NP - Germany Won't Budge on Austerity: Economic Suicide is Character Building
alice malice
alicewmalice at gmail.com
Thu Oct 16 16:22:13 CDT 2014
Joe, you should take a basic course in economics. The unemployment
rate number is what it says it is. Problem with you ignorant headline
types is that you don't know what it says. Look it up Joe.
On Wed, Oct 15, 2014 at 11:20 PM, Joseph Tracy <brook7 at sover.net> wrote:
> • BIS Warns On ‘Violent’ Reversal Of Global Markets (AEP)
>
> The global financial markets are dangerously stretched and may unwind with shock force as liquidity dries up, the Bank of International Settlements has warned. Guy Debelle, head of the BIS’s market committee, said investors have become far too complacent, wrongly believing that central banks can protect them, many staking bets that are bound to “blow up” as the first sign of stress. In a speech in Sydney, Mr Debelle said: “The sell-off, particularly in fixed income, could be relatively violent when it comes. There are a number of investors buying assets on the presumption of a level of liquidity which is not there. This is not evident when positions are being put on, but will become readily apparent when investors attempt to exit their positions. “The exits tend to get jammed unexpectedly and rapidly.” Mr Debelle, who is also chief of financial markets at Australia’s Reserve Bank, said any sell-off could be amplified because nominal interest rates are already zero across most of the industrial world.
>
> “That is a point we haven’t started from before. There are undoubtedly positions out there which are dependent on (close to) zero funding costs. When funding costs are no longer close to zero, these positions will blow up,” he said. The BIS warned earlier this summer that the world economy is in many respects more vulnerable to a financial crisis than it was in 2007. Debt ratios are now far higher, and emerging markets have also been drawn into the fire over the last five years. The world as whole has never been more leveraged. Debt ratios in the developed economies have risen by 20 percentage points to 275pc of GDP since the Lehman Brothers crash. The new twist is that emerging markets have also been on a debt spree, partly as a spill-over from quantitative easing in the West. This has caused a flood of dollar liquidity into these countries that they have struggled to control. It has pushed up their debt ratios by 20 percentage points to 175pc, and much of the borrowing has been at an average real rate of 1pc that is unlikely to last.
> ........
> 5.9% is not the real unemployment rate in the US. That is just a lie. Also pakistanis making socks for rich US companies who have not been payed for 2 months and whose boss just disappeared because he can't keep up his payments have also been 100 % employed. This is story I know first hand.
> On Oct 15, 2014, at 9:29 AM, alice malice wrote:
>
>> Not a big fan of the domino or contagion theory because the US economy
>> is not that global, not that connected to Europe, and its major
>> trading partners here, Mexico and Canada, are in good shape and will
>> not be knocked off the track by Europe or Japan or Russia or China.
>> Moreover, the oil market, a global market that can send the US economy
>> into a tailspin in a hurry has been tamed by the glut of oil and
>> energy produced in America. Again, while the Big Capitalized
>> International Co. in the US will suffer a bit from a strong dollar and
>> a weaker Europe, a weaker, though still growing China, as exports are
>> important to the earning and growth of these huge companies, most of
>> the US economy is driven by small companies and the consumer, and
>> these are in very good position, as rates are quite low and inflation
>> and gas prices are low, so I expect the US will continue to grow at a
>> 2-3% rate over the next few years. Not great but not recession. It's
>> not only the housing market that is shored up but the consumer, the
>> banks, the workforce, the revenues at the state and local levels. So,
>> while the US faces many headwinds, some from Europe and Japan, these
>> will not derail the recovery. Again, it's great to be a United States
>> with a Central Bank and a reserve currency, now a glut of oil. The US
>> is fundamentally different from Europe. It has, to give but one
>> example, a 5.9% unemployment rate.
>>
>> On Wed, Oct 15, 2014 at 6:20 AM, Kai Frederik Lorentzen
>> <lorentzen at hotmail.de> wrote:
>>>
>>>> Is France, Italy, Spain ...doing enough?
>>>
>>> Spain? Yes. Same for Portugal and Ireland.
>>>
>>> But Italy and France? Definitely not!
>>>
>>> When the ship goes down it will take place there and then spread first to
>>> the rest of EU-Europe and then to other regions of the global economy. The
>>> large home market of the US would probably work as a buffer here to avoid
>>> the worst consequences for at least some time.
>>>
>>> To keep this balanced: The new German federal government, a coalition of CDU
>>> and SPD, is damaging the reform measures the Schröder administration put
>>> through by enabling easier ways to go into early retirement plus pensions
>>> for mothers, which both are counterproductive presents to the aging voters.
>>>
>>> At this point a personal statement seems adequate: I do not sympathize with
>>> banks. The role of the big banks in the Euro crisis - Goldman Sachs helped
>>> Greece faking its statistics to get into the Euro zone, and the current
>>> president of the ECB is a former employee of this beautiful bank house - is
>>> highly ambivalent. And this is not the only problematic thing about banks in
>>> the world history of the last 200 years. Perhaps - just yesterday I read an
>>> article saying that economists and even some bankers themselves started to
>>> think about this seriously again since 2008 - the basically simple idea of
>>> Freigeld would be a better way to handle the question of money:
>>>
>>> http://en.wikipedia.org/wiki/Freigeld
>>>
>>>> Freigeld has several special properties:
>>>
>>> It is maintained by a monetary authority to be spending power stable (no
>>> inflation or deflation) by means of printing more money or withdrawing money
>>> from circulation
>>> It is cash-flow safe (a scheme is put in place to ensure that the money is
>>> returned into the cash flow - for example, by demurrage - requiring stamps
>>> to be purchased and periodically attached to the money to keep it valid)
>>> It is convertible into other currencies
>>> It is localized to a certain area (it is a local currency)
>>>
>>> The name results from the idea that there is no incentive to store or hoard
>>> Freigeld as it will automatically lose its value after some time. It is
>>> claimed that as a result, interest rates would drop to almost zero. <
>>>
>>> It is, however, highly improbable that the Powers That Be will ever allow
>>> such a life affirming reform. So, for the time being we have to live under
>>> the dictatorship of banks, and individuals as well as states have to deal
>>> with it. And here the question of fairness arises. That the German people -
>>> who were, like most other people from the EU-countries, never asked whether
>>> they wanna be members of the EU, let alone whether they wanna have the Euro!
>>> - have, as taxpayers, to give guarantees for other countries that not only
>>> don't do serious reform yet also insult the contemporary Germany as a
>>> reincarnation of Nazi-Deutschland, is not fair. And the ECB's nano interest
>>> rates, here Germany (which has, just like the other countries, only one
>>> vote) is always overruled by the mediterranean economies, do constantly move
>>> money from Germany to the south of Europe. Germans have significantly lesser
>>> real estate than other people in the EU. They also tend to shy away from
>>> stocks (- and when I look at the development of my shares of Adidas and SAP,
>>> they are probably not as irrational as the newspapers say). And so Germans
>>> have their money mostly on the bank. Where it loses and loses value. As such
>>> this might go on without accident for quite some time. But when the going
>>> gets tough? Greece or Cyprus were certainly no real problem for the
>>> stability of the EU because they're simply too small to be of systemic
>>> relevance. With Italy and France the situation is completely different. When
>>> one of these countries crashes, the shock waves will be felt worldwide --
>>>
>>>
>>> On 14.10.2014 23:19, alice malice wrote:
>>>
>>> How does one define austerity? The word is tossed about by all sides,
>>> but at cross purposes and no serious definition is agreed upon. Is
>>> Germany doing enough? Is France, Italy, Spain ...doing enough? Is a
>>> political and fiscal solution feasible? What of the Bank? The Germans
>>> are paying a dear price for the political failures of other nations
>>> and for the geopolitical conflicts, the sanctions and so on. Now, it
>>> is close to a tipping point.All of this is good for the US, as the US
>>> is unwinding its massive QE, and US rates are being driven lower, the
>>> dollar higher. Well, that's the weight of an Empire. Germany must see
>>> this and it must make them angry, but pawns and knights are not
>>> queens. That's the game, Germany is responsible, with the Russians,
>>> for the chess board, so it goes.
>>>
>>> On Mon, Oct 13, 2014 at 9:07 AM, David Morris <fqmorris at gmail.com> wrote:
>>>
>>> Clearly this response shows the weakness of the Euro: the "Union" is a
>>> farce.
>>>
>>> But Germany won't be able to stand alone for long. If Europe is screwed, so
>>> is Germany.
>>>
>>>
>>>
>>> On Mon, Oct 13, 2014 at 3:53 AM, Kai Frederik Lorentzen
>>> <lorentzen at hotmail.de> wrote:
>>>
>>> On 12.10.2014 12:09, alice malice wrote:
>>>
>>> Europe is screwed. And Germany is only doing what it needs to do to
>>> get in a better position to recover over the longer term.
>>>
>>>
>>> Amen!
>>>
>>> -
>>> Pynchon-l / http://www.waste.org/mail/?list=pynchon-l
>>>
>>>
>>>
>> -
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