How do you expect the Fiscal Crisis of the Euro to end?

1. 59

   RighterOneposted 11 years ago

   How do you expect the Fiscal Crisis of the Euro to end?
   
   And do you think that the US and China are doomed to follow the same fate?
   
   

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2. 64

   maxoxam41posted 11 years ago

   The elite decided that the euro would be good for the Europeans. Europe adopted it. With the euro came a hidden inflation. Debts increased. Greece threatened to give up the euro if it was not given a relief by Germany and the other oppressors. The Italian and the Spanish economies are failing people. The euro is superior to the dollar. The dollar lost 96% of its value. The Fed overproduces the currency. We are in debt.  I don't see in what way the US won't follow a parallel destinity since it crashed not a long ago? If China launches its national demand it may not suffer as much.

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   1. 59

      RighterOneposted 11 years agoin reply to this

      Full agreement. Only way out of this is to take the bailout directly to the people - while at the same time grabbing and prosecuting the tiny but rich and powerful Global Elite. Sort of a simultaneous world-wide bankruptcy/reset to coveted Gold Std.

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3. 96

   chef-de-jourposted 11 years ago

   The European experiment has to continue in some form - if the Euro collapses many think economic disaster will follow and an enormous depression take hold. At the moment there is an enormous imbalance between the north and south, exacerbated by history and national mindsets. On the one hand Germany feels it has to impose stricter conditions on Greece to meet the loans agreed in the bail out plan - hence the need for bureaucrats to oversee this delicate operation. Greece has also a part to play - greed and over optimism in the early 2000's created a vast bubble of credit (plus cooking the books didn't help!)  the recession burst it!!!! It was classic boom and bust on a gigantic scale.
   
   Now Italy and Spain plus Portugal are the wrong side of the line. If things don't pick up globally (ie the US economy falters over the next 18 months or so)
   Italy may have to do what Spain has already done and pump Euro loaned money into the banking system?
   
   It's all very confusing. Government cuts all over Europe are being made to reduce debt BUT there is a growing call for growth to be stimulated so that younger people can get work. In Spain unemployment for Under 25's is near 50%!!
   
   Where does all this nonsense leave democracy? Some would say democracy is but a shadow of its former self.
   Italy doesn't have an elected leader!
   Greece has a sort of pseudo government! When Merkel visied recently (for a few hours only!) protesters came out dressed like Nazis!!!
   Belgium doesn't seem to have had a proper government for about 2 years!
   Catalonia in Spain wants its own government!
   
   Meanwhile Great Britain keeps the pound sterling, closes its ears to insults from Germany and watches events unfolding from a distance!!!!
   
   So, there'll be more chaos and cuts for ordinary people, whilst the wealthy get away by investing their money in Swiss banks!!

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   1. 59

      RighterOneposted 11 years agoin reply to this

      Democracy, really? The Eurozone is a Big Socialist State, and has effectively been that way since even before its official formation. The USSR and the Eurozone are one and the same, except the latter being about 25 years more technologically advanced

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4. 61

   CHRIS57posted 11 years ago

   Economy is not necessarily rocket science. There is a watermark leaving its line all over economies on this planet. This watermark is created by technological progress. 100 years ago how many had to work in agriculture, to grow food? 50%? How many are there today in a developing or developed economies? 3%? There are combines all over this planet.
   Now - technological progress of mankind defines, how much of the GDP of an economy has to be invested into making stuff, into producing, into harvesting something. This percentage, this waterline is some 15% of GDP, no matter if we look at the US, Switzerland, Singapour. Brazil or China. Any economy that has its productive industries above this watermark are exporting stuff, any economies who are below have to import more than they export. It is not important why it is this way. It is only important to understand that differences, sustained differences in productivity, in being above or below the watermark create crisises. You can call them fiscal or financial crisises, they are all based on real economic distractions.
   In Europe, in the Eurozone, these huge differences in productivity led to excessive borrowing from Greece, Spain, Portugal and to excessive overproduction and overlending by Northern Europe, especially economic predators like Germany or The Netherlands. As long as the huge gap in productivity is not closed, as long the financial crisis will prolong. So the only way out is either Southern Europe to drop out of Euroland or Northern Europe do the same and create their viking/german mark/crown.
   For the US and its economic role in the world: situation is not much different than the role of PIIGS economies in Europe. The US is consistently underperforming concerning productivity. Only 10% is producing industry while 90% is service. Now, the US economy and the world as a whole is not going to be saved by another Pizza bakery in the neighbourhood (service) but only by making stuff, by doing real stuff that can be traded, exported, imported.. Look at statistics and understand that 10% productivity is 5% below watermark for the US and that means 5% of GDP has to be imported and that is pretty much of what is happening.
   Whatever is happening inside Europe and the Eurozone in particular is happening between the US on the borrowing side and the BRIC economies and Europe on the lender side.
   Economics is not rocket science, much is predictable. The only difficulty is the time frame.

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   1. 59

      RighterOneposted 11 years agoin reply to this

      Wow! What a great answer! Thanks for taking the time - and I believe I shall follow you. (Perhaps you could do the same and share some of your input...?)
      
      So when do YOU think it all goes *KA-BOOM,* Mr. CHRIS57?

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5. 69

   LandmarkWealthposted 11 years ago

   The Euro Crisis will end badly with a deep, deep recession. The problem will and to some extent has already spread beyond the PIIGS into Germany now.  There is a huge disconnect in terms of cultural economics.  The union of a currency without a fiscal union was a bad idea to begin with. Now they are trapped in an economic death spiral.  The ECB will attempt to continue to try to bailout the nations that are of immediate concern.  In the end it will fail. 
   
   In terms of the US, would like to think not. But the US is rapidly moving towards a similar european style socialist democracy.  The entitlement state is the root of the fiscal insolvency, and looking at the culture of the US, it's hard to imagine we can turn back now.  Yet I am hopeful.  Our ability to self monetize our debt without the approval of other nations allows us more flexibility.  Yet, in the long run that may simply worsen the problem. 
   
   China is another story altogether.  I actually think they are more likely to move towards a more free market economy and away from the entitlement state over the next several decades.  At the moment there is an awful lot of economic manipulation in the Chinese marketplace by there Gov't.  But I believe there younger generation will more willingly embrace the free markets.

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   1. 59

      RighterOneposted 11 years agoin reply to this

      Simply perfect. I would disagree only in that you seem to still think of the 'three legs of the World Economy' - China, USA, and Europe that is - as separate. We live in ONE world and we share ONE economy. Euro goes kaboom, so will the Dollar & Y

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   2. 69

      LandmarkWealthposted 11 years agoin reply to this

      I could envison with the right reforms, we could actually benefit from their failure much like the 50's when Europe was rebuilding the rubble from WW2 .  But we are not likely to implement any such reforms here anytime soon...Sadly.

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   3. 61

      CHRIS57posted 11 years agoin reply to this

      I dont think there will be a deep recession if the Euro goes bust. Things are bad for Southern Europe already now. For Northern Europe any crisis is a chance. It was so in 2008 and it will be so with the crisis to come.

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   4. 69

      LandmarkWealthposted 11 years agoin reply to this

      Northern Europe is already now in contraction.  Germany's GDP has offically begun to contract.  It's too late

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   5. 61

      CHRIS57posted 11 years agoin reply to this

      So what, Northern Europe, Germany in particular can take a 5 to 7% slump in GDP for a year or so. Happened before in 2008, but this time will not be as bad, because only hit real economy, banking issues were sorted out last crisis.

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   6. 69

      LandmarkWealthposted 11 years agoin reply to this

      The answer is more complex.  The devaluing of the Euro caused by the other nations Helps German exports. But they then have to bail out the other members. If the other nations like greece leave the currency appreciates and crushes exports.Bad cycle

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