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Merv....."reasonably confident"
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You may not agree with the German stance, but you do have to admit that their economy is doing pretty well compared to the rest of Europe. Possibly they do know what they are talking about.
Well, they know what they're talking about with regards to the German economy. Which although it is facing huge structural problems for the future, has survived pretty well so far.
But that was always the problem...;)
ECB policy has always been distorted to suit the needs of Germany, rather than the needs of the collective states as a whole.
What was right for Germany was very wrong for Ireland. And now what's needed in Ireland is intolerable to the Germans. Which seems rather unfair, given that they very much to blame for many of these problems occurring.
In a community of many different economies, with different monetary policy needs, there has to be give and take. And so far the Germans have been doing a lot of taking, and not very much giving.
The Germans will have to compromise on monetary policy and live with higher inflation for a few years, or the Eurozone will have to split up, as the current situation is unsustainable for the weaker states.
Which would be a shame, as the last couple of times Europe descended into a bunch of Nations intent on playing beggar-thy-neighbour it didn't work out very well for the rest of the world....“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »Well, they know what they're talking about with regards to the German economy. Which although it is facing huge structural problems for the future, has survived pretty well so far.
But that was always the problem...;)
ECB policy has always been distorted to suit the needs of Germany, rather than the needs of the collective states as a whole.
What was right for Germany was very wrong for Ireland. And now what's needed in Ireland is intolerable to the Germans. Which seems rather unfair, given that they very much to blame for many of these problems occurring.
In a community of many different economies, with different monetary policy needs, there has to be give and take. And so far the Germans have been doing a lot of taking, and not very much giving.
The Germans will have to compromise on monetary policy and live with higher inflation for a few years, or the Eurozone will have to split up, as the current situation is unsustainable for the weaker states.
Which would be a shame, as the last couple of times Europe descended into a bunch of Nations intent on playing beggar-thy-neighbour it didn't work out very well for the rest of the world....
Don't think you can blame the Germans for the Irish going on a debt binge. It could have been controlled but they decided they liked it (while it lasted)0 -
Don't think you can blame the Germans for the Irish going on a debt binge. It could have been controlled but they decided they liked it (while it lasted)
You can certainly blame the Germans for ensuring ECB policy was unfit for the peripheral states.
The ongoing consequences have their roots in a decade of Germany refusing to compromise on monetary policy. And it's still happening today.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »You can certainly blame the Germans for ensuring ECB policy was unfit for the peripheral states.
The ongoing consequences have their roots in a decade of Germany refusing to compromise on monetary policy. And it's still happening today.
What was to stop the peripheral states running their economies in a manner that tied in with the ECB (German) policy? Most knew what it was before joining.0 -
What was to stop the peripheral states running their economies in a manner that tied in with the ECB (German) policy? Most knew what it was before joining.
Because we're talking monetary policy here, not fiscal policy.
So for example, base rates were clearly too low for too long in Ireland. Yet were not raised because that would have stifled German growth.
Now Ireland is in need of monetary stimulus, but has no chance of getting it because the Germans are scared of inflation.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
Germany has inflation at around 2% and unemployment at around 5%. Which would tend to indicate that the two are not linked in the way you explain.
Unemployment insurance is mandatory in Germany. So possible to receive 60% -70% of normal pay for 6 months to 2 years, while seeking new employment.0 -
HAMISH_MCTAVISH wrote: »Because we're talking monetary policy here, not fiscal policy.
So for example, base rates were clearly too low for too long in Ireland. Yet were not raised because that would have stifled German growth.
Now Ireland is in need of monetary stimulus, but has no chance of getting it because the Germans are scared of inflation.
Spot on Hamish, when rates for Germany needed to be low they were. Yet when the PIGGSF need some euros to be printed the Germans don't want any part of it.
Their answer (Tobin tax), is going to get louder and louder yet out of 124b it would generated 100billion would come from the city of London!! No wonder they so want it, I wonder if they would be so enthusiastic if each country (rightly), kept the tax from their own stock exchange lol.0 -
The Tobin tax would just send most of the business to Hong Kong, Zurich or similar.0
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The Connection with unemployment and property values in Ireland is pretty easy to see.
A huge overcapacity of manpower in the construction industry has been left jobless.
This is a direct result of stupid money being assumed to be made on any project being thrown up.
Demand Destruction is a consequence of a property and construction spiral that has been discovered for what it is ...An impossibility to maintain at anything like the level that was seen by some as "normal"
A simple rule of thumb for anyone to see and that should raise concerns would be .....If your city redevelops and the skyline changes by anything more than 5% a year ..Then it is time to be worried... ..This is not sustainable.0 -
Graham_Devon wrote: »Well he stated it WOULD fall to target in 2011...and 2010.
Now he's only reasonably confident, when actually data is on his side?!
I seem to remember him telling me that the inflation increase, early in 2010, was "just a blip".
I also remember T. Blair telling me "just give us a bit more time, we'll find Saddam's WMD". I made a note of both predictions, and thought that these people in high authority knew what they were doing.30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0
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