on Sky earlier to the "Lost decade" (ref the great Japanese depression)we all discussed on here months ago,Steffan has started something here PH will soon be running government policy.
Months ahead of the Press and politicians as usual.
Months ahead of the Press and politicians as usual.
Gary11 said:
So really Globs for us with only minor comprehension of such things with this little knowledge gleebed mainly from this forum I would add! This Euro situation is just really like a big "equity release scheme" running up compounded intrest,I hadnt thought of it that simplisticly before but beacause debt isnt getting paid down that I suppose is exactly what it is,(bearing in mind my dear late grandmother availed her self of only 2k on such a scheme which soon rocketed to over 10k)I hope the multiples dont follow the same path,we worked out in the end another 10yrs would have wiped out ALL her equity! God help the eurozone if it does.
Debt may not be getting paid down but it is being devalued, at least in concept, so long as inflation rates stay above interest rates. (Simplistically).Of course that creates other problems .... mostly social. Small indicators might be, for example, increasing suicide rates in places that are not usually prone to volatile suicide stats. Greece, apparently, would be an example.
Meanwhile ... Spain is looking pretty grim. If the original Merkosy strategy was to keep Greece bumping along until the Autumn (2012) in the hope that 'confidence' would turn things around for Italy and Spain there seems to be a good chance that matters that the ECB activity cannot influence may take over before then.
LongQ said:
Debt may not be getting paid down but it is being devalued, at least in concept, so long as inflation rates stay above interest rates. (Simplistically).
Of course that creates other problems .... mostly social. Small indicators might be, for example, increasing suicide rates in places that are not usually prone to volatile suicide stats. Greece, apparently, would be an example.
Meanwhile ... Spain is looking pretty grim. If the original Merkosy strategy was to keep Greece bumping along until the Autumn (2012) in the hope that 'confidence' would turn things around for Italy and Spain there seems to be a good chance that matters that the ECB activity cannot influence may take over before then.
So Spain is TBTBR & HBAT LOL Im learning!Of course that creates other problems .... mostly social. Small indicators might be, for example, increasing suicide rates in places that are not usually prone to volatile suicide stats. Greece, apparently, would be an example.
Meanwhile ... Spain is looking pretty grim. If the original Merkosy strategy was to keep Greece bumping along until the Autumn (2012) in the hope that 'confidence' would turn things around for Italy and Spain there seems to be a good chance that matters that the ECB activity cannot influence may take over before then.
Globs said:
powerstroke said:
Can anyone tell me how so much debt could have been run up?? surely there are only so many dead end motorways and unconected bridges that could have been built
and one leged lesbian single mother dance troupes to sponsor !!!
Have a careful look at the red graph that bosscerbera posted: That shows an EXPONENTIAL debt growth.and one leged lesbian single mother dance troupes to sponsor !!!
Most people don't know what exponential debt growth looks like - well it looks just like that.
Funny thing, when you rent your money from a central bank, you don't need to spend a single cent to create a debt like that.
Some of the eurozone debt is overspending, but a huge chunk is simplly the currency debt compounding. That's why the eurozone, the UK and the US all have debt growth that looks just like that.
The only truely debt free places are the insides of central banks. Everyone else gets screwed.
once again seems the banks have the upper hand allowed countrys and their populations to live on borrowed money and create false wealth and living standards by "taking in each others washing". Now the credit card is fully maxed out!! once again what is the next step?? the powers that be are in denial and still taking salary and expences so they will be happy with the dream world they created seems its a bit like a over heating engine it would be better to stop let it cool down and fix the problem ,but they would rather drive on untill the thing melts down ....
Edited by powerstroke on Sunday 29th April 13:14
powerstroke said:
Sorry I was tying to be flippant! Yes the graph is very revaling
once again seems the banks have the upper hand allowed countrys and their populations to live on borrowed money and create false wealth and living standards by "taking in each others washing". Now the credit card is fully maxed out!! once again what is the next step?? the powers that be are in denial and still taking salary and expences so they will be happy with the dream world they created seems its a bit like a over heating engine it would be better to stop let it cool down and fix the problem ,but they would rather drive on untill the thing melts down ....
Globs comment regarding the growth of debt interest is rather significant.once again seems the banks have the upper hand allowed countrys and their populations to live on borrowed money and create false wealth and living standards by "taking in each others washing". Now the credit card is fully maxed out!! once again what is the next step?? the powers that be are in denial and still taking salary and expences so they will be happy with the dream world they created seems its a bit like a over heating engine it would be better to stop let it cool down and fix the problem ,but they would rather drive on untill the thing melts down ....
In economic terms it is why even a 0.1% contraction is a disaster because the only way to pay off the debt interest is through expansion (which involves of course creating more money).
Back to your car analogy, the car can't stop and cool down, it MUST go faster and faster each year. So the MX5 has had a 335d engined MX5 has been remapped, it has had miniture rear seats fitted which were then folded down and even the mirrors have been folded in. But no matter how fast it goes, it must always go faster and faster each year otherwise it will be nuked from orbit. It has even been put on a conveyer belt (would that be equivalent to QE lol ?).
Edited by RichardD on Sunday 29th April 17:35
RichardD said:
Globs comment regarding the growth of debt interest is rather significant.
In economic terms it is why even a 0.1% contraction is a disaster because the only way to pay off the debt interest is through expansion (which involves of course creating more money).
Back to your car analogy, the car can't stop and cool down, it MUST go faster and faster each year. So the MX5 has had a 335d engined MX5 has been remapped, it has had miniture rear seats fitted which were then folded down and even the mirrors has have been folded in. But no matter how fast it goes, it must always go faster and faster each year. It has even been put on a conveyer belt (would that be equivalent to QE lol ?).
I think the the "QE" would be free fuel !!In economic terms it is why even a 0.1% contraction is a disaster because the only way to pay off the debt interest is through expansion (which involves of course creating more money).
Back to your car analogy, the car can't stop and cool down, it MUST go faster and faster each year. So the MX5 has had a 335d engined MX5 has been remapped, it has had miniture rear seats fitted which were then folded down and even the mirrors has have been folded in. But no matter how fast it goes, it must always go faster and faster each year. It has even been put on a conveyer belt (would that be equivalent to QE lol ?).
Gary11 said:
I think the the "QE" would be free fuel !!
OK, we're getting daft now..................
or maybe we aren't!
If certain countries are content for the consuming nations (with their overvalued currencies) to give them paper/numbers in return for shiny stuff (or oil), then basically ... it is free !?
RichardD said:
OK, we're getting daft now..................
or maybe we aren't!
If certain countries are content for the consuming nations (with their overvalued currencies) to give them paper/numbers in return for shiny stuff (or oil), then basically ... it is free !?
If you could re-value quickly enough fixing the price and having to pay for it, yep, pretty much.or maybe we aren't!
If certain countries are content for the consuming nations (with their overvalued currencies) to give them paper/numbers in return for shiny stuff (or oil), then basically ... it is free !?
Thinking of extreme inflation situations ... if back in the dark days in Germany after WWI someone had had a freezer and stocked up on, say, bread (a relatively cheap basic staple food) they could have become multi-millionaires in no time storing it for a week and then selling on at a much higher price. However, as with property, this only works if you then re-invest in something less expensive or just sell up and stick with the cash obtained. In effect this is what devaluation is. Those who are unlucky in the property market get stuck with negative equity. They have the option to walk away (or rather be kicked out) ad start again. Under EZ rules you can't walk away without losing all support (it seems) so you are forced to sit it out for an indeterminate period no matter how beneficial a move to a new house/job/financial opportunity might be.
On the other hand those smiling faces on the web ads from companies that claim to write off large outstanding debts ... that's defaulting apparently offering happiness as nice helpers come along, apparently, and tell your creditors to cut you a lot of slack. Or, to put it another way, tell the creditors that they have to leech off those who can afford to pay or take a dividend cut or whatever.
The temptation to live life to the full and die owing a large fortune with no heirs to suffer the fallout is quite strong ... but one has to start young I think to plan accordingly and get the full benefit.
RichardD said:
Globs comment regarding the growth of debt interest is rather significant.
In economic terms it is why even a 0.1% contraction is a disaster because the only way to pay off the debt interest is through expansion (which involves of course creating more money).
Economic darwinism.In economic terms it is why even a 0.1% contraction is a disaster because the only way to pay off the debt interest is through expansion (which involves of course creating more money).
The technique of using loan interest to suppress economic rivals is thousands of years old and has been regarded as a very unpleasant practice for most of that time. It was outlawed by both christianity and islam but condoned by judaism, hence the stereotype of the jewish money lender. If you swap Shylock for ECB then Shakespeare's Merchant of Venice is as relevant now as it's ever been.
The fallacy of constant growth has thus been understood for a long time, however it refuses to go away because it suits those at the top. Then as now there's always a bit of mess when it comes to collecting that pound of flesh.
The west used loan interest as a weapon during the cold war, offering huge IMF loans to poor countries in the knowledge that they'd never be paid back, thus ensuring supplies of cheap raw materials. The MO was something like this:
IMF > I see you're having some problems, would you like a loan?
Poor country > Yes please. (Possibly coercion / corruption involved if they refuse the loan).
IMF > It's been a year, can we have the first repayment please?
Poor country > Sorry we can't afford the interest, let alone pay you back.
IMF > That's ok, just implement this program of reform involving austerity and privatization. You'll return to growth soon but in the mean time we'll accept payment in cheap raw materials.
The above scenario isn't far off what happened in Venezuela and Argentina, countries that found themselves in the same position as Antonio. Just as has always happens the IMF/Shylock never got their pound of flesh and everyone was worse off.
What worries me most is that the IMF/ECB have not changed their MO when dealing with Europe. They are piling on the debt while committing to austerity and privatization, almost like they've come to believe their own bulls
t. I just hope no one in Europe has to elect a Chavez before the Shylocks realize they're not getting paid.Edited by Tartan Pixie on Sunday 29th April 20:49
Tartan Pixie said:
Economic darwinism.
The technique of using loan interest to suppress economic rivals is thousands of years old and has been regarded as a very unpleasant practice for most of that time. It was outlawed by both christianity and islam but condoned by judaism, hence the stereotype of the jewish money lender. If you swap Shylock for ECB then Shakespeare's Merchant of Venice is as relevant now as it's ever been.
The fallacy of constant growth has thus been understood for a long time, however it refuses to go away because it suits those at the top. Then as now there's always a bit of mess when it comes to collecting that pound of flesh.
The west used loan interest as a weapon during the cold war, offering huge IMF loans to poor countries in the knowledge that they'd never be paid back, thus ensuring supplies of cheap raw materials. The MO was something like this:
IMF > I see you're having some problems, would you like a loan?
Poor country > Yes please. (Possibly coercion / corruption involved if they refuse the loan).
IMF > It's been a year, can we have the first repayment please?
Poor country > Sorry we can't afford the interest, let alone pay you back.
IMF > That's ok, just implement this program of reform involving austerity and privatization. You'll return to growth soon but in the mean time we'll accept payment in cheap raw materials.
The above scenario isn't far off what happened in Venezuela and Argentina, countries that found themselves in the same position as Antonio. Just as has always happens the IMF/Shylock never got their pound of flesh and everyone was worse off.
What worries me most is that the IMF/ECB have not changed their MO when dealing with Europe. They are piling on the debt while committing to austerity and privatization, almost like they've come to believe their own bullst. I just hope no one in Europe has to elect a Chavez before the Shylocks realize they're not getting paid.
Bullseye, an excellent post, and extra credit for very relevant Shakespeare references on a motoring forum. The infamous structural adjustment programmes of the World bank and the like, structurally destroying economies for 50 years, but great for corporate profits.The technique of using loan interest to suppress economic rivals is thousands of years old and has been regarded as a very unpleasant practice for most of that time. It was outlawed by both christianity and islam but condoned by judaism, hence the stereotype of the jewish money lender. If you swap Shylock for ECB then Shakespeare's Merchant of Venice is as relevant now as it's ever been.
The fallacy of constant growth has thus been understood for a long time, however it refuses to go away because it suits those at the top. Then as now there's always a bit of mess when it comes to collecting that pound of flesh.
The west used loan interest as a weapon during the cold war, offering huge IMF loans to poor countries in the knowledge that they'd never be paid back, thus ensuring supplies of cheap raw materials. The MO was something like this:
IMF > I see you're having some problems, would you like a loan?
Poor country > Yes please. (Possibly coercion / corruption involved if they refuse the loan).
IMF > It's been a year, can we have the first repayment please?
Poor country > Sorry we can't afford the interest, let alone pay you back.
IMF > That's ok, just implement this program of reform involving austerity and privatization. You'll return to growth soon but in the mean time we'll accept payment in cheap raw materials.
The above scenario isn't far off what happened in Venezuela and Argentina, countries that found themselves in the same position as Antonio. Just as has always happens the IMF/Shylock never got their pound of flesh and everyone was worse off.
What worries me most is that the IMF/ECB have not changed their MO when dealing with Europe. They are piling on the debt while committing to austerity and privatization, almost like they've come to believe their own bulls
t. I just hope no one in Europe has to elect a Chavez before the Shylocks realize they're not getting paid.Edited by Tartan Pixie on Sunday 29th April 20:49
Edited by Traveller on Monday 30th April 08:07
Puts me in mind of something I was told last week.
Lets say that instead of being a banker you are a rat infestation exterminator.
Rats need water. Especially important for them. So if you want to drive them somewhere else you could simply elimiate local water supplies that they can access. If you want to kill them you remove the water supplies and then make liquid poison available. They will take the poison because they need the liquid.
On the other hand if you want to perpetuate the business but have some apparent success you would do nothing of note about water supplies and use dry bait and poison. This will allow you to display the success of a few bodies but the business will thrive as the rats recognise the danger of the dry bait and feed elsewhere.
It's a bit being in charge of writing H&S rules. Once you have a safety requirement pinned down you are no longer needed .... unless you keep changing the rules.
Finance is no different. Quite how gambling that includes the ability to become individually wealthy betting on failure became part of acceptable international finance is something that I find very puzzling. No doubt someone will have written a thesis explaining how it is a 'good thing for the market'.
Lets say that instead of being a banker you are a rat infestation exterminator.
Rats need water. Especially important for them. So if you want to drive them somewhere else you could simply elimiate local water supplies that they can access. If you want to kill them you remove the water supplies and then make liquid poison available. They will take the poison because they need the liquid.
On the other hand if you want to perpetuate the business but have some apparent success you would do nothing of note about water supplies and use dry bait and poison. This will allow you to display the success of a few bodies but the business will thrive as the rats recognise the danger of the dry bait and feed elsewhere.
It's a bit being in charge of writing H&S rules. Once you have a safety requirement pinned down you are no longer needed .... unless you keep changing the rules.
Finance is no different. Quite how gambling that includes the ability to become individually wealthy betting on failure became part of acceptable international finance is something that I find very puzzling. No doubt someone will have written a thesis explaining how it is a 'good thing for the market'.
LongQ said:
Puts me in mind of something I was told last week.
Lets say that instead of being a banker you are a rat infestation exterminator.
Rats need water. Especially important for them. So if you want to drive them somewhere else you could simply elimiate local water supplies that they can access. If you want to kill them you remove the water supplies and then make liquid poison available. They will take the poison because they need the liquid.
On the other hand if you want to perpetuate the business but have some apparent success you would do nothing of note about water supplies and use dry bait and poison. This will allow you to display the success of a few bodies but the business will thrive as the rats recognise the danger of the dry bait and feed elsewhere.
It's a bit being in charge of writing H&S rules. Once you have a safety requirement pinned down you are no longer needed .... unless you keep changing the rules.
Finance is no different. Quite how gambling that includes the ability to become individually wealthy betting on failure became part of acceptable international finance is something that I find very puzzling. No doubt someone will have written a thesis explaining how it is a 'good thing for the market'.
The first thing rat catcher has to do is to catch a breeding pair of rats alive so that, once he's killed all or most of the infestation, he can release them to seed a new population. Not sure how this fits with the metaphor...Lets say that instead of being a banker you are a rat infestation exterminator.
Rats need water. Especially important for them. So if you want to drive them somewhere else you could simply elimiate local water supplies that they can access. If you want to kill them you remove the water supplies and then make liquid poison available. They will take the poison because they need the liquid.
On the other hand if you want to perpetuate the business but have some apparent success you would do nothing of note about water supplies and use dry bait and poison. This will allow you to display the success of a few bodies but the business will thrive as the rats recognise the danger of the dry bait and feed elsewhere.
It's a bit being in charge of writing H&S rules. Once you have a safety requirement pinned down you are no longer needed .... unless you keep changing the rules.
Finance is no different. Quite how gambling that includes the ability to become individually wealthy betting on failure became part of acceptable international finance is something that I find very puzzling. No doubt someone will have written a thesis explaining how it is a 'good thing for the market'.
motco said:
LongQ said:
Puts me in mind of something I was told last week.
Lets say that instead of being a banker you are a rat infestation exterminator.
Rats need water. Especially important for them. So if you want to drive them somewhere else you could simply elimiate local water supplies that they can access. If you want to kill them you remove the water supplies and then make liquid poison available. They will take the poison because they need the liquid.
On the other hand if you want to perpetuate the business but have some apparent success you would do nothing of note about water supplies and use dry bait and poison. This will allow you to display the success of a few bodies but the business will thrive as the rats recognise the danger of the dry bait and feed elsewhere.
It's a bit being in charge of writing H&S rules. Once you have a safety requirement pinned down you are no longer needed .... unless you keep changing the rules.
Finance is no different. Quite how gambling that includes the ability to become individually wealthy betting on failure became part of acceptable international finance is something that I find very puzzling. No doubt someone will have written a thesis explaining how it is a 'good thing for the market'.
The first thing rat catcher has to do is to catch a breeding pair of rats alive so that, once he's killed all or most of the infestation, he can release them to seed a new population. Not sure how this fits with the metaphor...Lets say that instead of being a banker you are a rat infestation exterminator.
Rats need water. Especially important for them. So if you want to drive them somewhere else you could simply elimiate local water supplies that they can access. If you want to kill them you remove the water supplies and then make liquid poison available. They will take the poison because they need the liquid.
On the other hand if you want to perpetuate the business but have some apparent success you would do nothing of note about water supplies and use dry bait and poison. This will allow you to display the success of a few bodies but the business will thrive as the rats recognise the danger of the dry bait and feed elsewhere.
It's a bit being in charge of writing H&S rules. Once you have a safety requirement pinned down you are no longer needed .... unless you keep changing the rules.
Finance is no different. Quite how gambling that includes the ability to become individually wealthy betting on failure became part of acceptable international finance is something that I find very puzzling. No doubt someone will have written a thesis explaining how it is a 'good thing for the market'.
Better still if these savings requirements are enforced by law. Change the 'deal' later and, say, reduce pensions (or extend the working life expectancy - same thing in terms of the original contract) and the cash liability is at worst reduced. At best one can filch some money from the funds and encourage others to do likewise.
If you can drag more of the future outgoings through pension payments into the tax trap so much the better - you claw back and so reduce the net cost, although of course you take a hit on admin overheads if your admin systems are crap. But then even some of that comes back in tax ....
Edited by LongQ on Monday 30th April 21:28
Driller said:
Nail hit squarely into the tin lid by Tartan Pixie.
And people naively think that they can "change" things by voting a different government into power
I'm baffled. I thought you were all for the Euro (and by default the ECB/IMF) and that it was a terrific idea which was indestructable.And people naively think that they can "change" things by voting a different government into power
Like St Paul, perhaps reading this thread has given you a conversion on the road to Domestos
Ah, threw you the old googly eh?
I'm for the Euro because it's a very useful thing and represents a nice ideal (I know, I know) of countries getting on together.
Apart from that, I'm in, don't have a choice in the matter and now I'm in, it would be very bad news for me if it failed. It would be bad news for millions of other ordinary, blameless people too.
Of course, if it did fail, a very few other people would probably stand to make an awful lot of money.
Other than that there is no "by default" ECB/IMF thing. I hate politics and politicians and all the other members of their exclusive I Know how to Play With Money Club who rule the planet.
They should all be cast into a burning pit along with all the marketing executives.
Oh and it is indestructible, you know why? Because the people in charge (you know, the ones that make up all the rules of this game we're playing?) have decided it should be.
I'm for the Euro because it's a very useful thing and represents a nice ideal (I know, I know) of countries getting on together.
Apart from that, I'm in, don't have a choice in the matter and now I'm in, it would be very bad news for me if it failed. It would be bad news for millions of other ordinary, blameless people too.
Of course, if it did fail, a very few other people would probably stand to make an awful lot of money.
Other than that there is no "by default" ECB/IMF thing. I hate politics and politicians and all the other members of their exclusive I Know how to Play With Money Club who rule the planet.
They should all be cast into a burning pit along with all the marketing executives.
Oh and it is indestructible, you know why? Because the people in charge (you know, the ones that make up all the rules of this game we're playing?) have decided it should be.
Edited by Driller on Monday 30th April 17:53
Driller said:
Nail hit squarely into the tin lid by Tartan Pixie.
And people naively think that they can "change" things by voting a different government into power
Well theyve had enough of the toffy nosed tories and dont like austerity,so will vote for nulabia,yes they are that stupid the feckless will ignore all that has gone before and vote for labour next election as they will no doubt be better off, THAT will be my cue to be out of here there will be no hope....really no hope millibund as PM is actualy scary.And people naively think that they can "change" things by voting a different government into power
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