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John Schults / Reuters
The future of the eurozone depends heavily on the efforts of French President Nicolas Sarkozy and German Chancellor Angela Merkel. But despite their single nickname of "Merkozy," the Franco-German duo has yet to produce a master plan.
The latest plan to save the euro zone calls for the boldest moves yet since the crisis exploded on the Continent this year. Yet despite a looming threat of failure, Europe's leaders and citizens remain deeply split over the same issues that that have doomed a series of failed proposals over the past two years.
The new plan calls for a treaty that would fix one of the most critical, longstanding flaws in Europe’s monetary union: the lack of centralized control over member countries' decisions about taxes and spending. The absence of those controls have allowed free-spending nations like Greece and Italy to run up massive national debts that larger countries, like France and Germany, have refused to backstop.
The new treaty, which would require approval of all 17 countries that use the euro, would include automatic sanctions for countries that fail to keep government deficits in check.
For now, the proposal has given European bankers and political leaders some breathing room, as investors gave the idea a vote of confidence. Following the announcement Monday, the euro rose against the dollar, stocks gained and yields on European government bonds dropped.
“The fiscal stick is being rewarded by the market carrot,” said Douglas Borthwick, a currency trader with Faros Trading. “We continue to expect this going forward. The market rewards fiscal responsibility.”
But markets have rallied before on hopeful pronouncements from the leaders of Europe's "core countries” only to see proposals dead-ended by the complex political process of forging consensus among 17 countries. In general European voters tend to be leery of ceding their national independence to a centralized spending authority in Brussels. European leaders are scheduled to consider the latest proposals at a summit in Brussels Friday.
After U.S. markets closed Monday, Standard & Poor's warned that it may carry out an unprecedented mass downgrade of eurozone countries if EU leaders fail to reach agreement at the summit. The ratings agency placed the ratings of 15 euro zone countries, including top-rated nations Germany and France, on credit watch negative -- a move that signals a possible downgrade in no later than three months.
As with past failed proposals, the latest announcement came from French President Nicolas Sarkozy and German Chancellor Angela Merkel, the two strongest “core” economies that are struggling to stem the contagion from the weaker, heavily indebted peripheral economies of Greece, Italy, Spain, Portugal and Ireland.
Despite that common interest, the two countries remain divided over key elements of any bailout plan.
“There are still significant differences between Sarkozy and Merkel, so we're in for a volatile week,” said Patrice Perois, a trader at Kepler Capital Markets. “The risk is that any kind of disappointment could trigger a (market) pull-back."
France has long opposed efforts to dilute its national independence by turning over control of budgetary decisions to a central European agency with the power to veto spending decisions. Various enforcement mechanisms have been considered, including granting the European Court of Justice the power to punish governments that defy centrally imposed spending limits. Just months away from a presidential election, Sarkozy faces rivals warning voters that he is prepared to sacrifice French sovereignty to unelected EU officials.
For their part, German voters are loathe to allow their taxes to be spent bailing out weaker, free-spending countries. Faced with German voters' deep-seated fears of a recurrence of 1920s hyperinflation that sank the Weimar Republic, Merkel has also staunchly opposed the idea of letting the European Central Bank print euros to underwrite massive bond purchases,
The long-simmering crisis reached a boiling point in the past few weeks as investors became increasingly skeptical about a series of broken promises to get Europe’s fiscal house in order. Those investors have demand higher interest rates on European government debt to offset the risk they won’t get their money back.
The euro is holding firm against the dollar, boosted by optimism on Italian austerity measures and the Merkel-Sarkozy meeting, with Marc Chandler, Brown Brothers Harriman.
Europe’s weaker countries, including Greece, Portugal and Spain, have been paying that premium for months as budget-balancing spending cuts sapped economic growth and cut into revenues, which forced deeper cuts in a downward economic spiral. European leaders have assembled a collection of war chests to bail out those countries if they reach the end of their fiscal rope.
The crisis entered a new phase last month, when the rate on Italian bonds soared to 8 percent, a level widely acknowledged as unsustainable. With the third-largest pool of debt, behind the U.S. and Japan, Italy’s debt load is far too big to bail out. Various proposals to find bigger pools of bailout funding, including a proposal that the European Central Bank simply print more euros, have run into political, technical and legal roadblocks.
The latest round of proposals also includes a bid to raise Europe’s member country contributions to the International Monetary Fund, which would expand its financial firepower to backstop a debt default. The IMF so far has failed to attract larger contributions from countries outside Europe, including the U.S., China and Brazil.
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Don't you dare come begging to UNCLE SAM again !!!!
It is your mess now clean it up. Sell your country's GOLD !!! Do something to help yourselves for once. I have not once heard of a country selling it's gold to get out of debt or at least cut the debt down to size !!!
I know it's just a pipe dream . But if we have our way good old UBCLE BEN will not come rideing in to rescue you.
bob
Why would Europe look to the U.S. for bailout when it's all ready trillions in debt to China?
Gerrow, can we can get money from the Chinese and lend it to Europe?
Why is no one talking about how the banks of the original Euro-zone countries speculated on and de-valued the currencies of the countries that joined later? It is no wonder that the southern-Mediterranean countries have gone into a debt cycle, when the value of their original currencies was halved compared to the Euro. Who said so? How does this work? We are letting you into our little shell game, but we are only going to credit you with half of what you bring to the table. Then we are going to loan you money at interest, to make up the difference from what you agreed to let us steal from you, just so you can join our club and prosper like us frugal and enterprising, non lazy northern Europeans. Hello?
d gerrow:
Because they know we are stupid and wanna play big superpower status. Even though our economy is going down the drain and people are give\ing up looking for a job that President celebrates as lowered unemployment. Bernake will do stupid thing and guaranttee hudnreds of billions of euro bond or particiapte in it.
Price of being "Bana Kuba" Iis African saying Chance to act big and get applause while at home kids are starving.
"But markets have rallied before on hopeful pronouncements from the leaders of Europe's "core countries” only to see proposals dead-ended by the complex political process of forging consensus among 17 countries."
The chance of all 17 Eurozone countries agreeing to an austerity program just to benefit the 'Big Spenders' in Greece, Italy, Spain and Portugal is somewhere between 'Slim and None'.
And of course, they have the example of Obama, telling them that they should 'Spend their way to prosperity'.
The 'Smart Money' is still betting on default. Throwing more money onto a sinking ship never works.
That's exactly what the banksters want Bob. they want to use this as an excuse to buy up the worlds gold so that when the whole economy goes tits up they can pull an MF Global on us and simply run off with the farm.
The stock market, especially the financial markets, rise and fall on whatever Europe SAYS about fixing this problem. It will be interesting to see the shakeout between the weaker (PIIGS) and the rest of Europe like Germany France Netherlands. A bailout of the weak ones by the strong ones will put substantial pressure on the Euro. This would help trade to Europe as things are so expensive there now. And us Americans can take our European vacations for less cost.
The4ugh!ngm
You are right the banks want everyone to go bust so that the bank's clients and their stock price can go down the toilet (sarcasm added). The banks want growth so that they can be prosperous again. If you haven't noticed, financials have been the worst performer in the capital markets.
I agree with you but note that China owns less than 8% of our public debt--still, a load of money.
I don't care what strategic plan they have up their sleeves. The American government should not be bailing out these people again. We need to stay focused on taking care of America and the American people first and always.
Let them fall, and let them pick up the pieces and rebuild. Giving them the American tax dollars will only make things worse for the USA, because we all already know that there is no saving these people as long as their corrupt government continues to rob the piggy-bank and continue to waste money.
I say NO to bailing out these people. Take care of the American people and America first.
Arieus, one word, Globalization. If Europe is unable to resolve this debt fiasco then the Euro will fail. If that happens then the GDP of most nations in Europe could drop as much as 25%, if not more. The US and European markets are very interdependent. If the GDP of Europe drops substantially, what do you think would happen to the GDP of the US? What impact would that have on jobs in the US? If the unemployment rate begins to rise again, what affect would that have on tax revenue for local, state and federal governments? Nearly 75% of the US budget is allocated to Medicare, Social Security and defense spending. Spending can only be cut so much. Falling revenue and inability to cut spending, would result in higher deficits.
With that said, the US should not be the only nation helping Europe. Other countries around the world should also contribute as they will be equally hindered by the failure of the Euro. If the Euro fails the world most likely will fall back into a recession, if not a depression.
Ben Franklin, "An ounce of prevention is worth a pound of cure."
Bob1/28...... you don't get it,I do understand what your saying and in a world that is not so corrupt in banker occupation that would be great.....the problem here is that they are ( these countries PIIGS ) having to collateralise theirdebt with there Railroads,Lottery's,national monuments ,gold and in Greece's case their islands at interest rates that cannot be paid back in that case they lose their country's sovereignty ( freedom)...that's why they are rioting and have unrest if the bankers bust the Europeans we will be next here in America,we would not like it if Goldman Sachs made us collateralise our national monuments at interest rates we could not repay so they would repo them,making it simple for people to understand it is like playing Monopoly and they winner just keeps acquiring property till he wins and games over so if they take Europeans gold they will just get more powerful and unstoppable,we have a huge problem here as well that doesn't get much attention and and that is the Federal Reserve they are as much to our federal government as Walmart does,all of our tax dollars go for interest payments to them for printing money.....can anyone say JP Morgan that's who is running it all with Goldman....we need a world revolt to stop these bastards!
Too late...Uncle Samboma has already made the deal and the US will soon be funneling billions of greenbacks into the Euro-twilight zone. Need to read the book "Aftershock" to see the whole plan laid out and played out by the man who prophesied this depression. tic-tok tic-tok tic-tok...almost forgot...also - see the award winning documentary "AGENDA" to see how this all plays into the well-documented plan of the overthrow of the USA via a financial collapse...now... tic-tok tic-tok tic-tok
The European Union will collapse within the next year or two. It has to. Europe is suffering from the economic gangrene of insolvency. This is happening in both the public and private sector. Unless the diseased states are removed the risk is spread to the non-infected. Bailouts, as we have seen here, are a temporary reprieve at best. The disease is unsustainable debt because of decades of monetary malfeasance and fiscal malinvestment.
As the irrational social and economic justice mentality spread throughout many of the European Union States the results became obvious. Unless you have economies diverse enough to weather the repeated bust and boom cycle of Keynesianism at some point the whole unit collapses. This principle, seen developing in the US for decades, should have been a warning to the EU and certainly to ourselves. Instead the EU not only embraced this insanity, they put it on steroids.
Bread and Circuses have been the handiwork of Empires for millennia. Give the people their little entitlements while at the same time driving the economy into the ground. After creating monstrous debt the incompetents in the government then turn to the people and tell them they need to pay more in taxes and face severe austerity measures. The process is insidious, but now should be obvious. Yet it isn't. As the wealth is not just transferred around within the nation itself it is also redistributed to the cronies abroad. We just caught a glimpse of this with our own "Bailouts" where we were told it was a mere $700 Billion dollars but in actuality several untold TRILLIONS. Who received this money? Why? When will it be repaid? Answers are avoided under the clandestine cloak of the Federal Reserve. Recent evidence suggests we will once again be the proud providers of rescue funds to the EU. If it hasn't happened already.
Remember, a government big enough to give you everything you want is big enough to take everything you have (in the name of sovereignty).
The criminal and incestuous relationships governments around the world have created with central banks can only be regarded as treasonous. As politicians provide the crumbs of safety-nets to the masses, the liberties and freedoms of nations are slowly eroded. Our political leaders borrow more and more money to pay off the banks, which return the favor by lending ever more money to our governments.
In a true free-market economy, failure gets penalized. Instead of accepting losses on malinvestments, which would have invariably led to collapse of some of the Too Big To Fail banks, decisions were made to transfer the losses to taxpayers via loans, guarantees and in the case of the EU to the newly formed European Financial Stability Fund. The monies did not go to help the failing economies, instead it passed through the European Central Bank to recipient countries and to the banks and investment funds. The natural response was to accept insolvency and let failed private lenders and banks eat their losses. However, this was not allowed. Ireland and Portugal were forced to take the money.
The reason for this forced bailout was to insure that the banks would show up at the next bond auction in Spain, Belgium, Italy and even France and Germany. As we have seen, the cartels plan has failed. Greece, Ireland and Portugal are ruined. These lonely nations will never have the ability to save and grow fast enough to pay off the debt Brussels has imposed on them, all in the name of "saving" them. More Bread and Circuses.
Solutions, unfortunately, are as Draconian as the threat of collapse, but possible. The banks need serious and open parallel stress tests by independent regulators, investors and analysts. Trust but verify. Any banks recapitalized with tax payer dollars should be forced to allow ownership stakes in return. Boards should be removed and replaced. Austerity moves must be Draconian and effective with repeated reviews of success or failure. At the point our global economies are at today even these steps may prove fruitless but at least there is a fair and possible result of success.
Most importantly we need to learn from this debacle in the EU right here in our own country. This Keynesian insanity of monetization of debt to preserve unsustainable entitlements and social programs must end. Massive government corruption, waste, fraud and abuse must be eliminated. Layer upon layer of bureaucracy must be purged and removed from the federal government ranks and returned to the States so We The People can have more control and oversight of our precious tax dollars before even this comes to a screeching halt.
Unfortunately, as I stated above, the EU will collapse because the necessary and obvious solutions will be rejected by both the governments and the entitlement indoctrinated EU populace. If all WE do is keep one eye on the EU at all times and assure ourselves we don't follow in their failed attempts, we just might be able to avoid a similar fate.
As much as I’d like to believe that, I doubt it.
God Bless and save America.
Control the money and you control Nations and it's populace. So, if countries fail to increase taxes and control spending, will the U.N. tenacle, G-8, show it's muscle and start a war with that country ? Or will the larger Euro nations ask deficient countries to hand over ALL THEIR MATERIAL POSSESSIONS ?
Yeah, wouldn't you believe it....the above article came from the World's Socialist Web site.
Standby EUrozone countries.....you are about to be sucked into black hole.
The first known Markets were started by Muslims and Jews - look at where it got them.
How do you base the strength of a country based on the Stock Markets, what the heck does a country produce that makes money? What are investors investing in that is going to recover? If you can follow this mumbo jumbo then I want the number to your dealer.
Is Uncle Sam and all other governments just middle men. No wonder governments started making businesses that put small companies out of business, and they still lost money. These countries did everything they could think of to get an advantage and still have to answer to corporations. Then the corporations have to borrow from the banks, and the government bails out the banks.
This system has run its course just as the might is right system ran its course - are we all so stupid that we can't invent a new course? So much manipulation just to get the last drops of blood (money) from the old systems - at far too big a cost to the future. We deserve what we get for electing crooks.
Schoen has been smoking his own fart and getting high on it again. The fact is the European financial crisis is more than one year old. And the solution proposed today is not Bold; it's the same bailout formula implemented several times during the past year with Greece as the primary recipient.
More than a year ago, the PIIGS were insolvent as today. Nothing has changed except the ECB had thrown nearly 30billion Euros into a rat-hole called Greece. More than a decade ago, the EU claimed that the new Euro currency will be unlike the US Dollar because the ECB will not print fiat currency the way the Federal Reserve has in debasing the US Dollar.
For many years, the value of the Euro appreciated against the Dollar as the ECB exercise restraint in expanding the money supply while the Federal Reserve printed Dollar 24/7. The PIIGS crisis will test whether the ECB has the will to control the impulse to print its way out of this mess.
I must say to my good friend B. Give them a smile and tell them no. As they did us in the beginning of our time. If indeed they ask for our help. Let them reap what they have sewn . ;]
Let it look as if Zan a Duex did Kublikhan.
"She was, On-ly, fif-teen". "Now Blow the bloody doors off"!
"Come come Mr. Bond".... "You enjoy folding your cards as much as I".
Cheers
Here we go again! Another plan in a line of many that is supposed to breathe life into the ailing union called the Euro zone! How many times in the past 12 months or so have we seen this, yet in no time there will be something else in the way of a solution and things will continue to limp on for another day, week, month, year. When will someone stand up and call it as it is?! When will Merkel and Sarkozy develop some spine and declare Europe’s monetary union finished!!?? Or is it too hard to admit that their monetary union was conceived in a hurry and without proper guidelines in place, to counter the troubling and erratic $US?!
What we are seeing in Europe today is what happens when the Socialists run out of other people's money to spend. The extremely liberal social welfare systems in countries like Greece were unsustainable. When the economic downturn hit, the number of people turning to these government funded social support systems grew to the point that there simply was not enough coming in to support the outflow. In addition, the governments failure to build up any kind of surplus to get them through a downturn meant that the problem hit hard and fast. There simply was no reserve to fall back on. We are rapidly heading for the same kind of crash here. The only thing that has saved the US so far is that our social support systems, while significant, are no where near as generous as those in the more socialist oriented European countries and the US had a greater ability to borrow money to try and get past the rough patch. However, our ability to continue borrowing has been seriously curtailed and if our economy does not turn around soon things are going to head south. There is absolutely no way that the US can afford to, nor should we spend our tax dollars to try and save the PIIGS in Europe from their self created mess. Attempting to do so will not only not work, it will accelerate our own problems and drag the US further towards economic collapse. We should not be pouring any more money into the IMF for the European bankers to use to continue to try and spend their way out of their problem.
The great experiment that was the Euro is likely on it's last legs. I do not see any way that the economies of Germany and France can continue to support the PIIGS, nor should they. The only way to save the Euro at this point would be to cut loose the economies that are failing an separate them from the Euro. This does not mean that the other countries in Europe should completely cut off the ailing countries, but they need to be removed from the Euro to limit the damage to the other countries in the community. Let these countries go back to using their own sovereign currency so that the valuation of their currency can move independent of the Euro. Right now the Brits are sitting back extremely happy that they decided to pass on the Euro and stick with the Pound. Not that England's economy is in fantastic condition, but it is far better off than it would be as a member of the Euro.
So it looks like they are doing nothing to address the issue of outstanding debt. No real talk here, it seems they want to speak about token measures like centralizing control over taxing and spending. That's going to go over pretty badly in countries like Greece most likely.
We all know the solution however; Europe and the US will chip in to inflate their way out of this crisis. And who's paying for this, well anyone holding Euros or dollars.
I agree on inflation, however I would put it out there that a loan which is not repaid is a gift not unlike the Helicopter drop idea and is inflationary, in which case inflation occurred in the past and it is too late to go back.
GHX
Inflation is always a Central Bank's answer to repaying current debt with largely worthless future money.
A $Dollar from 1970 is currently worth about $0.16 today because of inflation. That $15 Trillion of our National Debt may only be worth about $2.4 Trillion in the future, but of course, by then, our Debt will probably be $100 Trillion.
And so it goes. Liberals push for more spending on entitlements/big government and neocons push for more spending on overseas military involvement and foreign aid. Until we elect honest and fiscially responsible politicans like Ron Paul its just going to be more of the same.
Roy, the point I am making is we need to STOP issuing debt to countries, businesses and people who cannot afford to repay. At one point I had close to $340,000 in available credit much of which has now been reduced, but that is ridiculous in the extreme!. My point is we would not be in this place without excess DEBT. DEBT IS INFLATION SQUARED!!!!!.
Your choice now is to do without your pension or inflate away the debt and get your pension whichever you feel would be most convenient.
That said without all the debt your pension would be a LOOOOOOOOOTTTTTTTTTT smaller since it too is debt.
It is time for Europe to divide itself into two blocks. One block cosnists of advanced countries and other
block consists of rest. Advanced block can help lesser one and try to bring them to level they can move to
advanced block.
This is theonly way all coutnries can progress. Greece can benefit by devalueation of currency. That will make
it goods acceptable and Greeks will automatically have to lower their standards in that they cannot get all
advanced outnry goods at same prices and will have to pay more. Thus theywill be able to export more, import less fixing their trade baloance. They also will be able to balance theri budget but automatic austerity of devaluation.
But Europeans refuse to wait the months or years it will take to get out of their self-made mess. They could begin taking daily showers and the volume of soap sold would rise, helping their economy
The proposal is essentially DOA but it is more about political high drama then solution. The Euro concept was intriguing but fatally flawed because independent sovereign nations will not ever agree to give up sovereignty simply for economic unity. Besides this is a region that has fought over lessor matters time and again throughout history and can not overcome cultural tradition in favor of capitalism. Anyone who thinks for a second that Europe can adopt a US federal/States model is naive.
So Germany is no longer pretending not to rule Europe. Germany has finally decided to admit that Merkel is the Kaiser while Sarkozy is now the admitted leader of Vichy France 2.0.
Its very shameful that the filthy rich investors are cheering and celebrating people loosing their retirement checks and people being forced into the streets. Why Kaiser Merkel even replaced the Governments of the German Provinces of Greece and Italy with her unelected puppets.
If I were Greek or Italian, I would be steaming mad that Kaiser Merkel booted democratically elected governments and replaced them with Technocrats.
It will NOT work!!!
They intend to impose controls to limit the amount of debt a country can incur each year and they say the absence of those controls have allowed free spending nations like Greece and Italy to run up massive national debts.
Think about it for a minute; if you were a politician who wanted to get re-elected, but you couldn't spend huge sums on your pet projects because of limits that prevent you spending borrowed dollars, what would you do?
You would do what every politician already does - - You would defer spending on the infrastructure projects like roads, bridges, streets, sewer lines, and then you would spend the infrastructure money on your pet projects.
This is what all politicians have been doing for years. They let the infrastructure crumble and they transfer the infrastructure money to their pet projects to make the voters happy and get themselves re-elected.
This is the reason why infrastructure is crumbling in every state; mismanagement by politicians.
The Euro is dead either way but this new strategy might keep the Euro alive for another couple years; meanwhile the roads and bridges and sewers will crumble from lack of annual maintenance and neglect.
This is a very bad, twisted joke and it demonstrates how messed up the situation is. All such a centralized oversight in the current credit-based system would do is to insure that the lower level countries would remain undeveloped. The only way a country can develop in a credit-based system is to borrow more than it can probably ever pay back. The development can never overreach the debt. And since debt is the way the lenders maintain their own progressive profits, the debt always eventually overwhelms the developing country. The development itself is always relative, limited, temporary. Though it would be rough at first, the best thing that the lower level countries of Euro-union could do is to drop out of the union and entirely re-orient and re-organize their economies. It is very unlikely they would decide to do that, but the alternative is this descending deeper and deeper into illusion and confusion and unhappiness until the unhappiness becomes utter misery. Then what?
I feel like I live in a civilization/society that is a mixture of a high school and an insane asylum. All the real teachers and doctors have been murdered and replaced by the strongest students and patients.
Europe is suffering the same fate that the US did in 2008 - Banksters keep the profits, but assign risk and loss to the taxpayers.
Many years ago, Banksters had "skin in the game." They personally assumed the risk, and losses, for the choices that they made.
The US & Europe need to make laws that restore this equilibrium. The golden parachutes of the Banksters & CEO's must end!
This is exactly what happens when you let unelected people run he government. The so called "Technocrats are nothing more than Globalist shills who know how to rig the game! Using Technology...
Technocrat= Bureaucrat with an Iphone
Although I gotta say, it's not Like The U.S is any better, the only saving grace is at least we elect our criminals, or maybe ACORN and The bush Family stuff the ballot. Either way, it doesnt matter. The NWO is coming for us all, and we better get ready. And if you think I'm just a tinfoil hat conspiracy theorist
The new plan calls for a treaty that would fix one of the most critical, longstanding flaws in Europe’s monetary union: the lack of centralized control over member countries' decisions about taxes and spending.
Of course our elected people are just so great.
Well said laughingman
No different than what we are going through ... We are simply getting numb to the fact that we are now over 15 trillion in debt..
Actually 100 trillion in total US debt not counting infrastructure failure such as bust dams and failed bridges.
We are in deeeeeeeeep!
Oh boy all countries and forces them too watch there debt. Since we are talking about countries that riot when they pass laws that allow employers to fire people who are younger then 26 without goverment approval (the outrage busniess owners get to decide who they keep), or riot if you rise there retirment age this will be impossible. Best plan of action get are own crap in line and then step back and try to shield ourselfs has best has possible when that ticking time bomb called the EU goes off.
HEY, I got a idea, lets go with the Obama dream plan, let the Euro and the dollar go belly up, let the world go into another depression..Then comes the NEW WORLD ORDER, and the Amero, all controlled by the great Muslim dictator OB...It would get rid of all the repubs and dems games, there would be the rich and the poor, and to hell with the rest...Wait a minute...didn't Hitler try that????
The Dow has risen above 12,000 again. It is time for a bout of bad news to push it back down into the low 10,000's so people will panic sell, lose their money, and then the "buy low sell high" folks will buy, the news will get better, the Dow will reach 12,000 again, those buy low sell high will sell - repeat!!!
The money pump continues - fush, thuck, fush, thuck..........
Gosh, should have bought at about 10,000 on the first go round. Darn it anyway.
What debt let's party.
Dumbrowski of Lyon"Air Service Report Predicts the Future of Commercial Travel"
Eropes debt is of significnant interst to me by limiting the wealth of the criminal class.
By extoling the virtues of happiness in our life. I feel totally committed to all before us.
Since we know the certitudes of the world we will live in together. My only regret is that
I will no longer suffer the slings and arrows of outrageos fortunes because you and I
tust not only in our own faiths but in the faith of the Lord above. Be not, want not.
Airline Chairman De Marco of Pisa Square - fly the world with flair on Trans World Airlines, Ltd.
A Howard Hughes Corporation. Founded in the 1960's still the bigest and still the best. Also
founded as Trans Western International and The Pan Ameican Global Corporation.
Where have you been? The Fed announced that they were going to bailout the euro banks already. If they haven't done it yet, it just a matter of time until the fed starts shipping dollars overseas.
What is amazing about that announcement is that the money they are sending is money that the fed is borrowing; its not a surplus. Our government ran out of money at the beginning of August and has been borrowing money to operate since then. You remember the debt crises nonsense at the end of the summer?
Who cares that Congress is turning this country into a 3rd world nation with the debt its accumulating. It will be a whole new learning experience for Americans.
The US Federal Reserve provided Europe with over $4 Trillion since 2009 and they still need cash? - but the gist of this article is the need for one Euro Bank - they need to pass a treaty to achieve this - Soon it wil be one Bank and one world - we are less than 30 years away from achieving this major milestone in humankind
Just a few years ago they were bragging about the almighty Euro.
Humpty Dumpty is more like it now. All the King's horses and all the King's men couldn't put the Euro back together again.
And remember the U.S.A. foot the bill for the Iraq and the Afghanistan wars. It seems the Europeans can't rise above the weight of their own socialism.
Socialism is such a tried and busted theory, yet SO very enticing for the common man!
I find it amazing that it's "unsustainable" for Italy to pay 8% yet millions on tax-paying citizens in MANY countries are paying much more than that on credit cards. Do you sense a double standard here? Shouldn't it be a level playing field for government and their citizens?
Absolutely, if you pay more than 6% interest you're likely going under but it's up to you, you don't like the rate, then don't borrow. Simple.
On the other hand, if you have decent collateral, I'll be happy to lend you money at 8%.
Um, for a limited time only!
I think that the Mediteranean countries with the big debt problems need to make a political decision on how badly do they want to keep the Euro as their currency. It's obvious that the richer countries France and Germany have lost patience with this situation and will try to enforce budgetary discipline as the price of keeping the Euro as their currency. They need to threaten to kick out the countries that can't get a handle on their finances. It might be a smaller economic union in the end but a more stable one.
Jeez - does that picture look like bedroom eyes between those two?
those irresponsible countries WANT to get kicked out and bankruptcy, in the same way an employee may want to get fired so they can beg unemployment or at least avoid blame (they fired me, its not my fault).
budgets need to be based on actual money collected, not future money. i may have an idea how i want to divvy a paycheck up, but if i repeatedly fail at implementing the reality of how a budget actually works, i need to place the dollars on the table and assign with what i actually have
Europe's problems are simple. Spend more than you bring in to the point no one will lend you any more money.
They need a 40 hr workweek, a 1 week vacation the first year rather than a 6 week vacation, companies that do not live off of government handouts, etc.
Europe, your Vacation is OVER. Now get to work.
Agreed! There is much to be said about our work week being way too long and too hectic, but Europeans take vacations at the drop of a hat -- during the 70s, when I was stationed in Naples, Italy, it seemed the Navy Exchange and Commissary at the Naval Support Activity offices were closed at least one day a week because of all the Italian holidays. Like you said, Europe's getting a wake-up call -- time for them to act like the rest of the world.
Why don't they just do what they do in the USA. Give all the CEO's and Board Members, big salaries, expense accounts, bonuses and Golden Parachutes. Everything will work as desired.
In case you haven't noticed the US, Obama, has given the European Central banks 7 trillion dollars already to bail them out and recently committed more support. As we speak "tax cheat", Geitner, is in Europe figuring out how much the next bill will be. Bend over Americans and grab your ankles, here is comes again.
How much did it cost last week on Monday to add "liquidity" prior to the US Stockmarket going up 480 points? That info has been pretty secret with even the talking heads and print reporters keeping quiet. Or maybe no money was loaned to European and international banks?
ALL so countries like Italy, Greece and Ireland can make their pension payments.
CUT THEM OFF!
Yank - As I understood what the Fed and other Central Banks did was not give any money, but made it clear that they would ALL give money to backstop the EU/ECB/EFSF to keep Europe from sliding into recession or outright collapse after bond rates in Italy reached the unsustainable level of 8%+.
No money has traded hands...yet. Of course it isn't a matter of "if" but more one of "when".
The US taxpayer already has a government to bail out. We don't need to take on another one.
Believe me, guys in the fed, huge banks and international businesses have the us lined up to bail these sob's out . They fund our polititions and are trying to figure out how to get the rest since they own so much right now. If it gets bad enough locally, these people or the so called smarly ranting do nothing, teleprompter reading polititions better watch out, cause their at least 10 million without jobs that are running out of dough and they are gonna start gettting hungry.
Running a global financial system using debt based monetary system is not the same as running a business. A business can aim to have a balanced budget. A country cannot. Why? you may ask. Here is why:
Entire money supply is interest bearing debt. Money is created when we borrow. Here is how banks create money:
www.tradingstocks.net/html/banks_create_money.html
This debt has reached it's limits. For the last 200 hundred years there was always room to find new borrowers, so that new money could be earned to pay old debt with interest. But the sea has ended. Due to demographic problems in US and Europe, expansion of debt has stopped after we ran out of sub-prime borrowers. Now we are paying of debt and that is deflationary. In order for the economy to function normally, debt must increase exponentially. And that cannot happen in a limited world.
The deficit of 1.5 trillion is funding 50 to 60 million jobs in America. We are borrowing to spend on consumer economy. These are all service sector jobs. Google for "DEFLATIONARY CRASH" to understand why these jobs cannot be sustained. We need manufacturing jobs, science, engineering and technology jobs. Service sector jobs are not able to help curb trade deficit. It is a dead end. Keynesians are dead wrong about it. At the end of the day, they won't be able to spend to stimulate the economy. Once their hand is forced, the crash will be unlike anything we have ever witnessed. We need to let the free markets run so that private sector can align itself with what works and what does not. FED is giving the wrong signals to the economy and it is creating wrong kind of jobs. These jobs won't survive the next leg down.
Deflation is an integral part of the monetary system, just like inflation. Japan had it for 2 decades. We are not immune. Bernanke has a lot more printing to do. Unfortunately that only changes who pays for the debt: savers or borrowers. In a global economy, it does not matter who pays. It will cause a depression.