EPTThe European Debt Crisis and the Euro - Page 98
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mathemagician1986
Germany549 Posts
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WhiteDog
France8650 Posts
Also, in France, but it's most likely also the case in most occidental country, there are a lot of studies (Thomas Piketty, Camille Landais) showing that there is a huge change since 1990 or so, in the fact that the richest are less and less working and more and more gaining their money from different kind of rent. So the idea that the rich guy is the sucessful individual who work more than everyone is just wronger and wronger as time pass. Get real. The 75% tax income is not made to kill incentives, it's made to force rich and wealthy people who are not working to give their money to poor / middle class working people. | ||
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RvB
Netherlands6313 Posts
On August 14 2012 18:50 mathemagician1986 wrote: I'm really scared for the economy in europe at the moment. But at the same time, we've at least started to face the shit that is our system, while a lot of other declining economies simply point their fingers at us, ignoring their own problems. I believe in the end the EU will leave this crisis behind and become competitive again, but it's going to be a bumpy ride. The decline of the Greece economy has slowed down a bit and NL also shows 0.2% compared to last quarter which was unexpected so it's not all bad :D. | ||
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Kavallerie
Germany89 Posts
http://www.bbc.co.uk/news/business-19252724 It seems that Germany, France and to some extent the Netherlands were able to maintain either zero growth or positive growth. This was not enough to offset the Eurozone recession. I'm really hoping for the best for countries like Italy and Spain. | ||
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Rassy
Netherlands2308 Posts
http://www.group30.org/images/PDF/ReportPDFs/OP84.pdf | ||
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Gaga
Germany433 Posts
![[image loading]](http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2012/08/Who%20benefits%20from%20Euro_0.jpg) Tales Of The Unexpected: Who Really Benefited From The Euro (Hint: NOT Germany) | ||
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Daray
6006 Posts
http://www.bbc.co.uk/news/business-19499950 "The ECB aims to cut the borrowing costs of debt-burdened eurozone members by buying their bonds." "The maturities of the bonds being purchased would be between one and three years and there would be no limits on the size of bond purchases, he added." Here we go again... any thoughts? | ||
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Gaga
Germany433 Posts
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JonnyBNoHo
United States6277 Posts
On September 07 2012 00:48 Daray wrote: I guess we can bump this thread again. http://www.bbc.co.uk/news/business-19499950 "The ECB aims to cut the borrowing costs of debt-burdened eurozone members by buying their bonds." "The maturities of the bonds being purchased would be between one and three years and there would be no limits on the size of bond purchases, he added." Here we go again... any thoughts? Soooo, cross your fingers and hope that the crisis is resolved before inflation rears its ugly head? Well, good luck to them. It certainly has a shot at working - I hope they don't blow it. | ||
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Hider
Denmark9447 Posts
On September 07 2012 04:00 JonnyBNoHo wrote: Soooo, cross your fingers and hope that the crisis is resolved before inflation rears its ugly head? Well, good luck to them. It certainly has a shot at working - I hope they don't blow it. Its sterilized. | ||
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Trowa127
United Kingdom1230 Posts
Its *supposed* to be sterilized. When was the last time the ECB said something that actually turned out to be true? Remember they've been printing on the secondary markets for yonks now. Anyway I did say this would happen six months ago and once again was told I was stupid and wrong in this thread.  Good article for people who don't know what sterilisation is - http://www.efinancialnews.com/story/2012-09-06/ecb-mario-draghi-bond-buying-sterilisation?mod=blogheadlines-home As the article points out, sterilisation isn't possible when the scale of printing is 'unlimited' | ||
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JonnyBNoHo
United States6277 Posts
Ahh, ok. What are they doing to sterilize? Are they buying bonds from countries with high interest rates and selling bonds with low rates? Or is there another mechanism they are using? | ||
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Trowa127
United Kingdom1230 Posts
On September 07 2012 04:22 JonnyBNoHo wrote: Ahh, ok. What are they doing to sterilize? Are they buying bonds from countries with high interest rates and selling bonds with low rates? Or is there another mechanism they are using? http://openeuropeblog.blogspot.co.uk/2011/11/ecb-sterilisation-fail.html Please note that they said they would sterilise in the past and that was an outright, blatant lie. It is never going to happen. | ||
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Gaga
Germany433 Posts
yeah, thats why nothing will change except for a few days/weeks of rising asset prices. Like their previous program btw... can kicking down the road. to the guy who asked what it means, i means that they will decrease their "normal" money printing elsewhere in the same amount they buy bonds to not increase the overall moneysupply more than normal. Or they sell some of their assets ... or in the words of bloomberg : "To sterilize the bond purchases, the ECB will remove from the system elsewhere the same amount of money it spends, ensuring the program has a neutral impact on the money supply. " | ||
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Hider
Denmark9447 Posts
On September 07 2012 04:22 JonnyBNoHo wrote: Ahh, ok. What are they doing to sterilize? Are they buying bonds from countries with high interest rates and selling bonds with low rates? Or is there another mechanism they are using? nvm. | ||
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Hider
Denmark9447 Posts
On September 07 2012 04:27 Trowa127 wrote: http://openeuropeblog.blogspot.co.uk/2011/11/ecb-sterilisation-fail.html Please note that they said they would sterilise in the past and that was an outright, blatant lie. It is never going to happen. Well according to that source, they did sterilize most of the money. Here is one quote from the source: "- This all raises questions over whether the ECB is reaching some technical limit for sterilisation. It has long been rumoured that there is a limit to the amount of liquidity which the ECB can suck out of the system at reasonable rates. There could come a point where the banks simply do not have the liquidity at hand to fill such huge need for deposits, especially given that their funding is already spread so thinly during the crisis." To my knowledge there is no liquidty problem in the eurozone. Capital is the problem. So banks can put their money in the weekly deposits, which will have no effect on their capital ratio. | ||
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Trowa127
United Kingdom1230 Posts
On September 07 2012 05:52 Hider wrote: Well according to that source, they did sterilize most of the money. Here is one quote from the source: "- This all raises questions over whether the ECB is reaching some technical limit for sterilisation. It has long been rumoured that there is a limit to the amount of liquidity which the ECB can suck out of the system at reasonable rates. There could come a point where the banks simply do not have the liquidity at hand to fill such huge need for deposits, especially given that their funding is already spread so thinly during the crisis." To my knowledge there is no liquidty problem in the eurozone. Capital is the problem. So banks can put their money in the weekly deposits, which will have no effect on their capital ratio. Yes, most - but that isn't all of it, and remember this was on a much smaller scale than proposed now. I just find it very hard to believe a bond buying scheme with a potentially unlimited scope will have 100% or even close to 100% sterilization. The 5% they missed out on in the example above would be a huge amount of money when taken in the context of the new bond buying plan! | ||
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Hider
Denmark9447 Posts
On September 07 2012 06:08 Trowa127 wrote: Yes, most - but that isn't all of it, and remember this was on a much smaller scale than proposed now. I just find it very hard to believe a bond buying scheme with a potentially unlimited scope will have 100% or even close to 100% sterilization. The 5% they missed out on in the example above would be a huge amount of money when taken in the context of the new bond buying plan! Possibly. Do you any facts on Operation Twist. Wasn't that 100 sterilized? | ||
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topoulo
253 Posts
It means that the ecb will only buy bonds from countries whom already under a treaty - somekind of troika - imf whatever. I am not sure this is for all european countries or only italy or spain i havent red the whole part . howerver that means that soon italy will be in an imf treaty and spain just signed a 402bn package ... It means that the central bankerr is a hostage of anykind of demands imf or whoever has. ultimate speculators will have a party soon , since they will bet at which point the goverments will refuse imf demands and when that happens game over. for greeks as example if imf wants a 6 days working( it doesnt have any effect since there are no jobs in greece but alas) Greeks refuse that means the central bank wont be buying. so imf will ask whatever they wnat and if any member refuses the buying is null... What that exactly does is maybe , giving a year of life in the eurozone - since the eurozone is as strong as its weaker links.. The weaker parts atm are nearly bankrupted and wont hold much . troikas demands have no logic and only makes things worse ( obvious form the recent eurozone graphs)so do the math. | ||
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Rassy
Netherlands2308 Posts
It would be a remarkable fast recovery from a financial crisis, manny other crisis such as the asia financial crisis, the argentinian one and the swedish one lasted longer if i remember correctly. Europe will print monney but it looks it will be a limited amount of printing, Germany and other countrys can still stop anny aditional aid programs, they have to give permission for them , this esm does not seem to be a blanc cheque. Besides voting for the esm there where 2 other major events this week: the netherlands had its elections and helicopter ben aproved more monney printing (yet again) Personally i think and hope the elections of the netherlands will show europe the road and be an example for other governments to come. The elections in the netherlands have a difficult outcome at first sight, the big leftwing party and the big rightwing party both have 40 out of 150 totall seats, and there does not seem to be a reasonable majority possible for either a leftwing, or a rightwing administration. What i hope,and expect is the 2 big partys compromising and forming the government together. This seems verry difficult at first sight (it would be like torry and labour making one government) but it is not impossible and it has been done before in the netherlands with verry good results. I hope to see a new form of social capitalism emerge from this, take the best ideas from both the left and the right side. Maybe this is wishfull thinking but i am optimistic . It is something that could go wrong also though, i have to admit. If the partys fail to form a government in a reasonable amount of time it could lead to more controversy between leftwing and rightwing , not only in the netherlands but in the whole of europe. Then BB also aproved a new round of quantitive easing today, it almost felt like he had to wait for the esm to be aproved before feeling free to do so. Now that europe will print a bit of monney, america can print a bit more again also. America prints monney on a much larger scale then europe though and as a result i expect a strong euro for the coming months, maybe even back to 1.40 Well, i realy hope the crisis in europe is now more or less over, or at least that the worst is behind us. The tone is set for the solution,printing monney is the key and i expect it will be the key for the future also. Inflation is the least notable of the manny ways in wich one can get poorer. | ||
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