Augermeister and Kom (posts 1 & 3) both made valid points. But I am still impressed with CHS’s high level analysis and the logic of his conclusions. He certainly helped my understanding of the issues, and I found nothing to disagree with based on my understanding of the situation. I think it is excellent work.
Travlin
[quote=Travlin]
Augermeister and Kom (posts 1 & 3) both made valid points. But I am still impressed with CHS’s high level analysis and the logic of his conclusions.
[/quote]
Concur. At the funeral, it can be debated whether or not that flower arrangement on the coffin is made up of fuchsia or purple flowers – but the fact remains that there’s still a dead body inside.
Viva – Sager
Dear Sager,
I dont want to be unpolite, but the funeral of who?
At the funeral, it can be debated whether or not that flower arrangement on the coffin is made up of fuchsia or purple flowers -- but the fact remains that there's still a dead body insideMy funeral? Yours? Dexter Morgan? I would like to tell you that it was GS who sent mr. Geithner to Europe to try saving his own bets. Do you realise who will die if some bets will loose all his shirt if Europe doesnt do what some financial players want? If you dont understand what am I talking me about, read GEAB and maybe you understand where the family is very worried with the terminal patient. My condolences.
…Germany is faced with the unenviable task of bailing out its "customer nations.” Meanwhile, the residents of Greece, Italy, Spain, Portugal, and Ireland are faced with the unenviable task of cutting government benefits to realign their budgets with the productivity of their underlying national economies.
CHINA is faced with the unenviable task of bailing out its "customer nations." Meanwhile, the residents of US are faced with the unenviable task of cutting government benefits (& printing paper $?) to realign their budgets with the productivity of it’s underlying national economy…
Seems like all of us are stuck between a rock and a hard place.
-therockpit
It is my opinion that sooner or later most of the world’s economies are going to end up in that coffin. The color of the flowers on top is – again, in my opinion – not important. Viva – Sager
American is federation of states. If one state starts to do badly, then persons move to another state; e.g. out of Michigan. State to state trade is not tracked since America is one people and the whole country is the land where one lives. For example, I could move from where I live to another state this day and that would be it. Can you do that in Euro?
Regarding imports, assuming imports are consumed in the importing country, then imports are roughly PART OF internal consumption. Therefore, if internal consumption is flat (even though imports are rising) and exports are materially growing each year, the Germany’s central bank will be collecting too much foreign exchange. This leads to shoddy loan standards as the banks want to put the money to work where ever. I woud think in this environment the German People who do the work will not want to now bailout other Euro nation(s).
If we step back even further we see that this is not really a Euro versus America scenario. Each zone uses the same tricks and shuffles money back and forth. It seems the Euro zone will implode first simply because it is not a federation of states and America is so that the US can kick the can a little longer than Euro, leveraging the reserve currency.
[quote=kugscheese]If we step back even further we see that this is not really a Euro versus America scenario. Each zone uses the same tricks and shuffles money back and forth. It seems the Euro zone will implode first simply because it is not a federation of states and America is so that the US can kick the can a little longer than Euro, leveraging the reserve currency.[/quote]My feelings exactly. This isn’t a competition between the US and the EU, or Euro-bashing as Kom appears to feel it is. Both patients are terminal and it is only a matter of time. One patient, the US, has the advantage of its states not only sharing the same currency, language, and culture, but also the same central fiscal and taxing authority.
That last quality is the essential difference between the two systems.
Without a central taxing and fiscal authority, the EU has no chance of solving the PIIGS problems except by letting the door hit them on the way out. And that will mean it won’t be the same EU anymore and it will mean major haircuts and major EU banks. US banks will definietly take huige haircuts as well for that matter. In fact, this could send the world into a tailspin bigger than anything that’s ever been seen before. With the way the financial system is levered these days, we could be looking at unprecedented financial chaos.
As Dr. M says, keep 3 month’s cash and 3 month’s food within reach, at the bare minimum!
Dear KugsCheese,
American is federation of states. If one state starts to do badly, then persons move to another state; e.g. out of Michigan. State to state trade is not tracked since America is one people and the whole country is the land where one lives. For example, I could move from where I live to another state this day and that would be it. Can you do that in Euro?I wish to put this very bold: Can you do that in Euro? Do you really want my answer? Or do you want to pretend to be smart? Look, my friend, come to Europe, educate yourself in a true and well managed school and later try to put me some real and valuable questions. Best regards PS When the ignorance is so rampant the only choice is closing the eyes and forget who pretend to be more smart than others. Not only pretending to be more smart but to teach the barbarians europeans how to manage their own problems.
The European Union's (EU) Internal Market (sometimes known as the Single Market, formerly the Common Market) seeks to guarantee the free movement of goods, capital, services, and people – the EU's four freedoms – within the EU's 27 member states.[1] http://en.wikipedia.org/wiki/Internal_Market_(European_Union)
[quote=kom]Look, my friend, come to Europe, educate yourself in a true and well managed school and later try to put me some real and valuable questions.
[/quote]
kom,
My son will be studying overseas next year (in Europe). Could you recommend a true and well managed school of economics for a university student?
Dear FB,
I agree at certain point with this view. But let me ask something. All the fiscal system in USA applies to every state? Is it the same to every state? Or every state has their own fiscality? Thanks in advance for your answer. Because that answer applies to EU. But your question is very important because is one of the great flaws of the Euro. However, this crisis teached us europeans that we cant support a common currency if every state will not loose some sovereignty. And some sanctions are not applied when some state fails do acompply the european rules. In the begining of the euro project some politicians believed that the markets could realise the differences betweeen well managed countries and bad managed coutries through interests rates demanded to each country. But they discovered that markets tend to be right most of time but they failed to evaluate the risk and the fiscal management of each country. The markets failed to properly evaluate risk of each country and after the financial crisis markets overreact evaluating the same countries and the risks. We discovered that markets are not the best risk evaluator all the time and they fail sometimes. So, europeans must to study one way to let markets evaluate themselve the risks of each country and at same time to prevent the same failures of the markets. We dont have clear answers to the questions and we are trying to know wich best solutions are. So, today, europeans are discussing one way to put pressure on each country, through the markets and new Treaties. The Greece example will teach us a lot of our failures, not only political but the way as the markets work and evaluate risks in the financial systems and the credit markets cross country. As you see, we, europeans, are working hard to understand the true role of the market failures in this process and trying to seacrh the best solution. EU made some changes and they are working well in Ireland and Portugal. The Greek problem looks more difficult because the lack of good leadership in Greece. Why is bad this leadership? Because they believe that they can avoid economic reforms through defaults. Well, EU wants Greece better managed not to save banks. But to be better well managed, Greeks must to understand that austerity measures are not the sanction but the cure for their own problems. This lack of understanding the necessity of economic reforms by greeks politicians is the worst enemy now. EU is not a Federal State who can send federal troops and bureaucrats to manage Greece. EU is not a dictatorship but a peculiar union where each country is treated as equal. That means more discussion and more hard working politics. Best reagrds PS I suggest you to start reading some working papers from european politicians and academics about this subject: http://www.bportugal.pt/pt-PT/OBancoeoEurosistema/IntervencoesPublicas/Lists/FolderDeListaComLinks/Attachments/104/intervpub20100910.pdf This former academic and euro expert is now the "treasury secretary" in Portugal. He is politician now because they need to fix their problems and to try fix euro currency flaws and introduce new laws and treaties to solve our common problems. As you see, european politicians study very careful the problems and dont to try to be more smart than others. They can be more slowly in their decision making process but arent formers bankers who rule politicians. This is only an example how europeans politicians are very well educated and they study carefully our problems, not to save banks but to save our people. We are in Europe, do you see?
Without a central taxing and fiscal authority, the EU has no chance of solving the PIIGS problems except by letting the door hit them on the way out.
Dear FB,
Sorry, but the link I wish to give you about euro flaws is that one:
http://www.bportugal.pt/pt-PT/OBancoeoEurosistema/IntervencoesPublicas/Lists/FolderDeListaComLinks/Attachments/104/intervpub20100910.pdf
Sorry about my error.
Best regards.
Dear AO,
I think its better for you son he looks a good school in Europe. Not you, let him find by his own means. However, some Dutch or Swiss schools are very good. But depends also of your son desire and the expertise he wishes to study.
But as I said: let him search what he desires and have passion for.
Best regards
kom,
Thank you for your prompt reply. I’m writing for him since he’s interested in a select few to review and short of time at the moment. He’s going to select the school, not me, but we reasoned that since you are in Europe and express familiarity with these schools, you must know which are the best and can save him some time in his search. You would certainly know better than us. Can you recommend the names of specific Dutch and Swiss schools?
What a way to make an entrance Mr. Charles Hugh Smith! As paraphrased from the GEAB link, it’s the discussion that leads to the solution. No matter how one feels about this article, to ignite a great debate is an accomplishment. Critical thinking is alway necessary when digesting information about the current Europe / US crisis. Regardless of the stats that need to be adjusted, it is important information in a timely manner from the GEAB and this article. The details can be debated, but ultimately we agree on the bigger details. Taxpayers in the US had to pay for the mistakes of the private banks. Now, Europe taxpayers are being asked to pay for the mistakes of the private banks, whether it is the austerity measures in Greece of higher taxes or German citizens footing the bill for the bail out.
I hope for the EU’s sake, they do find a path to save Euroland while taking the banks to task. We obviously saw no justice here in the US in terms of the ones who got rich creating this crisis. If they do find that path, it will give me hope that the public citizens here in the US can stop listening to "the sky is falling" rhetoric of Washington, Wall street and private banks that ultimately just covers their own ass.
I understand the anger KOM feels towards the US. Who here has not felt this same anger? This article or this forum is not the enemy. Just as no one forced the Irish banks to take the money. They were "greedy, unregulated and stupid". No one forced the EU to follow the US policy of private banks extending unlimited credit to the uncreditworthy. It was pointed out three years ago when the US housing market tanked and the CDS’s issued by banks were deemed worthless that the "Emperor had no clothes". Blame Wall street…I do. It doesn’t change the fact the EU willingly followed the US down the same path to insolvency.
[quote=kom] Dear KugsCheese,
American is federation of states. If one state starts to do badly, then persons move to another state; e.g. out of Michigan. State to state trade is not tracked since America is one people and the whole country is the land where one lives. For example, I could move from where I live to another state this day and that would be it. Can you do that in Euro?I wish to put this very bold: Can you do that in Euro? Do you really want my answer? Or do you want to pretend to be smart? Look, my friend, come to Europe, educate yourself in a true and well managed school and later try to put me some real and valuable questions. Best regards PS When the ignorance is so rampant the only choice is closing the eyes and forget who pretend to be more smart than others. Not only pretending to be more smart but to teach the barbarians europeans how to manage their own problems.
The European Union's (EU) Internal Market (sometimes known as the Single Market, formerly the Common Market) seeks to guarantee the free movement of goods, capital, services, and people – the EU's four freedoms – within the EU's 27 member states.[1] http://en.wikipedia.org/wiki/Internal_Market_(European_Union)[/quote] Kom, your wikipedia link answers the questions: Free movement of workers: Main article: Freedom of movement for workers Workers have the right to move to a different Member State, to look for work and be employed under the same conditions as nationals of that State (subject to a number of reserved areas greatly varying according to country: this means in many instances nationals of country A exercising a profession in country B the equivalent of which a national of country B would not be authorised to exercise in country A), number and benefit from the same social and tax advantages. This right has been extended by the Court of Justice to family members that accompany the worker, although they derive their rights from the main holder. Family members from non-EU states also have these rights. To claim these rights, family members must complete specific paperwork. In the United Kingdom, for example, the relevant document is the EEA family permit. I understand that labor movement has been a goal but a challenge; I do read The Economist. The reason this is a challenge is due to the taxation being national and monetary policy being supranational.