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Europe Needs Debt Relief, Not Decades Of Austerity

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http://www.guardian.co.uk/business/2011/mar/28/europe-debt-relief

From Donegal to the Algarve, to the streets of Athens, voters on Europe's "periphery", as economists dismissively call it, are slowly waking up to a sobering truth – they face years of austerity, yet wage cuts, job losses and crumbling public services will not extricate them from financial crisis. In fact, by driving their economies into an ever deeper slump, it may even make things worse. The pain could just bring more pain.

Paul Krugman, the US Nobel prize-winning economist, calls it "the austerity delusion". As Ed Miliband said of the coalition's austerity policies last week: "It's hurting, but it's not working."

The Irish would certainly agree with that – Dublin has been widely praised for its draconian spending cuts, but the latest official figures, released on Thursday, showed that the economy has now been in recession for three years. Domestic demand is 27% lower than during Ireland's Celtic Tiger heyday. Investment is down by 60%, exports are falling, and, as any cash-strapped homeowner could tell you, when your income shrinks, it gets harder to service your debts.

This "debt trap" is familiar to campaigners who spent years fighting for the cancellation of Africa's multibillion-pound loans from the west. Millions of taxpayers in wealthy countries were moved to sign petitions and march on their capitals as part of the Jubilee 2000 movement.

The plight of Portuguese nurses or Irish homeowners can hardly be compared to the grinding poverty of Africa's indebted millions, but the stark logic of the situation is the same. Adopting the harsh deflationary policies imposed by international lenders, and meeting punitive interest payments, sucks the life out of already fragile economies, and that makes repayment even tougher.

And yet no one questions the logic of spending money you don't have. Spend the money then plead poverty you can't pay it back and then take a country IVA or go bankrupt.

If there is going to be a debt write off globally then you have to ensure no govt can run a deficit. Balanced budgets only. Otherwise we'll end up in this mess once more.

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Neurotic fear of deflation seems to be popping up everywhere. Whats the problem, have they all loaded up on the shiny stuff?

Let the foul air out (deflate) of the bubbles as the natural course of events. Sit back, buy bonds and relax cheap houses and everything else is on the way!

Deflation is a HPCers bestest friend ever. Banksters hate it as it devalues their debt.

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Neurotic fear of deflation seems to be popping up everywhere. Whats the problem, have they all loaded up on the shiny stuff?

Let the foul air out (deflate) of the bubbles as the natural course of events. Sit back, buy bonds and relax cheap houses and everything else is on the way!

Deflation is a HPCers bestest friend ever. Banksters hate it as it devalues their debt.

Please list all deflations that have occured under a fiat money before state failure and full blown economic collapse.

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they focus too much on GDP.

of course, an already propped up GDP with immense borrowing is going to fall as they cut public spending. It can be no other way....and of course, this means debt is reducing.

People need to create jobs that pay and add value.

Christ knows what though if you live in a city flat or rented.

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they focus too much on GDP.

of course, an already propped up GDP with immense borrowing is going to fall as they cut public spending. It can be no other way....and of course, this means debt is reducing.

People need to create jobs that pay and add value.

Christ knows what though if you live in a city flat or rented.

They have to focus on GDP - they can't have an objective definition of wealth because it reveals they are all thieves and no one wants them to do what they are doing. Activity is all they can look at, whether the activity is merited or wanted can't be asked.

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And yet no one questions the logic of spending money you don't have. Spend the money then plead poverty you can't pay it back and then take a country IVA or go bankrupt.

Well, we have ultra-highly-paid geniuses at the various investment banks who should know if lending money to a government is a good or bad idea. Just as the banks should have people making detailed assessments of whether people can really afford the mortgages they are asking for, or their BTL business plan.

If you dish out cash to anyone who asks without bothering to check that they can pay you back.. you should not be remotely surprised if you get it in the shorts.

If there is going to be a debt write off globally then you have to ensure no govt can run a deficit. Balanced budgets only. Otherwise we'll end up in this mess once more.

Well.. I've put up a slightly more sophisticated plan before.. Deficit spending, especially for capital projects, is fine; it is up to the lenders to assess if an entity is really good for the money, that is what they are paid to do. Takes two to tango.

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Please list all deflations that have occured under a fiat money before state failure and full blown economic collapse.

Ah, er, well there was Japan, well sorta kind of, er, and then there was, er.......... :(

You didn't actually need to write the bit after "fiat money" as far as I can see.

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These are money supply figures, right?

http://www.economicshelp.org/blog/economics/history-of-inflation-in-uk/

Inflation in UK

1888 0.70%

1887 -0.50%

1886 -1.60%

1885 -3.00%

1884 -2.70%

1883 -0.50%

1882 1.00%

1881 -1.10%

1880 3.00%

1879 -4.40%

1878 -2.20%

1877 -0.70%

1876 -0.30%

1875 -1.90%

1874 -3.30%

1873 3.10%

1872 4.70%

1871 1.40%

1870 0.00%

1869 -5.00%

1868 -1.70%

1867 6.10%

1866 6.50%

1865 0.90%

1864 -0.90%

1863 -3.60%

1862 -2.60%

1861 2.70%

1860 3.70%

1859 -1.80%

1858 -8.40%

1857 -5.60%

1856 0.00%

1855 3.30%

1854 15.10%

1853 9.30%

1852 0.00%

1851 -3.00%

1850 -6.40%

1849 -6.30%

1848 -12.10%

1847 12.00%

1846 4.00%

1845 4.90%

1844 -0.10%

1843 -11.30%

1842 -7.60%

1841 -2.30%

1840 1.80%

1839 7.30%

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yah , but that was before we had clever central bankers targetting inflation at 2%...the ideal inflation they reckon.

I reckon, my grandfathers pound should by the same now as it did then...AT THE VERY LEAST...as productivity has improved beyond measure.

deflation is natural...I mean, who apart from Property VIS LOOKS to pay more for something this week than last week?

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They have to focus on GDP - they can't have an objective definition of wealth because it reveals they are all thieves and no one wants them to do what they are doing. Activity is all they can look at, whether the activity is merited or wanted can't be asked.

If you wanted better objectivity I guess you could calculate GDP adjusted in terms of Dollars, Euros or a basket of commodities.

I doubt you'd see that in the press though.. it would look pretty frightening :unsure:

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Injin also said under a fiat monetary system. So great depression and earlier don't count.

http://en.wikipedia.org/wiki/Gold_standard#Impact_of_World_War_I_.281914-25.29

Impact of World War I (1914-25)

Governments faced with the need to fund high levels of expenditure, but with limited sources of tax revenue, suspended convertibility of currency into gold on a number of occasions in the 19th century. The British government suspended convertibility (that is to say, it went off the gold standard) during the Napoleonic wars and the US government during the US Civil War. In both cases, convertibility was resumed after the war.[citation needed] The real test, however, came in the form of World War I, a test "it failed utterly" according to economist Richard Lipsey.[1]

In order to finance the costs of war, most belligerent countries went off the gold standard during the war, and suffered significant inflation. Because inflation levels varied between states, when they returned to the standard after the war at price determined by themselves (some, for example, chose to enter at pre-war prices), some countries' goods were undervalued and some overvalued.[1]

.....

The gold specie standard ended in the United Kingdom and the rest of the British Empire at the outbreak of World War I. Treasury notes replaced the circulation of the gold sovereigns and gold half sovereigns. However, legally, the gold specie standard was not repealed. The end of the gold standard was successfully effected by appeals to patriotism when somebody would request the Bank of England to redeem their paper money for gold specie. It was only in the year 1925 when Britain returned to the gold standard in conjunction with Australia and South Africa that the gold specie standard was officially ended.

The UK after WWI was not on the gold standard.

Edited by interestrateripoff

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<br /><a href='http://en.wikipedia....I_.281914-25.29</a><br /><br /><br /><br />The UK after WWI was not on the gold standard.<br />

It's a fascinating story - I did the research a year or so ago.

Around time of Russian Revolution a load of UK Military(Marines) and Sailors revolted demanding better pay and conditions.

All the UK Elites crapped themselves and shunted all our Gold reserves off to USA/Fort knox (including their wealth too - ready for a quick exit!)

Shortly after something amazing happened - a greater shareout of the UK's wealth to all!

Unemployment benefits and an early NHS was brought in as the UK uber-wealthy ducked below the parapets /tried desperately to calm down a well armed nation who wanted a bigger slice of the pie than the Edwardian 'Masters' had ever let them have!

They have since the 60's reverted to their vile money-grabbing, disgusting ways - boosted in the Thatcher era (greed is good, Big Bang dereg. for the City to rampage etc)

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Financiers loathe the idea, arguing that allowing default creates the problem of "moral hazard" – countries might have an incentive to borrow recklessly, in the knowledge that they can always turn to the debt court if times get hard.

Funny how reckless lending is 'innovation'- a good thing- while reckless borrowing is apparently a bad thing.

Besides, how could even a state government engage in reckless lending while the doors of credit are guarded by the steely eyed paragons of the financial sector whose integrity and sheer talent is beyond question.

:lol:

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  • 276 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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