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You are all wrong. Printing money can halt Europe's crisis.
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There's a huge amount of unsustainable debt floating around, which needs to be paid for.
Do make up your mind..... Either the debt is unsustainable, in which case it won't be paid for, or it's sustainable, in which case it will be paid for.
It can't be both.Temporarily saving the euro through inflationary policy doesn't stop that.
Actually, as the article states, large parts of Europe are heading for deflation.
And that really is "unsustainable".
Interest rate policy that is suitable for Germany is not suitable for the peripheral states. Don't forget a large part of this crisis was caused by rates being set too low for too long to tackle a slowdown in Germany as a result of the hangover from integration of east Germany. This fuelled the bubble in the PIIGS.It rewards the indebted countries and punished the prudent countries. Introducing more moral hazard.
Germany was hardly being "prudent" by requiring a decade of low rates to stimulate it's own economy. And causing a runaway bubble in other parts of Europe as a result.“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 -
It's unsustainable, as in creditors aren't going to get all their money up. Some will take a hair cut.
Anyway, must go. My trains arriving. Have fun debating with graham the wise.0 -
Germans, finns, dutch amongst others. There's a huge amount of unsustainable debt floating around, which needs to be paid for. Temporarily saving the euro through inflationary policy doesn't stop that. It rewards the indebted countries and punished the prudent countries. Introducing more moral hazard.
The Germans will end up paying anyway whether its through inflation or bailouts. The best they can do it take this punishment on the chin and take steps to avoid a re-occurance in the future.0 -
thescouselander wrote: »The Germans will end up paying anyway.
Yes they will.
As they should.
Because their economic "success" has been an illusion, built on an unsustainable imbalance where low interest rates acting as a stimulus for Germany fuelled a bubble in the peripheral states, who then bought more from Germany, turning it into a surplus nation and transferring wealth from the rest of the Eurozone into 'the Fatherland'.
Thinking that Germany was "prudent" is like thinking Bernie Madoff was a "financial genius".“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 -
I cannot understand why Germany do not just go back to the mark and let the rest of the Eurozone bicker amongst themselves about who has been the most stupid. The whole world will buy German products and pay premium prices for them.0
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I cannot understand why Germany do not just go back to the mark .
I'm sure that is the only option now left for them and they have probably already made that decision ...... the conundrum is how to go about it in a way that will avoid a devastating financial crisis that could last for years.0 -
I know a few germans, and get the impression that any government that let inflation run away would be crucified in an election. A fear of inflation is virtually in their DNA.0
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HAMISH_MCTAVISH wrote: »Yes they will.
As they should.
Because their economic "success" has been an illusion, built on an unsustainable imbalance where low interest rates acting as a stimulus for Germany fuelled a bubble in the peripheral states, who then bought more from Germany, turning it into a surplus nation and transferring wealth from the rest of the Eurozone into 'the Fatherland'.
Thinking that Germany was "prudent" is like thinking Bernie Madoff was a "financial genius".
true enough. they'd have been better off relying on a good old-fashioned pwoperdee bubble like all the best countries.FACT.0 -
thescouselander wrote: »The Germans will end up paying anyway whether its through inflation or bailouts. The best they can do it take this punishment on the chin and take steps to avoid a re-occurance in the future.
No. It's the banks which will need take a haircut. They desperately need up the buffers. Their capital position is going to take a hit.
The Germans would have lost more had they continued to throw good money after bad. That's the key point.0
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