Barclay says "no" and Italy has been sentenced to insolvency. Next is France. Europe is repeating the crisis of the nineteen thirties. Germany says never again to inflation and the Euro will be renamed Deutsche Mark.
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comments:
Anonymous
said...
FT's Gideon Rachman has thrown in the towel.
He wants Southern Europe to withdraw from the euro, effectively creating a Northern Euro D-Mark zone.
Also A.R. from The Economist. "The euro zone is in a death spiral. Markets are abandoning the periphery, including Italy, which is the world's eighth largest economy and third largest bond market. This is triggering margin calls and leading banks to pull credit from the European market. This, in turn, is damaging the European economy, which is already being squeezed by the austerity programmes adopted in every large euro-zone economy. A weakening economy will damage revenues, undermining efforts at fiscal consolidation, further driving away investors and potentially triggering more austerity. The cycle will continue until something breaks. Eventually, one economy or another will face a true bank run and severe capital flight and will be forced to adopt capital controls. At that point, it will effectively be out of the euro area. What happens next isn't clear, but it's unlikely to be pretty."
As I said before, there is an endless supply of bad news out there, and the Powers That Be will let it trickle out as slowly as possible, so as not to frighten the natives.
Austerity programs do not damage economies - this is a total fallacy. The government cannot create wealth, only transfer it from one person to another. Giving free money to middle aged pensioners and do nothing government employees does not make your country more rich (if it did, Greece would be the richest country on earth) and the sooner that stops, the better. When you stop these payments you are not creating "unemployed" - these people were unproductive already, they just did not appear on the books as the charity cases that they really were.
5 comments:
FT's Gideon Rachman has thrown in the towel.
He wants Southern Europe to withdraw from the euro, effectively creating a Northern Euro D-Mark zone.
Also A.R. from The Economist. "The euro zone is in a death spiral. Markets are abandoning the periphery, including Italy, which is the world's eighth largest economy and third largest bond market. This is triggering margin calls and leading banks to pull credit from the European market. This, in turn, is damaging the European economy, which is already being squeezed by the austerity programmes adopted in every large euro-zone economy. A weakening economy will damage revenues, undermining efforts at fiscal consolidation, further driving away investors and potentially triggering more austerity. The cycle will continue until something breaks. Eventually, one economy or another will face a true bank run and severe capital flight and will be forced to adopt capital controls. At that point, it will effectively be out of the euro area. What happens next isn't clear, but it's unlikely to be pretty."
Very bad. Panic again.
As I said before, there is an endless supply of bad news out there, and the Powers That Be will let it trickle out as slowly as possible, so as not to frighten the natives.
Anon.
What will we natives do without Silvio providing entertainment? And without Sarkozy? We may lose our joie-de-vivre!
Austerity programs do not damage economies - this is a total fallacy. The government cannot create wealth, only transfer it from one person to another. Giving free money to middle aged pensioners and do nothing government employees does not make your country more rich (if it did, Greece would be the richest country on earth) and the sooner that stops, the better. When you stop these payments you are not creating "unemployed" - these people were unproductive already, they just did not appear on the books as the charity cases that they really were.
K
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