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On July 03 2012 16:52 Rassy wrote:
No thats not true, safings are alot higher then the debt still.
At least in the netherlands they are, and i asume in germany as well.
If inflation is an atractive solution depends on who is in debt and who has the safings..
Inflation is realy not a way to solve annything though and this should be easy to understand.
Ho yeah, so German pension funds is more than 2,400 billions €, and 83% of the GDP ?
Yeah interesting because most economist agree that the current inflation targeting (2%) is too low. I don't even understand how people don't understand that.
Here the IMF chief economist (not a "socialist") said inflation should be raised :
In a new paper with two other IMF economists, Giovanni Dell'Ariccia and Paolo Mauro, Mr. Blanchard says policy makers need to consider radically different approaches to deal with major banking crises, pandemics or terrorist attacks. In particular, the IMF paper suggests shooting for a higher-level inflation in "normal time in order to increase the room for monetary policy to react to such shocks." Central banks may want to target 4% inflation, rather than the 2% target that most central banks now try to achieve, the IMF paper says.
http://online.wsj.com/article/SB10001424052748704337004575059542325748142.html
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On July 03 2012 17:07 WhiteDog wrote:Show nested quote +On July 03 2012 16:52 Rassy wrote:
No thats not true, safings are alot higher then the debt still.
At least in the netherlands they are, and i asume in germany as well.
If inflation is an atractive solution depends on who is in debt and who has the safings..
Inflation is realy not a way to solve annything though and this should be easy to understand. Ho yeah, so German pension funds is more than 2,400 billions €, and 83% of the GDP ? Yeah interesting because most economist agree that the current inflation targeting (2%) is too low. I don't even understand how people don't understand that. Here the IMF chief economist (not a "socialist") said inflation should be raised : Show nested quote +In a new paper with two other IMF economists, Giovanni Dell'Ariccia and Paolo Mauro, Mr. Blanchard says policy makers need to consider radically different approaches to deal with major banking crises, pandemics or terrorist attacks. In particular, the IMF paper suggests shooting for a higher-level inflation in "normal time in order to increase the room for monetary policy to react to such shocks." Central banks may want to target 4% inflation, rather than the 2% target that most central banks now try to achieve, the IMF paper says. http://online.wsj.com/article/SB10001424052748704337004575059542325748142.html
The biggest dutch pension fund has 200 billion which is nearly half of our public debt 460 billion and 28% of our GDP and that is 1! Pension fund.
So it's not weird if German pension funds would be as high as that.
Edit: I found an article on the Dutch news about it: our total pension funds are 870 billion which exceeds the GDP with 146%.
http://www.rtl.nl/components/actueel/rtlnieuws/2012/03_maart/16/economie/pensioenfondsen-hebben-recordvermogen-in-kas.xml
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On July 03 2012 16:52 Rassy wrote:
No thats not true, safings are alot higher then the debt still.
At least in the netherlands they are, and i asume in germany as well.
If inflation is an atractive solution depends on who is in debt and who has the safings..
Inflation is realy not a way to solve annything though and this should be easy to understand.
Not that easy to understand actually. If your country has a majority population that has not paid into the savings fund and its facing 30% unemployment, like the Latin states, then you would prefer to inflate away the debt. If your country is still scared that 4% inflation --> 100% inflation ---> another failed Austrian 'tricks' them into starting another war then you dont.
But since Germany is dependent on its export markets for economic growth, and Netherlands is just an input component into the German economy, if the Germans drive the olive zone into poverty and thus destroy their markets the next thing that will happen will be a contraction in Germany that spreads to its component providers, like the Netherlands. And then you will also have high unemployment and the question of whether the old or the young should get to succeed. Because the old usually vote in higher number than the young, you will have your deflation and get to re-live the French experiences of the 1930s. Eventually enough young will be unemployed that they will care and they will vote for a pro-inflation party.
What the French guy you are talking to is suggesting is to skip 4-5 years of brutal misery for the youth at the cost of making the older people who are soon off to another world anyway slightly poorer.
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4% inflation is a complete disaster imo.
it would also mean 4%+ interest rates wich will greatly effect the economy and costs of our debt.
yes this is a paradox according to some economists but high inflation comes with high interest wich is not that weird when you think about it.
The people with monney (the rich and powerfull people) set the interest rates, and when inflation is high, they simply want more interest to keep up.
(this is my simple explanation for the well known paradox that high inflation comes with high interest rates)
Inflation does not solve annything, it only postpones the inevitable.
We can inflate away our current debts,but we will keep making new debts at an even greater speed
this will greatly devaluate the euro in the end.
All our imports will become alot more costly,and we have to do trade at a less favourable rate then we do now.
This makes everyone more poor.
Also the debt is a result of to much spending and to little income,inflating it away wont change annything fundamentally if we still keep spending more then we make.
Inflation also leads to mis allocation of resources, because everything is increasing in price it is relativly easy to make monney on anny investment (just inflation will make it worth more) and as a result of this lots of what otherwise would be bad investments are made.
Some inflation is needed, to keep people and monney from getting lazy but annything above 2-3% is to much imo.
Meh dont get me started on inflation , i truly hate it lol.
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Has anyone of you read about Carlota Perez' work? What she basically says is that
"historically technological revolutions arrive with remarkable regularity, and that economies react to them in predictable phases. Her argument provides much needed perspective not just on history, but on our own times. And especially on our own information revolution."
So, because of technological revolution (this time the internet and the possibility of sending and receiving information very much quicker than before), our economy reacts in the way we see now. It allows for casino finance in a much broader scale than before.
I don't think the euro problems are happening only because of cultural differences within the EU, making equal financial policy difficult hence leading to monetary policy basically useless. I think all the major economies in the world are linked together much more intensely than what we actually want to comprehend.
Read this publication. Again, quote:
"This article holds that the recent financial collapse belongs to a family of major boom and bust episodes associated with the way in which successive technological revolutions are assimilated by the economy and society. This understanding would move policy thinking away from trying to regulate against further bubbles and, instead, towards actively shaping market conditions to enable the full flourishing of the newly installed technological potential into what can be a sustainable global golden age. Such an objective would also guide the necessary changes in taxation and the financial system in order to make real economy investment more profitable than casino finance. The article briefly describes the recurring historical pattern, discusses the nature of what can be seen as the recent double bubble collapse and examines the elements of a possible global golden age combining universal ICT, “green” growth and full global development."
EDIT: Sorry. Wrong video. THIS is it.
What I like about her is that she doesn't present it as if she has some incentive to say what she does. It seems like it basically is a result of thorough and objective research.
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On July 03 2012 16:52 Rassy wrote:
No thats not true, safings are alot higher then the debt still.
At least in the netherlands they are, and i asume in germany as well.
If inflation is an atractive solution depends on who is in debt and who has the safings..
Inflation is realy not a way to solve annything though and this should be easy to understand.
correct ... in germany thats 2 trillion federal dept vs 5 trillion savings.
edit: there is actually an article(in german) that says it's 10 trillion ... http://www.manager-magazin.de/finanzen/artikel/0,2828,815440,00.html#ref=rss
(to remind you ... billion in german = trillion in english)
edit2: its 5 trillion in monetary assets and 5 trillion in buildings and other hard assets.
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On July 03 2012 20:36 Gaga wrote:Show nested quote +On July 03 2012 16:52 Rassy wrote:
No thats not true, safings are alot higher then the debt still.
At least in the netherlands they are, and i asume in germany as well.
If inflation is an atractive solution depends on who is in debt and who has the safings..
Inflation is realy not a way to solve annything though and this should be easy to understand. correct ... in germany thats 2 trillion federal dept vs 5 trillion savings. edit: there is actually an article(in german) that says it's 10 trillion ... http://www.manager-magazin.de/finanzen/artikel/0,2828,815440,00.html#ref=rss (to remind you ... billion in german = trillion in english)
Well I guess we all know who has most of this money. If there will be inflation, or any other signals that show that rich people might lose much money, the capital will flee the country, like it happened in Greece, like it is happening now in France.
Solving problems via inflation is (mostly) a pipedream of salon socialists who had the luck of being born with a golden spoon in their mouth or young and often idealistic people.
Totally eliminating european debt via inflation will probably cut regular Joe's savings (and his pension funds) in half. This solution would generate the same problems it tries to solve. Imagine european states have to pay half the pension of every pensionnaire and future pensionnaire in the Euro zone. We will be at the exact same point as now, just the countries which are now regarded as in halfway decent shape will be fucked also.
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On July 03 2012 22:16 AngryMag wrote:
Well I guess we all know who has most of this money. If there will be inflation, or any other signals that show that rich people might lose much money, the capital will flee the country, like it happened in Greece, like it is happening now in France.
Capitals are fleeing from France?
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On July 04 2012 01:58 Kukaracha wrote:Show nested quote +On July 03 2012 22:16 AngryMag wrote:
Well I guess we all know who has most of this money. If there will be inflation, or any other signals that show that rich people might lose much money, the capital will flee the country, like it happened in Greece, like it is happening now in France. Capitals are fleeing from France?
well right now, mostly rich persons from France move to GB. Most analysts see french enterprises/corporations/ bigger businesses following if Hollande sticks to his strategy of higher taxation for rich people and corporations.
According to analysts of GB real estate businesses (for example Knight-Frank analyst Grainne Gilmore, I just have german sources, if you google the business and the name of the analyst, I am sure you will also find sources in your tongue), the demand for upper class estates all over the GB from wealthy french people increased over 30% since Hollande became president.
Most people in the finance world are sure that the corporations will follow, just takes a little bit longer to move complete businesses. Individual people basically just have to jump on a plane..
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2 things can pretty much happen:
1: We go on with the Euro/Europa and the countrys that got things in order right now cause they live by strict rules will pay for the countrys that didnt and the whole of europe will level in economics no matter what work ethic/old-age pension countrys have. (So mostly holland/germany/finland will give up a lot of their wealth to reward countrys that consciously didnt live by the rules)
2: We stop with the Euro/Europa, country have to keep their own pants up again so not living by the rules will make theirselves hurt instead of the whole of europa. We dont have to close borders so trading can go on but we do need countrys to have their own identity / currency so they can devaluate when needed
Right now the "leaders" or choosing for option 1 since the majorty of the European countrys will get a positive boost by that.. but tbh, Germany and in lower mention holland/finland will never + Show Spoiler + go on with that, since they people will break down the country if they have to keep paying for southern countrys.... so ofc the Euro will crash, no other option.
In Germany the CSU (which forms the goverment with Merkel's CDU and the FDP) allready stated that they will let the govement crush if they keep giving money to the weaker european brothers, thats the first step...
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On July 03 2012 19:59 Rassy wrote:
4% inflation is a complete disaster imo.
Seriously ? During the 30 glorious, the inflation rate was around 5-7%, and it was the most productiv economic in the history of the whole europe.
4% is nothing...
Capital will not flee from France (or just a little), Hollande is not a "socialist" like people should define what is a socialist. You should stop reading the news paper...
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On July 04 2012 05:42 WhiteDog wrote:Seriously ? During the 30 glorious, the inflation rate was around 5-7%, and it was the most productiv economic in the history of the whole europe. 4% is nothing...
The causality between inflation and production goes the opposite way of what you've written.
Because of an increase in production and consumption, wages and prices increases. Basic economics.
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On July 04 2012 06:42 Primal_MK wrote:Show nested quote +On July 04 2012 05:42 WhiteDog wrote:On July 03 2012 19:59 Rassy wrote:
4% inflation is a complete disaster imo. Seriously ? During the 30 glorious, the inflation rate was around 5-7%, and it was the most productiv economic in the history of the whole europe. 4% is nothing... The causality between inflation and production goes the opposite way of what you've written. Because of an increase in production and consumption, wages and prices increases. Basic economics.
Did I say the inflation during the 30 glorious made it the most productive ? I said, there was an inflation around 5 and 7%, and it was the most productiv economic period in the history of the whole europe, hence inflation is not necessarily a "complete disaster" (meaning it does not prevent our economy from having this productivity).
It's not about understanding basic economy, it's about understanding what the other wrote.
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On July 04 2012 02:41 AngryMag wrote:
well right now, mostly rich persons from France move to GB. Most analysts see french enterprises/corporations/ bigger businesses following if Hollande sticks to his strategy of higher taxation for rich people and corporations.
According to analysts of GB real estate businesses (for example Knight-Frank analyst Grainne Gilmore, I just have german sources, if you google the business and the name of the analyst, I am sure you will also find sources in your tongue), the demand for upper class estates all over the GB from wealthy french people increased over 30% since Hollande became president.
Most people in the finance world are sure that the corporations will follow, just takes a little bit longer to move complete businesses. Individual people basically just have to jump on a plane..
Nonsense.
While it is true that many members of the wealthiest families have looked at foreign real-estates through their counselors, there still is no sign of any sort of exodus. There are two main reasons this won't happen : first, it's expensive and emotionally difficult to leave your country (no, you don't have to just hop on a plane, you also need to have lawyers working for a full year before and a full year after your departure), and second, Hollande is a center-left president who chose a prime minister that just aknowledged that the government needs to cut expenses in a drastic way. You might think that "people in the financial world" are dumbasses who get scared whenever someone speaks of the left-wing, but they're smart people that realize that the government's hands are tied.
Any sort of "panic" has come from wealthy individuals who have a personal grudge against left-wing ideas. A couple may leave, but it's nothing that will hinder the French economy. A dozen persons =/= French capital.
Not only that, but the new tax might not even be applied, and if it is it will only concern 20 000 individuals. There hasn't been any solid talk of any other form of tax.
How is this even a problem if the growth rate has continously declined for the past ten years, putting us on the verge of recession?
I will now kindly ask my fellow europeans to stop bullshitting about our internal affairs if you don't even know what's really going on. Merkel openly backing Sarkozy was deeply inapporpriate, and Cameron's declarations were simply outrageous. Mind your own business.
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I will now kindly ask my fellow europeans to stop bullshitting about our internal affairs if you don't even know what's really going on. Merkel openly backing Sarkozy was deeply inapporpriate, and Cameron's declarations were simply outrageous. Mind your own business.
We are Europe, your business is our business as long this crisis isnt dealt with
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On July 04 2012 20:42 WallieP wrote:Show nested quote +
I will now kindly ask my fellow europeans to stop bullshitting about our internal affairs if you don't even know what's really going on. Merkel openly backing Sarkozy was deeply inapporpriate, and Cameron's declarations were simply outrageous. Mind your own business.
We are Europe, your business is our business as long this crisis isnt dealt with
Oh sorry, when Cameron stated that he will gladly take any money that leaves our country, it almost seemed as if we were enemies.
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On July 04 2012 20:37 Kukaracha wrote:Show nested quote +On July 04 2012 02:41 AngryMag wrote:
well right now, mostly rich persons from France move to GB. Most analysts see french enterprises/corporations/ bigger businesses following if Hollande sticks to his strategy of higher taxation for rich people and corporations.
According to analysts of GB real estate businesses (for example Knight-Frank analyst Grainne Gilmore, I just have german sources, if you google the business and the name of the analyst, I am sure you will also find sources in your tongue), the demand for upper class estates all over the GB from wealthy french people increased over 30% since Hollande became president.
Most people in the finance world are sure that the corporations will follow, just takes a little bit longer to move complete businesses. Individual people basically just have to jump on a plane.. Nonsense. While it is true that many members of the wealthiest families have looked at foreign real-estates through their counselors, there still is no sign of any sort of exodus. There are two main reasons this won't happen : first, it's expensive and emotionally difficult to leave your country (no, you don't have to just hop on a plane, you also need to have lawyers working for a full year before and a full year after your departure), and second, Hollande is a center-left president who chose a prime minister that just aknowledged that the government needs to cut expenses in a drastic way. You might think that "people in the financial world" are dumbasses who get scared whenever someone speaks of the left-wing, but they're smart people that realize that the government's hands are tied. Any sort of "panic" has come from wealthy individuals who have a personal grudge against left-wing ideas. A couple may leave, but it's nothing that will hinder the French economy. A dozen persons =/= French capital. Not only that, but the new tax might not even be applied, and if it is it will only concern 20 000 individuals. There hasn't been any solid talk of any other form of tax. How is this even a problem if the growth rate has continously declined for the past ten years, putting us on the verge of recession? I will now kindly ask my fellow europeans to stop bullshitting about our internal affairs if you don't even know what's really going on. Merkel openly backing Sarkozy was deeply inapporpriate, and Cameron's declarations were simply outrageous. Mind your own business.
So France will buck history. No rise in taxes and regulations has not been followed by capital flight when capital is able to flee, anywhere in the world, any time. France must be special and will escape this just because.
France after Germany has been the biggest driver of making a political system where other countries in Europe have a higher stake and thus a voice in every other country's internal affairs, don't get pissy when they voice opinions about your internal affairs you don't like. Keeping your nose out of other people's business sure didn't stop many Euro countries - including France - from threatening to do economic damage to Austria after they voted a way Europe didn't like (for the Freedom Party).
http://www.sfgate.com/politics/article/Austria-Threatens-EU-Expansion-Plans-Over-2750327.php
Austria's frustration over European Union sanctions, which had largely degenerated into a long- distance cat fight between Austria and France, led over the weekend to threats by Austria to block EU expansion.
They also did this back in 1999-2000, and it was a lot more serious than the recent spat over the Freedom Party.
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Something to understand though is that the ones willing to flee have already done that. France has been a high tax country since forever, and for 20 years at least it has been easy to evade fiscal pressure by going to Begium/England/Switzerland or the English fiscal paradises of Jersey/Guernsey
The ones still here are stuck, because their main activity is on french soil, because they need to stay in Paris to do business (close to political power/close to other big firms), or for any other reason
About the taunts between European leader, it's just internal politic moves. And I very much agree with the fact that french leaders are very prone to get involved in other country's business
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I will now kindly ask my fellow europeans to stop bullshitting about our internal affairs if you don't even know what's really going on. Merkel openly backing Sarkozy was deeply inapporpriate, and Cameron's declarations were simply outrageous. Mind your own business.
the best part is that we(germans) are directly on the path of paying for the depts of whole europe and that includes the dept by lowering the pension age to 60 in france while we work till 67.
and you tell us to shut up while begging for our money ? yeah ... why don't we just quit this Euro shit... then your arguments gets valid again.
and dont start with germany profiting from the euro shit again ... delivering stuff on credit that won't be paid back is not profiting. we did very well with the DM if you remember history.
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On July 04 2012 23:56 DeepElemBlues wrote:So France will buck history. No rise in taxes and regulations has not been followed by capital flight when capital is able to flee, anywhere in the world, any time. France must be special and will escape this just because. France after Germany has been the biggest driver of making a political system where other countries in Europe have a higher stake and thus a voice in every other country's internal affairs, don't get pissy when they voice opinions about your internal affairs you don't like. Keeping your nose out of other people's business sure didn't stop many Euro countries - including France - from threatening to do economic damage to Austria after they voted a way Europe didn't like (for the Freedom Party). http://www.sfgate.com/politics/article/Austria-Threatens-EU-Expansion-Plans-Over-2750327.phpShow nested quote +Austria's frustration over European Union sanctions, which had largely degenerated into a long- distance cat fight between Austria and France, led over the weekend to threats by Austria to block EU expansion.
The thing is, no other new taxes have been announced or applied (except a sort of Tobin tax, which is a neglectable european measure). It is therefore nonsensical to say that capital is already fleeing the country - if it was (and it isn't), it would be for other reasons.
But you're right, France is in other people's business too, I apologize. I was simply mad that suddenly everyone cares about us as if we were a new socialist country, when French themselves call the government a "pink" government - soft and somewhat inoffensive.
I do however believe that we need more Europe or no Europe at all and right now, because the situation is just ridiculous in the current state of things.
PS : no Germany, we don't need a bailout, and no I don't think that retirement at 60 will be reinstated, that was an electoral promise.
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EPT
