Eurozone debt crisis

[superfrank]

EU referendum: Pundits mull future without Britain
http://www.bbc.co.uk/news/world-europe-19742182

A commentary by Michael Stuermer in the German daily Die Welt says it is "in the German interest to keep Britain in the EU at almost any cost". Mr Stuermer praises the "free trade instincts" of the British and says European defence without the UK "would be a knife without a blade".

Hubert Wetzel in Germany's Sueddeutsche Zeitung is somewhat cooler on Britain's continued membership. "Of course Britain's departure would be a disaster for the EU. However, with all due respect, Europe has bigger problems," Mr Wetzel says.

The Europe correspondent of the French daily Liberation, Jean Quatremer, is categorical. "In a few years' time, Britain will have left the EU," he says in a blog post.

Before the credit crunch the view of the average UK voter was that it was "inevitable" that Britain would join the Euro. How things change.

I can't see the point of EU membership now. It costs us a fortune and I don't get the free trade argument - the US trades with Europe without any problems and they are not in the "single market".

The Eurozone will increasingly go down the road of socialist superstate (until it eventually breaks up)... Britain would be best served being outside the whole undemocratic mess. Bring on the referendum.

[giulio2010]

EU referendum: Pundits mull future without Britain
http://www.bbc.co.uk/news/world-europe-19742182

A commentary by Michael Stuermer in the German daily Die Welt says it is "in the German interest to keep Britain in the EU at almost any cost". Mr Stuermer praises the "free trade instincts" of the British and says European defence without the UK "would be a knife without a blade".

Hubert Wetzel in Germany's Sueddeutsche Zeitung is somewhat cooler on Britain's continued membership. "Of course Britain's departure would be a disaster for the EU. However, with all due respect, Europe has bigger problems," Mr Wetzel says.

The Europe correspondent of the French daily Liberation, Jean Quatremer, is categorical. "In a few years' time, Britain will have left the EU," he says in a blog post.

Before the credit crunch the view of the average UK voter was that it was "inevitable" that Britain would join the Euro. How things change.

I can't see the point of EU membership now. It costs us a fortune and I don't get the free trade argument - the US trades with Europe without any problems and they are not in the "single market".

The Eurozone will increasingly go down the road of socialist superstate (until it eventually breaks up)... Britain would be best served being outside the whole undemocratic mess. Bring on the referendum.

Could that mean that if Britain leaves Europe, all the concessions obtained by Betfair on the basis of European treaties could be considered no more valid and then there is a chance of being banned due to lack of authorization??. Or will Gibralter be still part of Europe wheter Britain remain or not remain in Europe??? If that is the case, Betdaq may benefit from it...Or am I talking nonsense?

[superfrank]

Gibraltar is a British overseas territory so will be part, or not, of whatever Britain is part of as far as I'm aware.

[Euler]

Where there's muck there's brass. How to make money from the Euro mess: -

http://www.thirdpointpublic.com/wp-cont ... r-TPOI.pdf

[superfrank]

Where there's muck there's brass. How to make money from the Euro mess: -

http://www.thirdpointpublic.com/wp-cont ... r-TPOI.pdf

sounds like front-running central banks by buying MBS, distressed credit etc. knowing that they will always do "whatever it takes"?

[superfrank]

Spain does not need a bailout - Luis de Guindos
http://www.bbc.co.uk/news/business-19837739

i would happily back a Spanish bailout at 1.01

[Euler]

This is why UK IP is picking up a following: -

http://www.youtube.com/watch?v=9LsQY1OxoEY

[superfrank]

according to Peston, Britain might suffer more from a EZ collapse than Germany

Can Germany afford eurozone collapse?
http://www.bbc.co.uk/news/business-20322746

...by 2015 it will be so obvious to the German people that it is business with China that is making them richer that their incentive to show fiscal solidarity with Spain and Italy - to use German wealth to underpin the recovery of weaker eurozone economies - will be even less than it is today (for what it's worth, Goldman believes Germany's trade with Spain will be less than a tenth of its trade with China by 2020).

you have to take your hat off to the German's for their economic resilience.

[giulio2010]

There 's something evil in the information given to us in the newspapers. The other day I followed a speech by a man which is usually very well informed about what actually happening and always tells the truth or what he thinks is the truth. He confirmed the rumors about the real eurozone crise.
He said that Europe already collapsed so did Italy. It's all still going on because France and Germany still have strong interest in some eurozone countries. Apparently France and Germany have a package of Italian public debt (do not know for Spain and Greece) about 1/4 (500billions or more) in return France and Germany recieved the ok to build nuclear power plants, privatization of water, the construction of a railway line Turin-lyon and other business in Italy in favour of their economy. The problem is that the referendum for the construction of nuclear power plants has not passed ( Japan earthquake paid a major part of italian decision) as well as the privatization of water and there are also daily protests and disorder in order to build the line lyon-turin. Just after this the Berlusconi governament was sent home and an illegitimate governament Took over. It 's true that Mario Monti has given more credibility to our country, but not many know that Monti was sent to Italy to pay handsomely and dizzying interests to the French and Germans. All money that the ECB is sending to the banks are then turned in some way to Germany and France. German citizens have no knowledge of these dirty games of power and even if they did, their country is enriching at Greece, Spain, Italy, Portugal and other countrys cost so they keep quite. Mario Monti was sent here cause thanks to our grandparents Italy is still a rich country, Germany and France want to make most out of it, making us pay (after the referendum), an immoral, 80billion euros a year of interest. Once they have destroyed everything we have inherited they will admit the European failure, leaving some countries in poverty. They will then move forward their gold and invest it in China, India, Brazil, etc.. Thanks god the Italians are waking up, but the illegitimate government will not go away. The governament rejected the elections requested by the majority of citizens. I predict some big disorders soon. If we can get the elections, I am confident that Italy will leave Europe before it is too late. The bankruptcy ( which already happened in 2011 and swept under the carpet) or refusal to pay the debt, as did Ecuador, is almost inevitable if interest continues to grow.

[superfrank]

yes the German's and French aren't doing all the bailout stuff because they love the rest of Europe so much, they want something in return (and will probably take Italy's gold at some point).

what the French don't realise is they they are next in line for Germany

Who will dictate Europe's future? ~ Stephanie Flanders
http://www.bbc.co.uk/news/business-20354081

[CaerMyrddin]

Right now Portugal is paying more in interest than what it spends in health, education and SS. This is obviously unsustainable. The debt has risen and will keep rising despite all the austerity measures.

The balance of trade has become positive recently, but 20% of the portuguese exports is... gold!

There isn't a single gold mine in Portugal, so you get the picture...

Of course that we will become poorer than what we were, the overspending is taking its toll, but things have been done in an incredibly unfair way. Social unrest is rising and things are looking ugly...

[superfrank]

but things have been done in an incredibly unfair way

agreed, all the measures taken since the crisis started have been designed to protect the wealth of those that did most to cause the crisis. as usual ordinary people are being asked to pay the bill for the largesse.

[Euler]

The New Depression - Richard Duncan

I've lifted this from a discussion elsewhere: -

As Duncan states in the book, we've switched from Capitalism to Creditism, and the economic rules and theories of this system have yet to be figured out, but they are different. Keynes, Mises, Rothbard, Fisher, Minsky, and other great economists developed their theories in a much different financial and economic world, and I think it is important to realize this when developing the right framework today. Many of their thoughts are timeless, and many have been misinterpreted.

“By the time the credit crisis began in 2007, the debt issued (and the credit extended) by the GSEs and the asset-backed security (ABS) issuers had radically altered the size and structure of the U.S. economy. Combined, the GSEs and ABS issuers had $12 trillion in debt outstanding, up from $1 trillion 20 years earlier.

What did Fannie and Freddie and the ABS issuers do with all the money they borrowed? They lent it to the household sector in the form of mortgages and consumer credit. Between 1982 and 2007, the mortgage debt of the household sector rose ten times to $10.5 trillion. Consumer credit increased six times over the same period to $2.5 trillion.

Relative to the overall size of the economy, the financial sector’s debt rose from 21 percent of GDP in 1980 to 116 percent in 2007. The household sectors’ debt rose from 50 percent to 98 percent of GDP over the same period.

Adding all sectors together, total credit market debt averaged around 150 percent of GDP between 1946 and 1970. That ratio moved up gradually to 170 percent by the end of the 1970s, but then accelerated sharply during the 1980s, ending that decade at 230 percent. The rate of debt expansion slowed during most of the 1990s, but surged again from 1998. By 2007, total credit market debt to GDP had hit 360 percent.

That ratio understates the impact that so much credit growth had on the economy. That is because credit, as it expanded, caused the economy to expand, too. The numerator in the equation influenced the denominator. Put differently, the credit growth caused the economic growth—or, at least, much of the economic growth.”

[Euler]

"“…the paper money creation by the PBOC and other currency manipulating central banks, which amounted to nearly $5 trillion between 1999 and 2007 alone, is responsible for destabilizing the world economy, and not differences in the rate of real “savings,” as Bernanke contends.

China’s central bank prints yuan and uses it to buy dollars in order to hold down the value of the yuan to support export-led growth. It is the dollars that the PBOC accumulates in that manner that are “lent” to the United States. The money China pumps into the United States drives up asset prices, drives down interest rates, and funds a wide range of malinvestment.

Many fear that China will stop buying debt from the United States or that it will suddenly dump the U.S. debt it already owns. It won’t. If China stopped buying U.S. debt, its economy would collapse because that would mean that it had stopped manipulating its currency by buying dollars. In that case, its currency would soon double in value and then double again relative to the U.S. dollar as Chinese exporters converted their large export earnings into yuan. That would be more than enough to pop the great Chinese bubble.

So, the bottom line is this: Not only can China not sell the dollar reserves it now owns; it must continue accumulating more dollar reserves each year in line with its massive trade surplus with the United States.”"

[superfrank]

"That ratio understates the impact that so much credit growth had on the economy. That is because credit, as it expanded, caused the economy to expand, too. The numerator in the equation influenced the denominator. Put differently, the credit growth caused the economic growth—or, at least, much of the economic growth."

i've been arguing this case for ages, i.e. that it was credit expansion alone that created the growth.

"Not only can China not sell the dollar reserves it now owns; it must continue accumulating more dollar reserves each year in line with its massive trade surplus with the United States."

they're buying gold with all those dollars too