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On July 15 2011 01:35 Ganondorf wrote:Show nested quote +On July 13 2011 15:39 Flyingdutchman wrote:On July 13 2011 08:26 Ganondorf wrote:
Italy seems to be responding to the speculation attempts and both the stock market and the bond market are slowly recovering. Italy will default on its own, it's too big to be lead to default by speculation.
The current new financial law is missing 15bilion€, which are financed by a yet-to-be-defined fiscal reform in 2014, after the next elections :D I guess that made the markets rage a bit, who didn't understand that's just the way italian polticians work, trying to force the next government to make impopular austerity measures so it will be short lived.
Italy can easily be saved by improving the way the EU works, which should aim at making the euro lose some of its value and reduce the spread between bonds, maybe even take a step further, after the monetary union, make a bond union, which would also give more control over local governments spending. That would get rid of the spread problem and give speculators and rating agencies nothing to work on. Failing that, yeah the euro will go down, and possibly even the financial system as we know it (because of the domino effect in this case, most sovereign states will default, including germany and the us), paving the way for a new and hopefully better one. There is no way the healthier Eurostates will go with a bond union just because Italy doesn't want (or can't because of politics) to reduce spending. Instead of taking measures to ensure healthy fiscal policy you want the easy/short sighted option of just shifting the burden of risk on to other nations. Your idea can't even work since no nation I can think of will give up its fiscal autonomy to some central agency that would determine the amount of money one can borrow. I'm sorry but this just comes across as a spoiled brat that doesn't want to clean his room. You do realize that the excessive value of the euro has put those states on the road to default in the first place ? I'm not saying the stronger states should give out money, i'm just saying, if germany, france, the netherlands and the other "healthy" states like the euro as it is, they will have to pay for it, nothing comes for free. Without those politcal advances, the monetary union makes absolutely no sense and should be reversed. Italy would be fine if it still had its own currency and could just devalue it, and the same stands for most countries in trouble. The euro was only a first step to a full economic union of europe, if that's not happening, then get rid of it and try again in 50 years.
Why would Germany pay for Italians who are working less than they do? This is simply ridicolous. This fluctuation is not possible anymore, which is a problem. But it only helps for tourism and export. Greece exports nothing and only had/has tourism.
Italy is also destroyed. The only thing which more or less works is the north part. Mafia is still very strong and your president doesn't need a comment I guess.
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It's not about how much you work.
It's about how productive you are at work. Or to say it in other words, how much the product you worked on rose in value by your work.
and germany will help, because it's well being depends too much on the financial health of its neighbours and everyone with high influence on the politicians is also very interested in it.
german people are not upset about it enough.
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so glad the UK stayed outta it, gotta feel for countrys like german that have been funding the whole thing and dont get as much outta it as some of the less developed countries
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On July 15 2011 19:49 Gaga wrote:
It's not about how much you work.
It's about how productive you are at work. Or to say it in other words, how much the product you worked on rose in value by your work.
^^This
Also Italy and the USA are also balancing the double edged blade that is foreign debts
But no, the EURO won't fall, they won't allow it
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Due to inevitable economic laws, the West was doomed the instant the first factory moved to China.
If there is more supply for a service (like unskilled labour) than demand, the suppliers have absolutely no bargaining power. Especially when their income and therefore their home and food depends on it. From an economic point of view, any unskilled labour paid more than the cost of food is overpaid.
China knows this because it is a country led by engineers and economists, whereas the West has such things as minimum wages and morals about living standards that disapprove of giving people the equivalent of €50/month. And as a result, there is no way the West is going to keep one single manufacturing job.
And not just manufacturing jobs: the market for high level jobs will not grow as fast as the supply grows due to globalisation, creating unemployment at those levels as well. IT personnel paid €1/day in India was just the beginning. Every job below managerial level will suffer. In the end there will be an upperclass of very rich globalised capitalists/robber barons/top managers and engineers with unique skills while everyone else experiences >50% unemployment rate.
Europe is the first to fall because it has denied the above inevitable process for over thirty years. During the '60s "full employment" was expected to be within reach for the left and was seen as possible but not desirable by the right. Nowadays there would be a 40% unemployment rare if not for the government. Which means the government needs to take on debt and crush the productive population under taxes. This is unsupportable, but it happened so slowly (boiling frog syndrome) that nobody really noticed.
Everything the West can possibly do about the crisis is futile, other than:
- accepting that some people are going to have to earn €50/month.
- isolationism: keeping a Western economy running completely separate from the Eastern one, until educated people start getting jealous of the electronic gadgets and cars in China and tear down the wall.
I say the former should happen and the West should attack the East on their own turf: Chinese labour cheap as (and treated like) dirt. This does not actually have to condemn the majority to poverty. Cutbacks will be needed, but "second best" products are actually potentially a lot cheaper than brand new ones and the housing market will be forced to adapt as well, drastically reducing living costs.
For instance, there is a car in India that costs about €1500 new and naturally it is not allowed in Europe due to nanny state laws that decide for you that crash safety is so important for you that you don't want a car that may be less safe but costs €1500. The value of an iPad1 has plummeted after the iPad2 even though there is very little difference between them. A five year old PC is worth about €100 on the second hand market. The list goes on.
This will be the future whether you like your iPad2/Yaris/Bravia or not. The question is, will the European governments move to this model of their own accord, spending some money to ease the transition, or will the IMF do it for them and forbid them from investing a cent into making it as painless as possible for the people?
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what you forget is that china gets richer everyday...
and when they reached productivity levels of the west, they will get payed what we do now = equal competition.
Trade never works just in one direction.
even today there are already chinese companys building plants in germany to access the german/european market better.
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I think the biggest problem actualy and for the futur is the Eurozone leadership. There is none. No authority who can say "Hey !! What the frack u're doing there?? 20 billion euros for that shit? No, change your mind u can't afford it. U've got responsabilities for your people and the next generations."
This is the big issue, no global leadership. We need a strong leadership, indirectly elected (many by European congress?) with a high authority, maybe high enough to say "Sorry insert country, the president you've elected lied to you, he/she is not good enough to make good choise of the futur, he must be replaced asap"
We are all in the same boat, but there are tons of captains. And iceberg is coming. Something as to change. And fast.
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One of the problems with Chinese economy versus the rest is that China keep their currency low through devaluation, hollowing out their consumers abillity to spend money abroad. This has a positive effect on the Chinese trade making their products cheaper to the rest of the world, while making it possible for Chinese people to keep buying Chinese goods, and since most/all western countries has agreed to ban devaluation as a currency policy only China has the ability, because if everyone could/would do it then everybody would loose, which is why most countries stopped doing it in the first place.
+ Show Spoiler +
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On July 15 2011 20:09 Xanrae wrote:
Due to inevitable economic laws, the West was doomed the instant the first factory moved to China.
If there is more supply for a service (like unskilled labour) than demand, the suppliers have absolutely no bargaining power. Especially when their income and therefore their home and food depends on it. From an economic point of view, any unskilled labour paid more than the cost of food is overpaid.
China knows this because it is a country led by engineers and economists, whereas the West has such things as minimum wages and morals about living standards that disapprove of giving people the equivalent of €50/month. And as a result, there is no way the West is going to keep one single manufacturing job.
And not just manufacturing jobs: the market for high level jobs will not grow as fast as the supply grows due to globalisation, creating unemployment at those levels as well. IT personnel paid €1/day in India was just the beginning. Every job below managerial level will suffer. In the end there will be an upperclass of very rich globalised capitalists/robber barons/top managers and engineers with unique skills while everyone else experiences >50% unemployment rate.
Europe is the first to fall because it has denied the above inevitable process for over thirty years. During the '60s "full employment" was expected to be within reach for the left and was seen as possible but not desirable by the right. Nowadays there would be a 40% unemployment rare if not for the government. Which means the government needs to take on debt and crush the productive population under taxes. This is unsupportable, but it happened so slowly (boiling frog syndrome) that nobody really noticed.
Everything the West can possibly do about the crisis is futile, other than:
- accepting that some people are going to have to earn €50/month.
- isolationism: keeping a Western economy running completely separate from the Eastern one, until educated people start getting jealous of the electronic gadgets and cars in China and tear down the wall.
I say the former should happen and the West should attack the East on their own turf: Chinese labour cheap as (and treated like) dirt. This does not actually have to condemn the majority to poverty. Cutbacks will be needed, but "second best" products are actually potentially a lot cheaper than brand new ones and the housing market will be forced to adapt as well, drastically reducing living costs.
For instance, there is a car in India that costs about €1500 new and naturally it is not allowed in Europe due to nanny state laws that decide for you that crash safety is so important for you that you don't want a car that may be less safe but costs €1500. The value of an iPad1 has plummeted after the iPad2 even though there is very little difference between them. A five year old PC is worth about €100 on the second hand market. The list goes on.
This will be the future whether you like your iPad2/Yaris/Bravia or not. The question is, will the European governments move to this model of their own accord, spending some money to ease the transition, or will the IMF do it for them and forbid them from investing a cent into making it as painless as possible for the people?
Wow ... not sure whether you are trolling, but if not you sure should take that economics101 course again. There are so many flaws in this analysis that it's difficult to even start, but only a short look at the massive increases in labour cost in China and India (India's manufacturing cost increased by 20% in a single year (!!) in 2010) is sufficient to crush the conclusions you draw.
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I couldn't say one way or the other but I really do hope the euro doesn't collapse like the dollar has these past few years. The last thing we need is another financial crisis like that in the world.
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On July 15 2011 21:02 MiraMax wrote:Show nested quote +On July 15 2011 20:09 Xanrae wrote:
Due to inevitable economic laws, the West was doomed the instant the first factory moved to China.
If there is more supply for a service (like unskilled labour) than demand, the suppliers have absolutely no bargaining power. Especially when their income and therefore their home and food depends on it. From an economic point of view, any unskilled labour paid more than the cost of food is overpaid.
China knows this because it is a country led by engineers and economists, whereas the West has such things as minimum wages and morals about living standards that disapprove of giving people the equivalent of €50/month. And as a result, there is no way the West is going to keep one single manufacturing job.
And not just manufacturing jobs: the market for high level jobs will not grow as fast as the supply grows due to globalisation, creating unemployment at those levels as well. IT personnel paid €1/day in India was just the beginning. Every job below managerial level will suffer. In the end there will be an upperclass of very rich globalised capitalists/robber barons/top managers and engineers with unique skills while everyone else experiences >50% unemployment rate.
Europe is the first to fall because it has denied the above inevitable process for over thirty years. During the '60s "full employment" was expected to be within reach for the left and was seen as possible but not desirable by the right. Nowadays there would be a 40% unemployment rare if not for the government. Which means the government needs to take on debt and crush the productive population under taxes. This is unsupportable, but it happened so slowly (boiling frog syndrome) that nobody really noticed.
Everything the West can possibly do about the crisis is futile, other than:
- accepting that some people are going to have to earn €50/month.
- isolationism: keeping a Western economy running completely separate from the Eastern one, until educated people start getting jealous of the electronic gadgets and cars in China and tear down the wall.
I say the former should happen and the West should attack the East on their own turf: Chinese labour cheap as (and treated like) dirt. This does not actually have to condemn the majority to poverty. Cutbacks will be needed, but "second best" products are actually potentially a lot cheaper than brand new ones and the housing market will be forced to adapt as well, drastically reducing living costs.
For instance, there is a car in India that costs about €1500 new and naturally it is not allowed in Europe due to nanny state laws that decide for you that crash safety is so important for you that you don't want a car that may be less safe but costs €1500. The value of an iPad1 has plummeted after the iPad2 even though there is very little difference between them. A five year old PC is worth about €100 on the second hand market. The list goes on.
This will be the future whether you like your iPad2/Yaris/Bravia or not. The question is, will the European governments move to this model of their own accord, spending some money to ease the transition, or will the IMF do it for them and forbid them from investing a cent into making it as painless as possible for the people? Wow ... not sure whether you are trolling, but if not you sure should take that economics101 course again. There are so many flaws in this analysis that it's difficult to even start, but only a short look at the massive increases in labour cost in China and India (India's manufacturing cost increased by 20% in a single year (!!) in 2010) is sufficient to crush the conclusions you draw.
Seeing as how he started that rant with "due to inevitable economic laws" I'd say he can be safely disregarded.
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[QUOTE]On July 15 2011 19:51 Grovbolle wrote:
[QUOTE]On July 15 2011 19:49 Gaga wrote:
It's not about how much you work.
It's about how productive you are at work. Or to say it in other words, how much the product you worked on rose in value by your work.
But no, the EURO won't fall, they won't allow it[/QUOTE]
I don't think it's in their power. Just look back at how much drama was there when Greece was about to recive the first financial aid. Nobody (except of people who really knew what was going on and at how terrible state the greek public sector is) expected there would be any need to give them more. One year later, they are recieving even bigger aid and many people are now saying Greece will go bankrupt anyway.
Money simply aren't infinite and there just isn't enough to forever keep saving other countries apart from Greece like Italy, Spain, Portugal.
My guess is Greece will announce bankrupcy, leave EMU and get back to Drachma. They will get another financial aid to make the switch possible. With weak currency greek export will grow and if they stick to strict reforms of public sector, they will hopefully stabilize. However, this won't resolve problems in other countries I mentioned and sooner or later they will have to leave EMU as well, after greek lesson, with significantly lower cost though. Then even in „healthy“ countries (if there are any after all of this) the costs of using Euro will be greater than benefits. Thus the EMU will come to an end.
I give it 3-5 years
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#Ondik
Even though I get what you are saying, and do understand your arguments and reasoning, your opinion is as much a guess as ours as to what will happen. Why should the EU allow Greece to just declare bankruptcy and thus write off all debt as "bad debt"?. If they do so, why isn't America doing the same? seeing as they owe about 14 trillion dollars to china and the rest of the world
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On July 15 2011 21:11 Osmoses wrote:Show nested quote +On July 15 2011 21:02 MiraMax wrote:On July 15 2011 20:09 Xanrae wrote:
Due to inevitable economic laws, the West was doomed the instant the first factory moved to China.
If there is more supply for a service (like unskilled labour) than demand, the suppliers have absolutely no bargaining power. Especially when their income and therefore their home and food depends on it. From an economic point of view, any unskilled labour paid more than the cost of food is overpaid.
China knows this because it is a country led by engineers and economists, whereas the West has such things as minimum wages and morals about living standards that disapprove of giving people the equivalent of €50/month. And as a result, there is no way the West is going to keep one single manufacturing job.
And not just manufacturing jobs: the market for high level jobs will not grow as fast as the supply grows due to globalisation, creating unemployment at those levels as well. IT personnel paid €1/day in India was just the beginning. Every job below managerial level will suffer. In the end there will be an upperclass of very rich globalised capitalists/robber barons/top managers and engineers with unique skills while everyone else experiences >50% unemployment rate.
Europe is the first to fall because it has denied the above inevitable process for over thirty years. During the '60s "full employment" was expected to be within reach for the left and was seen as possible but not desirable by the right. Nowadays there would be a 40% unemployment rare if not for the government. Which means the government needs to take on debt and crush the productive population under taxes. This is unsupportable, but it happened so slowly (boiling frog syndrome) that nobody really noticed.
Everything the West can possibly do about the crisis is futile, other than:
- accepting that some people are going to have to earn €50/month.
- isolationism: keeping a Western economy running completely separate from the Eastern one, until educated people start getting jealous of the electronic gadgets and cars in China and tear down the wall.
I say the former should happen and the West should attack the East on their own turf: Chinese labour cheap as (and treated like) dirt. This does not actually have to condemn the majority to poverty. Cutbacks will be needed, but "second best" products are actually potentially a lot cheaper than brand new ones and the housing market will be forced to adapt as well, drastically reducing living costs.
For instance, there is a car in India that costs about €1500 new and naturally it is not allowed in Europe due to nanny state laws that decide for you that crash safety is so important for you that you don't want a car that may be less safe but costs €1500. The value of an iPad1 has plummeted after the iPad2 even though there is very little difference between them. A five year old PC is worth about €100 on the second hand market. The list goes on.
This will be the future whether you like your iPad2/Yaris/Bravia or not. The question is, will the European governments move to this model of their own accord, spending some money to ease the transition, or will the IMF do it for them and forbid them from investing a cent into making it as painless as possible for the people? Wow ... not sure whether you are trolling, but if not you sure should take that economics101 course again. There are so many flaws in this analysis that it's difficult to even start, but only a short look at the massive increases in labour cost in China and India (India's manufacturing cost increased by 20% in a single year (!!) in 2010) is sufficient to crush the conclusions you draw. Seeing as how he started that rant with "due to inevitable economic laws" I'd say he can be safely disregarded.
I LOLed...
On topic: I for one welcome the crisis, because it forces the members of the EMU to decide which direction they want to be heading. The European legislative system is in dire need of reform in any case and the crisis might just provide enough leverage to bring about some change. If the Euro is to have a future then a closer political coordination certainly is required, as is solidarity with states who are in financial trouble. Abolishing the Euro, would not be the end of the world, but acting as if this would magically resolve the fiscal problems of member states is just untrue. A strong currency depreciation usually results to a strong loss of wealth for the respective country and is not a get-out-of-jail-for-free card.
I personally like how the political idea of a unified Europe has affected my life. My girlfriend is from Italy, my best friend from Poland, we are currently planning to visit Porto with some Portuguese colleagues, since we have been to the wonderful city of Kopenhagen with two girls from the Ucraine last year. The fact that this is possible only 65 years after the end of world war 2, in which my grandfather spent time as a p.o.w. in Italy seems completely unreal to me.
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It is easy to solve all these economic problems. A comprehensive eu wide debt monotorium followed by massive infrustructure building and 0% interest loans to business from the ecb via national banks bypassing the private banking system will do the trick. You need to engage in more substantial national industrial projects at the individual nation and eu wide level. A minimum corporate tax rate must be introduced and tax evasion must be cracked down on with brutal efficiency. Problem solved.
This will not occur and so the euro will collapse.
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On July 15 2011 21:20 Grovbolle wrote:
#Ondik
Even though I get what you are saying, and do understand your arguments and reasoning, your opinion is as much a guess as ours as to what will happen. Why should the EU allow Greece to just declare bankruptcy and thus write off all debt as "bad debt"?. If they do so, why isn't America doing the same? seeing as they owe about 14 trillion dollars to china and the rest of the world
Many nations have done the debt monotorium road before like argentina or russia and it worked like a charm. In europe the problem is that the European banks will go bust if greece folds and they dont like that. Do not forget that not a single penny went to greece from the bailout every cent went to French and German banks. It was a bailout of French and German banks labelled a bailout of greece! In the case of the US the US treasury market is so important to the global economy that if the US defaulted the global economic and monetary system would completely collapse faster than you would believe possible. Hyperinflation may result from the panic.
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On July 15 2011 21:44 Choros wrote:Show nested quote +On July 15 2011 21:20 Grovbolle wrote:
#Ondik
Even though I get what you are saying, and do understand your arguments and reasoning, your opinion is as much a guess as ours as to what will happen. Why should the EU allow Greece to just declare bankruptcy and thus write off all debt as "bad debt"?. If they do so, why isn't America doing the same? seeing as they owe about 14 trillion dollars to china and the rest of the world Many nations have done the debt monotorium road before like argentina or russia and it worked like a charm. In europe the problem is that the European banks will go bust if greece folds and they dont like that. Do not forget that not a single penny went to greece from the bailout every cent went to French and German banks. It was a bailout of French and German banks labelled a bailout of greece! In the case of the US the US treasury market is so important to the global economy that if the US defaulted the global economic and monetary system would completely collapse faster than you would believe possible. Hyperinflation may result from the panic.
The argument that "in the bailout no penny went to greece but all to the banks" makes as much sense as saying "there was no bailout as long as one lets greece pay back its debt". Yes, there was a bailout and yes, greece profited the most from this bailout and as a side effect so did the investors. What is a "monotorium" by the way? Do you mean moratorium?
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On July 15 2011 22:07 MiraMax wrote:Show nested quote +On July 15 2011 21:44 Choros wrote:On July 15 2011 21:20 Grovbolle wrote:
#Ondik
Even though I get what you are saying, and do understand your arguments and reasoning, your opinion is as much a guess as ours as to what will happen. Why should the EU allow Greece to just declare bankruptcy and thus write off all debt as "bad debt"?. If they do so, why isn't America doing the same? seeing as they owe about 14 trillion dollars to china and the rest of the world Many nations have done the debt monotorium road before like argentina or russia and it worked like a charm. In europe the problem is that the European banks will go bust if greece folds and they dont like that. Do not forget that not a single penny went to greece from the bailout every cent went to French and German banks. It was a bailout of French and German banks labelled a bailout of greece! In the case of the US the US treasury market is so important to the global economy that if the US defaulted the global economic and monetary system would completely collapse faster than you would believe possible. Hyperinflation may result from the panic. The argument that "in the bailout no penny went to greece but all to the banks" makes as much sense as saying "there was no bailout as long as one lets greece pay back its debt". Yes, there was a bailout and yes, greece profited the most from this bailout and as a side effect so did the investors. What is a "monotorium" by the way? Do you mean moratorium?
That money didnt go to Greece.
A monotorium is different from a default because it simply refers to a temporary freeze on payments of debt rather than a cancellation of debt.
Nations which have, at one time or another, declared a debt moratorium, are Peru, Pakistan, Brazil, Mexico, Russia, Argentina and the United States in the Great Depression with its World War I debts (1931). The most recent addition to this group is Ecuador, which entered a technical moratorium on its foreign debt on 14 November 2008. Ecuador stopped all payments on its 2012 bond, but has continued on the 2015 bond.
It basically says that the creditors will get their money back AFTER the economy has been reparied not before. In the mean time the credit creation capability of the ECB must be used to channel credit at very low rates to Governments AND Business directly to support the economy focussing on giving loans into long term investment projects so as to actually repair the economy in a meaninful way. The debt monatorium would best be applied to all countries under stress not only Greece if not EU wide. This will also help the economy by freeing up funds being sucked into interest repayments allowing it to flow back into the real economy as opposed to the blackhole of global banking.
Cancelling the debt would be alright as well however may be more chaotic for the financial system. If you persue a debt preservation strategy by contrast expect economic collapse.
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Imo. the main problem is how the central and private banks operate..how this whole fractional reserve fiat banking system works. Its fundamently flawed and deceptive. No wonder it cause financial meltdowns from time to time.
And BTW for those of you who are ignorant and in denial.. The PRIVIAT banks do CREATE MONEY. Thats how they operate..creating money..kinda "out of the air". BUT.."money"..its not the same money as most people define money..for only the central bank can (legaly) create that type money.
But regardless private banks do create money !!!!! ..."bank money", or "book money"..money that basicly is "debt money" (at least those i know of). They are IOU (I owe you) money. And it is money that basically only exist "in the book"
And this "fake" "book/draft mony" is causing (or at least has the potential to cause) one of the "systems" mayor flaws and deception..cuz its causing people to believe they have claim on money that DOES NOT REALLY EXIST...
To bad so many people is blinded to how fundamently flawed and massively deceptive this whole system is. The banks manipulate the money supply, and they are blessed by the goverment to do so.
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EURO will remain a strong money no matter what. it still has more value than dollars (which makes me happy payin less for streaming such as MLG, NASL or GSL)
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EPT
