Six Weeks To SaveThe Euro ..

[letric]

World leaders were warned last night that they have six weeks to save the euro from collapse.
Chancellor's warning after another day of financial turmoil.
James Chapman

http://www.dailymail.co.uk/home/index.html

[guyguy]

Man, the fall of the Euro will have severe repercussions all over the world, especially here in America and Canada. I pray that this doesn't happen.

[oecarb]

Too much depends on the euro. The EU is the world's largest economic bloc. It is the UK's biggest trading partner. The euro is the world's No 2 reserve currency.

The Americans are blaming the euro for all the world's problems. But the EU leaders have their own view:


"I found it peculiar that even though the Americans have significantly worse fundamental data than the euro zone that they tell us what we should do and when we make a suggestion ... that they say no straight away," Maria Fekter (the Austrian Finance Minister) told reporters afterwards, recalling a difference of opinion between Geithner and German Finance Minister Wolfgang Schaeuble on how to reinvigorate the euro zone and tax financial deals.

http://www.reuters.com/article/2011/09/16/eurozone-geithner-scene-idUSLDE78F09G20110916

[vaio]

gosh man letric! :rolleyes:

http://www.dailymail.co.uk/news/article-2041201/George-Osbornes-eurozone-crisis-warning-6-weeks-save-euro.html

[lexbarker]

Too much depends on the euro. The EU is the world's largest economic bloc. It is the UK's biggest trading partner. The euro is the world's No 2 reserve currency.

The Americans are blaming the euro for all the world's problems. But the EU leaders have their own view:

Carbs , it is all planned. The Euro will fall before the US dollar.

[miktay]

Unless there is a major catyclysm to distract the world...the Euro will fall.

The interest rate on 1 yr Greek gubmint notes is 100+ %. This is unsustainable.

Greece is the straw that breaks the camels back.

Spain, and Italy will follow.

Southern Euro countries have fleeced Northern European banks.

The ECB cannot bail out these countries and shore up the European banking system.

European voters will not stand for this.

American banks will suffer. They sold insurance (read: CDSs) on Greek debt to European banks.

This is similar 2 the 2008 Lehman crisis.

Except it will be worse.

[oecarb]

Carbs , it is all planned. The Euro will fall before the US dollar.

Lex, a helluva lot of countries - especially exporters and producers of commodities - are holding US dollars (which you say is worthless). What could they do with these?


SÃO PAULO, BRAZIL – The strong position of Brazil and other developing nations during the current economic crisis could see them helping out debt stricken countries in the European Union, according to Finance Minister Guido Mantega. President Dilma Rousseff is in New York (http://riotimesonline.com/brazil-news/rio-daily/rousseff-in-new-york-for-un-talks-daily/) to open the United Nations General Assembly, and will also attend a meeting taking place between the BRICS (Brazil, Russia, Indian, China and South Africa) countries, the IMF and the World Bank.

http://riotimesonline.com/brazil-news/front-page/brics-may-offer-support-to-struggling-eu/

[Solachica]

Euro wud fall? I have to buy some euro so maybe I wud wait :s:

[miktay]

Lex, a helluva lot of countries - especially exporters and producers of commodities - are holding US dollars (which you say is worthless). What could they do with these?Oecar: a lot of currencies are going 2b debased.This includes the US dollar. The US dollar will suffer the consequences in due course.I lay a good part of the responsibility for this squarely at the feet of the US who departed fm Bretton Woods in 1971. All countries followed suit. We now have a plethora of fiat floating and pegged currencies.Of immediate concern tho iz the Euro.The US can print it's way out of a debt crisis until creditors cease to extend credit.This is not allowed for the Euro. As is any mechanismn for member departure fm the Eurozone.These will happen anyway.

[greall]

Sorry,oecarb,but the Eurozone's under way too much pressure...more than the USD and the camel's about to collapse...

Greg

[oecarb]

The US can print it's way out of a debt crisis until creditors cease to extend credit.This is not allowed for the Euro.

OK. I'll stick my neck out here. Why break the habit of a lifetime? lol

My prediction is that the BRICS would bail out the euro.

The price of this would be that the real, the yuan, the rupee, rand and the rouble would join the euro to kick out the dollar as world reserve currency.

[miktay]

OK. I'll stick my neck out here. Why break the habit of a lifetime? lolMy prediction is that the BRICs would bail out the euro.The price of this would be that the real, the yuan, the rupee and the rouble would join the euro to kick out the dollar as world reserve currency. Interesting Carbs. What iz the basis of this supposition?

[lexbarker]

Lex, a helluva lot of countries - especially exporters and producers of commodities - are holding US dollars (which you say is worthless). What could they do with these?

The road to a one world currency is under way. I believe in the end there will be an exchange of the new currency for the debased money. You control the money, you control the economy, you control the country, you control the people.

[lexbarker]

OK. I'll stick my neck out here. Why break the habit of a lifetime? lol

My prediction is that the BRICS would bail out the euro.

The price of this would be that the real, the yuan, the rupee, rand and the rouble would join the euro to kick out the dollar as world reserve currency.

Hmmm, quite interesting. Moving from Brand X toilet paper to Cement Bags. Well, at least your finger doesn't bore through. The bowl might be plugged and overflowing but you are clean.

[guyguy]

If the Euro falls and the USD falls too, which seem to be a certainty, the world's reserve currency will then become the Chinese Yuan. That prediction that the world will end in October may be correct after all.

[oecarb]

Interesting Carbs. What iz the basis of this supposition?

The following chain of events:


France's Lagarde To Meet Chinese Officials To Seek Support For IMF Top Job Bid

-- French Finance Minister Christine Lagarde to meet China vice premier, central bank chief and finance minister to seek support for IMF top job bid
-- China not yet committed but unlikely to block Lagarde if bid widely supported, analysts say
-- China may hope for Lagarde's support in promoting international role of yuan, analysts say

http://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid=201106070656dowjonesdjonline000 121&title=frances-lagarde-to-meet-chinese-officials-to-seek-support-for-imf-top-job-bid

The payment?
.

IMF names first Chinese deputy managing director

China has secured its first top-level post at the International Monetary Fund (IMF) in recognition of its growing power in the global economy.

New IMF Managing Director Christine Lagarde appointed Zhu Min to a newly created deputy managing director post.

http://www.bbc.co.uk/news/business-14131719
.
Next move?
.

The strong position of Brazil and other developing nations during the current economic crisis could see them helping out debt stricken countries in the European Union, according to Finance Minister Guido Mantega. President Dilma Rousseff is in New York to open the United Nations General Assembly, and will also attend a meeting taking place between the BRICS (Brazil, Russia, Indian, China and South Africa) countries, the IMF and the World Bank.....

.....Mantega sparked rumors and debate in both Brazil and other BRICS nations last week when he was quoted as saying that the EU needs help: “We’re going to meet next week in Washington and we’re going to talk about what to do to help the European Union get out of this situation.”

As Mantega explained to Valor Econômic, Brazil’s financial daily, the political interest in the strategy to buy sovereign debt from Europe is “to appear publicly as contributors to market stability and thereby demonstrate to what extent the balance of the global economy is changing.”

http://riotimesonline.com/brazil-news/front-page/brics-may-offer-support-to-struggling-eu/

Also check Jeffry Yu here. This is important:

http://www.reuters.com/article/video/idUSTRE78B24R20110914?videoId=221509269

[miktay]

If the Euro falls and the USD falls too, which seem to be a certainty, the world's reserve currency will then become the Chinese Yuan. That prediction that the world will end in October may be correct after all.This is not just a US or European problem.This is a global issue. Fiat currencies are backed by domestic economies. The Yuan is currently not convertible. The Chinese economy has debt problems.The manufacturing sector is slowing.
HONG KONG - Is China's economy in trouble, too? As the U.S. economy appears to teeter on the edge of another recession, Europe struggles with a financial crisis and emerging markets like Brazil and India show new weaknesses, China might appear to be in better shape than most countries, economists say. But "better" is relative. On the surface, economists at the International Monetary Fund and most banks are still estimating China's growth rate to be more than 9 percent this year. China continues to run very large trade surpluses. New construction starts have soared with a government campaign to provide more affordable housing. And yet, the country's huge manufacturing sector is starting to slow and orders are weakening, especially for exports. The real estate bubble is starting to spring leaks, even as inflation remains stubbornly high for consumers - despite a series of interest rate increases and ever-tighter limits on bank lending. Because China's mighty growth engine has been one of the few drivers of the global economy since the financial crisis of 2008, signs of deceleration could add to worries about the global outlook. A survey of Chinese purchasing managers, just completed by HSBC and Markit Economics, shows a third consecutive month of contraction in the manufacturing sector. The release of the survey results Thursday contributed to a global slide in stock markets that day. Meanwhile, huge loans that Chinese banks have made to state-owned enterprises and local governments over the past three years could cause trouble if the economy does slow. http://economictimes.indiatimes.com/news/international-business/global-crisis-is-chinas-economy-in-trouble-too/articleshow/10104287.cms

[miktay]

The following chain of events:The payment?..Next move?.Also check Jeffry Yu here. This is important:http://www.reuters.com/article/video/idUSTRE78B24R20110914?videoId=221509269 A 'BRICS' bailout really means a China bailout...Brazil, Russia and India are on the fence.
New Delhi would be “cautious” about supporting a plan, an Indian finance ministry official, who declined to be identified, said on Tuesday.India holds about 20 percent of its $320 billion in foreign currency assets in euro debt and a senior Indian official said that proportion would not change.“All I can tell you is we will maintain the 20 percent ratio,” the official said.Vadim Lukov, the Kremlin’s special envoy to the G8 and a BRIC coordinator, declined to be drawn on a BRICS plan.“I will not deny or confirm this information,” Lukov said. “Any such information may disturb the markets and potential buyers of the bonds.”Global policy coordination would also be difficult because countries are at different stages of the economic cycle, Indian Finance Minister Pranab Mukherjee said on Tuesday.A Brazilian government source said the country did not intend to use its international reserves of around $355 to buy European debt.http://business.financialpost.com/2011/09/14/will-the-brics-save-europe/ China appears to want trade 'concessions'Will China throw good money after bad money?Will all Eurozone nations agree to this.?IMHO we will have to wait and see.

[lexbarker]

A 'BRICS' bailout really means a China bailout...Brazil, Russia and India are on the fence.http://business.financialpost.com/2011/09/14/will-the-brics-save-europe/ China appears to want trade 'concessions'Will China throw good money after bad money?Will all Eurozone nations agree to this.?IMHO we will have to wait and see.
China is in a "damn if you did and damn if you don't" situation. If they do give it there may be a lot of strings attached. But in the end when all the aid is gone the problem will be still there as long as the people who created it are still running the show.

[oecarb]

China is in a "damn if you did and damn if you don't" situation. If they do give it there may be a lot of strings attached. But in the end when all the aid is gone the problem will be still there as long as the people who created it are still running the show.

EU/China trade is very important.


TIANJIN - Economic ties between the European Union and China constitute a key component of a sustainable global recovery, and the two should work to look beyond short-term trade irritants, said a European Commission economist at a five-day forum that ended Saturday.

Lucian Cernat, chief economist of the European Commission, said China is the fastest growing market for EU trade and an important destination of the bloc's foreign direct investment, while the EU remains the biggest market for Chinese exports.

http://www.chinadaily.com.cn/china/2011-09/17/content_13726396.htm

[lexbarker]

EU/China trade is very important.

So is that viewed as a sort of "hostage" situation?
The USA/China trade is also important and look at the quantity of dollars they are holding.
You think they should have the same amount in Euros too?

[oecarb]

So is that viewed as a sort of "hostage" situation?
The USA/China trade is also important and look at the quantity of dollars they are holding.
You think they should have the same amount in Euros too?

Check out what this fella have to say:

http://www.reuters.com/article/video/idUSTRE78B24R20110914?videoId=221509269

[lexbarker]

Check out what this fella have to say:

http://www.reuters.com/article/video/idUSTRE78B24R20110914?videoId=221509269

Yeah, I saw that in your previous post that is why I said that China is in a no-win stiuation. However, like I said, if the EU do get the bailout and nothing is done to remove the cause of the problem, it is just wasted money for the BRICS but the bankdits would be laughing all the way from the bank.

[oecarb]

Yeah, I saw that in your previous post that is why I said that China is in a no-win stiuation. However, like I said, if the EU do get the bailout and nothing is done to remove the cause of the problem, it is just wasted money for the BRICS but the bankdits would be laughing all the way from the bank.

If the EU is bailed out, all attention would turn to the vast US debt.

[miktay]

If the EU is bailed out, all attention would turn to the vast US debt.

IMHO any Euro bailout will be am ongoing action..

Greece may have an orderly default but Spain and Italy are wobbling. Then there is Portugal and Belgium.

Eurozone politicians cannot agree.

A growing minority recognize French and German gubmint actions as thinly disguised bank bailouts. European bank runs have started.

Debtor nationals resent imposed austerity. They have no voice in the poltitical process.

The Euro crisis will not go away until gubmnint stops bailing out the banks.

[oecarb]

IMHO any Euro bailout will be am ongoing action..

Greece may have an orderly default but Spain and Italy are wobbling. Then there is Portugal and Belgium.

Eurozone politicians cannot agree.

A growing minority recognize French and German gubmint actions as thinly disguised bank bailouts. European bank runs have started.

Debtor nationals resent imposed austerity. They have no voice in the poltitical process.

The Euro crisis will not go away until gubmnint stops bailing out the banks.

Miktay,

Concentrate on the US debts which were accumulated over sixty years or so and which are massive. EU debts are nowhere near.

If EU debts can bring the world economy down, why aren't all the world's nations jumping in to help? To save themselves?

Why is the euro still around $1.36? Higher than it was 9 months ago.

Why isn't gold at $5,000 plus?

IMHO, as soon as a solution - even a temporary one - is found, the world would suddenly sit up and notice the US debt.

[BW]

:o

[miktay]

Miktay,Concentrate on the US debts which were accumulated over sixty years or so and which are massive. EU debts are nowhere near.If EU debts can bring the world economy down, why aren't all the world's nations jumping in to help? To save themselves?Why is the euro still around $1.36? Higher than it was 9 months ago.Why isn't gold at $5,000 plus?IMHO, as soon as a solution - even a temporary one - is found, the world would suddenly sit up and notice the US debt. Carb: The Federal Reserve can monetize the deficit until credit iz denied. US gubmint can also intimidate by dispatching/alerting any one of its 11 carrier groups or 100s of forin military bases. At the moment the ECB/Eurozone can do neither of these. The US has about a hundred years of monetary and political union.The Eurozone has not. German shopkeepers gripe about paying Greek pensions. 'Twas just 70 years ago Germanny invaded France, Belgium and Holland. And az 2!why gold iz not $5000 ....merhinks iz the subject of another thread/post. The short answer iz the average Joe and most pension funds do not hold gold. Per Keynes...gold iz still considered... 'a barbarous relic'.

[greall]

Carb: The Federal Reserve can monetize the deficit until credit iz denied. US gubmint can also intimidate by dispatching/alerting any one of its 11 carrier groups or 100s of forin military bases. At the moment the ECB/Eurozone can do neither of these. The US has about a hundred years of monetary and political union.The Eurozone has not. German shopkeepers gripe about paying Greek pensions. 'Twas just 70 years ago Germanny invaded France, Belgium and Holland. And az 2!why gold iz not $5000 ....merhinks iz the subject of another thread/post. The short answer iz the average Joe and most pension funds do not hold gold. Per Keynes...gold iz still considered... 'a barbarous relic'.

Merkel's got to sell this idea of increasing DE's contribution to the EFSF...make or break for her since the plebs are getting antsy despite the brave face that she's putting up.

As per miktay's point,the US has more more wiggle room here now...

Greg

[lexbarker]

If the EU is bailed out, all attention would turn to the vast US debt.

You mean "Poof" all the EU worries done and all the nations singing "Kum By Ya"?

[greall]

The world's two largest economies have amassed massive debts...there's no panacea for instant relief...

Greg

[oecarb]

Carb: The Federal Reserve can monetize the deficit until credit iz denied. US gubmint can also intimidate by dispatching/alerting any one of its 11 carrier groups or 100s of forin military bases. At the moment the ECB/Eurozone can do neither of these. The US has about a hundred years of monetary and political union.The Eurozone has not. German shopkeepers gripe about paying Greek pensions. 'Twas just 70 years ago Germanny invaded France, Belgium and Holland. And az 2!why gold iz not $5000 ....merhinks iz the subject of another thread/post. The short answer iz the average Joe and most pension funds do not hold gold. Per Keynes...gold iz still considered... 'a barbarous relic'.

Miktay,

It's simple.

Bear in mind the following:

1. Most debt is in USD.
2. The US has very high debt.
3. Most countries have foreign reserves in USD and in some euro.

Many countries are concerned about the US debt and the possibility of the US inflating out of debt and/or the collapse of the USD.

Many would like to get out of USD or reduce their exposure.

If they start to dump USD, it could collapse and their holdings would lose value.

However, they could buy EU paper with USD from the ECB or the EFSF (exchanging US paper for EU paper).

The EU would use these USD to pay off EU debt.

It would also mean that those countries would not be as dependent on USD and they would not care too much if the USD collapsed.

[miktay]

Miktay,It's simple.Bear in mind the following:1. Most debt is in USD.2. The US has very high debt.3. Most countries have foreign reserves in USD and in some euro.Many countries are concerned about the US debt and the possibility of the US inflating out of debt and/or the collapse of the USD. Many would like to get out of USD or reduce their exposure.If they start to dump USD, it could collapse and their holdings would lose value.However, they could buy EU paper with USD from the ECB or the EFSF (exchanging US paper for EU paper).The EU would use these USD to pay off EU debt.It would also mean that those countries would not be as dependent on USD and they would not care too much if the USD collapsed. Carbs:US debt iz onerous. On this we agree. Many know this. But have Eurozone Central Bankers dumped US $ reserves? What about non-Euro countries? How about Japan?Why does China exchange US $ 4 gold in secret? Economically it mayvbe simple. But when u hold billions (or trillions)...asset shifts move markets. Asset shifts attract attention. Geopolitically it iz not clear cut. Try depegging fm US dollars when this iz conducting military exercises( in intl waters) off ur coastline.This is gunboat diplomacy. The US uses 11 of these 2 protect the dollar. This iza powerful 'support'.The Euro does not have this 'support' http://t3.gstatic.com/images?q=tbn:ANd9GcTKLPoIDCzQgbM4AM4yaukv3N7tItUnu 5KtxX5Nb-eGi9ACkFh5

[oecarb]

Merkel's got to sell this idea of increasing DE's contribution to the EFSF...make or break for her since the plebs are getting antsy despite the brave face that she's putting up.

As per miktay's point,the US has more more wiggle room here now...

Greg
.
.

Germany Backs Euro Rescue Fund to Set Stage for Next Steps
German lawmakers approved an expansion of the euro-area rescue fund’s firepower, freeing the way for European officials to focus on what next steps may be needed to stem the debt crisis.

The lower house of parliament passed the measure with 523 votes in favor and 85 against, granting the fund powers to buy bonds in secondary markets, enable bank recapitalizations and offer precautionary credit lines. It raises Germany’s guarantees to 211 billion euros ($287 billion) from 123 billion euros. The main opposition Social Democrats and Greens said before today’s session in Berlin that they’d vote with Chancellor Angela Merkel’s government, assuring passage.

http://www.bloomberg.com/news/2011-09-28/germany-votes-on-euro-rescue-fund-to-set-stage-for-more-anti-crisis-steps.html

[miktay]

Carbs:This iz throwing good money after bad. The German people don't want this.
When German lawmakers vote Thursday on whether to put more money into Europe's bailout fund—a step many investors see as essential to prevent a market panic—several conservative deputies, including Wolfgang Bosbach, a prominent champion of European integration, are expected to vote "no." Mr. Bosbach, a high-ranking conservative in Ms. Merkel's Christian Democratic Union, has recently become an outspoken critic of the bailout strategy."The first medicine didn't work, and now we are simply doubling the dose," said the lanky Mr. Bosbach of the Greek debt crisis. "My fear is that when the big bang happens, it won't just be us who will have to pay but generations hereafter."The lawmaker rebellion underscores a broader shift among Germans about their nation's role in Europe since the crisis erupted nearly two years ago. While the Thursday vote is expected to pass, and a vast majority of Germans continue to feel a strong, historical commitment to Europe, with a common currency as its anchor, many have grown doubtful of whether it's worth the ever-growing cost of saving the euro.A poll for national German broadcaster ZDF earlier this month shows three-quarters of Germans are against the expanded European rescue fund that's subject to Thursday's vote.The measures before German parliament today would nearly double the main euro-zone's bailout fund's lending capacity to €440 billion ($595 billion) and allow the fund to buy sovereign bonds in the open market.Germany's contribution to the new, expanded rescue loan package is €211 billion, still less than half the €500 billion it pledged to bail out its banks in 2008. But many see the European Central Bank's moves to buy billions of euros in low-grade government bonds of southern European countries as another sign that European institutions are slipping away from them.Even more unpalatable is the prospect of making the euro zone collectively liable for its members' debts, as a growing chorus of European officials have recently urged. Many argue so-called euro bonds, which Ms. Merkel has steadfastly opposed, are the bulwark to relieve financial pressure on debt-ridden members and underpin the euro zone's full fiscal union.But to Germans, it would mean relinquishing their hard-won low borrowing rates to pay for the largess of more free-wheeling members."Ultimately the euro-bond issue will come to a head, and Ms. Merkel will have an impossible dilemma," says one senior German coalition lawmaker. "If she goes back to the German people with [euro bonds], she is out. If she doesn't, she will be a very lonely person in Europe."http://online.wsj.com/article/SB10001424052970204138204576598643746175236.html

[oecarb]

Carbs:This iz throwing good money after bad. The German people don't want this. http://online.wsj.com/article/SB10001424052970204138204576598643746175236.html

I keep saying that Germany is a country that does things that no American would expect or understand.

In a downturn, US firms cut jobs. German firms (supported by their government) keep their workers so they can be ready for the next upturn.

The re-unification of Germany was unprecedented. A very prosperous country welcoming back its separated primitive ex-communist brothers, suffering years of high unemployment and coming out smiling..........

The EU is unprecedented. Germany again - the most prosperous European country - joining up with a load of losers (Spain and Portugal were third world countries a couple of decades ago) and building up this union so it is now the largest trading bloc in the world with an economy larger than that of the mighty USA.

Germany refuses to compete on price. You want German goods, you pay five or six times what anybody else would charge and you boast about your ability to afford it. lol

Right now the country is postioning itself for when the rest of Europe can afford to splurge out on German goods again.

And a vote of 523 votes in favor and 85 against .........

Watch this space........

[miktay]

Dbl

[miktay]

Carbs: I think I can understand Western European socialism.

W.Germany/EU helped their E.German Spanish and Portugese brethren gain access to the common market and a single currency.

EU gubmint helps companies during a bidnezz downturn.

Lend ur less fortunate neighbour a helping hand.*

At the very least this iz good Karma.

I think I get it.*

But Greece iz different.*

Germany iz not helping Greece cuz of a recession.

Germany iz not helping Greece cuz it emerged impoverished fm a communist bloc.

The Greek gubmint borrowed to the hilt. Greek debt now stands at 150% of income.

If ur neighbour fell on hard times would u help him after he lived large for years on borrowed money?*

Futher wud u help a spendthrift neighbour knowing u busted ur rass wukking, and sacrificed present consumption to enjoy a decent retirement ?*

These questions merhinks can better frame the issue whether ur a German, American or Trini.

And consider another point.

EU gubmint bailouts are largely bank bailouts.*

Northern EU banks bought Greek IOUs. US banks sold EU banks insurance on these loans.

So...are u willing to give up part of ur pension to pay the bankers a multi-million Euro bonus?*

*

[oecarb]

Carbs: I think I can understand Western European socialism.

W.Germany/EU helped their E.German Spanish and Portugese brethren gain access to the common market and a single currency.

EU gubmint helps companies during a bidnezz downturn.

Lend ur less fortunate neighbour a helping hand.*

At the very least this iz good Karma.

I think I get it.*

But Greece iz different.*

Germany iz not helping Greece cuz of a recession.

Germany iz not helping Greece cuz it emerged impoverished fm a communist bloc.

The Greek gubmint borrowed to the hilt. Greek debt now stands at 150% of income.

If ur neighbour fell on hard times would u help him after he lived large for years on borrowed money?*

Futher wud u help a spendthrift neighbour knowing u busted ur rass wukking, and sacrificed present consumption to enjoy a decent retirement ?*

These questions merhinks can better frame the issue whether ur a German, American or Trini.

And consider another point.

EU gubmint bailouts are largely bank bailouts.*

Northern EU banks bought Greek IOUs. US banks sold EU banks insurance on these loans.

So...are u willing to give up part of ur pension to pay the bankers a multi-million Euro bonus?*

*
Greece should never have been allowed to join th euro at this point. The US born PM cooked the books with the willing help of Goldman Sachs. If Greece does default, a few US banks would have to take hits but the ECB/EFSF will reimburse EU banks.

At the end of the day, if the euro does fail, Germany, France, Luxemburg, Holland and Finland could just walk away and form their own new currency. More rigid rules could then be made for other countries to join.


As worries over Greece rattle world markets, records and interviews show that with Wall Street’s help, the nation engaged in a decade-long effort to skirt European debt limits. One deal created by Goldman Sachs helped obscure billions in debt from the budget overseers in Brussels.

Even as the crisis was nearing the flashpoint, banks were searching for ways to help Greece forestall the day of reckoning. In early November — three months before Athens became the epicenter of global financial anxiety — a team from Goldman Sachs arrived in the ancient city with a very modern proposition for a government struggling to pay its bills, according to two people who were briefed on the meeting.

The bankers, led by Goldman’s president, Gary D. Cohn, held out a financing instrument that would have pushed debt from Greece’s health care system far into the future, much as when strapped homeowners take out second mortgages to pay off their credit cards.

It had worked before. In 2001, just after Greece was admitted to Europe’s monetary union, Goldman helped the government quietly borrow billions, people familiar with the transaction said. That deal, hidden from public view because it was treated as a currency trade rather than a loan, helped Athens to meet Europe’s deficit rules while continuing to spend beyond its means.

http://www.nytimes.com/2010/02/14/business/global/14debt.html?pagewanted=all

[miktay]

Greece should never have been allowed to join th euro at this point. The US born PM cooked the books with the willing help of Goldman Sachs. If Greece does default, a few US banks would have to take hits but the ECB/EFSF will reimburse EU banks.

Pardon me... but isn't ' reimburse' 'French' 4 printing money?


At the end of the day, if the euro does fail, Germany, France, Luxemburg, Holland and Finland could just walk away and form their own new currency. More rigid rules could then be made for other countries to join.

Wait....wait...Carbs...what happen 2 all the brotherly Euro luv u keep referring to?

No warm & fuzzy feelings left 4 Belgium, Spain, Portugal and Italy?

How allyo Europeans fickle so...

In any case if the Euro fails I dont think there will be any appetite for 'another' common currency...

[miktay]

Dbl

[miktay]

U kno things are starting 2 unravel when bougie journalists openly call politicians "idiots" to their face...in public...This marks a triumph for the Euroskeptics...who bashed the Euro since it wuz conceived...But it may be a phyrric victory...[http://www.youtube.com/watch?v=TxPFZra8MuM

[lexbarker]

Nigel Farage, one of Carb's boy, has been calling them idiots for some time now.
This clip is from last November.

.
http://www.youtube.com/watch?v=Fyq7WRr_GPg

[oecarb]

U kno things are starting 2 unravel when bougie journalists openly call politicians "idiots" to their face...in public...This marks a triumph for the Euroskeptics...who bashed the Euro since it wuz conceived...But it may be a phyrric victory...[http://www.youtube.com/watch?v=TxPFZra8MuM

Miktay,

First, let's get some facts straight:

1. The European Union is a voluntary union of 27 countries. No country is forced to join.

2. The euro is used by 17 of these countries. Again, this is voluntary. This means that 10 countries - including the UK - use their own currencies. So there are 11 currencies in the EU.

3. Being a member of the EU therefore does not mean that a country has to use the euro. The countries using the euro are known as the EUROZONE.

4. If a country wishes to use the euro as its currency, it should conform to certain rules before it is permitted to join the EUROZONE.

5. If it is found that the country had cooked its books, why should it not be kicked out of the EUROZONE? They don't have to be kicked out of the EU.

If you tell your son that it's time for him to leave home or that you and the wife have decided to retire to France, that does not mean you have lost that warm and fuzzy feeling.

6. The chap on your UTube video is from the same party as Lex's hero - The United Kingdom Independence Party which is against the UK's existing membership of the EU. The UK does not use the euro so the rules of the EUROZONE do not apply to the UK anyway.

7. The fact that there are still countries lining up to join the EU and the euro means that some people see some merit in membership of one or both, I think.

[oecarb]

Pardon me... but isn't ' reimburse' 'French' 4 printing money?

Yep. Ask your pals Bernanke and Geithner. They want the EU to join them in the print room. Maybe it lonely in there. So, why not? lol


(Reuters) - Treasury Secretary Timothy Geithner drew a cool response from EU policymakers when he urged them to leverage their bailout fund to better tackle the debt crisis and to start speaking with one voice.

http://www.reuters.com/article/2011/09/16/us-eurozone-idUSTRE78B24R20110916?feedType=RSS

But then, as I said in my post #36, Germany does not always do what everyone expects them to do..............

[miktay]

The fact that there are still countries lining up to join the EU and the euro means that some people see some merit in membership of one or both, I think.

People line up 4 welfare.

People line up 4 CPEP 'jobs'.

People line up for pyramid (ponzi) schemes.

They want easy money. I don't blame them.

But nothing iz free. Sooner or later a price must be extracted. The piper must be paid.

IMHO in the case of the Euro...it will be sooner.

[oecarb]

IMHO in the case of the Euro...it will be sooner.

No problem for me. I would just use ££££££ instead.

But I still think you wrong. We'll see.

[miktay]

No problem for me. I would just use ££££££ instead.But I still think you wrong. We'll see. I hope I am wrong.This chap doesn't seem 2 think so.Note interviewer's abrupt change of topic from Euro to Arab spring at 0:49.She wuz caught flatfooted. This iz typical. Many are oblivious to the potential imminent decline of the Euro.http://www.youtube.com/watch?v=krKvZfePUq8&feature=youtube_gdata_player

[oecarb]

I hope I am wrong.This chap doesn't seem 2 think so.Note interviewer's abrupt change of topic from Euro to Arab spring at 0:49.She wuz caught flatfooted. This iz typical. Many are oblivious to the potential imminent decline of the Euro.http://www.youtube.com/watch?v=krKvZfePUq8&feature=youtube_gdata_player

Miktay, there are different points of view:

NEW YORK (CNNMoney) -- Economists are convinced the euro will survive as a currency without losing any members ... not even Greece.

Of the 22 economists surveyed by CNNMoney, 17 are predicting that the euro will hold together, even though almost all of them believe Greece will default on its debt by the end of next year.

http://money.cnn.com/2011/10/02/news/international/euro_breakup/index.htm?iid=HP_River

The US is saying that Europe's debt crisis could cause a collapse in the world financial system.

Reminds me of the days when my mother used to give me bake and saltfish for my lunch and all them fellas that didn't even have a rock cake to eat would be giving me fatigue. lol

If Europe is too big to fail, the world will have to bail it out IMHO. And if that ain't happening, then is only electioneering going on.

[sacky]

i bet the us economy collapses before the euro goes down.

http://www.guardian.co.uk/business/2011/oct/04/ben-bernanke-us-economy-faltering

[oecarb]

i bet the us economy collapses before the euro goes down.

http://www.guardian.co.uk/business/2011/oct/04/ben-bernanke-us-economy-faltering

If Greece defaults, them hedge funds in real trouble.

[miktay]

i bet the us economy collapses before the euro goes down.http://www.guardian.co.uk/business/2011/oct/04/ben-bernanke-us-economy-falteringUS economy faltering...Euro crisis affects global bourses...Monetary policy not a sustainable soltn...protestors unhappy...hi unemployment...Nothing new here.Central Banker speeches are filled with things ppl already know...

[oecarb]

I think this sheds light on the German attitude (Merkel speaking):


Solidarity is always cheaper than if we were to go it alone and wind up with the problem Switzerland has -- that the currency level is so high that you can’t export any products anymore. Today, going it alone is no path to a better future.”

“We must press ahead with the task” begun by former Chancellor Helmut Kohl when he made the political decision in favor of the euro after German reunification in 1990, she said.

http://www.bloomberg.com/news/2011-10-04/merkel-says-she-remains-opposed-to-joint-euro-area-bonds.html

[miktay]

I think this sheds light on the German attitude (Merkel speaking): A few acquaintances does not make a strong community.Many countries would wish to have the "problems" of Switzerland.A strong currency, hi GDP per capita, referenda on key political issues, a hi standard of living, and recognized export brands.These are qualities to be admired. Ms Merkel cannot make the EMU/Euro look better by disparaging Switzerland or CHF.This is not a good comparison.

[oecarb]

A strong currency, hi GDP per capita, referenda on key political issues, a hi standard of living, and recognized export brands.

Perfect description of Germany before unification and in the days of the deutschmark - downside being the world's second strongest currency. The owners of the strongest currency (USD) started exporting their jobs. Germany did not do this and is still reliant on exports.

She is decribing what Germany would face if they pulled out of the euro and did not have a common currency that other countries shared. It is a fair comparison.

[miktay]

Carbs: Am missing something here. Are u implying Germans joined the Eurozone to have a weaker currency?

[oecarb]

Carbs: Am missing something here. Are u implying Germans joined the Eurozone to have a weaker currency?

No. But now they are in and such a large amount of their exports go to other Eurozone countries.

If they pull out now, they would find themselves in a similar position to Switzerland which is now fighting to keep the CHF down so that other countries acn afford to buy thir goods.

[sacky]

wasnt the reson the money was giving to the banks in 08 was to stimulate growth and provide lending,it didnt happen,so look what they did next.

http://www.guardian.co.uk/business/2011/oct/06/quantitative-easing-75bn-bank-of-england

[miktay]

No. But now they are in and such a large amount of their exports go to other Eurozone countries. If they pull out now, they would find themselves in a similar position to Switzerland which is now fighting to keep the CHF down so that other countries acn afford to buy thir goods.Fighting to keep CHF 'down' iz mercantilistic folly. It iz one reason why we are in a global debt crisis.A strong currency upsets exporters but makes imports cheaper. To keep exporters happy central banks print money. Nations that print to mometize deficits 'encourage' exporters to use subsidies. This creates distortions. This creates bubbles.I doubt the Swiss can keep CHF in sync wit the Euro.

[miktay]

wasnt the reson the money was giving to the banks in 08 was to stimulate growth and provide lending,it didnt happen,so look what they did next.http://www.guardian.co.uk/business/2011/oct/06/quantitative-easing-75bn-bank-of-englandBanks get bailouts to shore up their balance sheet.They hold many overvalued assets.They are highly leveraged.A slight decrease in asset values would require capital Infusions. Otherwise the banks would go insolvent.The banks may or may not lend the bailout money.If they lend it inflation will go higher.

[oecarb]

This thread was started four weeks and two days ago. A lot has happened since then. We are now in the end game methinks.

[greall]

'Merkozy' are still in talks while Greece burns...literally...

Greg

[oecarb]

'Merkozy' are still in talks while Greece burns...literally...

Greg

Yes Greall. But at least the talks now have much more definite aims.

The euro has risen about 4% in that time so some people seem to believe there is hope.

The euro price of gold has dropped by €5.47 per ounce while the dollar price has increased by $59.60.

http://goldprice.org/gold-price.html

As I understand it, the status quo is as follows:

There will be a write down of Greek debts (a haircut) of between 40% (the creditor stance) and 60% (the EU stance). It is expected that the actual figure would be 50%, which is what the market has priced in, according to Bloomberg.
It is not clear whether this will qualify as a default. If it does, hedge funds could take a big hit. Many American banks/institutions could be affected way beyond the Greek debts as, apparently there has been widespread naked short selling.
EU banks are to try to raise private investment capital.
If they cannot, the individual countries would stump up cash but there would be strict conditions including tighter regulations and additional taxes and could also include share acquisitions.
The EFSF which stands at €400 billion (US $550 billion) is to be leveraged with or without ECB involvement. This would increase its power by about $1.5 trillion to $2.2 trillion.
Italy, as the biggest EU debtor, has been ordered to get their house in order. This would greatly reduce the risk of contagion and might mean that the ESFS need not be leveraged as much.
But hey! The six weeks are not over yet. ;)

[miktay]

Carbs:

Per ur boy Ambrose Evans-Pritchard...the status quo iz wobbling...

http://www.telegraph.co.uk/finance/financialcrisis/8863677/Greek-vote-sets-off-pandemonium-engulfs-Italy.html


Greek vote sets off 'pandemonium', engulfs Italy

Greece's startling decision to call a referendum on last week's EU summit deal has set off wild tremors across the eurozone, pushing Italy to the brink of a perilous downward spiral.

The country's ruling Pasok party appeared to be splintering on Tuesdsay night, leaving it unclear whether the governent of premier George Papandreou can survive a parliamentary vote of confidence on Friday.

Signs that the EU's pain-stakingly negotiated Grand Plan is unravelling within days has been a profound shock to confidence.

A frantic search for safe havens led to the second biggest one-day fall ever recorded in Europe's AAA bond yields. Ten-year German Bund yields tumbled 25 basis points to 1.77pc, with similar moves in non-EMU Swedish and Danish debt. British Gilt yields fell to 2.2pc.

Italy took the brunt of the punishment. Spreads over Bunds spiked to a crisis-high of 459 basis points before the European Central Bank came to the rescue. Spanish spreads reached 384.

Andrew Roberts from RBS said Italy's debt stress is "dangerously close to a level that could cause pandemonium in financial markets".

The point of no return - judging from the sequence in Greece, Ireland and Portugal - would most likely be if LCH Clearnet imposed higher margin requirements. This trigger is 450 points over a basket of AAA benchmark bonds. The spread reached 388 on Tuesday. "We're two more days of violence from this point, but we're not there yet," he said.

The Greek move - denounced by France's Elysee as "irrational and dangerous" - raises the serious possibility that a euro member could soon be forced out of the monetary union, setting a precedent with explosive ramifications for other states in trouble.

"I would have liked to do without this piece of news," said Eurogroup chairman Jean-Claude Juncker. "It is something that brings a great nervousness, that adds great insecurity to already great insecurity."

Mr Juncker said a "no" vote by Greek citizens would set in motion events that could lead to bankruptcy and threaten Greece's foothold in Europe.

"If the Greek people say no to everything that has been agreed so far, then I don't see either how we can continue with the Greeks on good terms," he said.

If is far from clear how Greeks might vote. A Kappa Reserach poll found that 80pc oppose the EU-IMF "Memorandum", but far less would vote against it, and 70pc want to stay in the euro. The EU's haircut deal leaves Greece with debt of 120pc of GDP in 2020 - if all goes well - after nine years of austerity and slump.

However, quest for membership of every part of the EU system has been central to Greece's foreign policy since the return to democracy in the 1970s. For Greeks, cut off in the furthest corner of the Balkans, and cheek by jowl with the Near East, European identity has almost sacred importance.

While it is likely that the Greeks would vote "yes", the referendum ensures weeks or months of eurozone chaos and calls into question every component of the EU rescue package.

China, Japan, Russia and Brazil have already reacted coldly to calls to rescue Euroland by playing a direct role in the EU's bail-out fund (EFSF). They are likely to keep an even wider berth now that monetary union is once again proving unmanageable without an economic government to back it up.

Yu Yongdin, a former Chinese rate-setter, told Europe not to expect too much. "Eurozone countries will have to save themselves. Expectations of a 'red knight' are sorely misplaced."

Jacques Cailloux, Europe economist at RBS, said the Greek demarche is an ugly turn of events. "This added uncertainty will likely block any new potential financial support from countries outside monetary union to the EFSF," he said

"In the current situation, the ECB remains the only credible backstop and will be forced to step up massively its bond purchases to prevent a new escalation of contagion risks."

The crisis in Italy is a nightmare debut for the ECB's new president Mario Draghi, who took over on Tuesday from Jean-Claude Trichet - viewed by Frankfurt as more German than the Germans.

Mr Draghi, former head of Italy's central bank, is in an awkard position where his first act in office is to oversee the purchase or "monetisation" of Italian bonds. If he presides over a cut in interest rates on Thursday - as demanded by the OECD and a chorus of global voices - the move will inevitably fuel suspicions among German and Dutch hardliners that the ECB has turned Latin.

"He had better find himself a German grandmother fast," said Hans Redeker, currency chief at Morgan Stanley.

The collapsing credibilty of Silvio Berlusconi's coalition in Rome is bringing matters to a head. The Democrat opposition called on Italy's president to appoint a salvation government immediately. "This is an urgent necessity to face the coming storm," it said.

The bail-out machinery was already under scrutiny before Greece's move. Plans to leverage part of the EFSF four or five times to €1 trillion, by using it as a "first loss" bond insurer, concentrates risk for the six AAA states that underpin the fund. The danger is that this will cost France its AAA rating, accelerating contagion to the eurozone core.

Critics say this is a massive design flaw in the concept and will never gain market acceptance. Mounting evidence that Europe is tipping back into slump may, in any case, finish off the idea. Standard & Poor's has warned that it will cut France's rating by up to two notches if there is an EMU recession.

John Higgins from Capital Economics said events are closing in on Euroland. "We expect the crisis to build, prompting a prolonged recession in the eurozone, and at some point the end of the euro itself in its current form.

[trini123]

What's up with the Greek Referendum? PPl offerring a bail out and you swing around to ask if it is acceptable. Are these Greeks retarded? What is they say no? There is no plan B.

[edyle]

What's up with the Greek Referendum? PPl offerring a bail out and you swing around to ask if it is acceptable. Are these Greeks retarded? What is they say no? There is no plan B.

If somebody borrows money then says you borrowed it, are you going to say ok, ok, ok, I'll just pay back half?

[trini123]

The bailout is not free money? ***** if they are just lending I can see why this would be turned down. I wouldn't borrow more money if I were already is debt up to my @rse (my@rse).

[edyle]

The bailout is not free money? ***** if they are just lending I can see why this would be turned down. I wouldn't borrow more money if I were already is debt up to my @rse.

I'm not entirely sure what the situation is but my impression from the news is
- Greece is supposedly in debt
- the creditors have offered a deal to cancel half the debt plus impose AUSTERITY on the POPULATION.

By the way, part of the reason for all this is that Greece joined up with the EURO.
As a result, they can't just do what Argentina did a decade ago.

Seems the banksters learnt their lesson from the Argentina experience, and maybe that was part of the reason for the development of the EURO in the first place.

[oecarb]

The Greek govt hid their debts so they could be allowed to join the euro.
After joining the euro, the Greek govt found they could borrow at even better interest rates - which they did.
They then could not repay these debts.
The EU offered a bailout which allowed Greece to be excused 50% of their debts.
But part of the conditions was that the Greek peoples' salaries and standards of living, pensions etc should be cut.
The govt is calling a referendum to ask the people if they would accept these conditions. There have already been riots.
If they vote no, the bailout will not be implemented and Greece might default.
This could trigger payments by hedge funds of about six times the Greek debt and result in them having to pay out some $1.1 trillion.
Many of the hedge funds have cross-hedged so other firms will have to reimburse them.
Many of these hedge funds are US based so there can be a colossal collapse across the US.
Greece might then have to exit the euro. This could cause a complete collapse of the Greek economy.

Could be real marse.

However, it is possible that they would vote yes, given the consequences of voting no. Just.

This what the Greek PM is hoping, methinks.

[lexbarker]

The Greek govt hid their debts so they could be allowed to join the euro.
After joining the euro, the Greek govt found they could borrow at even better interest rates - which they did.
They then could not repay these debts.
The EU offered a bailout which allowed Greece to be excused 50% of their debts.
But part of the conditions was that the Greek peoples' salaries and standards of living, pensions etc should be cut.
The govt is calling a referendum to ask the people if they would accept these conditions. There have already been riots.
If they vote no, the bailout will not be implemented and Greece might default.
This could trigger payments by hedge funds of about six times the Greek debt and result in them having to pay out some $1.1 trillion.
Many of the hedge funds have cross-hedged so other firms will have to reimburse them.
Many of these hedge funds are US based so there can be a colossal collapse across the US.
Greece might then have to exit the euro. This could cause a complete collapse of the Greek economy.

Could be real marse.

However, it is possible that they would vote yes, given the consequences of voting no. Just.

This what the Greek PM is hoping, methinks.

But, ah tort in an earlier post you said that the Greek economy was miniscule to the rest of the EU and would not have too much effect if it falls apart.

[oecarb]

But, ah tort in an earlier post you said that the Greek economy was miniscule to the rest of the EU and would not have too much effect if it falls apart.

The Greek economy is miniscule. A default or a Greek exit from the EU/euro, as I understand it, will not greatly affect the EU or the euro.

But all the derivatives/hedging attached to a default are massive and would affect mainly US institutions, as I understand it.

And it could have a grave effect on the Greek people.

[miktay]

The bailout is not free money? ***** if they are just lending I can see why this would be turned down. I wouldn't borrow more money if I were already is debt up to my @rse (my@rse).

Nothing iz free....ESP money...

The 'bailouts' come with strings attached called austerity...

Austerity will be bourne by the Greek ppl...

But at this stage it iza moot point...

Greece will default. There are no other viable alternatives.

[Redman]

The Greek economy is miniscule. A default or a Greek exit from the EU/euro, as I understand it, will not greatly affect the EU or the euro.

But all the derivatives/hedging attached to a default are massive and would affect mainly US institutions, as I understand it.

And it could have a grave effect on the Greek people.

Quite a bit of German banks are loaded up to carb,

And there is counterparty risk that would be a indirect issue-I know of one hedge fund that had to close for a while-they had their cash at A which folded because A invested money in a fund that went belly up.

So its really open ended

Later

[miktay]

The current era of cross cascading leveraged global finance needs but one major counterparty to reneg 2 choke the liquidity beast.

At such a point gubmint wud step in to 'grease' the system.

But most gubmints are insolvent. This iz not news.

What iz alarming iz just how badly insolvent most gubmints really are after decades of Keyensian excess.

This leaves few alternatives.

Weak minded politicians and their banker masters will likely inflate 2 mitigate debts.

This comes at a hi cost that neither gubmint nor politicians will have 2 pay.

But the people will pay.

And they will pay dearly.

[oecarb]

And there is counterparty risk that would be a indirect issue-I know of one hedge fund that had to close for a while-they had their cash at A which folded because A invested money in a fund that went belly up.

So its really open ended

Later

Redman, this where the real risk is. Add an unknown amount of naked short selling to the mix and you could be talking trillions and trillions.

But it now looks like the credit event will not take place. So we can all breathe easier.

Papandreou will have to go. There is talk of elections, but I don't think that is necessary as a new coalition can be formed and a leader, who could become the new PM, chosen. Greece will accept the medicine, the poor will suffer a bit more. Loads of regulations will be introduced and there will be business as usual.

[lexbarker]

What iz alarming iz just how badly insolvent most gubmints really are after decades of Keyensian excess.

This leaves few alternatives.

Weak minded politicians and their banker masters will likely inflate 2 mitigate debts.

This comes at a hi cost that neither gubmint nor politicians will have 2 pay.

But the people will pay.

And they will pay dearly.

Mik, you need Keynesian economics to support the social programs, without it social programs would be very limited.

[oecarb]

Mik, you need Keynesian economics to support the social programs, without it social programs would be very limited.

Incorrect.

You just need govts, individuals and companies to pull together - realising that you need each other.

The Captitalst cannot create wealth without workers - educated and skilled.

Workers cannot earn money without the Capitalists.

A country cannot be stable if there are great inequalities.

To smooth out inequalities and give better opportunities to the disadvantaged, govts must levy taxes.

What is Keynesian about a functional capitalism that creates real wealth and distributes it among its citizens and corporations.

[edyle]

Incorrect.

You just need govts, individuals and companies to pull together - realising that you need each other.

The Captitalst cannot create wealth without workers - educated and skilled.

Workers cannot earn money without the Capitalists.

A country cannot be stable if there are great inequalities.

To smooth out inequalities and give better opportunities to the disadvantaged, govts must levy taxes.

What is Keynesian about a functional capitalism that creates real wealth and distributes it among its citizens and corporations.

What is the Capitalist that you refer to?
I am guessing that by Capitalist you mean a person (or possibly a Corporation?) who owns high wealth; and perhaps is inclined to use such wealth to acquire more wealth. I would also guess that you might mean "money" instead of wealth.


To smooth out inequalities and give better opportunities to the disadvantaged, govts must levy taxes.
In an attempt to 'smooth out inequalities' a government must commit a crime (theft)?

[oecarb]

What is the Capitalist that you refer to?
I am guessing that by Capitalist you mean a person (or possibly a Corporation?) who owns high wealth; and perhaps is inclined to use such wealth to acquire more wealth. I would also guess that you might mean "money" instead of wealth.

Edyle, my definition of a capitalist is one who invests money in a business and who would employ people to help him build that business.


In an attempt to 'smooth out inequalities' a government must commit a crime (theft)?

Edyle, suppose I tell you some of the services the British Government provides.

You can then tell me which ones you agree with and how they should be funded. OK?

A doctor who holds your records, is available to you and paid by the govt. (all citizens/residents)
Ambulance service (all citizens/residents)
Health care (all citizens/residents) - including medical tests, treatment, hospital stay (inc meals) all staff paid by the govt.
Prescriptions (all citizens/residents) - max charge £7.00 (US $11.00) Those over 60, under 16 and unemployed - no charge.
Education (all citizens/residents) to secondary level and loans for university education. Loans to be paid back when you earn more than a certain amount. Those from poorer families have their fees reduced or have no fees.
Police Service (all citizens/residents)
Fire Service (all citizens/residents)
Rubbish collection (all citizens/residents)
Unemployment benefit (for unemployed people)
Housing benefit (for those who are homeless or who cannot afford rent)
Child benefit (those with children)
Income support (for people on low incomes with families)
Carer's allowance (for people with severely disabled relatives)
Disability benefit (for people with disabilities who are unable to work)
State pension (currently for men 65 and over and for women 60 and over)

[oecarb]

Redman, this where the real risk is. Add an unknown amount of naked short selling to the mix and you could be talking trillions and trillions.

But it now looks like the credit event will not take place. So we can all breathe easier.

Papandreou will have to go. There is talk of elections, but I don't think that is necessary as a new coalition can be formed and a leader, who could become the new PM, chosen. Greece will accept the medicine, the poor will suffer a bit more. Loads of regulations will be introduced and there will be business as usual.

A new Greek PM is to be chosen tomorrow (Monday 7th November) - probably Venezelos or Papademos.


Greeks agree coalition government without Papandreou
Greek leaders at crisis talks in Athens have agreed to form a new national unity government, the president's office says.
Beleaguered Prime Minister George Papandreou will step aside and his successor will be chosen on Monday, the statement said.

http://www.bbc.co.uk/news/world-europe-15614883

[miktay]

Mik, you need Keynesian economics to support the social programs, without it social programs would be very limited.

Lex:

The decision of who wins and looses iz in the hands of bureaucrats.

Historically the perception iz that gubmint largess works. The populce genreally believe that they get back the taxes they pay.

And when the economy iz good there is money to go around.

But how long can social programs last if gubmint iz chronically insolvent in a recession?

How do German citizens feel knowing their taxes go to pay the multi million € bankers bonus'?

This is the legacy of Keynesian economics.

Gubmint giveth and gubmint taketh away.

Nothing iz free.

[oecarb]

How do German citizens feel knowing their taxes go to pay the multi million € bankers bonus'? Nothing iz free.

This is the same argument that some people using to argue that China wouldn't help out the EU.

They say that even poor Greeks get more than the average Chinese citizen.

But they don't notice that China propping up the US - the "richest" country in the world.

And when you check it out, all debt is in fiat currency. So they could be paid back in fiat currency.

And, if the German and French banks can't raise private capital, they will have to accept what Merkozy offering them and they will have to watch them bonuses and the naked short selling for a start.

[miktay]

This is the same argument that some people using to argue that China wouldn't help out the EU.

They say that even poor Greeks get more than the average Chinese citizen.

But they don't notice that China propping up the US - the "richest" country in the world.

And when you check it out, all debt is in fiat currency. So they could be paid back in fiat currency.

And, if the German and French banks can't raise private capital, they will have to accept what Merkozy offering them and they will have to watch them bonuses and the naked short selling for a start.

Carbs:

The bankers are in charge.

They run the Merkozy.

German citizens are supporting the bad loans made by N. Euro banks.

They don't get much in return.

Continually bailouts of an insolvent Greece make no sense unless viewed fm a banking perspective.

Greece gave the world democracy.

But Greek democracy iz now suppressed by the Brussels machine. The bankers and Eurocrats need suppression for their strategy to suceed.

Bankers try in vain to prevent the inevitable.

Alll roads lead 2 a banking crisis.

http://tspmarketwatch.com/wp-content/uploads/2011/03/What-To-Do-About-Greece.jpg

[oecarb]

Alll roads lead 2 a banking crisis.

Sez who?

[miktay]

Sez who?

The insurance market for Euro bank debt.

Euro bank stress tests

The capital markets

http://mobile.reuters.com/article/idUSnL6E7JA1M20110810?irpc=932

LONDON, Aug 10 (IFR) - European banks' credit default swaps widened sharply and their bond prices fell on Wednesday.

French banks were hard hit, with BNP Paribas five-year CDS widening 19bp to 231bp, Societe Generale 4bp wider at 284bp and Credit Agricole 9.5bp wider at 251.5bp, according to Markit data.

Deutsche Bank was the worst performer as its five-year CDS widened 18.5bp to 160bp.

Credit Agricole bonds are up to 23bp wider across the curve led by the 3.50% April 2015 at at swaps plus 278bp.

BNP Paribas bonds are holding up better at the short end of the yield curve but its 4.125% Jan 2022 and 4.50% March 2023 are about 10bp wider bid at swaps plus 120s area.

SocGen bonds are about 10-20bp wider although the longer dated 4.75% March 2021 is underperforming at 28 wider at swaps plus 251bp bid. (Reporting by IFR Markets)

http://www.forbes.com/sites/stephenpope/2011/07/17/european-bank-stress-test-only-eight-europe-is-in-peril/

7/17/2011 @ 6:26AM |4,336 views
European Bank Stress Test; Only Eight? Europe Is In Peril!

One does not have to dig too deep to discover the *exposure level of *the banks from the “big” European nations, France, Germany and the UK. Liability risk to the nations that have already been bailed out i.e. Greece, Ireland and Portugal sums to €500Bn. If one broadens the sweep to include exposure to Italy and Spain then the figure leaps to €2Tn. So imagine my concern, but not surprise to learn that the European Banking Authority, (EBA) has revealed that in the course of the 2011 stress tests a mere 8 out of the 90 European banks that undertook stress tests* have failed. the EBA claimed that the test would ensure*the banks could withstand another financial crisis. What a sham. What a wasted opportunity. In fact beyond the broken 8*a further 16 are considered as in the danger zone. Spain had 5 banks fail the financial healthchecks, 2 Greek banks failed and there was 1 from Austria.*I wish for once, the European authorities would be bold and actually design a test that is rigerous. I do not want to see failure for the sake of it, but the financial community at a global level deserves and should demand better. Still, fudge, duck and cover have become a bywords for being European when matters of sovereign debtand bank liquidity*are being discussed.

http://online.wsj.com/article/SB10001424053111903648204576552822654479258.html

FRANKFURT—Battered European banks suffered further steep share-price declines on Monday as investors grew more concerned about the banks' access to funds.

Worries about worsening economic data, litigation, sovereign debt exposure and a potential rise in nonperforming loans all contributed to the liquidity concerns that hit the bank shares.

While European stock markets fell about 5% across the board Monday, bank stocks were hit harder.

[oecarb]

Miktay, from your post:


Liability risk to the nations that have already been bailed out i.e. Greece, Ireland and Portugal sums to €500Bn. If one broadens the sweep to include exposure to Italy and Spain then the figure leaps to €2Tn.

Have you ever wondered why a $2.8 trillion debt in a $16 trillion economy should worry the whole world ?

After all, various "financial gurus" from both sides of the Atlantic seem to think it should not be a problem and they have repeatedly said that the ECB (European Central Bank) should just "act like a central bank" and inject liquidity into the system.


There is a second-level backstop for the ECB, and it is the one which I suspect will be called upon in the end. Although it is subject to all sorts of nominal restrictions on its freedom of action to reflect its multinational character, which have served to prevent it ever being free to behave like the Fed, the ECB is ultimately a central bank and, as such, it can always be given the green light to print Euros in whatever quantity is required to pay its debts or simply to cover the cost of more loans The Geithner proposal amounts essentially to freeing the ECB from some of its existing constraints and preparing it to monetise Europe’s fiscal deficits, a policy similar to that which the Obama Administration itself has pursued vigorously so as to fund massive bailouts of Fannie Mae, Freddie Mac and other basket cases, with results that have been at best extremely mixed.

http://blogs.reuters.com/great-debate-uk/tag/ecb/

[saltwater]

The Geithner proposal amounts essentially to freeing the ECB from some of its existing constraints
Can you elaborate on this. What are the Geithner proposals and what are the ECB's existing constraints.

[miktay]

Miktay, from your post:



Have you ever wondered why a $2.8 trillion debt in a $16 trillion economy should worry the whole world ?

After all, various "financial gurus" from both sides of the Atlantic seem to think it should not be a problem and they have repeatedly said that the ECB (European Central Bank) should just "act like a central bank" and inject liquidity into the system.

Carbs:

The "financial gurus" are largely Keynesian economists.

They advocate 'liquidity injections' to monetize deficits.

This iz a bad idea.

'Liquidity injection' iz 'french' for 'printing money'.

Printing money drives inflation.

Inflation iza stealth tax upon the people.

As savings, salaries and pensions are debased the middle class shrinks and the poor become poorer.

Financial bubbles are chiefly caused by newly printed money looking for a home.

Printing money iza primary reason we are in a global debt crisis.

Printing money can postpone the debt crisis but it will exacerbate the eventual reckoning.

Printing money begets printing mo money. It iz addictive.

Printing money iz not a good solution.

[oecarb]

Carbs:

The "financial gurus" are largely Keynesian economists.

They advocate 'liquidity injections' to monetize deficits.

This iz a bad idea.

'Liquidity injection' iz 'french' for 'printing money'.

Printing money drives inflation.

Inflation iza stealth tax upon the people.

As savings, salaries and pensions are debased the middle class shrinks and the poor become poorer.

Financial bubbles are chiefly caused by newly printed money looking for a home.

Printing money iza primary reason we are in a global debt crisis.

Printing money can postpone the debt crisis but it will exacerbate the eventual reckoning.

Printing money begets printing mo money. It iz addictive.

Printing money iz not a good solution.

Well, like I said before, the British did it for over a hundred years and the Americans have done it for the past seventy years. So I don't see how the French come into this.

And, as I also said, the debt was in fiat currency which, according to you, is not real money.

So why you so worried if they pay back in fiat currency?

You think they should start paying back that debt in gold?

And how can printing money drive inflation if they use it to pay back a debt? The money done spend long time and all the drive on inflation done happen. Long, long before they get the money to pay off the debt.

[oecarb]

Can you elaborate on this. What are the Geithner proposals and what are the ECB's existing constraints.

Salt,

hope this helps:

http://www.reuters.com/article/2011/09/16/us-eurozone-idUSTRE78B24R20110916

http://en.wikipedia.org/wiki/European_Central_Bank

[miktay]

Well, like I said before, the British did it for over a hundred years and the Americans have done it for the past seventy years. So I don't see how the French come into this.

Carbs:

That the UK and US inflated iz true.

But they didn't do it at the same time and to
such an extent.

Every major reserve currency iz being inflated.

USD, Yen, GBP, CHF.

Thiz iza global crisis.


And, as I also said, the debt was in fiat currency which, according to you, is not real money.

Dont recall writing fiat currency iznt real money.

U can buy a big screen tv with fiat currency.

Fiat currency iz money

But fiat currency iz not sound money.

It does not adhere to a basic qualitiy of good money: scarcity.

Fiat currency iz not scarce if central bankers create it at will.


So why you so worried if they pay back in fiat currency?

Debasing fiat currency iza stealth tax upon the people. They do not see it coming.

They wake up one day 2 find they cant afford the basic necessities of life.

This leads to social unrest.

Twas Henry Ford 1 that astutely opined:


It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.

The French revolution wuz driven in part by the monetization of soverign debt.

The peasants could not afford bread. They did not have cake.

The peasants revolted.

People can 'lose their heads' when money iz debased (pun intended)


You think they should start paying back that debt in gold?

The G20 asked Germany to back stop the EFSF with gold.


BERLIN, Nov 7 (Reuters) - Chancellor Angela Merkel told G20 leaders in Cannes last week the independence of the German central bank meant she could not back proposals to use German gold and foreign currency reserves or International Monetary Fund special drawing rights to boost the euro zone bailout fund, a spokesman said on Monday.
http://mobile.reuters.com/article/idUSL6E7M71ID20111107?irpc=932

Germany declined.

Why does the G20 ask 4 German guarantees in gold rather than Euros?

[miktay]

And how can printing money drive inflation if they use it to pay back a debt? The money done spend long time and all the drive on inflation done happen. Long, long before they get the money to pay off the debt.

Pinting money increases the money supply.

Production iz not increasing.

Mo money chasing the same goods and services iz the root (and only) cause of inflation.

[lexbarker]

I think Carbs is frightened by the fact that his buying power of his fiat currency will be decreased in his retirement age and ignoring it will make it go away.

[edyle]

Edyle, my definition of a capitalist is one who invests money in a business and who would employ people to help him build that business.



Edyle, suppose I tell you some of the services the British Government provides.

You can then tell me which ones you agree with and how they should be funded. OK?

A doctor who holds your records, is available to you and paid by the govt. (all citizens/residents)
Ambulance service (all citizens/residents)
Health care (all citizens/residents) - including medical tests, treatment, hospital stay (inc meals) all staff paid by the govt.
Prescriptions (all citizens/residents) - max charge £7.00 (US $11.00) Those over 60, under 16 and unemployed - no charge.
Education (all citizens/residents) to secondary level and loans for university education. Loans to be paid back when you earn more than a certain amount. Those from poorer families have their fees reduced or have no fees.
Police Service (all citizens/residents)
Fire Service (all citizens/residents)
Rubbish collection (all citizens/residents)
Unemployment benefit (for unemployed people)
Housing benefit (for those who are homeless or who cannot afford rent)
Child benefit (those with children)
Income support (for people on low incomes with families)
Carer's allowance (for people with severely disabled relatives)
Disability benefit (for people with disabilities who are unable to work)
State pension (currently for men 65 and over and for women 60 and over)



Agree with:


Health care (all citizens/residents) - Primary, including Ambulance.
Education (all citizens/residents) All levels for those capable/qualified.
Police Service (all citizens/residents)
Fire Service (all citizens/residents)
Poverty/disablility support.

Funding is via Corporate Profit tax, and limited money creation where necessary to avoid deflation.

====
In a new economy for example, mostly Primary Education would be affordable; as the economy develops, more Secondary Education and Health becomes affordable.

[oecarb]

Pinting money increases the money supply.

Production iz not increasing.

Mo money chasing the same goods and services iz the root (and only) cause of inflation.

Paying off debt is like filling a hole. It aint going to make a mountain.

[oecarb]

I think Carbs is frightened by the fact that his buying power of his fiat currency will be decreased in his retirement age and ignoring it will make it go away.

Sorry Lex. My fiat currency is the British pound. I does spend euros after I convert.

[oecarb]

Funding is via Corporate Profit tax, and limited money creation where necessary to avoid deflation.

So this aint thiefing?

[miktay]

Paying off debt is like filling a hole. It aint going to make a mountain.

Depends on whey u getting the sand...

If yuh bring sand fm another part of d beach...iz no scene...

But if u create sand..by say dropping it fm a helicopter....yuh go increase the amt of sand on that beach...

[oecarb]

Depends on whey u getting the sand...

If yuh bring sand fm another part of d beach...iz no scene...

But if u create sand..by say dropping it fm a helicopter....yuh go increase the amt of sand on that beach...

But the problem started because someone dug a hole in that particular part of the beach and they throw way the sand.

So filling it in can't have an effect locally unless somebody going to start using up the sand you just used to fill the hole.

To come back to reality, the Greeks borrowed money. They fete and they party and do what they did. They push up the price of champagne and inflation running high. Now they can't pay back. So they have a hole. If somebody fill that hole for them, they just back to how they should have been.

How inflation going to come into that? Unless they use this money for more party. They done have they inflation.

The money that is paid back is going back to the same people who lent it so how can that cause inflation for them?

[edyle]

But the problem started because someone dug a hole in that particular part of the beach and they throw way the sand.

So filling it in can't have an effect locally unless somebody going to start using up the sand you just used to fill the hole.

To come back to reality, the Greeks borrowed money. They fete and they party and do what they did. They push up the price of champagne and inflation running high. Now they can't pay back. So they have a hole. If somebody fill that hole for them, they just back to how they should have been.

How inflation going to come into that? Unless they use this money for more party. They done have they inflation.

The money that is paid back is going back to the same people who lent it so how can that cause inflation for them?

This is off point, but it was not the Greek PEOPLE that borrowed the money it was the Greek GOVERNMENT.

If "Governments" have the legal power to borrow money then steal from the PEOPLE to pay it back, then that's exactly what they will eventually do, and such action is a CRIME.

[oecarb]

This is off point, but it was not the Greek PEOPLE that borrowed the money it was the Greek GOVERNMENT.

If "Governments" have the legal power to borrow money then steal from the PEOPLE to pay it back, then that's exactly what they will eventually do, and such action is a CRIME.

Edyle I am not sure how the money was spent - whether on govt schemes or social welfare but, broadly, I agree.

[saltwater]

Salt,

hope this helps:

http://www.reuters.com/article/2011/09/16/us-eurozone-idUSTRE78B24R20110916

http://en.wikipedia.org/wiki/European_Central_Bank

Thks for the links.

[lexbarker]

Sorry Lex. My fiat currency is the British pound. I does spend euros after I convert.

Did I specify Euro? They are all sinking but at a different rate.

[lexbarker]

Paying off debt is like filling a hole. It aint going to make a mountain.

That money that created the hole did not disappear, it is still in the system. Once the money is printed (physical or virtual) it is inflation but the effects my not be seen until it begins to be circulated.

[oecarb]

That money that created the hole did not disappear, it is still in the system. Once the money is printed (physical or virtual) it is inflation but the effects my not be seen until it begins to be circulated.

This money was created at the time the loans were made. Loans are a way of magicking future money into existence. This money can be spent immediately and causes inflation immediately. It is already in circulation. Paying it back does not alter the situation - unless another loan is made. This is happening all the time anyway and is the main reason why fiat currency is being undermined.

It is no accident that both Islam and early Christianity have banned loans.

[miktay]

This money was created at the time the loans were made. Loans are a way of magicking future money into existence. This money can be spent immediately and causes inflation immediately. It is already in circulation. Paying it back does not alter the situation - unless another loan is made. This is happening all the time anyway and is the main reason why fiat currency is being undermined.

It is no accident that both Islam and early Christianity have banned loans.

Carbs:

Money from a single depositor can be leveraged more than once.

Thiz iz the fractional reserve nature of the banking system.

The EFSF has member 'guarantees' of € 1 trillion.

A bailout of Greece, Portugal and Italy (not 2 mention Spain) wil require mo than €1 Trillion.

Where will thiz money come from?

China iz unlikely 2 help.

Money will have 2b created.

Then there iz the Euro banking sector. It iz wobbling.

Bankers will have 2b bailed out.

Where will the money come from?

Money will have 2b created.

[sacky]

n a way, the real story is not so much any contest between Cameron and Merkozy, but between Cameron's paymasters in the City, and the ECB in Frankfurt.
Six weeks ago the UK government took the unprecedented step of launching a legal challenge against an ECB move to make all clearing operations in euro-denominated instruments above a certain volume take place in the Eurozone under central bank supervision.
Most such operations currently take place in London, and on Thursday morning, the main London clearing-house LCH suddenly doubled the margin or collateral requirements on trade in 7-10 year Italian bonds, carefully timing the move to drive 10-year yields above the key 7% level, triggering a derivative avalanche that quickly took yields to unsustainable levels, while City economists appeared all over British TV announcing the end of the Euro.
This followed up the previous week's attack which had opened a breach or beach-head in the Eurozone at its weakest point, in Greece.
The main weapon in the ongoing 2-year war between the US-UK financial 'Allies' and the key Eurozone axis of Germany-Italy is the credit insurance or CDS which is taken as the market pricing of risk attaching to debt. London clears most Eurozone CDS, and when LCH (jointly owned by City traders) opened the attack on Italy, speculators holding no Italian bonds started buying insurance policies on Italian debt they didn't own but hoped to destroy ('naked CDS'), driving up the market measure of default risk on Italian bonds, and thereby further driving down the prices of the now supposedly 'riskier' bonds (which prices automatically factor in the market pricing of risk), and driving up the yield, which in turn, once above the 7% level, further drove up the price of Italian soveriegn CDS in a sort of virtuous speculative circle.
A coordinated derivatives attack, by the very people who will lose out if they don't destroy the Euro and ECB first, can move the prices and yields of the bonds the derivatives are nominally hedging much more than direct shorting of the bonds themselves (especially in the case of Italian debt where there's a huge market and great liquidity).
Eurozone leaders, led by Germany, have tried to ban such 'naked CDS', starting with a joint proposal from Merkel and Sarkozy to the European Commission in March 2010. But London has consistently resisted such regulation, repreatedly deferring even discussion, first delayed to July 2010, and since repeatedly delayed until at least July 2012 - by which time some people in the City think the battle will be over anyway.
Of course, the people who pay for this vicious cycle of unregulated (and untaxed - another battle) speculative asset-stripping, as the London-NY bearpack attacks the threatening Euro and Eurozone regulation, are the ordinary people of the Eurozone and of Europe more generally.
One can only hope that the experienced Italian trader Draghi at some carefully-timed point in the near future turns the tables on the feral speculators of the City and Wall St by suddenly announcing that the ECB will underwrite Eurozone sovereign debt.
It would be interesting to see if the UK government, on behalf of the City, then tried to contest the move as contravening the Lisbon Treaty they so despise.
Perhaps not, because a successful speculative attack on the Club Med would probably bring down a few of the UK banks that haven't fully insured their collective Club Med exposure of about ₤350bn.
Interesting times.

http://www.guardian.co.uk/politics/wintour-and-watt/2011/nov/11/davidcameron-angela-merkel

[oecarb]

The main weapon in the ongoing 2-year war between the US-UK financial 'Allies' and the key Eurozone axis of Germany-Italy is the credit insurance or CDS which is taken as the market pricing of risk attaching to debt. London clears most Eurozone CDS, and when LCH (jointly owned by City traders) opened the attack on Italy, speculators holding no Italian bonds started buying insurance policies on Italian debt they didn't own but hoped to destroy ('naked CDS'), driving up the market measure of default risk on Italian bonds, and thereby further driving down the prices of the now supposedly 'riskier' bonds (which prices automatically factor in the market pricing of risk), and driving up the yield, which in turn, once above the 7% level, further drove up the price of Italian soveriegn CDS in a sort of virtuous speculative circle.


Thanks Sacky.

This is why everybody is so afraid of Eurozone defaults. Every Tom,Dick, Harry and he tantie betting on a default. If that happen, a lot of financial institutions going to tumble and it could be the end of derivatives markets especially with cross party risks.

Pretty soon, either the whole world going to start begging the ECB to stump up. Or all them institutions going to find it cheaper to pay off the debts and stave off a world wide calamity.

[miktay]

Another Eurozone member country passes the tipping point...


Nov. 11 (Bloomberg) -- Slovenia’s 10-year government bonds slid for a fourth day, with the yield topping 7 percent for the first time since the nation adopted the euro in 2007, as the debt crisis in Europe roils markets.

The yield rose to 7.14 percent at 1:05 p.m. in Ljubljana, according to Bloomberg data. The spread, or the difference investors demand to hold the securities instead of similar- maturity German debt, also advanced to a euro-era record of 545 basis points. A basis point is a hundredth of a percentage point.
http://www.businessweek.com/news/2011-11-11/slovenian-bond-yield-breaks-7-first-time-since-euro-entry.html

[oecarb]

Like I said:

One of the first and most effective ways to combat the crisis and the potential downturn, experts say, would be to enable the European Central Bank, or E.C.B., to act as a lender of last resort, or to at least let it print some more money, to try a little inflation as a recipe for growth and debt reduction.

“I understand the German fetish with inflation, but that’s increasingly wearing thin,” said Jan Techau, a German who is the director of Carnegie Europe in Brussels. “The reluctance to use the E.C.B. as the lender of last resort when Italy is solvent is something I don’t understand.”

In part, it is a result of the German economy’s unusual strength throughout the crisis. In the last few years, it has grown stronger — with higher exports, rising employment, an unexpected burst of tax revenue, even a windfall from an accounting error — while others in Europe have struggled.

German trade groups have pressed Mrs. Merkel to do what it takes to save the euro, which has been a boon for exporters, allowing them to sell products in a currency depressed by the troubles of its weaker members.

http://www.nytimes.com/2011/11/13/world/europe/for-european-union-and-the-euro-a-moment-of-truth.html?pagewanted=2&_r=1&nl=todaysheadlines&emc=tha2
Asian and other countries beginning to panic?


Nov. 12 (Bloomberg) -- U.S. President Barack Obama said formation of new governments in Greece and Italy may help calm world markets roiled by the European debt crisis, which is having a “dampening effect” on the global economy.

“We’re not going to see massive growth out of Europe until the problem’s resolved,” Obama told corporate chief executive officers gathered in Honolulu today as part of the Asia-Pacific Economic Cooperation forum. The president said he was “cautiously optimistic” of getting through the current crisis.

Europe’s sovereign-debt crisis was a frequent topic at the summit aimed at improving economic ties in the Asia-Pacific region as officials said they are bracing for a worsening of the situation in Europe that may push the global economy into a recession and increase volatility in financial markets. Investors this week pushed Italian bond yields passed the 7 percent level that drove Greece, Ireland and Portugal to seek bailouts, ahead of the resignation today of Italian Prime Minister Silvio Berlusconi.

“You can’t talk about Asia without talking about Europe right now,” Jerry Webman, chief economist at OppenheimerFunds Inc. in New York, told Bloomberg News in Honolulu yesterday. “Having a prolonged economic slump in Europe is really threatening to the export-oriented Asian economies.”

http://www.businessweek.com/news/2011-11-13/obama-says-europe-making-progress-as-apec-nations-fear-worst.html

[Sly1]

Wealth Tax Won't Solve All Italy's Woes
Spain's ranges between 0.2% to 2.5%, while France's is between 0.5% and 1.8%. So, were Italy to decide on a 1% rate, for example, the wealth tax could raise about €27 billion
But Italy has €1.9 trillion of outstanding sovereign debt, and annual debt-servicing payments of about €77 billion this year.
"Tax the rich" is increasingly the cry in Italy, as the troubled euro-zone country tries to put its finances in order.

I don't know if this measure will solve Italy's money problems.

[lexbarker]

Well. the new Greek PM was a big boy from the ECB. The nation that gave us democracy could not exercise their democracy for a vote on another bailout. Democracy is dead for them.

And the new PM coming in for Italy is a former member of the Trilateral commission. Good luck with him.

[oecarb]

The EU is moving towards a more permanent solution. The world will just have to wait.


The euro crisis now entering its third year is the main theme occupying Germany’s ruling party as more than 1,000 delegates gather in Leipzig. The convention’s main motion is on the euro.

Euro members that get financial support must reduce debt and strengthen their economies, according to the draft text of the motion to be debated today. “Some countries will achieve this quickly, while others will need our solidarity and our encouragement for years,” it says.

The chancellor addresses the convention with domestic public opinion going her way. Merkel’s handling of the debt crisis is backed by 56 percent of Germans, up from 45 percent in early October, according to an FG Wahlen poll for ZDF television published Nov. 11. Merkel’s overall approval rating also rose. The Nov. 8-10 poll of 1,278 people has a margin of error of as much as 3 percentage points.

Merkel will use her speech to issue a “warning” that it’s necessary to do everything to move toward a “stability union,” the CDU’s Meister said. “We mustn’t just draft rules, we need to patrol them and enforce them,” he said. “We need more discipline.” Merkel will deliver that message “loud and clear.

http://www.bloomberg.com/news/2011-11-13/merkel-says-eu-must-forge-closer-union-to-convince-bondholders.html

[oecarb]

Wealth Tax Won't Solve All Italy's Woes
Spain's ranges between 0.2% to 2.5%, while France's is between 0.5% and 1.8%. So, were Italy to decide on a 1% rate, for example, the wealth tax could raise about €27 billion
But Italy has €1.9 trillion of outstanding sovereign debt, and annual debt-servicing payments of about €77 billion this year.
"Tax the rich" is increasingly the cry in Italy, as the troubled euro-zone country tries to put its finances in order.

I don't know if this measure will solve Italy's money problems.
From the Wall Street Journal:


As fears mount that Italy could be sucked into the vortex of the euro-zone debt crisis, consider this: The country’s public finances are among the strongest in the European Union.

Say what?

Italy is one of just five EU countries that are expected to run a primary surplus — meaning that, excluding debt interest payments, their income is greater than their spending — in 2011, according to the European Commission’s spring economic forecast. Its primary surplus is expected to be 0.8% of gross domestic product, less than only Hungary and Sweden, and higher than the rest of the euro zone, including stalwarts such as Germany and Finland.

The figure shows that Italy’s budget sins are largely in the past: interest payments on the country’s mountain of debt, accumulated during years of lax budget policy, are expected to be 4.8% of GDP, the second-highest in the EU after Greece .

Forgetting the past, Italy is in fine shape.

So what, you might say. To quote William Faulkner: “The past is never dead. It’s not even past. Italy’s large current budget deficit is going to be a problem decades from now.” (Okay, I may be misremembering part of this quote.) A deficit is a deficit, whether the cause is borrowing to fund current operations or borrowing to pay interest on existing debt.

Maybe so. But Italy’s primary surplus shows that the government as currently configured can pay its own way, even during a time of weak economic growth. That’s much more than can be said for Greece, Portugal, Ireland or even Spain, all of which are expected to run primary deficits this year.

Moderately higher growth and/or inflation — and some time — would help solve the country’s historical debt burden. Italy is expected to pay a 4% rate on its outstanding debt this year; but annual nominal GDP growth hasn’t broken 3% in five four years, and it averaged just 3.7% from 2001-2007.

Without more nominal GDP growth, Italian debt must rise. New measures pledged by the Italian government are aimed at raising the country’s long-term growth rate. This might be a steep hill to climb: changing long-term growth rates is a notoriously difficult task that could take years.

Or the euro zone could intervene to drive down Italian yields below the country’s 3% nominal GDP growth rate, putting Italian debt on a downward trajectory. That’s what the European Central Bank is doing this morning through its bond purchases. But seven-year yields are at 5.02%, requiring a lot more buying from a reluctant ECB to get the job done.

http://blogs.wsj.com/brussels/2011/08/08/italy-pays-for-sins-of-the-past/

[oecarb]

Well. the new Greek PM was a big boy from the ECB. The nation that gave us democracy could not exercise their democracy for a vote on another bailout. Democracy is dead for them.

And the new PM coming in for Italy is a former member of the Trilateral commission. Good luck with him.

Lex, if you belong to a club, you have to play by the rules.

Everybody saying you can't have monetary union without political union. All the EU is saying is

"We have to move closer to a United States of Europe. You in or you out?"

And if they vote no, even you might be bawling now. You pension fund might be tie up in some euro derivative.

[edyle]

Wealth Tax Won't Solve All Italy's Woes
Spain's ranges between 0.2% to 2.5%, while France's is between 0.5% and 1.8%. So, were Italy to decide on a 1% rate, for example, the wealth tax could raise about €27 billion
But Italy has €1.9 trillion of outstanding sovereign debt, and annual debt-servicing payments of about €77 billion this year.
"Tax the rich" is increasingly the cry in Italy, as the troubled euro-zone country tries to put its finances in order.

I don't know if this measure will solve Italy's money problems.


Wealth tax

From Wikipedia, the free encyclopedia




An aspect of fiscal policy (http://en.wikipedia.org/wiki/Fiscal_policy)



Policies (http://en.wikipedia.org/wiki/Tax_policy)[show]





Economics (http://en.wikipedia.org/wiki/Tax#Economics_of_taxation)[show]





Collection (http://en.wikipedia.org/wiki/Tax_collection)[show]





Noncompliance (http://en.wikipedia.org/wiki/Tax_noncompliance)[show]





Distribution[show]





Types[show]





International (http://en.wikipedia.org/wiki/International_taxation) and trade (http://en.wikipedia.org/wiki/Trade)[show]





By country (http://en.wikipedia.org/wiki/Category:Taxation_by_country)[show]




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This article may be unbalanced (http://en.wikipedia.org/wiki/Wikipedia:Neutral_point_of_view#Undue_weight) towards certain viewpoints. Please improve the article (http://en.wikipedia.org/w/index.php?title=Wealth_tax&action=edit) by adding information on neglected viewpoints, or discuss the issue on the talk page (http://en.wikipedia.org/wiki/Talk:Wealth_tax). (December 2010)



A wealth tax is generally conceived of as a levy based on the aggregate value of all household holdings actually accumulated as purchasing power stock (rather than flow), including owner-occupied housing (http://en.wikipedia.org/wiki/Home); cash (http://en.wikipedia.org/wiki/Cash), bank deposits (http://en.wikipedia.org/wiki/Bank_deposits), money funds (http://en.wikipedia.org/wiki/Money_fund), and savings in insurance (http://en.wikipedia.org/wiki/Insurance) and pension plans (http://en.wikipedia.org/wiki/Pension); investment in real estate (http://en.wikipedia.org/wiki/Real_estate) and unincorporated businesses (http://en.wikipedia.org/wiki/Unincorporated_entity); and corporate stock (http://en.wikipedia.org/wiki/Stock), financial securities (http://en.wikipedia.org/wiki/Financial_securities), and personal trusts.[1] (http://en.wikipedia.org/wiki/Wealth_tax#cite_note-EWBR-0)



So what's a weath tax?
First of all, it is not a transaction tax as in income tax and sales tax, but is a direct tax on existing 'wealth', presumably, such as a citizen's SAVINGS ACCOUNT as well as a citizen's PROPERTY.

So when is this tax due? Upon your death? Like a death tax? No it is due annually;
If govt take a piece of whatever you happen to have every year, then isn't it a great thing you can't live forever, because if you live forever the govt will end up with 100% of everything you have.

Wealth tax, like property tax, income tax and tax, is a CRIME against the PEOPLE committed by governments just as slavery was a crime against the PEOPLE committed by governments.

[lexbarker]

Lex, if you belong to a club, you have to play by the rules.

Everybody saying you can't have monetary union without political union. All the EU is saying is

"We have to move closer to a United States of Europe. You in or you out?"

And if they vote no, even you might be bawling now. You pension fund might be tie up in some euro derivative.

Carbs, they are molding your minds and training you to go along with a one-world-govmint. All these
countries have a gun to their heads. Greek PM not acceptable? Out. Italy man not
acceptable? Out. They have their men in now. And look out for the other troubled countries
that are hesitating. And, you said there is no such thing as an EU govmint? They are bigger
than country govmint. They are the EU govmint of govmints. The citizens are at the mercy of
these people.

[lexbarker]

No matter what happens, this "coming" bailout won't do anything, the money goes to the bankers.
More of the same.

[miktay]

Lex, if you belong to a club, you have to play by the rules.

Everybody saying you can't have monetary union without political union. All the EU is saying is

"We have to move closer to a United States of Europe. You in or you out?"

And if they vote no, even you might be bawling now. You pension fund might be tie up in some euro derivative.
Carbs:

Ppl who thro free fete always have plenty friends & willing accomplices.

It u give-way free thing ppl will come.

If France & German banks offer free loans to an exclusive club... all kinda riff raff bound 2 show up...

That Franco and German banks gave cheap Euro loans to less disciplined countries iz now immaterial.

These loans will never be repaid. They will be defaults. The loans are free money.

Riff raff will go along with most anything as long as the 'freeness' continues.

There iz no longer much debate that Greece will default. Itz more a question of when and how.

When other wayward members see Greece renege they will act accordingly.

They also want freeness.

They will default.

And there are the Irish. They accepted austerity. But they will demand 'freeness' if Greece defaults.

In their quest to form the United States of Europe Eurocrats seem 2 have forgotten a basic tenet of politics.

Politicians are untrustworthy.

They lie cheat and steal.

Many are in the back pockets of the bankers.

Membership in an exclusive club cannot wash away these sins.

In any crisis it iz difficult to get agreement among politicians of a single country.

In the inevitable intensification of the Euro crisis it will be near impossible to get politicians fm the disparate factions and coalitions of 17 Eurozone member countries to agree on much.

Any accords that may be reached will be very expensive.

[oecarb]

Well, I right in the middle of all this. A spectator just telling it as I see it - as long as the British pound still going. My personal opinion cant change nothing.

And Britain aint joining no United States of Europe.

[sacky]

Well, I right in the middle of all this. A spectator just telling it as I see it - as long as the British pound still going. My personal opinion cant change nothing.

And Britain aint joining no United States of Europe.

which is a shame,seeing we only specialise in financial services.:(

[oecarb]

which is a shame,seeing we only specialise in financial services.:(

True. But I cant do nothing about that - except make sure i have enough red beans, rice, black eye peas, pigeon peas, potatoes and flour to keep me and the wife going until something is sorted. ;)

[miktay]

While much focus iz on the Eurozone many other countries struggle in the background.

The cat, the rat and the dog are all in the same sinking ship.

The leaky vessel they cling 2 iz Keynesian economics.

Keynesian economics has given gubmints & bankers carte blanche to create money.

Printed money iz now a tsunami of debt.

Thiz iza global crisis.

There are no lifeboats.


China’s economy has a reputation for being strong and prosperous, but according to a well-known Chinese television personality the country’s Gross Domestic Product is going in reverse.

Larry Lang, chair professor of Finance at the Chinese University of Hong Kong, said in a lecture that he didn’t think was being recorded that the Chinese regime is in a serious economic crisis—on the brink of bankruptcy. In his memorable formulation: every province in China is Greece.

The restrictions Lang placed on the Oct. 22 speech in Shenyang City, in northern China’s Liaoning Province, included no audio or video recording, and no media. He can be heard saying that people should not post his speech online, or “everyone will look bad,” in the audio that is now on Youtube.

In the unusual, closed-door lecture, Lang gave a frank analysis of the Chinese economy and the censorship that is placed on intellectuals and public figures. “What I’m about to say is all true. But under this system, we are not allowed to speak the truth,” he said.
Despite Lang’s polished appearance on his high-profile TV shows, he said: “Don’t think that we are living in a peaceful time now. Actually the media cannot report anything at all. Those of us who do TV shows are so miserable and frustrated, because we cannot do any programs. As long as something is related to the government, we cannot report about it.”
He said that the regime doesn’t listen to experts, and that Party officials are insufferably arrogant. “If you don’t agree with him, he thinks you are against him,” he said.
Lang’s assessment that the regime is bankrupt was based on five conjectures.
Firstly, that the regime’s debt sits at about 36 trillion yuan (US$5.68 trillion). This calculation is arrived at by adding up Chinese local government debt (between 16 trillion and 19.5 trillion yuan, or US$2.5 trillion and US$3 trillion), and the debt owed by state-owned enterprises (another 16 trillion, he said). But with interest of two trillion per year, he thinks things will unravel quickly.
Secondly, that the regime’s officially published inflation rate of 6.2 percent is fabricated. The real inflation rate is 16 percent, according to Lang.
Thirdly, that there is serious excess capacity in the economy, and that private consumption is only 30 percent of economic activity. Lang said that beginning this July, the Purchasing Managers Index, a measure of the manufacturing industry, plunged to a new low of 50.7. This is an indication, in his view, that China’s economy is in recession.
Fourthly, that the regime’s officially published GDP of 9 percent is also fabricated. According to Lang’s data, China’s GDP has decreased 10 percent. He said that the bloated figures come from the dramatic increase in infrastructure construction, including real estate development, railways, and highways each year (accounting for up to 70 percent of GDP in 2010).
Fifthly, that taxes are too high. Last year, the taxes on Chinese businesses (including direct and indirect taxes) were at 70 percent of earnings. The individual tax rate sits at 81.6 percent, Lang said.
Once the “economic tsunami” starts, the regime will lose credibility and China will become the poorest country in the world, Lang said.
Several commentators have expressed broad agreement with Lang’s analysis.
Professor Frank Xie at the University of South Carolina, Aiken, said that the idea of China going bankrupt isn’t far fetched (http://soundofhope.org/programs/162/202654-1.asp). Major construction projects have helped inflate the GDP, he says. “On the surface, it is a big number, but inflation is even higher. So in reality, China’s economy is in recession.”
Further, Xie said that official figures shouldn’t be relied on. The regime’s vice premier, Li Keqiang for example, admitted to a U.S. diplomat that he doesn’t believe the statistics produced by lower-level officials, and when he was the governor of Liaoning Province “had to personally see the hard data.”
Cheng Xiaonong, an economist and former aide to ousted Party leader Zhao Ziyang, said that high praise of the “China model” is often made on the basis of the high-visibility construction projects, a big GDP, and much money in foreign reserves. “They pay little attention to things such as whether people’s basic rights are guaranteed, or their living standard has improved or not,” he said.
Behind the fiat control of the economy, which can have the appearance of being efficient, there is enormous waste and corruption, Cheng said. It means that little spending is done on education, welfare, the health system, etc.
Cheng says that for the last decade the Chinese regime has accumulated its wealth primarily by promoting real estate development, buying urban and suburban residential properties at low prices (or simply taking them), and selling them to developers at high prices.
http://www.theepochtimes.com/n2/china-news/chinese-tv-host-says-regime-nearly-bankrupt-141214.html

[miktay]

dbl

[oecarb]

While much focus iz on the Eurozone many other countries struggle in the background.

The cat, the rat and the dog are all in the same sinking ship.

The leaky vessel they cling 2 iz Keynesian economics.

Keynesian economics has given gubmints & bankers carte blanche to create money.

Printed money iz now a tsunami of debt.

Thiz iza global crisis.

There are no lifeboats.


http://www.theepochtimes.com/n2/china-news/chinese-tv-host-says-regime-nearly-bankrupt-141214.html

Miktay,

I agree to a certain extent.

However, I go back to my "human sweat" theory. There will always have to be the production of goods and services produced through human sweat. Food grown, chickens and cattle raised, machinery produced, homes built etc.

There will always have to be some way of exchanging these - be it pieces of paper or pieces of metal or whatever.

Lifeboats would have to be built.

[sacky]

http://www.guardian.co.uk/commentisfree/2011/nov/16/city-of-london-class-interest

[miktay]

Miktay,

I agree to a certain extent.

However, I go back to my "human sweat" theory. There will always have to be the production of goods and services produced through human sweat. Food grown, chickens and cattle raised, machinery produced, homes built etc.

There will always have to be some way of exchanging these - be it pieces of paper or pieces of metal or whatever.

Lifeboats would have to be built.

U may be right Carbs but consider thiz...

The SS Titanic has stopped dead in the water.

We are assured by the 'captains' of banking gubmint and (controlled) mass media that thiz is a minor hiccup.

It will soon be put right...they say.

The Titanic iz considered 'unskinkable'. There are few lifeboats on board.

But those in the know are grabbing all available space on the lifeboats.

The ship will flounder. But the majority do not know this.

When it becomes apparent the ship will sink it will be too late to build a lifeboat.

[miktay]

Here iz one Irishman's opinion.

He sez the Euro iz crumbling.

If Italy defaults he promises economic Krakatoa.



http://www.youtube.com/watch?v=kzGJWtYnAdE&feature=player_embedded

[edyle]

Is the six weeks up yet?

[oecarb]

U may be right Carbs but consider thiz...

The SS Titanic has stopped dead in the water.

We are assured by the 'captains' of banking gubmint and (controlled) mass media that thiz is a minor hiccup.

It will soon be put right...they say.

The Titanic iz considered 'unskinkable'. There are few lifeboats on board.

But those in the know are grabbing all available space on the lifeboats.

The ship will flounder. But the majority do not know this.

When it becomes apparent the ship will sink it will be too late to build a lifeboat.
Miktay,

First, contrary to what many people seem to think, about one third of the passengers on the Titanic did survive, the last one dying on 1 June 2009.

http://en.wikipedia.org/wiki/RMS_Titanic

Next, while I do think we are about to see the bursting of the greatest bubble ever created by mankind - the $516 Trillion derivatives market (over ten times the GDP of the entire planet and all virtual money), there are still billions of people in Africa, India, China and the Americas who are not even aware of such things as derivatives.


According to Bank for International Settlements "$516 trillion at the end of June 2007"

http://en.wikipedia.org/wiki/Derivatives_market

But all countries would not be affected at the same time or to the same extent.

The euro is small fry here IMO.

[edyle]

Miktay,

First, contrary to what many people seem to think, about one third of the passengers on the Titanic did survive, the last one dying on 1 June 2009.

http://en.wikipedia.org/wiki/RMS_Titanic

Next, while I do think we are about to see the bursting of the greatest bubble ever created by mankind - the $516 Trillion derivatives market (over ten times the GDP of the entire planet and all virtual money), there are still billions of people in Africa, India, China and the Americas who are not even aware of such things as derivatives.



But all countries would not be affected at the same time or to the same extent.

The euro is small fry here IMO.

The fact that virtual imaginary constuctions (derivitives) seem to be causing REAL problems should tell us all something.

I suggest that imaginary debts be paid with imaginary cash! :) :) :)

[oecarb]

The fact that virtual imaginary constuctions (derivitives) seem to be causing REAL problems should tell us all something.

I suggest that imaginary debts be paid with imaginary cash!

Problem with this, Edyle, is that, as far as I understand, most of this "imaginary" cash is sitting in bank vaults all over the world in the form of certificates of transactions and is counted as "real" fiat cash - US dollars, no less.

You think it easy? lol

[guyguy]

Gentlemen,
This has been a most interesting discussion which I have been eagerly following. While I don't understand a great deal that has been discussed here, I'd like your opinion on an issue and its ramifications, particularly to the United States' citizenry.

For the past year, the Chinese have been surreptitiously trying to make the Renminbi the world's reserve currency, a position that has been held by the USD. What do you think the economic impact would be on the USA, and Europe, for that matter if the Renminbi did indeed become the world's reserve currency?

In his speech this week at the ASEAN Conference, China's President made several remarks that were diplomatically disguised in a manner that bespoke of China's desire to have global trade conducted in its currency.

Is this a good thing? If so, why? If not, then why not? What effect would this change in reserve currency have on the average american? And, will it have any impact on the rest of the world?

[Redman]

Well the global money supply has been inflated in all currencies over the last 10 years-right now the only solution to asert any control on any economy is growth.

Growth today means export-and therefore a cheap currency.

The universal political way would be to inflate the currency further in order to avoid the political cost of wringing the excesses out of an economy-you see the US and the Euro fighting this now.

China is fragile and is suffering from the same issues that the US and Euro are battling today-excessive capacity,and a hangover from cheap money-manifested in excess real estate projects.

This will limit Chinas ability to manipulate the currency so Im not sure China can continue to cheapen its currency vs the others.

That said the adoption of a new reserve currency will be gradual and slow enough to accommodate the time it would take to change without dislocation of the economy.

The impact in the US would be
Weaker currency-excess supply of the currency would reduce the value against others.
The US might be forced to absorb currency -this might be through higher rates.

But the outlook for the US econ is not strong any way so Im not sure that one would be able to separate the causes of the weaknesses if it were to happen today.

But I think this cant happen for a while now and therefore the impact would be dictated by the situation in place when the Chinese currency becomes dominant-IF it does.

Later

[edyle]

Problem with this, Edyle, is that, as far as I understand, most of this "imaginary" cash is sitting in bank vaults all over the world in the form of certificates of transactions and is counted as "real" fiat cash - US dollars, no less.

You think it easy? lol

Yes, seems like some kind of accounting fraud somewhere.

[edyle]

Gentlemen,
This has been a most interesting discussion which I have been eagerly following. While I don't understand a great deal that has been discussed here, I'd like your opinion on an issue and its ramifications, particularly to the United States' citizenry.

For the past year, the Chinese have been surreptitiously trying to make the Renminbi the world's reserve currency, a position that has been held by the USD. What do you think the economic impact would be on the USA, and Europe, for that matter if the Renminbi did indeed become the world's reserve currency?

In his speech this week at the ASEAN Conference, China's President made several remarks that were diplomatically disguised in a manner that bespoke of China's desire to have global trade conducted in its currency.

Is this a good thing? If so, why? If not, then why not? What effect would this change in reserve currency have on the average american? And, will it have any impact on the rest of the world?

It seems to me pretty obvious that one does not want to become DEPENDENT on a system like what has occurred and caused economic turmoil. I think the Prudent direction would be to NOT set in stone any reserve currency, although practicality might forge a TEMPORARY reserve currency without being locked in and dependent.

There is also the issue of GOLD, and PLATINUM which Nation States should reconsider utilizing as assurance of real possessed wealth.

[edyle]

Well the global money supply has been inflated in all currencies over the last 10 years-right now the only solution to asert any control on any economy is growth.

Growth today means export-and therefore a cheap currency.

The universal political way would be to inflate the currency further in order to avoid the political cost of wringing the excesses out of an economy-you see the US and the Euro fighting this now.

China is fragile and is suffering from the same issues that the US and Euro are battling today-excessive capacity,and a hangover from cheap money-manifested in excess real estate projects.

This will limit Chinas ability to manipulate the currency so Im not sure China can continue to cheapen its currency vs the others.

That said the adoption of a new reserve currency will be gradual and slow enough to accommodate the time it would take to change without dislocation of the economy.

The impact in the US would be
Weaker currency-excess supply of the currency would reduce the value against others.
The US might be forced to absorb currency -this might be through higher rates.

But the outlook for the US econ is not strong any way so Im not sure that one would be able to separate the causes of the weaknesses if it were to happen today.

But I think this cant happen for a while now and therefore the impact would be dictated by the situation in place when the Chinese currency becomes dominant-IF it does.

Later


Growth today means export-and therefore a cheap currency.

Question:
Does growth today of the world economy mean export to other planets?

[oecarb]

Gentlemen,
This has been a most interesting discussion which I have been eagerly following. While I don't understand a great deal that has been discussed here, I'd like your opinion on an issue and its ramifications, particularly to the United States' citizenry.

For the past year, the Chinese have been surreptitiously trying to make the Renminbi the world's reserve currency, a position that has been held by the USD. What do you think the economic impact would be on the USA, and Europe, for that matter if the Renminbi did indeed become the world's reserve currency?

In his speech this week at the ASEAN Conference, China's President made several remarks that were diplomatically disguised in a manner that bespoke of China's desire to have global trade conducted in its currency.

Is this a good thing? If so, why? If not, then why not? What effect would this change in reserve currency have on the average american? And, will it have any impact on the rest of the world?

A reserve currency, or anchor currency, is a currency that is held in significant quantities by many governments and institutions as part of their foreign exchange reserves. It also tends to be the international pricing currency for products traded on a global market, and commodities such as oil, gold, etc.

This permits the issuing country to purchase the commodities at a marginally lower rate than other nations, which must exchange their currencies with each purchase and pay a transaction cost. For major currencies, this transaction cost is negligible with respect to the price of the commodity. It also permits the government issuing the currency to borrow money at a better rate, as there will always be a larger market for that currency than others.

http://en.wikipedia.org/wiki/Reserve_currency

One advantage to any country issuing the currency - they get to play with the printing press. ;)

[sacky]

how much money is china owed by the us.

i found this piece of info which makes me think a lot stinks here,how could they not be srcapping the barrel


In July of 2009, the United States paid more than $19 billion in interest on the public debt [$19,812,486,187.83, Office of the Public Debt]. In 2009, according to the CBO, $187 billion of taxpayer funds were used just to pay interest on the debt—not to pay off the debt, just to pay interest on it.
Every American worker’s share of the national debt is more than $90,000.[Prove it...] (http://www.defeatthedebt.com/understanding-the-national-debt/how-much-do-we-owe/)
According to the Department of the Treasury, foreign holders of our national debt are owed a combined total of about $4.5 trillion (June 2011).
As reported by the Treasury Department, the top ten countries and entities holding U.S. debt are: Japan, China, the United Kingdom, Oil Exporters, Caribbean Banking Centers, Brazil, Hong Kong, Russia, Luxembourg, and Taiwan.

[oecarb]

Yes, seems like some kind of accounting fraud somewhere.

Edyle,

Technically, this is sound accounting practice, I believe.

You are a money lender. You lend me $1000, I sign an agreement promising to pay you back $10 a month for 10 years. You take out payment protection insurance insuring yourself against my defaulting in case I die, lose my job or get too ill to work etc.

All perfectly reasonable.

If you need more money to lend out, you can borrow money from your bank and use this agreement as collateral.

As far as the bank is concerned, this is as good as cash.


Problems arise if a rumour starts that I have terminal cancer or the company I work for is about to go bust.

The more these rumours spread, the more people will believe them.

Next thing, a lot of people start betting I will default some even mortgaging their house.

The "betting shops" then have to cover themselves. So they raise their charges and insure themselves with other "betting shops".

These then have to cover themselves with other betting shops etc.

So you have a helluva lot of people hoping I would default and a helluva lot praying to God that I pay.

Nobody will lend me money. Your bank refusing to lend you more money. You now catching your tail trying to pay the bank instalments. And my boss' bank now looking at him suspiciously too.

Sometime, this has to collapse. It can't go on forever. IMO

[edyle]

Edyle,

Technically, this is sound accounting practice, I believe.

You are a money lender. You lend me $1000, I sign an agreement promising to pay you back $10 a month for 10 years. You take out payment protection insurance insuring yourself against my defaulting in case I die, lose my job or get too ill to work etc.

All perfectly reasonable.

If you need more money to lend out, you can borrow money from your bank and use this agreement as collateral.

As far as the bank is concerned, this is as good as cash.


Problems arise if a rumour starts that I have terminal cancer or the company I work for is about to go bust.

The more these rumours spread, the more people will believe them.

Next thing, a lot of people start betting I will default some even mortgaging their house.

The "betting shops" then have to cover themselves. So they raise their charges and insure themselves with other "betting shops".

These then have to cover themselves with other betting shops etc.

So you have a helluva lot of people hoping I would default and a helluva lot praying to God that I pay.

Nobody will lend me money. Your bank refusing to lend you more money. You now catching your tail trying to pay the bank instalments. And my boss' bank now looking at him suspiciously too.

Sometime, this has to collapse. It can't go on forever. IMO

If the bank accepts your agreement as collateral that's their business. It's like accepting a Porsche as collateral; maybe it'll crash and get totally destroyed.

If a lot of people start BETTING by mortgaging their house, maybe a lot of people will lose their BETS and therefore lose their house. Somehow, the end result of BETTING is you LOSE eventually.

With a helluva lot of people BETTING one way and a helluva lot BETTING the other way, one side is going to win and one side is going to lose. But isn't the trouble is that the whole thing is like a con game? One side 'wins' the other side 'loses' but the loser's upfront bet turns out to be worthless so the winner complains that "somebody" has to pay?

It's about
1: GAMBLING
2: gambling with ficticious assets: if you win you win; but if you lose, the other guy ain't getting paid and he's PISSED.
The fraud is in the ficticious assets which he accepted as collateral otherwise it's merely his loss.

[oecarb]

It's about
1: GAMBLING
2: gambling with ficticious assets: if you win you win; but if you lose, the other guy ain't getting paid and he's PISSED.

They don't call it gambling. They call it a futures market. And they say it is safe because they can hedge against it by betting a certain amount against themselves in case they lose. So they figure if they win they win and if they lose they win too because they also bet they going to lose.

But, as you say, somebody bound to lose. And it only take one to lose for the whole thing to collapse.

Which is why I think the world is about to witness the bursting of the biggest bubble ever devised by mankind.

[guyguy]

how much money is china owed by the us.

i found this piece of info which makes me think a lot stinks here,how could they not be srcapping the barrel

In July of 2009, the United States paid more than $19 billion in interest on the public debt [$19,812,486,187.83, Office of the Public Debt]. In 2009, according to the CBO, $187 billion of taxpayer funds were used just to pay interest on the debt—not to pay off the debt, just to pay interest on it.
Every American worker’s share of the national debt is more than $90,000.[Prove it...] (http://www.defeatthedebt.com/understanding-the-national-debt/how-much-do-we-owe/)
According to the Department of the Treasury, foreign holders of our national debt are owed a combined total of about $4.5 trillion (June 2011).
As reported by the Treasury Department, the top ten countries and entities holding U.S. debt are: Japan, China, the United Kingdom, Oil Exporters, Caribbean Banking Centers, Brazil, Hong Kong, Russia, Luxembourg, and Taiwan.
Good stuff sacky. Can you post a link so that I can read the entire article?

[edyle]

They don't call it gambling. They call it a futures market. And they say it is safe because they can hedge against it by betting a certain amount against themselves in case they lose. So they figure if they win they win and if they lose they win too because they also bet they going to lose.

But, as you say, somebody bound to lose. And it only take one to lose for the whole thing to collapse.

Which is why I think the world is about to witness the bursting of the biggest bubble ever devised by mankind.

Now right there, there would be something wrong; if you could go into a place, and bet 2 sides and win either way, something's got to be wrong somewhere?

[miktay]

If the bank accepts your agreement as collateral that's their business. It's like accepting a Porsche as collateral; maybe it'll crash and get totally destroyed.

If a lot of people start BETTING by mortgaging their house, maybe a lot of people will lose their BETS and therefore lose their house. Somehow, the end result of BETTING is you LOSE eventually.

With a helluva lot of people BETTING one way and a helluva lot BETTING the other way, one side is going to win and one side is going to lose. But isn't the trouble is that the whole thing is like a con game? One side 'wins' the other side 'loses' but the loser's upfront bet turns out to be worthless so the winner complains that "somebody" has to pay?

It's about
1: GAMBLING
2: gambling with ficticious assets: if you win you win; but if you lose, the other guy ain't getting paid and he's PISSED.
The fraud is in the ficticious assets which he accepted as collateral otherwise it's merely his loss.

FYI thiz iz the method by which the big bankers make money.

They no longer rely much on deposits to fund their bets.

Big banks borrow in the wholesale markets.

Wholesale market investors are mo sophisticated than the avg bank depositor.

They can turn off the cash spigot and refuse to renew a loan on very short notice.

This iz the modern day version of a bank run:

*Lack of confidence has caused funding in the wholesale market 2 dry up.

*Banks are highly leveraged. In many cases 30-40:1

*Banks cannot maintain their risky bets

*Lack of funding forces a liquidation their positions at a loss.

*Balance sheets will be impaired.

Thiz iza downward vicious spiral.

Thiz iz Lehman Bros in 2008.

Inna modern day bank run u do not see a queue in front of the bank branches.

[miktay]

how much money is china owed by the us.

i found this piece of info which makes me think a lot stinks here,how could they not be srcapping the barrel


In July of 2009, the United States paid more than $19 billion in interest on the public debt [$19,812,486,187.83, Office of the Public Debt]. In 2009, according to the CBO, $187 billion of taxpayer funds were used just to pay interest on the debt—not to pay off the debt, just to pay interest on it.
Every American worker’s share of the national debt is more than $90,000.[Prove it...] (http://www.defeatthedebt.com/understanding-the-national-debt/how-much-do-we-owe/)
According to the Department of the Treasury, foreign holders of our national debt are owed a combined total of about $4.5 trillion (June 2011).
As reported by the Treasury Department, the top ten countries and entities holding U.S. debt are: Japan, China, the United Kingdom, Oil Exporters, Caribbean Banking Centers, Brazil, Hong Kong, Russia, Luxembourg, and Taiwan.


Twas John Connally, Treasury Sec in the Nixon admin that appropriately opined to the world...on ending the USD convertibility to gold in the 1970s:


It's our currency but it's your problem

Fm another pov: if u owe the bank 100k and can't pay you've got a problem.

If you owe the bank 15 trillion and can't pay the bank has a problem.

A reserve fiat USD iza global issue.

[oecarb]

*Banks are highly leveraged. In many cases 30-40:1

Thiz iz Lehman Bros in 2008.

If you're leveraged 40 to 1, you can bet $40 for every $1 you have.

If you win, you win big.

If you lose, you have to pay back $40 for every $1 you lose.

If you can use somebody else's money, that's even better.


MF Global (OTC Markets Group: MFGLQ), formerly known as Man Financial, was a major global financial derivatives MF Global provided exchange-traded derivatives, such as futures and options as well as over-the-counter products such as contracts for difference (CFDs), foreign exchange and spread betting. MF Global was also a primary dealer in United States Treasury securities. On October 30, 2011, a unit of the New York-based brokerage reported a “material shortfall” in customer funds that are required to be segregated under rules of the U.S. Commodity Futures Trading Commission. Customer accounts with $5.45 billion were frozen Oct. 31, the same day the parent company - MF Global Inc. - filed the eighth-largest U.S. bankruptcy after making a wrong-way $6.3 billion trade on its own behalf on bonds of some of Europe’s most indebted nations The shortfall in customer accounts may be [/b]as large as $1.2 billion[/b], or 22%, according to the trustee overseeing liquidation. MF Global Holdings Ltd. may have moved hundreds of millions of dollars from its futures client accounts to other accounts before its Oct. 31 bankruptcy. [2][3] The bankruptcy highlights ongoing efforts to regulate complex global financial firms as well as the European sovereign debt crisis.

http://en.wikipedia.org/wiki/MF_Global

[guyguy]

So, can anyone address my questions in a comprehensive and lucid manner?

[miktay]

If you're leveraged 40 to 1, you can bet $40 for every $1 you have.

If you win, you win big.

If you lose, you have to pay back $40 for every $1 you lose.

If you can use somebody else's money, that's even better.

Carbs:

Leverage cuts both ways.

At 40:1 gearing...an equity decline of 2.5% wud generate a margin call.

This iz modern global finance.

It iza house of cards perched atop a ponzi scheme.

[edyle]

If you're leveraged 40 to 1, you can bet $40 for every $1 you have.

If you win, you win big.

If you lose, you have to pay back $40 for every $1 you lose.

If you can use somebody else's money, that's even better.

That is where the CRIME would be.

[miktay]

So, can anyone address my questions in a comprehensive and lucid manner?

GG:

China has pursued the same wobbly economic policies as Western countries to boost its economy: Keynesian economics

A reserve fiat currency enables a host country to perpetrate financial and monetary indescretions without short term consequences.

There is more room to inflate. Forin gubmints that hold the reserve currency are less likley to dump it.

It is easier to destabalize unfreindly forin gubmints and start wars with a reserve fiat currency.

Before USD...Sterling wuz the reserve currency. The Royal Navy and British colony garrisons were used to support sterling. In those days the sun never set on the British empire.

Similarly the 11 aircraft carriers of the US Navy as well as forin US military bases are used to 'support' the US Dollar.

This iza powerful incentive 4 forin gubmints to hold the USD.

China does not have this.

The Chinese Yuan iz unlikely to replace the USD as the reserve currency in the near future.

This does not imply the USD does not have problems. IMO the US iz insolvent. It's debts far exceed those of the Eurozone.

But in the near term USD iz considered a 'safe' haven compared to the Euro.

But the day will come when USD will fall out of favor.

[guyguy]

miktay,
When the day comes that the USD falls out of favour, do you believe that the Yuan will replace it? If so, why, and if not why not? Which currency do you think will replace the USD and why do you think so? I know some of this is speculation but I strongly believe that there is going to be a financial crisis that will make all the previous ones seem insignificant. Additionally, I don't believe that the USA will ever go to war against China. What are your thoughts on that?

How do you think the adoption of another currency as the reserve currency will affect the USA?
Guy

[oecarb]

miktay,
When the day comes that the USD falls out of favour, do you believe that the Yuan will replace it? If so, why, and if not why not? Which currency do you think will replace the USD and why do you think so? I know some of this is speculation but I strongly believe that there is going to be a financial crisis that will make all the previous ones seem insignificant. Additionally, I don't believe that the USA will ever go to war against China. What are your thoughts on that?

How do you think the adoption of another currency as the reserve currency will affect the USA?
Guy

Guy, I would add my bit here. I agree with the other forumites on certain issues but disagree on others. My thoughts on this are basically encapsulated in the following that I posted before:


A reserve currency, or anchor currency, is a currency that is held in significant quantities by many governments and institutions as part of their foreign exchange reserves. It also tends to be the international pricing currency for products traded on a global market, and commodities such as oil, gold, etc.

This permits the issuing country to purchase the commodities at a marginally lower rate than other nations, which must exchange their currencies with each purchase and pay a transaction cost. For major currencies, this transaction cost is negligible with respect to the price of the commodity. It also permits the government issuing the currency to borrow money at a better rate, as there will always be a larger market for that currency than others.

http://en.wikipedia.org/wiki/Reserve_currency

So:


Countries hold the reserve currency mainly because commodities are priced in the reserve currency and most international transactions are carried out in the reserve currency.
If they do not have enough, they must convert their own currency to the reserve currency and they are subject to the exchange rate at the time - unless they can reach an arrangement to use their own or some other currency.
The country that issues the reserve currency is at an advantage because it can print as much as it wants of its own currency. Other countries are helpless. If they lose faith in the currency, they can't just dump it because this would reduce their wealth.


Now, I will list a some events:


Strauss Kahn when he was at the IMF was in favour of expanding the use of SDRs (special drawing rights). China was in favour of this though, obviously, they would prefer their own.
http://www.imf.org/external/np/exr/facts/sdr.htm
When Lagarde was canvassing for the position of Director of the IMF, she sought the support of many emerging countries and got Chima's support.
As soon as she got the job, she created a post of deputy director and appointed a Chinese national Zhu Min.
http://www.bbc.co.uk/news/business-14131719


My reading of the situation (and I am not an economist - just an enthusiastic amateur) is that the derivatives market is a bubble about to burst. I think Miktay agrees with me here.


Carbs:

This iz modern global finance.

It iza house of cards perched atop a ponzi scheme.

However, where we disagree (I think) is that if this happens before the world diversifies away from the USD as world reserve currency, I think that, since everything is priced in USD, this would be it for the dollar. No amount of warships would help in that case.

Still, as I say, I am not an expert but I hope this might point you in certain directions and lead you to form your own opinion.

[edyle]

miktay,
When the day comes that the USD falls out of favour, do you believe that the Yuan will replace it? If so, why, and if not why not? Which currency do you think will replace the USD and why do you think so? I know some of this is speculation but I strongly believe that there is going to be a financial crisis that will make all the previous ones seem insignificant. Additionally, I don't believe that the USA will ever go to war against China. What are your thoughts on that?

How do you think the adoption of another currency as the reserve currency will affect the USA?
Guy

I think it's called the Renminbi (I probably have the spelling wrong) that the Chinese are looking to create as an alternative to the USD and not specifically the existing Yuan.

[oecarb]

I think it's called the Renminbi (I probably have the spelling wrong) that the Chinese are looking to create as an alternative to the USD and not specifically the existing Yuan.
....
"Renminbi" is the official name of the currency introduced by the Communist People's Republic of China at the time of its foundation in 1949. It means "the people's currency".

"Yuan" is the name of a unit of the renminbi currency. Something may cost one yuan or 10 yuan. It would not be correct to say that it cost 10 renminbi.

An analogy can be drawn with "pound sterling" (the official name of the British currency) and "pound" - a denomination of the pound sterling. Something may cost £1 or £10. It would not be correct to say that it cost 10 sterling.

http://www.bbc.co.uk/news/10413076

[miktay]

When the day comes that the USD falls out of favour, do you believe that the Yuan will replace it? No
If so, why, and if not why not?
China has economic problems. It has pusued the same failed Keynesian exonomic policies as the Weatern Nations. It iz has severe debt. The debts are at the municipal level. Official Chinese stats do not report this. China prints money to monetize this debt. There are mega cities in China that do not have inhabitants.

China buys US gubmint IOUs to keep the Yuan low. They hold at least 1 trillion worth of these. This is a not so secret game. As the bishop said to the vicar : wink wink nudge nudge.


Which currency do you think will replace the USD and why do you think so?

I dont believe fiat currencies are sustainable. They're easily manipulated. Fiat currency iz backed by nothing more than gubmint promises. Gubmints are habitual liars.

That said if I had to I would look at CHF, Singapore $, Aus $, Chilean Peso and choose the least encumbered.

Bear in mind there iza slosh of global money seeking a home. Bubbles will grow and deflate. There are few buy and hold investments. Investment speculation iz the order of the day. 'One' must keep ahead of the pack 2 sucessfully speculate.


I know some of this is speculation but I strongly believe that there is going to be a financial crisis that will make all the previous ones seem insignificant. Agreed.


Additionally, I don't believe that the USA will ever go to war against China. What are your thoughts on that?

China tries to exert her military and economic might but iz thwarted by the USA. The US jealously guards her waning relations with other nations but China is the new ting on the block.

China cannot directly go to war with the USA. She would be annihilated.

If there iz war it would likely be a proxy war as was the Korean war.

If such an event were to occur 'one' speculates it could be a China-Pakistan vs US-India conflict.


How do you think the adoption of another currency as the reserve currency will affect the USA?

The US dollar will be devalued.

US gubmint iz 15 trillion in debt but thiz understates the true picture of US insolvency.

If the US were a corporation its balance sheet would show a 250 trillion deficit. For perspective total world GDP iz currently $70 trillion. The US cannot repay thiz level of debt. It iz mathematically impossible.

IMO in the med to long term the US iz likely to:

*inflate the USD
*start more wars.
*heavily tax US citizens
*impose capital controls
*increase surveillance of US persons
*debase the US constitution & BOR

[edyle]

....

Thanks.
It makes sense if by renminbi one means 'the people's currency' (presumably it is the mandarin for it);
and as for pound sterling: it would make sense if by that one meant 1 pound of silver! :)

[miktay]

Mo bad news on the global economy.

Thiz iza fine mess you've gotten us into Maynard.


China vice premier sees chronic global recession | Reuters

BEIJING | Sun Nov 20, 2011 1:41am EST

(Reuters) - A long-term global recession is certain to happen and China must focus on domestic problems, Chinese Vice Premier Wang Qishan has said.

"The one thing that we can be certain of, among all the uncertainties, is that the global economic recession caused by the international financial crisis will be chronic," Wang was quoted by the official Xinhua news agency as saying at the weekend.

Wang's comments were the most bearish forecast ever by a top Chinese decision-maker about the world economy, and Beijing's worry about a worsening global environment could translate into an impetus for pro-growth policies at home.

China launched a massive fiscal stimulus package with a price tag of 4 trillion yuan ($650 billion) in late 2008 to avert a big impact from the global financial turmoil.

According to Xinhua, Wang did not speak this time about any major policy change but reiterated that banks should be more flexible lending to the agricultural sector and small firms.

"As for our country, which relies highly on external demands, we must see the situation clearly and get our own business done," Xinhua quoted Wang as saying, referring to exports.

China's central bank, which sometimes has to report to Wang, who is in charge of China's financial sector, said last week that it is ready to fine-tune monetary policy if needed.

At a meeting of local government officials and financial executives in the central province of Hubei on Saturday, Wang said local financial institutions such as city commercial banks and credit cooperatives should not seek to expand their business beyond their regions.

Wang also urged banks to pay close attention to the international financial situation. Xinhua did not give further details.

[oecarb]

Thanks.
it would make sense if by that one meant 1 pound of silver! :)

That was the original meaning.


Great Britain's early use of the silver standard is still reflected in the name of its currency, the pound sterling, which traces its origins to before the Middle Ages (see Anglo-Saxon pound), when King Offa of Mercia introduced the silver penny, which copied the denarius of Charlemagne's Frankish Empire.

http://en.wikipedia.org/wiki/Silver_standard

[oecarb]

Miktay, you might find this interesting:


While many investors have been distracted by the goings on in Europe, China has been making a dent in the global gold market by making it easier for investors to buy and invest in the yellow metal.

The goal: To dominate the global gold market and carve out a new role for its currency, the yuan.

China and other developing nations like India have been encouraging citizens to buy and hold physical gold, in forms ranging from jewelry and coins to bullion bars. China's aggressive promotion has pushed Chinese consumer demand for gold up 25% overall this year - much higher than the 7% global average.

World Gold Council (WGC) Far East Managing Director Albert Cheng, who predicted in March 2010 that Chinese gold demand would double by 2020, noted: "We now believe this doubling may, in fact, be achieved far sooner."

China is pushing gold because it wants the government and citizens to build financial reserves in assets stronger than the U.S. dollar, euro, and other weakening currencies. It also increases China's role in the precious metals market.

But there's another effect of this push for gold ownership: it's dislodging the dollar as the world's main reserve currency..........

..........China plans to open the Pan Asia Gold Exchange (PAGE) in June 2012. PAGE will feature a market-driven pricing system and offer both physical gold purchases, including distribution or storage, and derivative products based on physical gold.

It will be open to anyone, either directly or through an agreement with The Agricultural Bank of China (ABC). Customer information for the exchange and the bank will be fully integrated, giving PAGE direct access to the accounts of 320 million retail customers and 2.7 million corporate clients in roughly 24,000 branches. The partnership makes gold buying incredibly easy for customers, who will be able to buy gold and silver online, with payment coming right out of their bank accounts.

Analysts expect the impact of this arrangement to be enormous, perhaps even changing the way global gold prices are established.

Currently, the futures market in London - overseen by the London Bullion Market Association (LBMA) - "fixes" the spot price of gold each morning and afternoon, based on trading action in London and on America's COMEX market. However, the LBMA and COMEX contracts are backed by just 10% of face value in physical gold, while the PAGE derivatives will be backed by a much larger percentage - meaning trading volume there could change worldwide supply-and-demand dynamics for the yellow metal.

This means the focus of global gold trading could shift quickly to China, where ABC and five other major Chinese banks will fix the gold price each morning at 8 a.m. local time - well ahead of the opening of European and U.S. metals markets.

If the link between PAGE and ABC accounts is a success, other small Chinese banks are already poised to offer over-the-counter (literally) and online gold sales to their customers.

This will push up prices as consumer demand climbs even higher. And, since the price fix will be in yuan, the currency will gain significant international legitimacy as a result.

http://moneymorning.com/2011/11/22/china-changing-global-gold-market/

[miktay]

U can run but u cant hide. Another bubble in the global economy looks set to buss.

http://www.thestreet.mobi/story/11309298/1/could-india-go-the-way-of-greece-and-italy.html


Could India Go the Way of Greece and Italy?
By Lindsey Bell - 11/14/11 - 8:30 AM EST
Tickers in this article: CMI CSCO
NEW YORK (TheStreet) -- Could India, which has the world's second-fastest-growing economy, follow the lead of Greece and Italy?
Long-term yields on India's debt are about 9%, much higher than Italy's when the European nation started to quake, an ordeal that ended with the resignation of Prime Minister Silvio Berlusconi two days ago. India's high yields are less concerning because the country's economy is growing quickly. Still, there are signs of slowing growth and a weakening banking system.

India's economy, like China's, is struggling to maintain rapid growth against a backdrop of high inflation, rising interest rates and monetary tightening. The country's trade deficit is widening, inflation is very high, and the savings rate has been de-regulated even as rates are already rising. This year, India's central bank expects GDP to grow by 7.6%, less than an earlier estimate of 8%.
The country's trade deficit widened to its highest level in 17 years in October. Some analysts think the deficit could get even bigger as higher oil costs drive up the value of imports. The deficit has weighed on the value of the rupee and, in turn, pushed up inflation.
In fact, the inflation rate has stayed above 9% since the start of last December. In an effort to cap rising prices, the central bank of India raised interest rates for the 13th time in October, making borrowing more difficult.
In a surprise move last week, Moody's downgraded the outlook on India's banking system to "negative" from "stable." The ratings agency, trying to anticipate deterioration in the banking system, cited asset quality as the cause for the downgrade.
A majority of the banks are owned by the government, and it is assumed that state-owned lenders account for about three-quarters of the market in terms of assets. Government ownership means they won't let the system fail, but it could also mean large capital infusions by the government if things go awry.
State Bank of India, one of the country's largest banks, reported that defaults on loans may increase and set aside funds to cover those potential defaults. Prior to the announcement, in October, Moody's downgraded the company's credit rating to D+.

[miktay]

However, where we disagree (I think) is that if this happens before the world diversifies away from the USD as world reserve currency, I think that, since everything is priced in USD, this would be it for the dollar. No amount of warships would help in that case.


Carbs:

See the below 4a OECD list of gubmint, household and corporate debt compared to GDP.

Note that some places thought 2b safe have hi levels of relative debt.

When and if the world moves away from the reserve fiat US dollar...which country/fiat currency can it choose?

http://images.johnmauldin.com/uploads/charts/110711-03.jpg

[oecarb]

Carbs:

See the below 4a OECD list of gubmint, household and corporate debt compared to GDP.

Note that some places thought 2b safe have hi levels of relative debt.

When and if the world moves away from the reserve fiat US dollar...which country/fiat currency can it choose?


Miktay, I know I am not an economist, but even I can see that this list is irrelevant re a "choice" of a reserve currency.

In the first case, the "choice", in my view, would not be a conscious choice but rather, what happens to slow the collapse at a certain point. If you fall of a cliff, you not going to fuss over if it is a big rock or a tree that slows your fall.

Next, I think it is more important to know what the debt was used for and what the underlying economic state is rather than the size of the debt.

For instance, you and I could earn the same amount and we might have the same amount of debt, but if you have your mortgage paid off and you borrowed money to buy another house, this is very different from if I still have a mortgage and I borrowed to buy a big flashy car.

[miktay]

Miktay, you might find this interesting:

Carbs:

Observe the syntax used in yr cited article. The word 'fix' iz used twice


Currently, the futures market in London - overseen by the London Bullion Market Association (LBMA) - "fixes" the spot price of gold each morning and afternoon, based on trading action in London and on America's COMEX market.


And, since the price fix will be in yuan, the currency will gain significant international legitimacy as a result.

Gold iz the least transparent of commodity markets.

It iz heavily manipulated.

In gold markets the fix iz in. Literally.

The manipulators are da good ole boys. JP Morgan, Goldman Sachs, Deutshe Bank et al.

Their naked shorts keep downward pressure on prices.

Bankers and gubmints hate gold.

Gold iza challenge to their fiat currency system.

Fiat currencies give gubmint and bankers
control over the people.

'One' can speculate why Chinese banks wish 2 exert such influence in the gold market.

Perhaps Chinese banks wish to join da good ole boys club.

Perhaps China wishes to hedge inflation. Her mercantilistic trade policies have exacerbated domestic inflation. Chinese food inflation iz 'officially' 12%. But in reality it iz higher. Chinese peasants riot over rising prices. This iz not widely reported in the mass media.

What ever the real reason one thing iz 4 certain.

Chinese influence over gold will be for China's benefit.

In addition to Anglo interference gold will be manipulated by the Chinese


The goal: To dominate the global gold market and carve out a new role for its currency, the yuan.

Gold iza fringe investment. Per Keynes gold iz still considered a 'barbarous relic'.

Gold represents just 1% of global financial assets.

It iz not clear that yuan denominated gold trading will do much to bolster the yuan's reserve currency appeal.

It would be different if oil wuz quoted in yuan.

But not gold.

[oecarb]

Interesting........


Carbs:

Gold iz the least transparent of commodity markets.

It iz heavily manipulated.

And, if the Chinese and their citizens buy up gold, that would push up the price of gold. Wouldn't it? And wouldn't people holding gold become more and more reluctant to sell, pushing it up even higher?


'One' can speculate why Chinese banks wish 2 exert such influence in the gold market.

Chinese influence over gold will be for China's benefit.

In addition to Anglo interference gold will be manipulated by the Chinese

If the price of gold goes up and China has been buying gold for dollars, doesn't that mean that China is dumping dollars for an appreciating asset?

And what happens to the dollar in the meantime? And what happens to dollar-denominated debt?

[sacky]

GG:

China has pursued the same wobbly economic policies as Western countries to boost its economy: Keynesian economics

A reserve fiat currency enables a host country to perpetrate financial and monetary indescretions without short term consequences.

There is more room to inflate. Forin gubmints that hold the reserve currency are less likley to dump it.

It is easier to destabalize unfreindly forin gubmints and start wars with a reserve fiat currency.

Before USD...Sterling wuz the reserve currency. The Royal Navy and British colony garrisons were used to support sterling. In those days the sun never set on the British empire.

Similarly the 11 aircraft carriers of the US Navy as well as forin US military bases are used to 'support' the US Dollar.

This iza powerful incentive 4 forin gubmints to hold the USD.

China does not have this.

The Chinese Yuan iz unlikely to replace the USD as the reserve currency in the near future.

This does not imply the USD does not have problems. IMO the US iz insolvent. It's debts far exceed those of the Eurozone.

But in the near term USD iz considered a 'safe' haven compared to the Euro.

But the day will come when USD will fall out of favor.

china is using its position in london to buy up as much american debt as possible,what does that say.

[oecarb]

china is using its position in london to buy up as much american debt as possible,what does that say.

Sacky, do you have a link for this?

[sacky]

Sacky, do you have a link for this?

http://www.davemanuel.com/so-how-much-money-does-the-us-owe-to-china-85/

[sacky]

Which Foreign governments own the most U.S. debt?

http://www.davemanuel.com/us-national-debt-clock.php


Answer: Here is the Top 10 (as of Sep/2011)

1. China, Mainland, $1173.5 billion dollars
2. Japan, $914.8 billion dollars
3. United Kingdom, $353.4 billion dollars
4. Oil Exporters*, $234.4 billion dollars
5. All Other, $210.9 billion dollars
6. Brazil, $210.0 billion dollars
7. Taiwan, $154.3 billion dollars
8. Carib Bnkng Ctrs**, $128.7 billion dollars
9. Hong Kong, $111.9 billion dollars
10. Switzerland, $108.4 billion dollars

*Includes oil exporting countries such as Saudi Arabia and Iran

**includes countries such as Bermuda and the Cayman Islands

Of the $4.3 trillion dollars of US debt that is owned by foreign governments, China and Japan own nearly half, as evidenced by this chart:

[miktay]

Interesting........



And, if the Chinese and their citizens buy up gold, that would push up the price of gold. Wouldn't it? And wouldn't people holding gold become more and more reluctant to sell, pushing it up even higher?



If the price of gold goes up and China has been buying gold for dollars, doesn't that mean that China is dumping dollars for an appreciating asset?

And what happens to the dollar in the meantime? And what happens to dollar-denominated debt?
Carbs:

Gold iz generally believed 2b headed higher. The PAGE should improve price discovery.

But trees do not grow to the moon. Gold will not always appreaciate.

Gold iz sought in time of uncertainty and loose monetary policy. People will hold gold as long as these factors persist. Some will never sell. East Indian women never sell their gold.

Prices of dollar denominated debt like most other debt will likely fall in the long term. There iz too much global debt.

The dollar will likely depreciate in the long term. In the short term it is appreciating.

Thiz is partially due to the Eurozone. Uncertainty in the Eurozone continues to grow.

The Dexia nationalization iz not going well.

Dexia is the beginning of the Eurozone banking crisis. The Euro banking crisis will get worse.


France, Belgium tussle over Dexia spooks markets

By Robert-Jan Bartunek

BRUSSELS (Reuters) - Belgium is leaning on
France (http://uk.reuters.com/places/france) to pay more into emergency
support for failed lender Dexia, newspapers reported, spooking investors who
thought a 90 billion euro (77 billion pound) rescue deal only needed rubber
stamping.

The countries are wrangling about short-term funding guarantees meant to wean
Dexia's "bad bank" off emergency liquidity and allow it to re-enter financial
markets, two Belgian newspapers reported.

"Belgium wanted Paris to guarantee more than had been agreed so far, because
France can fund itself at a cheaper rate than our country," Belgian daily De
Tijd said, following a similar report in De Standaard.

The newspaper did not name its sources.

Both countries on Wednesday denied that the restructuring plan for Dexia was
being renegotiated, with Belgian Finance Minister Didier Reynders saying he
hoped to reach an agreement with the European Commission in the coming
days.

In October, Dexia secured state guarantees from the two countries and
Luxembourg for up to 90 billion euros of borrowings over the next 10 years, but
talks on the fine print are showing little progress, De Tijd said.

http://uk.reuters.com/article/2011/11/23/uk-dexia-guarantees-idUKTRE7AM0PJ20111123

German bundt offerings are undersubscribed. None would have thought contagion would have reached the inner sanctum of the EZ at this juncture.

Ms Merkel has two choices: print money or break up the Eurozone. In the long term she may do both.


The decision of investors to boycott German bonds should be a huge wake-up
call for Angela Merkel
For months now the German Chancellor Angela
Merkel, behaving like some modern day King Canute trying to hold back the waves,
has remained resolute in her conviction that austerity measures alone will save
the eurozone.

This week however, there was a moment of truth
for the obdurate German leader. She discovered that even nations with the most
powerful and productive economies can be overwhelmed by the collective power of
the markets.

In what amounted to an enormous snub for
Germany and the eurozone, global investors refused to buy a large chunk of
newly-issued German bonds or parcels of her nation’s debt. Some 35 per cent of
the Euro 6 billions on offer was left unsold.

Bonds are issued by countries to fund their
borrowings. They are the equivalent of an IOU from governments to global
investors such as pension funds and insurance companies.

And because they carry a government guarantee
that they will be repaid with interest, they have always been regarded as one of
the safest forms of investment.

http://www.dailymail.co.uk/debate/article-2066294/The-decision-investors-boycott-German-bonds-huge-wake-Angela-Merkel.html?ito=feeds-newsxml



In volatile times money managers run for cover. For decades safe harbor has been the USD and treasuries.

Unless there is an unforeseen event it will be years before the dollar iz displaced as the primary world reserve currency.

[miktay]

china is using its position in london to buy up as much american debt as possible,what does that say.

Sacky:
China does not buy US debt because it needs investments.

It buys US debt to keep the US China trade going.

One of the best ways to ensure a market for your product iz to offer easy financing.

It doing so China exacerbates domestic inflation. Chinese citizens pay the price for a low yuan.

This is naked mercantilismn. The US knows this. It grumbles about the low yuan. This is for show. The US plays the game.

[oecarb]

Carbs:

Gold iz sought in time of uncertainty and loose monetary policy. People will hold gold as long as these factors persist. Some will never sell. East Indian women never sell their gold.

Miktay, This is very true. Most people would hang onto anything that is rising in value - usually till it is too late.
The following shows the distribution of the world's gold holdings (2008)

Jewelry.........................52%
Central banks...................18%
Investment (bars, coins)........16%
Industrial......................12%
Unaccounted......................2%

http://en.wikipedia.org/wiki/Gold_reserve

The only area where some sales would be likely, in my opinion, is in the investment sector and even there most would probably not be willing to sell.

At today's prices all investment gold is worth about $784 billion.

What do you suppose would happen to prices if there is definitely a concerted action by a country with $1.3 trillion free cash trying to buy up any available gold and a lot of people/institutions don't want to sell?

[sacky]

Sacky:
China does not buy US debt because it needs investments.

It buys US debt to keep the US China trade going.

One of the best ways to ensure a market for your product iz to offer easy financing.

It doing so China exacerbates domestic inflation. Chinese citizens pay the price for a low yuan.

This is naked mercantilismn. The US knows this. It grumbles about the low yuan. This is for show. The US plays the game.

then you will do so in a trade capacity,not gobbling up anything kinda shark like.

[sacky]

Carbs:

Gold iz generally believed 2b headed higher. The PAGE should improve price discovery.

But trees do not grow to the moon. Gold will not always appreaciate

Gold iz sought in time of uncertainty and loose monetary policy. People will hold gold as long as these factors persist. Some will never sell. East Indian women never sell their gold.

Prices of dollar denominated debt like most other debt will likely fall in the long term. There iz too much global debt.

The dollar will likely depreciate in the long term. In the short term it is appreciating.

Thiz is partially due to the Eurozone. Uncertainty in the Eurozone continues to grow.

The Dexia nationalization iz not going well.

Dexia is the beginning of the Eurozone banking crisis. The Euro banking crisis will get worse.


http://uk.reuters.com/article/2011/11/23/uk-dexia-guarantees-idUKTRE7AM0PJ20111123

German bundt offerings are undersubscribed. None would have thought contagion would have reached the inner sanctum of the EZ at this juncture.

Ms Merkel has two choices: print money or break up the Eurozone. In the long term she may do both.

http://www.dailymail.co.uk/debate/article-2066294/The-decision-investors-boycott-German-bonds-huge-wake-Angela-Merkel.html?ito=feeds-newsxml



In volatile times money managers run for cover. For decades safe harbor has been the USD and treasuries.

Unless there is an unforeseen event it will be years before the dollar iz displaced as the primary world reserve currency.

you do know that paul dacre and the mail is the most anti euro paper in the uk.

[miktay]

you do know that paul dacre and the mail is the most anti euro paper in the uk.

The bigger question: Is he right or is he wrong?

[miktay]

Dbl

[miktay]

Miktay, This is very true. Most people would hang onto anything that is rising in value - usually till it is too late.
The following shows the distribution of the world's gold holdings (2008)

Jewelry.........................52%
Central banks...................18%
Investment (bars, coins)........16%
Industrial......................12%
Unaccounted......................2%

http://en.wikipedia.org/wiki/Gold_reserve

The only area where some sales would be likely, in my opinion, is in the investment sector and even there most would probably not be willing to sell.

At today's prices all investment gold is worth about $784 billion.

What do you suppose would happen to prices if there is definitely a concerted action by a country with $1.3 trillion free cash trying to buy up any available gold and a lot of people/institutions don't want to sell?

Carbs:

$1.3 trillion would likely increase the price of gold at the expense of the USD.

But thIz iz not done in isolation. The outcome iz not clear.

The world still considers the dollar 'safe'. The dollar iz the primary reserve currency. Central bankers are increasing their holdings of USD.

Oil iz still priced in USD

China needs USD to perpetuate the US China trade. A depreciating USD would hurt US demand for Chinese goods. China does not want thiz.

Then there are da good ole boys to consider.

They short the gold market.

It iz not clear where they source their supply.

Some supply iz bought forward fm producers.

Some supply iz leased fm billion banks.

Thiz iz cloak & dagger stuff worthy of a John Le Carre novel.

[miktay]

The popping sounds u hear are not champagne corks.

It iz the sound of bubbles bursting.


House of horrors, part 2
The bursting of the global housing bubble is only halfway through
Nov 26th 2011 | from the print edition

MANY of the world’s financial and economic woes since 2008 began with the bursting of the biggest bubble in history. Never before had house prices risen so fast, for so long, in so many countries. Yet the bust has been much less widespread than the boom. Home prices tumbled by 34% in America from 2006 to their low point earlier this year; in Ireland they plunged by an even more painful 45% from their peak in 2007; and prices have fallen by around 15% in Spain and Denmark. But in most other countries they have dipped by less than 10%, as in Britain and Italy. In some countries, such as Australia, Canada and Sweden, prices wobbled but then surged to new highs. As a result, many property markets are still looking uncomfortably overvalued.

Explore and compare global housing data over time with our interactive house-price tool
The latest update of The Economist’s global house-price indicators shows that prices are now falling in eight of the 16 countries in the table, compared with five in late 2010. [-(For house prices from more countries see our website). To assess the risks of a further slump, we track two measures of valuation. The first is the price-to-income ratio, a gauge of affordability. The second is the price-to-rent ratio, which is a bit like the price-to-earnings ratio used to value companies. Just as the value of a share should reflect future profits that a company is expected to earn, house prices should reflect the expected benefits from home ownership: namely the rents earned by property investors (or those saved by owner-occupiers). If both of these measures are well above their long-term average, which we have calculated since 1975 for most countries, this could signal that property is overvalued.
http://www.economist.com/node/21540231

[oecarb]

Carbs:
$1.3 trillion would likely increase the price of gold at the expense of the USD.
But thIz iz not done in isolation. The outcome iz not clear.
The world still considers the dollar 'safe'. The dollar iz the primary reserve currency. Central bankers are increasing their holdings of USD.
Oil iz still priced in USD
China needs USD to perpetuate the US China trade. A depreciating USD would hurt US demand for Chinese goods. China does not want thiz.
Then there are da good ole boys to consider.
They short the gold market.
It iz not clear where they source their supply.
Some supply iz bought forward fm producers.
Some supply iz leased fm billion banks.
Thiz iz cloak & dagger stuff worthy of a John Le Carre novel.

So, Miktay

Did you know


Relations between the European Union and the People's Republic of China were established in 1975 and the two are each others' largest trading partners.

http://en.wikipedia.org/wiki/People%27s_Republic_of_China%E2%80%93European_Unio n_relations

How can you short a market if cash is being paid?
Why would the sources supply for a lower price if they can get cash?
Seems to me that China can benefit from buying gold and pushing up prices.
And it would be more important for them to support the euro.


With eurozone central banks holding some 64% of the world's gold reserves.........

http://money.cnn.com/2011/11/23/markets/gold_eurozone/index.htm?iid=HP_Highlight

[miktay]

Carbs:

China will not bailout the Eurozone unless there are substantial concessions.

The Chinese economy iz in trouble.

Chinese domestic inflation iz 12%+. China's gubmint debts iz USD 5 trillion+.

The difference between EZ debt and US debt iz timing.

The US can 'kick the can' down the road for some time.

Eurozone debt iz now due.


How can you short a market if cash is being paid?

U sell into the market. Increased supply without increased demand drives down prices.


Why would the sources supply for a lower price if they can get cash?

The supply iz leased.

[oecarb]

Carbs:

China will not bailout the Eurozone unless there are substantial concessions.
The Chinese economy iz in trouble.

Chinese domestic inflation iz 12%+. China's gubmint debts iz USD 5 trillion+.

As far as I understand it, the debt is internal and they still have trillions of USD. Not so? And China aint no democracy.

And they done lay down the concessions they want.


The difference between EZ debt and US debt iz timing.

The US can 'kick the can' down the road for some time.

Eurozone debt iz now due.

Tell that to Merkel. She just taking she time and saying she have to get political union, it might take years and all kinda treaty have to be drawn up.

Meanwhile all them CDS and counter-party deal jumping up in the pot. Could be trillions. You could see a lotta brown pants soon.


U sell into the market. Increased supply without increased demand drives down prices.

I thought you say that the supply of gold limited and a lotta people won't sell. Now this. What if China want to absorb all the excess supply and push up prices because they have a plan?


The supply iz leased.

What you mean by this, Breds?

[sacky]

The bigger question: Is he right or is he wrong?

very wrong,he is one that wants to believe in something which is long gone. the british empire,where they took and took and never want to give back,you heard of the elgin marbles :(

[letric]

very wrong,he is one that wants to believe in something which is long gone. the british empire,where they took and took and never want to give back,you heard of the elgin marbles :(

Of course ...:cool:

[miktay]

very wrong,he is one that wants to believe in something which is long gone. the british empire,where they took and took and never want to give back,you heard of the elgin marbles :(

Them that yearn 4 the good ole days are a dime a dozen...

He may be deluded about British imperial affairs but iz he wrong about the Euro?

[oecarb]

He may be deluded about British imperial affairs but iz he wrong about the Euro?

Well, by my calculations, Lectric started this thread almost 10 weeks ago and the euro is not dead yet.

In fact it has been rising against the dollar over the last week or so.

Interesting?

[miktay]

Well, by my calculations, Lectric started this thread almost 10 weeks ago and the euro is not dead yet.

In fact it has been rising against the dollar over the last week or so.

Interesting?

Carbs:

The Euro rises one week. It falls the following week.

Investors clutch at straws. They want to believe the rumors.

The rumor iz that Santa Claus iz coming to the Eurozone.

At age 7 most children stop believing in
Santa Claus.

7 year olds are smarter than many investors.

[miktay]

Who owes what to whom in the Euro crisis.

Note the largest debtor.

http://www.nytimes.com/interactive/2011/10/23/sunday-review/an-overview-of-the-euro-crisis.html

[edyle]

Carbs:

The Euro rises one week. It falls the following week.

Investors clutch at straws. They want to believe the rumors.

The rumor iz that Santa Claus iz coming to the Eurozone.

At age 7 most children stop believing in
Santa Claus.

7 year olds are smarter than many investors.

Soooooo....
Did the Euro die 4 weeks ago or not?

[edyle]

Well, by my calculations, Lectric started this thread almost 10 weeks ago and the euro is not dead yet.

In fact it has been rising against the dollar over the last week or so.

Interesting?

Yeah, I'd like to hear something about that said.
"Six Weeks to SaveThe Euro .."
Well, Six Weeks have passed....
Sooooooo, what is it, has the Euro been saved? Maybe it's on Life Support???? :o

[lexbarker]

Ay Carbs, are you affected by the reform of the UK pensions?

[miktay]

As far as I understand it, the debt is internal and they still have trillions of USD. Not so? And China aint no democracy.

This is true. China central planning iz as burecratic as that of the former Soviet Union. Despite being the factory to the world China iz largely a communist regime.

65% of China's GDP iz infrastructure.

China builds fast trains, mega cities and large bridges.

But the trains have few riders, the cities few inhabitants and the bridges few crossings.

These assets are unproductive.

These assets require maintainence.

Without nuff rents they will be a drain on the Chinese treasury inna slowing global economy.

http://www.youtube.com/watch?v=widrX8EQdu8&feature=youtube_gdata_player


Tell that to Merkel. She just taking she time and saying she have to get political union, it might take years and all kinda treaty have to be drawn up.

Meanwhile all them CDS and counter-party deal jumping up in the pot. Could be trillions.

You could see a lotta brown pants soon.

There will be nuff brown pants 2 go around.

Markets will savage the EZ if Ms. Merkel et al do not act decisively and soon.


I thought you say that the supply of gold limited and a lotta people won't sell. Now this. What if China want to absorb all the excess supply and push up prices because they have a plan?

Some ppl will not sell. Others jump on the bandwagon looking for safe harbor or a quick buck.

If the price dips they sell. They're speculators.


What you mean by this, Breds?

If 'one' were going to short the gold market where could 'one' get a regular large supply of gold biullion on short notice?

Supply from jewelery and industry are not homogenous and scattered.*It would take too long to amass a cache of bullion grade metal.

One could not get much from investors . They dont want their investment to lose value.

Speculators can buy gold forward fm producers. But*this is for future delivery. It does not help in the immediate present.

This leaves one group. Central Banks.

Is gold 'held' at central banks really there?

None can say with certainty. The gold at Fort Knox has not been audited since 1955.
*
Other than direct sales central banks transfer gold by leasing.*Or*swapping.

[oecarb]

Ay Carbs, are you affected by the reform of the UK pensions?

No Lex. I retired two years ago and getting it already. They aint going to change mine now. It only going to affect people who aint retire yet.

[oecarb]

Soooooo....
Did the Euro die 4 weeks ago or not?

Edyle, me and the wife was doing some Christmas shopping today and all the prices was still in euro. They taking my €20 notes and giving me change in euro. They taking my card too.

So what you think? lol

[oecarb]

This leaves one group. Central Banks.

As I posted earlier:


With eurozone central banks holding some 64% of the world's gold reserves.......

http://money.cnn.com/2011/11/23/markets/gold_eurozone/index.htm

So, who going to benefit if China push up the price of gold? ;)

[lexbarker]

No Lex. I retired two years ago and getting it already. They aint going to change it now.

I am glad for you.

[oecarb]

Miktay, check this out:


The US and EU account for around half of the world's economic output.
The 27 countries of the eurozone make up the largest trading partner for the US.

http://www.bbc.co.uk/news/world-us-canada-15932221


As a single economy, the EU traded €327 billion worth of goods and services with China as of 2009. As of 2011 EU - Chinese trade makes the EU and China each other's largest trading partners

http://en.wikipedia.org/wiki/List_of_the_largest_trading_partners_of_the_People 's_Republic_of_China

So, who going to suffer if the euro collapse?

[oecarb]

I am glad for you.

Why, thank you, kind Sir. lol

[miktay]

Miktay, check this out:





So, who going to suffer if the euro collapse?

Carbs:

Whatever the outcome plenty people will suffer.

Thiz iza global crisis.

Thiz iza race to the bottom.

He who Iz first shall be last.

You can but hope to choose the slowest horse.

[lexbarker]

So, who going to suffer if the euro collapse?

Everybody, this is the effect of globalism, to make the citizens financially poor so control is easily attained.

[oecarb]

Carbs:

Thiz iza race to the bottom.

He who Iz first shall be last.

You can but hope to choose the slowest horse.
No prizes for guessing who will win this race, IMHO

No wonder they getting peed off with the EU.


The amount of money the central bank parceled out was surprising even to Gary H. Stern, president of the Federal Reserve Bank of Minneapolis from 1985 to 2009, who says he “wasn’t aware of the magnitude.” It dwarfed the Treasury Department’s better-known $700 billion Troubled Asset Relief Program, or TARP. Add up guarantees and lending limits, and the Fed had committed $7.77 trillion as of March 2009 to rescuing the financial system, more than half the value of everything produced in the U.S. that year.

Bloomberg came up with that number after reviewing "29,000 pages of Fed documents obtained under the Freedom of Information Act and central bank records of more than 21,000 transactions."

http://readersupportednews.org/news-section2/320-80/8648-focus-bailout-was-really-777-trillion

[miktay]

No prizes for guessing who will win this race, IMHO

No wonder they getting peed off with the EU.

Carbs:

Thiz begs a question.

If US debt iz onerous why isn't the US in as much difficulty as theEZ?

That USD iz the primary reserve currency iz true. Central banks hold USD. Oil iz priced in USD. Most*countries need imported oil. Most countries need to hold USD.

See below the OECD table of debt-to-GDP ratiios.

http://images.johnmauldin.com/uploads/charts/110711-03.jpg

Japan, Britian, Canada & Sweden also have hi debt to income ratios.

Some have higher ratios than Greece

¥, £, CAN$ & SKrona are not primary reserve currencies.
Oil iz not priced in these currencies.

'One' cud ask: why aren't Japan, Britian,Canada and Sweeden*in as dire straights as Greece & italy?

Printing money iz at the heart of this.

US, UK, Canada and Sweden can print money.

Greece and Italy et al cannot.

Markets are twisting Ms. Merkels arm.

Markets kno that printing money iza tax upon the people.

Markets kno that Germany will have to pull out all the 'stops' to enable the printing presses.

But the markets do not care.

Markets need their 'fix'

They want Merkel 2print Euros.

Or breakup the EZ.

Or both.

[sacky]

Them that yearn 4 the good ole days are a dime a dozen...

He may be deluded about British imperial affairs but iz he wrong about the Euro?

very wrong,maybe the one size fit all formula was wrong,but in theory is the best thing to happen in the worlds financial markets.and if it wasnt for people like him and gordon brown the uk would be in the euro.

[sacky]

miktay,how is the market twisting her arm,i DONT SEE HER IN ANY HURRY TRYING TO GET THINGS SORTED TOO QUICKLY:

[sacky]

http://www.guardian.co.uk/business/2011/nov/30/world-central-banks-act-credit-crunch

[miktay]

miktay,how is the market twisting her arm,i DONT SEE HER IN ANY HURRY TRYING TO GET THINGS SORTED TOO QUICKLY:

She doesn't have much time.

She needs to get thiz right.


EVEN as the euro zone hurtles towards a crash, most people are assuming that, in the end, European leaders will do whatever it takes to save the single currency. That is because the consequences of the euro’s destruction are so catastrophic that no sensible policymaker could stand by and let it happen.

A euro break-up would cause a global bust worse even than the one in 2008-09. The world’s most financially integrated region would be ripped apart by defaults, bank failures and the imposition of capital controls (see article). The euro zone could shatter into different pieces, or a large block in the north and a fragmented south. Amid the recriminations and broken treaties after the failure of the European Union’s biggest economic project, wild currency swings between those in the core and those in the periphery would almost certainly bring the single market to a shuddering halt. The survival of the EU itself would be in doubt.

http://api.economist.com/node/21540255

[miktay]

very wrong,maybe the one size fit all formula was wrong,but in theory is the best thing to happen in the worlds financial markets.and if it wasnt for people like him and gordon brown the uk would be in the euro.

Sacky:

Thatcher and other Euroskeptics had the cojones to see Jean Monnet's legacy 4 what it really iz.

The Euro iz an experiment.

Some experiments work. Others do not.

Theory iz for tenured ivory tower academics.

Half baked theories have no place in the real world.

Especially with the livelyhood of millions at stake.

[oecarb]

Like I asked - who stand to lose if the euro collapses?

Stand up and be counted.


Central Banks Cut Cost of Borrowing Dollars

Six central banks led by the Federal Reserve made it cheaper for banks to borrow dollars in emergencies in a global effort to ease Europe’s sovereign-debt crisis.

Stocks rallied, driving the Dow Jones Industrial Average up the most since March 2009, commodities surged and yields on most European debt fell on the show of force from central banks aimed at easing strains in financial markets. The cost for European banks to borrow dollars dropped from the highest in three years, tempering concerns about the euro’s worsening crisis after leaders said they’d failed to boost the region’s bailout fund as much as planned.

http://www.bloomberg.com/news/2011-11-30/fed-five-central-banks-lower-interest-rate-on-dollar-swaps.html

There will be more.........

[miktay]

Like I asked - who stand to lose if the euro collapses?

Stand up and be counted.



There will be more.........

Carbs:

Thiz wuz asked. And answered.

All stand to lose if the Euro collapses.

And not 2 put too fine a point on it. I will lose (personally) if the Euro goes down. I have skin in the game.

But a bad idea...iza bad idea.

The Euro was never a good idea.

[sacky]

Carbs:

Thiz wuz asked. And answered.

All stand to lose if the Euro collapses.

And not 2 put too fine a point on it. I will lose (personally) if the Euro goes down. I have skin in the game.

But a bad idea...iza bad idea.

The Euro was never a good idea.

justify why you saying it was a bad idea,unless you have the lil britain mentality

[oecarb]

Yeah, why shouldn't the largest trading bloc on the planet aim for a common currency?

[oecarb]

Carbs:

All stand to lose if the Euro collapses.



Yep.

Until now, the international community has taken a back seat, allowing the EU to single-handedly shape the crisis response. But this is a European crisis in name only. As Jean-Claude Trichet, Chairman of the ECB recently said, “Europeans are at the epicenter of a problem which is a global problem.” The stage is European but the consequences will be felt from New York to Shanghai.

The US economy could be particularly hard hit. A serious downturn in the Eurozone would significantly lower demand for US exports to Europe, which currently support fourteen million US jobs. It would also spook global credit markets, raising the costs of financing US public debt. Derivatives expose US banks to a European default, so the US banking system itself might unravel. In sum, the US economy’s fledgling recovery would be dead in the water.

http://nationalinterest.org/commentary/europes-contagion-effect-prepare-global-economic-collapse-5640

[miktay]

justify why you saying it was a bad idea,unless you have the lil britain mentality


Yeah, why shouldn't the largest trading bloc on the planet aim for a common currency?

There are fundamental differences b/t N. Euro and S. Euro countries.

The difference iz mindset.

N Europe iz future oriented. N Europeans work hard, are diligent, pay attention to detail, and sacrifice.

They trust that if they work hard today tomorrow will be better.

N Europeans believe that man prospers by the sweat of his brow.

S. Europe iz less focused on the future. They are present oriented. Live well today and tomorrow will take care of itself.

One mindset iz not better or worse. But they are very different points of view.

And they don't mix well.

Whatever the reason It iz not clear.

N Europe produces. S Europe consumes.

N Europe runs trade and budget surplus.

S Europe runs trade and budget deficits.

Problems arises when they are thrown together in the same club on short notice.

The issue iz exacerbated when S European gets hold of
N European's credit card.

Credit iz shared. Culture iz different.

Putting different cultures and different values together too soon with a shared money pool Iza recipe for woe.

Thiz iz one reason the Eurozone iz breaking,down.

Bond yield spreads and stock market gyrations are a reaction to this mix of shared credit but different cultures.

[sacky]

There are fundamental differences b/t N. Euro and S. Euro countries.

The difference iz mindset.

N Europe iz future oriented. N Europeans work hard, are diligent, pay attention to detail, and sacrifice.

They trust that if they work hard today tomorrow will be better.

N Europeans believe that man prospers by the sweat of his brow.

S. Europe iz less focused on the future. They are present oriented. Live well today and tomorrow will take care of itself.

One mindset iz not better or worse. But they are very different points of view.

And they don't mix well.

Whatever the reason It iz not clear.

N Europe produces. S Europe consumes.

N Europe runs trade and budget surplus.

S Europe runs trade and budget deficits.

Problems arises when they are thrown together in the same club on short notice.

The issue iz exacerbated when S European gets hold of
N European's credit card.

Credit iz shared. Culture iz different.

Putting different cultures and different values together too soon with a shared money pool Iza recipe for woe.

Thiz iz one reason the Eurozone iz breaking,down.

Bond yield spreads and stock market gyrations are a reaction to this mix of shared credit but different cultures.

try again,because every continent has its share of work shirkers,so yr synopsis fail to enlight us any more,in other words what you are say ing is that there shouldnt be a caribbean common market,because we trinis like to limelol

[miktay]

try again,because every continent has its share of work shirkers,so yr synopsis fail to enlight us any more,in other words what you are say ing is that there shouldnt be a caribbean common market,because we trinis like to limelol

In a Caribbean common market how do u think Trinis would react if they had to pay Jamaica's debt?

Not well methinks.

[oecarb]

There are fundamental differences b/t N. Euro and S. Euro countries.

The difference iz mindset.

N Europe iz future oriented. N Europeans work hard, are diligent, pay attention to detail, and sacrifice.

They trust that if they work hard today tomorrow will be better.

N Europeans believe that man prospers by the sweat of his brow.

S. Europe iz less focused on the future. They are present oriented. Live well today and tomorrow will take care of itself.

One mindset iz not better or worse. But they are very different points of view.

And they don't mix well.

Whatever the reason It iz not clear.

N Europe produces. S Europe consumes.

N Europe runs trade and budget surplus.

S Europe runs trade and budget deficits.

Problems arises when they are thrown together in the same club on short notice.

The issue iz exacerbated when S European gets hold of
N European's credit card.

Credit iz shared. Culture iz different.

Putting different cultures and different values together too soon with a shared money pool Iza recipe for woe.

Thiz iz one reason the Eurozone iz breaking,down.

Bond yield spreads and stock market gyrations are a reaction to this mix of shared credit but different cultures.
Miktay,

This is riddled with stereotypes and does great injustice, for instance, to the Italians who, despite their fun-loving approach to life, have a highly industrialised economy.

What you did not mention (or perhaps did not know) is that every year millions of North Europeans retire and a large majority of them head off to live in the sunnier climes of southern Europe, notably Spain, Portugal, Italy and Greece. Millions of 70 and 80 year olds do put quite a disproportionate strain on the government-funded healthcare services of these countries.

Also, you probably did not know that EU leaders know southern Europeans at least as well as you do. All the present Eurozone countries had to spend flfteen years or more with their currencies shadowing the Deutschmark (the Exchange Rate Mechanism) before the launch of the euro and before they were allowed to join.

George Soros got his fame by betting that the UK would have to drop out.

[miktay]

Miktay,

This is riddled with stereotypes and does great injustice, for instance, to the Italians who, despite their fun-loving approach to life, have a highly industrialised economy.

What you did not mention (or perhaps did not know) is that every year millions of North Europeans retire and a large majority of them head off to live in the sunnier climes of southern Europe, notably Spain, Portugal, Italy and Greece. Millions of 70 and 80 year olds do put quite a disproportionate strain on the government-funded healthcare services of these countries.

Also, you probably did not know that EU leaders know southern Europeans at least as well as you do. All the present Eurozone countries had to spend flfteen years or more with their currencies shadowing the Deutschmark (the Exchange Rate Mechanism) before the launch of the euro and before they were allowed to join.

George Soros got his fame by betting that the UK would have to drop out.

Carbs: there are differences between countries.

Despite both being part of the Eurozone markets put a different value on German output than Greek output.

Despite a common currency they're considered different countries.

If the Greeks wish to borrow to fund their lifestyle why should German citizens pay for this?

This iz not unlike modern day banking. It iza moral hazard.

Banks speculate recklessly knowing that if they fail gubmint will bail them out.

How does this make sense?

[sacky]

Carbs: there are differences between countries.

Despite both being part of the Eurozone markets put a different value on German output than Greek output.

Despite a common currency they're considered different countries.

If the Greeks wish to borrow to fund their lifestyle why should German citizens pay for this?

This iz not unlike modern day banking. It iza moral hazard.

Banks speculate recklessly knowing that if they fail gubmint will bail them out.

How does this make sense?

you seem to be missing the bigger picture,where do americans go to retire.

[sacky]

In a Caribbean common market how do u think Trinis would react if they had to pay Jamaica's debt?

Not well methinks.

we been paying fo them guyana, barbados and so on for how many yrs now:bilnah:

[miktay]

we been paying fo them guyana, barbados and so on for how many yrs now:bilnah:

Yes. T&T gubmint has provided some assistance.

But thiz is on a case by case basis.

To date In the EZ Germany must bail out weaker countries.

Thiz iz no other option if the EZ is to survive.

[miktay]

you seem to be missing the bigger picture,where do americans go to retire.

American 'retirement' iza myth perpetuated by mass media and the financial servIces industry.

There will be no retirement for most Americans.

[oecarb]

American 'retirement' iza myth perpetuated by mass media and the financial servIces industry.

There will be no retirement for most Americans.

But people who work in Northern Europe do retire.

And you should see the pensions ordinary people retire on in Germany, France, Holland, Sweden, Finland, Norway and Finland (state pension schemes). And they all want to retire in a sunny climate with a low cost of living and state funded health care which is their right as citizens of the EU.

And Spain, Portugal, Italy and Greece bear the brunt of these retirees' health care costs as the EU rules state that any qualifying EU citizen has the right to the same level of health care in any other EU country that the citizens of that country are entitled to.

Even if many are healthy, just think of the cost of a few million of them.

[miktay]

But people who work in Northern Europe do retire.

And you should see the pensions ordinary people retire on in Germany, Holland, Sweden, Finland, Norway and Finland (state pension schemes). And they all want to retire in a sunny climate with a low cost of living.

Some European pensions will be debased.

Pensioners will have to adjust their expectations and lifestyle.

Thiz may be difficult to accept. But it iz inevitable.

In a world awash in too much fiat currrncy we can count on one thing.

Politicians will break their promises.

Thiz iza global crisis.

[greall]

As I pointed out on one of the earlier pages in this thread,my brethren in Aachen and Brest will grow tired of paying for the mistakes of the rest of Europe.

Greg

[sacky]

American 'retirement' iza myth perpetuated by mass media and the financial servIces industry.

There will be no retirement for most Americans.

typical selective blindness,what is florida to americans.

[sacky]

There is only one alternative to the euro's survival: catastropheLittle Englanders – and blinkered Germans – need to wake up to the implications of a fractured eurozone.

http://www.guardian.co.uk/commentisfree/2011/nov/13/will-hutton-euro-crisis-germany

[sacky]

Some European pensions will be debased.

Pensioners will have to adjust their expectations and lifestyle.

Thiz may be difficult to accept. But it iz inevitable.

In a world awash in too much fiat currrncy we can count on one thing.

Politicians will break their promises.

Thiz iza global crisis.

glad you know its global and not something which was started,in the eu.

[oecarb]

As I pointed out on one of the earlier pages in this thread,my brethren in Aachen and Brest will grow tired of paying for the mistakes of the rest of Europe.

Greg
Greall,

Jump high or jump low, Merkel is still chancellor. Her support is a coalition of parties that can change any time they wish.

But they haven't.

This says something, in my opinion.

Your brothers in Aachen have seen Germany grow more powerful and wealthy after reunification and they also know Germany is stronger because of the EU. They will support Merkel and she will get what she wants, IMHO:

1. Closer political and fiscal union in the Eurozone.
2. Banning of naked short selling in the EU
3. Taxing of bank transactions.

[greall]

They're getting weary,oecarb...

Greg

[miktay]

As I pointed out on one of the earlier pages in this thread,my brethren in Aachen and Brest will grow tired of paying for the mistakes of the rest of Europe.Greg

Greg: according to Sacky,Carbs and them all Europeans sit round the EZ campfire singing 'We are family'

What Sacky and Carbs do not see iz unsustainable debt and a chronic global economic slowdown will make all the difference.

[greall]

Let's agree to disagree that the EZ was an experiment that went haywire.

The 'Euroskeptics' would be singing the expected song of 'I told you so' with the British holding the hymnal and turning the pages.

The point of the matter is that you can't throw the 'better' economies with the 'horrendous' ones and expect a miracle without sacrifices.

At present,the Greek and Italian governments are being headed by former bankers as Brussels selects who runs these countries with onerous terms and conditions for 'bailouts'.

The question:high levels of national prosperity or the loss of the democratic right to elect your own governments?

Greg

[sacky]

Let's agree to disagree that the EZ was an experiment that went haywire.

The 'Euroskeptics' would be singing the expected song of 'I told you so' with the British holding the hymnal and turning the pages.

The point of the matter is that you can't throw the 'better' economies with the 'horrendous' ones and expect a miracle without sacrifices.

At present,the Greek and Italian governments are being headed by former bankers as Brussels selects who runs these countries with onerous terms and conditions for 'bailouts'.

The question:high levels of national prosperity or the loss of the democratic right to elect your own governments?

Greg

who would you want to run yr country in a crisis belasconi or a proven economist. :mischievous:

"In my opinion it's been deliberate. The ECB does not want to commit until the Europeans agree to tighter fiscal union. Market mayhem is an effective way of reaching political goals. If they'd done what the markets had wanted a month ago, Silvio Berlusconi would still be in power. Is that good for Italy or Europe?"

[sacky]

It's the European economy, stupid: US recovery hangs on solving debt crisisAmerica's economic revival, and Obama's re-election, may depend on whether Europe can push through the political change needed for the European Central Bank to act.
http://www.guardian.co.uk/business/2011/dec/03/eurozone-crisis-threatens-us-recovery

[miktay]

who would you want to run yr country in a crisis belasconi or a proven economist

The Proven economists are Keynesian economists.

What exactly they have been "proven at" iz not clear.

Keynesians have no solutions for the economic crisis except the same: gubmint stimulus, deficit spending, printing money, lowered interest rates.

This is clearly not working.

Keynesian economists are part of the reason the world is in a debt crisis.

Do not hope for help from Keynesian economists.

[miktay]

It's the European economy, stupid: US recovery hangs on solving debt crisis

America's economic revival, and Obama's re-election, may depend on whether Europe can push through the political change needed for the European Central Bank to act.
http://www.guardian.co.uk/business/2011/dec/03/eurozone-crisis-threatens-us-recovery



There is no 'economic revival' in America.

What some mistake for 'economic revival' is a slowdown of the rate of bad economic news.

This iza temporary phenomenon.

America's debt exceeds that of the Eurozone.

It cannot repay this debt.

[greall]

There is no 'economic revival' in America.

What some mistake for 'economic revival' is a slowdown of the rate of bad economic news.

This iza temporary phenomenon.

America's debt exceeds that of the Eurozone.

It cannot repay this debt.

Hmmm...bankruptcy proceedings or a bail out from 'mom and dad'...

Greg

[miktay]

Hmmm...bankruptcy proceedings or a bail out from 'mom and dad'...

Greg

A likely mix of both.

A bailout through the debasement of the US dollar.

Holders of US dollars will pay the price for this.

This will continue until creditors refuse to finance the deficit.

Then bankruptcy. But this will not happen tomorrow.

Today the focus is on the Eurozone.

[sacky]

The Proven economists are Keynesian economists.

What exactly they have been "proven at" iz not clear.

Keynesians have no solutions for the economic crisis except the same: gubmint stimulus, deficit spending, printing money, lowered interest rates.

This is clearly not working.

Keynesian economists are part of the reason the world is in a debt crisis.

Do not hope for help from Keynesian economists.

thats quite contradictory to what you been saying,so who or what system are you using to measure,the dept of this financial meltdown:(

[sacky]

A likely mix of both.

A bailout through the debasement of the US dollar.

Holders of US dollars will pay the price for this.

This will continue until creditors refuse to finance the deficit.

Then bankruptcy. But this will not happen tomorrow.

Today the focus is on the Eurozone.

so mr soros,what currency is likely to do best in the dog eat dog world of a failed capitalist system.

[oecarb]

Greg: according to Sacky,Carbs and them all Europeans sit round the EZ campfire singing 'We are family'

What Sacky and Carbs do not see iz unsustainable debt and a chronic global economic slowdown will make all the difference.

Miktay,

Since I have been living in the Eurozone, one of the things I noticed is that I can live here in France without having to buy a single item that was made outside the EU/EFTA region - or, for that matter the Eurozone. From cars to milk to tomatoes and potatoes, from beef to chicken to wine and beer, from washing machines to fridges to Martiniquan and Guadeloupan bananas and mangoes, from Norwegian oil and salmon to French nuclear produced electricity.

I think that says something.

[miktay]

Miktay,

Since I have been living in the Eurozone, one of the things I noticed is that I can live here in France without having to buy a single item that was made outside the EU/EFTA region - or, for that matter the Eurozone. From cars to milk to tomatoes and potatoes, from beef to chicken to wine and beer, from washing machines to fridges to Martiniquan and Guadeloupan bananas and mangoes, from Norwegian oil and salmon to French nuclear produced electricity.

I think that says something.

Help me out here Carbs.

What does that say?

[miktay]

so mr soros,what currency is likely to do best in the dog eat dog world of a failed capitalist system.

Sacky my friend...

Yuh could cuss mih till yuh blue in the face...

I ent go dig no horrors...

We go tek a drink and call it even...

But do me a big favor.

I'd prefer if yuh din call mih Mr Soros.

[lexbarker]

Miktay,

Since I have been living in the Eurozone, one of the things I noticed is that I can live here in France without having to buy a single item that was made outside the EU/EFTA region - or, for that matter the Eurozone. From cars to milk to tomatoes and potatoes, from beef to chicken to wine and beer, from washing machines to fridges to Martiniquan and Guadeloupan bananas and mangoes, from Norwegian oil and salmon to French nuclear produced electricity.

I think that says something.
I guess your computer is made in the EU zone too?

[oecarb]

I guess your computer is made in the EU zone too?

That's what they told me when I bought it.


Dell has its European manufacturing base in Ireland - or at least it has up to now. Dell is cutting two-thirds of the workforce at a major factory in Limerick. It's moving the 1,900 jobs there to a shiny, new plant in Poland.

http://www.npr.org/templates/story/story.php?storyId=99276446

Poland is also in the EU.

[lexbarker]

That's what they told me when I bought it.



Poland is also in the EU.

These days parts from automobiles to electronics are made all over the world, mostly where labour is cheapest. So, it is very unlikely that a whole device/merchandise would be made in one, 2 or 3 places. You have to differentiate, "Made in" with "Assembled in." Sometimes you see "Made in" and when you look inside you see parts from different countries. I guess there have to be a certain local percentage for it to be labelled as "Made in."

My Dell laptop is Made In Malaysia.

[oecarb]

These days parts from automobiles to electronics are made all over the world, mostly where labour is cheapest. So, it is very unlikely that a whole device/merchandise would be made in one, 2 or 3 places. You have to differentiate, "Made in" with "Assembled in." Sometimes you see "Made in" and when you look inside you see parts from different countries. I guess there have to be a certain local percentage for it to be labelled as "Made in."

My Dell laptop is Made In Malaysia.

This laptop says "Made in Poland". First time I checked, actually. My wife's was made in Ireland.

[edyle]

help me out here carbs.

What does that say?

independence.

[oecarb]

independence.

Correct, Edyle. If you could get most of what you want within your own borders, it don't really matter what your money is worth outside.

[miktay]

independence.


Correct, Edyle. If you could get most of what you want within your own borders, it don't really matter what your money is worth outside.

Carbs/Edyle:

The EZs domestic supply for consumption depends on many factors.

Absent import quotas and tariffs...one of these factors is price stability.

Availability comes at a price. Todays prices are affordable.

If the Euro iz debased to protect the EZ there will likely be a rise in future inflation.

Inflation iz an increase in general price levels.

EZ salaries and pensions will not rise to match inflation.

When this occurs there will still be availability and independence. But there will be less affordability.

In inflationary times gubmint traditionally steps in to impose price controls and quotas.

Price controls erode the economic incentive for domestic production.

Domestic production for domestic consumption falls.

Under a price control system there will be less available goods -except for the black (read: free) market.

Production will be then be sought offshore if it can be sourced cheaply. Or there will be continued shortages.

Do not count on continued independence affordability and availability if the Euro iz debased.

[sacky]

thats quite contradictory to what you been saying,so who or what system are you using to measure,the dept of this financial meltdown:(

still awaiting yr reply:(

Eurosceptics, beware: the euro crisis is bad for you too

[letric]

Miktay,

Since I have been living in the Eurozone, one of the things I noticed is that I can live here in France without having to buy a single item that was made outside the EU/EFTA region - or, for that matter the Eurozone. From cars to milk to tomatoes and potatoes, from beef to chicken to wine and beer, from washing machines to fridges to Martiniquan and Guadeloupan bananas and mangoes, from Norwegian oil and salmon to French nuclear produced electricity.

I think that says something.

Definitely ...