THE Eurozone Economics Thread pt 1 (merged) Archived

[GASMON]

The buggers are up to something. This just released on BBC News

http://www.bbc.co.uk/news/business-15419594

UK Prime Minister David Cameron has discussed changes to the European Union's treaty as part of a package to resolve the eurozone debt crisis. Speaking after European leaders held emergency talks, Mr Cameron said that any change would not be against UK interests. He gave no details of any changes being considered at the Brussels summit, attended by all 27 heads of EU states. Another meeting of all the EU countries will be held on Wednesday.

Initially only the 17 countries that use the euro were to meet on Wednesday. The EU leaders held a summit on Sunday morning amid fears that problems in Greece threaten to spread throughout Europe. This was followed in the afternoon by a meeting of the 17 eurozone countries.

Cameron will sell the UK down the river to appease his masters, the bankers (listed in previous posts). Of course the UK has little clout, the Germans will decide Europe's future, and it won't be nice (for non Germans).

This you tube explains quite nicely

http://www.youtube.com/watch?v=LyePCRkq ... r_embedded

Gas

[Fishman]

Duede, or whatever, I was so impressed with your post. You admitted you had no idea about what you were talking about, then finished with an admission you had no idea what you were talking about. Greece, one of the more socialist states, borrowed far more than it could pay back. So my statement that the socialist have spent all their money, and then others, actually DID contribute, yours did not. You just didn't like my statement of fact. Posting to state you have no clue,well that seems most appropriate for you.
Evil, you might be able make an argument about the "super rich" somewhere else, but certainly not with Greece. They collect few taxes from anyone, have far larger government than they can afford. Not super rich issues, just basic economics

[DomusAlbion]

I am never surprised at some people's ability to contort any subject at all into a rant against socialism. You do realize that your post adds absolutely zero to the conversation, right? Your post is devoid of content and I'm curious why you bother to post at all.

Anybody on these boards has the right to say what they like as long as it doesn't violate the rules of the board. Nobody made you a moderator of PO nor do we need high-handed self-righteous postings directing others' free speech.

Thank you very much.

[Duende]

Fishman wrote:

Duede, or whatever, I was so impressed with your post.

You're welcome. And it's Duende. D-U-E-N-D-E. Hey, you're trying though so no hard feelings.

Fishman wrote:

Greece, one of the more socialist states, borrowed far more than it could pay back.

And what exactly does that have to do with socialism? The US is far less socialist than the Germans, but they seem to be doing fine. Well enough anyway to bail out the whole of Europe it seems. The US - which is decidely LESS socialist than the Germans, mind you - will never pay off its debts either. No one's gonna pay off their debts, socialist or not.

I'm not attempting to defend socialism; I am trying to point out that boiling intensely complex issues like the European sovereign debt crisis down to off-the-cuff statements about degrees of socialism is unhelpful in moving the conversation forward. That's the point I meant to convey in the earlier post. So Fishman, if you care to explain in more detail how socialism corresponds to economic insolvency using real world examples (particularly in the case of European sovereign debt crisis), I will be happy to read it.

[vision-master]

I am never surprised at some people's ability to contort any subject at all into a rant against socialism. You do realize that your post adds absolutely zero to the conversation, right? Your post is devoid of content and I'm curious why you bother to post at all.

Anybody on these boards has the right to say what they like as long as it doesn't violate the rules of the board. Nobody made you a moderator of PO nor do we need high-handed self-righteous postings directing others' free speech.

Thank you very much.

Ok, Im gonna say Duende is right. You have already admitted your a conservative DomusAlbion. I could have fun with your name, but I'll let it go. lsol

[Novus]

The arrogance of the international bankers knows no bounds. They are threatening all of Europe with war if the don't turn over entire monetary system to them. People should revolt. Unless they want to live in a Robin hood in reverse state like America where the poor are taxed to fatten the rich.

[Sixstrings]

Cameron will sell the UK down the river to appease his masters, the bankers (listed in previous posts). Of course the UK has little clout, the Germans will decide Europe's future, and it won't be nice (for non Germans).

You Brits were smart to stay out of the Euro. Because *snap* in a flash here you have these bureaucrats in Brussels ready to usher in a bankster dictatorship. A new Finance Ministry with power over your budgets, power to cut and tax. This Finance Ministry will not be democratically elected.

It seems rather extraordinary to me -- it is dictatorship -- I wonder how Europeans feel about this, your sovereignty is gone and your vote is gone, just like that.

[Sixstrings]

I've researched the European sovereign debt crisis over the past week or so because I know so painfully little about it. The first thing that struck me was how long this has situation has been unraveling for - a number of years. Another thing that struck me is how widely varying the concern about the severity of the situation is. You go from Bloomberg and The Economist which looks at it as a relatively minor issue which could be solved quite simply, if only the political will was there. On the other hand, Zerohedge and Max Keiser make it sound like financial Armageddon is imminent. I really can't make heads or tails of it; there's just so much noise out there on it.

You make good points.

I've been following this stuff for years now and just barely understand it. I think the truth is that we can actually afford to do quite a bit of money printing but only to a point -- it is inflationary, but starting from no QE's at all before all this happened has given us some manageable slack to play out. (btw "money printing" is the Fed just creating money to buy US bonds -- that's monetization of national debt -- and also printing money and loaning it out to banks, hedge funds, and assorted governments and colorful characters all over the planet. They do this to "inject liquidity" and fight deflation.)

A lot of the inflation has been exported to developing countries -- our Fed prints money, loans it to banksters at 0%, they in turn buy mines in Australia or invest in Brazil or China. This has sparked inflation in those countries. Commodity inflation is probably what caused revolution in Egypt.

Some of the inflation, real inflation, makes its way here -- go to the grocery store, look at the shrinking package sizes. Look at the rising prices.

Look at commodity charts over the past few years -- oil, cotton, gold, everything. That's all inflation from bankster cash -- central bank prints money, loans it out at 0%, and Wall Street runs up futures.

As for Europe.. the analysts who say it's no big deal, I guess their point is Europe should do what our Fed does and just print unlimited cash and shut up already. And that's what this thread is about -- a new federal Finance Ministry for Europe, with the power to cut member state budgets, tax, and then they'll still have to run the printing press on top of that.

The thing I don't understand is the specifics of why the world is in such a financial black hole.. what's going on here.. the housing bubble in the US / Ireland / Spain was bad but this bad? My best guess at understanding is that it's a domino effect. Bad debts force government austerity, but the more they cut like in Greece, the less able they are to service their debt and the bond yields just get higher. So it's a spiraling debt trap. When Greece fails, as it surely will, then French banks will need a bailout because they got stuck with bad Greek debt. And our banks go under too, since they either hold Greek debt or are in bed with French banks and friggin' AIG is insuring the whole mess and we all know they're not good for it eh?

I've read some things before that suggest the Greek debt levels really aren't that bad in context with the whole of Europe. But read the above article -- they're now saying the Greek situation alone is going to swallow up the whole 440 billion euro rescue fund. That's like half a trillion dollars, that's a lot of money. That leaves no money to bail out Italy, Spain, or France.

I don't have a link but I've read something about how we've also passed the point where new debt creates new money -- if that's true, then this is end stage capitalism and it all ends in tears eventually.

If anyone has a better take on this than me, please have at it.

[Fishman]

D-U-E-N-D-E
Now that was a much better post on your part, you actually articulated a point. Agreed Germany is more socialist than the US (was). But Germany's industrial base is much larger than the socialist tendencies of its government. That's certainly not true of Greece.
Novus, help me out, the bankers lent Greece the money. Did they force Greece to take it? If I lend you money, should I expect it back at the rate we agreed upon? If yes, Greece will have to face strong austerity to pay their debt. If no, don't expect me to lend you more money. Then Greece faces strong austerity because of their spending habits. If you want to take my money, just say so. "Round here we call that thievery

[dsula]

"Round here we call that thievery

A socialist only calls it thievery if it's taken from him. If it's taken from others to give to him, it's ... socialism.

[Sys1]

It won't be a nice Christmas. I'm waiting for wednesday next european summit. This one is supposed to be decisive.
Euro is already doomed. We just don't know how long before things turn really bad where I live (France).
I guess we'll loose our triple A soon from S&P or Moodies... even if France cds are already getting exponential.
Our french politics like Sarkozy (president) and Christine Largarde (ministry of finance) are pathetically dumbs. During European meeting, they do basically two things :
- Decide the date of the next meeting.
- Smile at cameras to pretend everything is fine and under control.

I wish them to end at the end of a rope.

[dolanbaker]

Well, so far the markets are looking up.
They appear to have taken the soundbites and think it's all sorted!

[Sixstrings]

Well, so far the markets are looking up.
They appear to have taken the soundbites and think it's all sorted!

How much of that is money from the Fed discount window? Money printed from thin air, ultimately taken out of my pocket through inflation?

And what's the volume? Market can run up to the moon, but low volume.. it's shallow, means nothing. Hedge fund computers high frequency trading back and forth.

[rangerone314]

There are legions of unemployed youth all around Europe. It is possible that they will be the future recruits for the Eurozone military unit.
In USA, the young are indebted. Joining the military automatically wipes out your debt. You get to serve your nation and bring freedom all over the world. All expenses paid by the government as long as you are fighting. What's not to like?
China and India keep passing larger and larger military budgets every year. Last year they both expanded their respective military budgets by 12%. At this rate it will double every 6 years. Wonder what they are up to. They have the manpower but not the machinery. Yet.
The middle east region earns huge oil revenues. More than enough to keep the population fed and to keep them from revolting. They are breeding terrorists faster than wall street can perform high frequency trading. And they start recruiting young. Really young. Even Africa is not far behind.

Picture the SCO (China, Russia, Kazakh, Tadzikistan, Uzbeckistan etc) becoming a military alliance like NATO. Now imagine India, Pakistan and Iran join the SCO. Now you got a lot of manpower and a lot of money to buy technology.

Looking like the West DIDN'T win the Cold War after all. Kruschev lied though. He said "We will bury you." He didn't say "YOU will bury you."

[Fishman]

Sys, good luck there in France. Though my comments about Euro socialism were pretty nasty, I wish you guys the best of luck. Every time oil tops about 90 dollars , the economies drop. Those countries that had the most debt like Greece are suffering the most,... at present. History is full of economic downturns with the four horsemen right behind. Perhaps fracking will help for a while , but who knows.

[Daniel_Plainview]

Banks and Europe at loggerheads over Greek debt deal
Leading banks are at loggerheads with European leaders after lenders offered to accept losses of up to 40pc on their Greek debt holdings, a proposal seen as insufficient by politicians.

The offer – an increase on the banks' previous proposal of a 21pc 'haircut' – is set to trigger a tense period of negotiations and could determine the success of a crucial European summit on Wednesday. The IMF is thought to be calling for a 60pc haircut while Europe's leaders are demanding at least 50pc, but bankers have warned that anything over 40pc risks setting off a 'credit event', triggering credit default swaps.

David Cameron travelled to Brussels for the conclusion of a weekend of talks between European leaders but, as feared, politicians were unable to agree definitive moves to halt the crisis. ... Mr Cameron yesterday called on his European peers to redouble their efforts: "The crisis in the eurozone is having a chilling effect, not just on eurozone economies, not just on market confidence but on the British economy too. They need to come together and take responsibility for their currency."

...In a victory for Germany, leaders agreed that the European Central Bank would not play a role in boosting the EFSF's firepower. The agreement, a blow for France which had been hoping to use the ECB to lend potentially limitless funds, will raise further questions as to how politicians will boost the EFSF's strength. The focus appears now to rest on the EFSF being used to guarantee government bond sales....

[peripato]

Parasitic too big to fail banks don't want to suffer any significant losses, whilst domestic populations, either tired of austerity or with continued bank bailouts, or both, are increasingly growing exasperated with governments' who are in bed with these fraudsters and seem intent on throwing whole countries under the bus, instead of making them eat their insolvency shit sandwiches which are growing in stench.

Of course this will end so very sweetly and growth, swindling and pimping will resume shortly, the Eurozone hawks would have us believe.

[rangerone314]

Sys, good luck there in France. Though my comments about Euro socialism were pretty nasty, I wish you guys the best of luck. Every time oil tops about 90 dollars , the economies drop. Those countries that had the most debt like Greece are suffering the most,... at present. History is full of economic downturns with the four horsemen right behind. Perhaps fracking will help for a while , but who knows.

Our economy tanks at not much after 90 dollars.

The first stage will be Africa dying off first. You can pretty much write off east Africa first.

Stage two will be the Middle East and probably much of Southeast Asia. The Arab Spring cannot do much more than delay die off there, if that. Probably die off in Yemen and Egypt first.

Stage three will see large scale die off in China and India and much of South America, too. Also Mexico and Central America.

The last stage, you see a die off in Europe, Japan and North America.

[Daniel_Plainview]

Parasitic too big to fail banks don't want to suffer any significant losses, whilst domestic populations, either tired of austerity or with continued bank bailouts, or both, are increasingly growing exasperated with governments' who are in bed with these fraudsters and seem intent on throwing whole countries under the bus, instead of making them eat their insolvency shit sandwiches which are growing in stench.

Whilst the IMF wants banks to take a haircut of 60%, the fact that banks have upped their willingness to take haircuts from 21% to 40% shows that the banks now finally realize that the sovereigns are OUT OF MONEY and can no longer bail them out.

The problem is that once banks are forced to take a haircut greater than 40%, then a "credit event" will be triggered ... and the dominoes will begin to fall. Because banks are leveraged 25:1, the contagion will quickly turn into a blazing inferno.

So the banks are at their limit.

The sovereigns are at their limit.

The taxpayers are at their limit.

The bailouts are at their limit.

The citizens' appetites for austerity are at their limit.

And this is just for Greece. If Europe manages to solve the Greek crisis, then there's Italy, Spain, Portugal ... etc ...



The only solution may be to print money (even though this is illegal under the Eurozone) ... or to keep buying time by kicking the can on a daily basis. If Merkel and Sarkozy will be meeting on a daily basis, maybe they should move in together.

[Plantagenet]

The only solution may be to print money (even though this is illegal under the Eurozone) ...

Thats not going to happen----Germany has an extreme aversion to printing money willy nilly. Its something about wheelbarrows filled with Deutschmarks, Weimar and Hitler.