The Folly Of Underestimating Germany And The ECB [View article]
Rubbish. Firstly, Krugman was quoting Bill Gross. Secondly, the article was written in December 2007 when the subprime crash had already occurred. He even refers to the subprime crash in the past tense. The headline of the NYT article is:
"The financial crisis that began late last summer, then took a brief vacation in September and October, is back with a vengeance."
Now whose ideology is getting in the way of the facts. Show me a Krugman article from 2001 - 2006 forecasting the subprime crash and your accusation will carry some weight. Krugman isn't fit to lick the boots of Joseph Stiglitz who won the Nobel Economics Prize 5 years before Krugman and who kept warning throughout 2000 - 2007 about the coming crash.
Dec. 9th: The Beginning Of The End Game For The Eurozone [View article]
DigDeep, by 'status quo' I only meant the maintenance of the Euro and the EU, not the dreadful economic scams of the PIIGS (made possible largely by Goldman Sachs which kept debt off Greece's national accounts).
Today Merkel and Sarkozy supported 'Treaty Changes'. I think that says it all. It won't be easy, but the political will to strengthen the Euro and the EU is backed by EU citizens themselves according to recent polls. If it's too late for the EU, then it's way past late for the U.S..
The Folly Of Underestimating Germany And The ECB [View article]
Interestingly, I wrote this comment on the Kostohryz thread before I read your article:
Wow! A lot to digest. My initial reaction was that both the author and the vast majority of posters (with the notable exceptions of JasonC and Carolina1954) are typically smug American Exceptionalists who delight in Euro-bashing and have not the faintest clue how determined both European leaders and European citizens are to maintain the Euro in its current form. Everyone I have spoken to in Europe (and this view is supported by numerous recent opinion polls) is in favour of staying in the Euro and preventing its break-up. The Euro is a guarantor of the maintenance of the European Union itself; and its citizens, not to mention its politicians, are very aware that "united we stand, divided we fall". The EU has guaranteed the absence of wars (Bosnia was an ex-Soviet hangover) for the lengthiest period in European history, social and economic mobility across borders and massive reductions in commercial and transactional costs, encouraging economies of scale and boosting Eurozone exports. The Euro Current Account (in dire contrast to the U.S.'s) is in balance even if the mix is unbalanced.
Yes, I am well aware of all the problems discussed above, but removing the PIIGS or Germany from the Euro would open a Pandora's Box of problems even worse than the current ones that are (in time) manageable. An exit from the Euro would be as beneficial as if NY, NJ, Ill., Michigan and California were to exit the U.S. Dollar to solve their endemic debt and other macroeconomic problems (Real Unemployment in Detroit is 60 %). As JasonC has pointed out, the Euro's problems are 'political', not economic. Fiscal and monetary union WILL occur, and the PIIGS WILL agree to any austerity measures necessary to restore a reasonable degree of macroeconomic balance. You cannot have people being allowed to retire at 60 in Greece while Germans have to work till 67 to support a profligate Greek lifestyle, and the interesting thing is that the Greeks themselves (for all their squealing) recognize this, which is why the polls show their overwhelming support for both the Euro and the European Union. The Greeks themselves are angry at the fact that only 6 millionaires paid taxes last year and a lot of their criticisms are directed inwards. Fiscal and Monetary union will force the PIIGS leaders to observe the basic laws of economics, which is why corrupt and incompetent politicians in Italy and Greece have been replaced by highly qualified technocrats.
Thousands of people protesting austerity packages in Europe mask the underlying willingness of European citizens and leaders to maintain the official status quo. Study the polls.
Americans should look in the rear mirror: Real negative growth despite the lowest interest rates in history, 50 million without health insurance, 50 million on food stamps, 'real' nationwide Unemployment of 24 % (U1 - U9 less the BLS's ludicrous Birth-Death' rate adjustments), the highest Wealth Gap since the Great Depression, 32 of its States technically bankrupt and most Municipalities already in default, endemic trade deficits since the U.S. manufacturing base has shrunk 60 % since the end of WWII, a rapid decline in educational standards, crumbling infrastructure and so on.
European leaders will expand the monetary base, provide guarantees and so on, but these will be accompanied by genuine infrastructural development of the type which is unimaginable in the Lobby- and Entitlement-infested U.S.A..
P.S., Economic theory and practice are often diametrically opposed. I read hundreds of articles by experts, including famed Keynesians like Nobel Laureate Paul Krugman, who totally failed to forecast the 2008 subprime crash.
I have a feeling all the economic forecasts above are as 'theoretical' as those that forecasted a 'quick V-shaped recession' in 2009. Europeans are as determined to stay within the Euro as are bankrupt U.S. States to stick with the Dollar. And the macroeconomic imbalances in the U.S. are far more extreme than those in Europe.
The Folly Of Underestimating Germany And The ECB [View article]
Brilliant commentary, Marc. The 'Schadenfreude' is palpable throughout SA, and people truly underestimate the iron political will, of Eurozone leaders, not to mention the results of numerous recent opinion polls showing that the populations of both the core and periphery nations are desperate to stay in the Euro. Most criticisms of the status quo are directed inwards, against corrupt politicians like Berlusconi and incompetent ones like Papandreou.
The ;political will is there and will support stringent reforms at least and complete fiscal and monetary union at best.
Dec. 9th: The Beginning Of The End Game For The Eurozone [View article]
P.S., Economic theory and practice are often diametrically opposed. I read hundreds of articles by experts, including famed Keynesians like Nobel Laureate Paul Krugman, who totally failed to forecast the 2008 subprime crash.
I have a feeling all the economic forecasts above are as 'theoretical' as those that forecasted a 'quick V-shaped recession' in 2009. Europeans are as determined to stay within the Euro as are bankrupt U.S. States to stick with the Dollar. And the macroeconomic imbalances in the U.S. are far more extreme than those in Europe.
Dec. 9th: The Beginning Of The End Game For The Eurozone [View article]
Wow! A lot to digest. My initial reaction was that both the author and the vast majority of posters (with the notable exceptions of JasonC and Carolina1954) are typically smug American Exceptionalists who delight in Euro-bashing and have not the faintest clue how determined both European leaders and European citizens are to maintain the Euro in its current form. Everyone I have spoken to in Europe (and this view is supported by numerous recent opinion polls) is in favour of staying in the Euro and preventing its break-up. The Euro is a guarantor of the maintenance of the European Union itself; and its citizens, not to mention its politicians, are very aware that "united we stand, divided we fall". The EU has guaranteed the absence of wars (Bosnia was an ex-Soviet hangover) for the lengthiest period in European history, social and economic mobility across borders and massive reductions in commercial and transactional costs, encouraging economies of scale and boosting Eurozone exports. The Euro Current Account (in dire contrast to the U.S.'s) is in balance even if the mix is unbalanced.
Yes, I am well aware of all the problems discussed above, but removing the PIIGS or Germany from the Euro would open a Pandora's Box of problems even worse than the current ones that are (in time) manageable. An exit from the Euro would be as beneficial as if NY, NJ, Ill., Michigan and California were to exit the U.S. Dollar to solve their endemic debt and other macroeconomic problems (Real Unemployment in Detroit is 60 %). As JasonC has pointed out, the Euro's problems are 'political', not economic. Fiscal and monetary union WILL occur, and the PIIGS WILL agree to any austerity measures necessary to restore a reasonable degree of macroeconomic balance. You cannot have people being allowed to retire at 60 in Greece while Germans have to work till 67 to support a profligate Greek lifestyle, and the interesting thing is that the Greeks themselves (for all their squealing) recognize this, which is why the polls show their overwhelming support for both the Euro and the European Union. The Greeks themselves are angry at the fact that only 6 millionaires paid taxes last year and a lot of their criticisms are directed inwards. Fiscal and Monetary union will force the PIIGS leaders to observe the basic laws of economics, which is why corrupt and incompetent politicians in Italy and Greece have been replaced by highly qualified technocrats.
Thousands of people protesting austerity packages in Europe mask the underlying willingness of European citizens and leaders to maintain the official status quo. Study the polls.
Americans should look in the rear mirror: Real negative growth despite the lowest interest rates in history, 50 million without health insurance, 50 million on food stamps, 'real' nationwide Unemployment of 24 % (U1 - U9 less the BLS's ludicrous Birth-Death' rate adjustments, the highest Wealth Gap since the Great Depression, 32 of its States technically bankrupt and most Municipalities already in default, endemic trade deficits since the U.S. manufacturing base has shrunk 60 % since the end of WWII, a rapid decline in educational standards, crumbling infrastructure and so on.
European leaders will expand the monetary base, provide guarantees and so on, but these will be accompanied by genuine infrastructural development of the type which is unimaginable in the Lobby- and Entitlement-infested U.S.A..
Market Extremes Encourage Similar Outcomes In Europe [View article]
Pathetic. You know nothing about me. I contribute substantially to charities. My hatred of the Law of the Jungle is precisely because I see the results of the meanness of the U.S. socio-economic system that is lauded by every U.S. politician as The Greatest on Earth.
I read the link you provided. I disagree with its premises and naturally with its conclusions. The European North-South divide is nothing compared with the U.S. Wealth Gap Minus Safety Net, the Power of the Lobbies and the endemic corruption of the political system that will lead to even more deplorable living standards and civil conflict sooner than you can imagine. Already the U.S. has a 24 % 'real' Unemployment Rate, 50 million have no Health Care, 50 million live off Food Stamps and 100 million are officially below the Poverty Line. Go criticize Europe as much as you want but look occasionally in the rear mirror.
If The Euro Were A Car, It Would Be Recalled [View article]
Asbytec, I don't underestimate the problems in the Euro either. Let's wait till December 9th. What I don't agree with is the idea that the Dollar is 'safe' simply because, as you write, "the Dollar is just a coupon payment away from being made whole." If this were the case, how do you explain the Dollar's collapse in 1980 from DM 3.45 to 1.37 within a period of just 2 years. All the way up to DM 3.45 people were using the same arguments as you use today ("The DMark is inflexible, the Bundesbank refuses to expand the monetary base as their No. 1 concern is inflation", the Dollar is the only real global reserve currency and will always be the 'safe bet' in times of trouble, etc.,.).
Yes, the Dollar was perfectly "safe" at that time and there was no risk of default, but it was "overvalued" against every currency in the world and sank against every currency in the world (judging by the USD index of currencies against which it was/is measured). A devaluation of 60 % then was no different from the 60 % devaluation of Greek debt today. Either way, investors took a huge beating in investing in the Currency of Faith. So yes, the Dollar can and will indirectly default.
And why should this not recur? I mean, the U.S. is in a far worse macroeconomic situation today than in the early Eighties, and is certainly in no position to raise the Prime Rate to 21 % as Reagan/Volcker stupidly did in 1980 to attract FDI. Unemployment (I mean real unemployment) is at Great Depression levels, there are massive global economic competitors that did not even exist in 1980, and the U.S. Current Account and Trade Deficits are in terminal negative territory.
The Euro, on the other hand, needs only for its political leaders to put words into action. If they do, the Dollar will fall way below its all-time lows, just as it has been making lower lows relentlessly for the past 60 years. The trend is patently clear and will only be exacerbated by massive Keynesian cash infusions without underlying structural reforms. At least the Eurozone leaders all agree that success is dependent on sacrifice. U.S. leaders pretend there is no problem whatsoever and maintain the theory of a "Free Lunch" for a totally ignorant populace at the mercy of all-powerful Lobbies. What real macroeconomic reforms have occurred during the past 3 years? None. And you even have 'serious' political leaders and presidential candidates demanding a lowering of taxes "to boost the economy"!!! Same old, same old, guaranteed to reduce the U.S. to the level of a Neo-3rd world country. There are very, very few honest and truly nationalistic political leaders in the U.S.. Congress and the Senate consist of the "coerced and the bribed". Look at European politicians and you'll see (thank God Berlusconi is gone) leaders with integrity. In the U.S. politics is a 'contact sport' and the guy with the greatest financial muscle wins.
You cannot solve the U.S.A.'s cumulative fundamental problems by "throwing a switch" (= more "coupon payments").
If The Euro Were A Car, It Would Be Recalled [View article]
If the Dollar is sound fundamentally, why has it relentlessly declined for the past 60 years? If it is more sound than the Euro why is the Euro Current Account in balance and the U.S. equivalent in massive deficit? Why is the Euro just 15 % below its all-time high and the Dollar flirting with its all-time low?
Above all, if the Dollar is so sound why does the U.S.Government resort to manipulating all its official statistics and data to embellish the nation's performance? The "8.6 % Unemployment rate" is a sick joke, made possible only because around 15 % of the long-term unemployed, the underemployed and those who dropped out of the work force are not included. The real rate is around 24 %.
Dollar a safe currency? Form your own conclusions, but before doing so you should close your ears to mainstream media propaganda which is the only thing preventing an outright Dollar collapse. It is, as someone one said, a "currency of faith" with nothing fundamental behind it.
Market Extremes Encourage Similar Outcomes In Europe [View article]
It's a wild ride, Asbytec. I'm just happy I loaded up on the Spanish long bond ES0000011868 and Banco Santander (I was praising the latter on another thread and advising everyone to buy, since in addition to the histoprically low price it had a 11.2 % annual dividend). But I missed my limit order on Commerzbank by 10 pips and it shot up 30 % in 3 sessions!!!
I believe the sovereigns have no choice but to give up their fiscal and monetary sovereignty. And it won't take a century as it did with the U.S.A., because things move at the speed of light these days and everyone in the EU realizes the depth of the problem and the gravity of the remedy. I have been a super-strong EU and Euro bull since the inception of both (I'm talking about Jean Monnet, so you can guess how old I am!!!), and with a total $ 16 trillion E.U. GDP the Union has already surpassed my initial dreams. Now I'm dreaming bigger and better, because a bi-polar world that prevents China from becoming the dominant player cannot exist without a super-strong and cohesive EU..
The EU and U.S. both need each other, but I fear the U.S. economy is in terminal decline. The rubbish cheerleading of the Unemployment rate 'improvement' (entirely due to vast numbers of people dropping out of the "work force") is another smoke-and-mirrors effort to mask the U.S.'s vastly inferior prospects with regard to the EU and to the entire globe. The U.S. needs to ditch its lobby-supported clowns and cronies and get some real leaders at last, principled people like Chuck Hagel who declined re-election to the Senate out of disgust at the corrupt state of U.S. politics.
Market Extremes Encourage Similar Outcomes In Europe [View article]
You're right, the market needed cash. But I think Merkel also boosted risk appetite by emphasizing that a "rapid EU treaty change" was needed. She is now totally in tune with Draghi, while Sarkozi is sounding even more aggressive than both of them.
So when you have the 3 main players (Germany, France and Italy) pushing for fundamental change, which means fiscal; and eventually monetary union, I believe the worst is behind the Euro and 'quick fixes' are justified. What I didn't want to see was a U.S.-style QE I II III without reforms, and unlike the fratricidal budget battles in the U.S. the major European leaders are reading from the same page.
Official European Action And Why Italy Is Still At The Vortex [View article]
Great quote from the Polish FM!
Anyway, German activity is picking up but Merkel doesn't want to give the impression it's a foregone conclusion, as this would relax the pressure for reform throughout the zone.
Spanish 20-year sovereign bond jumped from 87 to 99 (almost parity) in just 3 sessions. I believe this is the end of the beginning and we've seen the lows for Euro risk assets.
Market Extremes Encourage Similar Outcomes In Europe [View article]
There is a huge difference between Tyranny of the variety practised by transparent dictatorships and the surreptitious kind practised by economic oligarchies. In many ways economic tyranny is more difficult to overthrow than political tyranny, because the former is disguised in the cloak of democracy.
While the U.S. suffers another Great Depression (based on Unemployment criteria used in 1929 the current unemployment rate is 23.5 %) its President proclaims his nation as the Greatest Nation on Earth!
Market Extremes Encourage Similar Outcomes In Europe [View article]
Oh I see, you favour the Law of the Jungle. So in your opinion the world belongs to those with inherited wealth and/or inherited brains, and the weak do not deserve a safety net. Your philosophy, embodied in Trickle Down Economics, led the U.S. into the quagmire it is in. I am a wealthy individual, and I don't want to live in a country where the majority is destitute, because the misery of those around me would reduce my own comfort, not to mention the fact that nations controlled by gun-toting police tend to be less safe and less pleasant than the typical European nation.
The Folly Of Underestimating Germany And The ECB [View article]
"The financial crisis that began late last summer, then took a brief vacation in September and October, is back with a vengeance."
Now whose ideology is getting in the way of the facts. Show me a Krugman article from 2001 - 2006 forecasting the subprime crash and your accusation will carry some weight. Krugman isn't fit to lick the boots of Joseph Stiglitz who won the Nobel Economics Prize 5 years before Krugman and who kept warning throughout 2000 - 2007 about the coming crash.
Dec. 9th: The Beginning Of The End Game For The Eurozone [View article]
Today Merkel and Sarkozy supported 'Treaty Changes'. I think that says it all. It won't be easy, but the political will to strengthen the Euro and the EU is backed by EU citizens themselves according to recent polls. If it's too late for the EU, then it's way past late for the U.S..
The Folly Of Underestimating Germany And The ECB [View article]
Wow! A lot to digest. My initial reaction was that both the author and the vast majority of posters (with the notable exceptions of JasonC and Carolina1954) are typically smug American Exceptionalists who delight in Euro-bashing and have not the faintest clue how determined both European leaders and European citizens are to maintain the Euro in its current form. Everyone I have spoken to in Europe (and this view is supported by numerous recent opinion polls) is in favour of staying in the Euro and preventing its break-up. The Euro is a guarantor of the maintenance of the European Union itself; and its citizens, not to mention its politicians, are very aware that "united we stand, divided we fall". The EU has guaranteed the absence of wars (Bosnia was an ex-Soviet hangover) for the lengthiest period in European history, social and economic mobility across borders and massive reductions in commercial and transactional costs, encouraging economies of scale and boosting Eurozone exports. The Euro Current Account (in dire contrast to the U.S.'s) is in balance even if the mix is unbalanced.
Yes, I am well aware of all the problems discussed above, but removing the PIIGS or Germany from the Euro would open a Pandora's Box of problems even worse than the current ones that are (in time) manageable. An exit from the Euro would be as beneficial as if NY, NJ, Ill., Michigan and California were to exit the U.S. Dollar to solve their endemic debt and other macroeconomic problems (Real Unemployment in Detroit is 60 %). As JasonC has pointed out, the Euro's problems are 'political', not economic. Fiscal and monetary union WILL occur, and the PIIGS WILL agree to any austerity measures necessary to restore a reasonable degree of macroeconomic balance. You cannot have people being allowed to retire at 60 in Greece while Germans have to work till 67 to support a profligate Greek lifestyle, and the interesting thing is that the Greeks themselves (for all their squealing) recognize this, which is why the polls show their overwhelming support for both the Euro and the European Union. The Greeks themselves are angry at the fact that only 6 millionaires paid taxes last year and a lot of their criticisms are directed inwards. Fiscal and Monetary union will force the PIIGS leaders to observe the basic laws of economics, which is why corrupt and incompetent politicians in Italy and Greece have been replaced by highly qualified technocrats.
Thousands of people protesting austerity packages in Europe mask the underlying willingness of European citizens and leaders to maintain the official status quo. Study the polls.
Americans should look in the rear mirror: Real negative growth despite the lowest interest rates in history, 50 million without health insurance, 50 million on food stamps, 'real' nationwide Unemployment of 24 % (U1 - U9 less the BLS's ludicrous Birth-Death' rate adjustments), the highest Wealth Gap since the Great Depression, 32 of its States technically bankrupt and most Municipalities already in default, endemic trade deficits since the U.S. manufacturing base has shrunk 60 % since the end of WWII, a rapid decline in educational standards, crumbling infrastructure and so on.
European leaders will expand the monetary base, provide guarantees and so on, but these will be accompanied by genuine infrastructural development of the type which is unimaginable in the Lobby- and Entitlement-infested U.S.A..
P.S., Economic theory and practice are often diametrically opposed. I read hundreds of articles by experts, including famed Keynesians like Nobel Laureate Paul Krugman, who totally failed to forecast the 2008 subprime crash.
I have a feeling all the economic forecasts above are as 'theoretical' as those that forecasted a 'quick V-shaped recession' in 2009. Europeans are as determined to stay within the Euro as are bankrupt U.S. States to stick with the Dollar. And the macroeconomic imbalances in the U.S. are far more extreme than those in Europe.
The Folly Of Underestimating Germany And The ECB [View article]
The ;political will is there and will support stringent reforms at least and complete fiscal and monetary union at best.
Dec. 9th: The Beginning Of The End Game For The Eurozone [View article]
I have a feeling all the economic forecasts above are as 'theoretical' as those that forecasted a 'quick V-shaped recession' in 2009. Europeans are as determined to stay within the Euro as are bankrupt U.S. States to stick with the Dollar. And the macroeconomic imbalances in the U.S. are far more extreme than those in Europe.
Dec. 9th: The Beginning Of The End Game For The Eurozone [View article]
Yes, I am well aware of all the problems discussed above, but removing the PIIGS or Germany from the Euro would open a Pandora's Box of problems even worse than the current ones that are (in time) manageable. An exit from the Euro would be as beneficial as if NY, NJ, Ill., Michigan and California were to exit the U.S. Dollar to solve their endemic debt and other macroeconomic problems (Real Unemployment in Detroit is 60 %). As JasonC has pointed out, the Euro's problems are 'political', not economic. Fiscal and monetary union WILL occur, and the PIIGS WILL agree to any austerity measures necessary to restore a reasonable degree of macroeconomic balance. You cannot have people being allowed to retire at 60 in Greece while Germans have to work till 67 to support a profligate Greek lifestyle, and the interesting thing is that the Greeks themselves (for all their squealing) recognize this, which is why the polls show their overwhelming support for both the Euro and the European Union. The Greeks themselves are angry at the fact that only 6 millionaires paid taxes last year and a lot of their criticisms are directed inwards. Fiscal and Monetary union will force the PIIGS leaders to observe the basic laws of economics, which is why corrupt and incompetent politicians in Italy and Greece have been replaced by highly qualified technocrats.
Thousands of people protesting austerity packages in Europe mask the underlying willingness of European citizens and leaders to maintain the official status quo. Study the polls.
Americans should look in the rear mirror: Real negative growth despite the lowest interest rates in history, 50 million without health insurance, 50 million on food stamps, 'real' nationwide Unemployment of 24 % (U1 - U9 less the BLS's ludicrous Birth-Death' rate adjustments, the highest Wealth Gap since the Great Depression, 32 of its States technically bankrupt and most Municipalities already in default, endemic trade deficits since the U.S. manufacturing base has shrunk 60 % since the end of WWII, a rapid decline in educational standards, crumbling infrastructure and so on.
European leaders will expand the monetary base, provide guarantees and so on, but these will be accompanied by genuine infrastructural development of the type which is unimaginable in the Lobby- and Entitlement-infested U.S.A..
Market Extremes Encourage Similar Outcomes In Europe [View article]
I read the link you provided. I disagree with its premises and naturally with its conclusions. The European North-South divide is nothing compared with the U.S. Wealth Gap Minus Safety Net, the Power of the Lobbies and the endemic corruption of the political system that will lead to even more deplorable living standards and civil conflict sooner than you can imagine. Already the U.S. has a 24 % 'real' Unemployment Rate, 50 million have no Health Care, 50 million live off Food Stamps and 100 million are officially below the Poverty Line. Go criticize Europe as much as you want but look occasionally in the rear mirror.
If The Euro Were A Car, It Would Be Recalled [View article]
Yes, the Dollar was perfectly "safe" at that time and there was no risk of default, but it was "overvalued" against every currency in the world and sank against every currency in the world (judging by the USD index of currencies against which it was/is measured). A devaluation of 60 % then was no different from the 60 % devaluation of Greek debt today. Either way, investors took a huge beating in investing in the Currency of Faith. So yes, the Dollar can and will indirectly default.
And why should this not recur? I mean, the U.S. is in a far worse macroeconomic situation today than in the early Eighties, and is certainly in no position to raise the Prime Rate to 21 % as Reagan/Volcker stupidly did in 1980 to attract FDI. Unemployment (I mean real unemployment) is at Great Depression levels, there are massive global economic competitors that did not even exist in 1980, and the U.S. Current Account and Trade Deficits are in terminal negative territory.
The Euro, on the other hand, needs only for its political leaders to put words into action. If they do, the Dollar will fall way below its all-time lows, just as it has been making lower lows relentlessly for the past 60 years. The trend is patently clear and will only be exacerbated by massive Keynesian cash infusions without underlying structural reforms. At least the Eurozone leaders all agree that success is dependent on sacrifice. U.S. leaders pretend there is no problem whatsoever and maintain the theory of a "Free Lunch" for a totally ignorant populace at the mercy of all-powerful Lobbies. What real macroeconomic reforms have occurred during the past 3 years? None. And you even have 'serious' political leaders and presidential candidates demanding a lowering of taxes "to boost the economy"!!! Same old, same old, guaranteed to reduce the U.S. to the level of a Neo-3rd world country. There are very, very few honest and truly nationalistic political leaders in the U.S.. Congress and the Senate consist of the "coerced and the bribed". Look at European politicians and you'll see (thank God Berlusconi is gone) leaders with integrity. In the U.S. politics is a 'contact sport' and the guy with the greatest financial muscle wins.
You cannot solve the U.S.A.'s cumulative fundamental problems by "throwing a switch" (= more "coupon payments").
If The Euro Were A Car, It Would Be Recalled [View article]
for the past 60 years? If it is more sound than the Euro why is the Euro Current Account in balance and the U.S. equivalent in massive deficit? Why is the Euro just 15 % below its all-time high and the Dollar flirting with its all-time low?
Above all, if the Dollar is so sound why does the U.S.Government resort to manipulating all its official statistics and data to embellish the nation's performance? The "8.6 % Unemployment rate" is a sick joke, made possible only because around 15 % of the long-term unemployed, the underemployed and those who dropped out of the work force are not included. The real rate is around 24 %.
Dollar a safe currency? Form your own conclusions, but before doing so you should close your ears to mainstream media propaganda which is the only thing preventing an outright Dollar collapse. It is, as someone one said, a "currency of faith" with nothing fundamental behind it.
Market Extremes Encourage Similar Outcomes In Europe [View article]
I believe the sovereigns have no choice but to give up their fiscal and monetary sovereignty. And it won't take a century as it did with the U.S.A., because things move at the speed of light these days and everyone in the EU realizes the depth of the problem and the gravity of the remedy. I have been a super-strong EU and Euro bull since the inception of both (I'm talking about Jean Monnet, so you can guess how old I am!!!), and with a total $ 16 trillion E.U. GDP the Union has already surpassed my initial dreams. Now I'm dreaming bigger and better, because a bi-polar world that prevents China from becoming the dominant player cannot exist without a super-strong and cohesive EU..
The EU and U.S. both need each other, but I fear the U.S. economy is in terminal decline. The rubbish cheerleading of the Unemployment rate 'improvement' (entirely due to vast numbers of people dropping out of the "work force") is another smoke-and-mirrors effort to mask the U.S.'s vastly inferior prospects with regard to the EU and to the entire globe. The U.S. needs to ditch its lobby-supported clowns and cronies and get some real leaders at last, principled people like Chuck Hagel who declined re-election to the Senate out of disgust at the corrupt state of U.S. politics.
Market Extremes Encourage Similar Outcomes In Europe [View article]
So when you have the 3 main players (Germany, France and Italy) pushing for fundamental change, which means fiscal; and eventually monetary union, I believe the worst is behind the Euro and 'quick fixes' are justified. What I didn't want to see was a U.S.-style QE I II III without reforms, and unlike the fratricidal budget battles in the U.S. the major European leaders are reading from the same page.
Market Extremes Encourage Similar Outcomes In Europe [View article]
http://yhoo.it/vBwFda
She's right, it's going to be a marathon, but there is a positive end in sight. Who needs quick fixes?
Official European Action And Why Italy Is Still At The Vortex [View article]
Anyway, German activity is picking up but Merkel doesn't want to give the impression it's a foregone conclusion, as this would relax the pressure for reform throughout the zone.
Spanish 20-year sovereign bond jumped from 87 to 99 (almost parity) in just 3 sessions. I believe this is the end of the beginning and we've seen the lows for Euro risk assets.
Market Extremes Encourage Similar Outcomes In Europe [View article]
While the U.S. suffers another Great Depression (based on Unemployment criteria used in 1929 the current unemployment rate is 23.5 %) its President proclaims his nation as the Greatest Nation on Earth!
Market Extremes Encourage Similar Outcomes In Europe [View article]