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Newsnight Lastnight

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Edd Balls saying "were staring down the barrel of a gun, its going to be much worse than 2008", said that stroong leader ship was necessary in europe, presumably meaning get gordo back and tell everyone to print money.

Had various commentators on. The concencus was that there are only two possible outcomes: germany effectively agreeing to unlimited underwriting of the PIGs debts or EU breakup and defaults galore.

The view seemed to be that the first option cant happen because merkel could never sell the idea to the (obviously quite sensible) german voters and yet there was head-in-the-sand attitude to considering the other (almost certain) outcome.

There was a guy on there saying austerity isnt working in greece and it cant possibly service the debt and that its enivitable that in the medium term greece with default and revert to its own currency.

After watching in my view is there will be a crisis within the next 3-6 months.

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I don't know why they call it a crisis.

The world and life will go on as we know it if greece defaults. Look at iceland, a lot smaller yes but things aren't so bad. Their currency didn't even devalue by that much.

Even 2008 didn't seem like a crisis. Part of me wishes governments hadn't intervened to see what would have happened. A few banks would have gone bust but they would have been bought up by remaining banks for pittance.

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Edd Balls saying "were staring down the barrel of a gun, its going to be much worse than 2008", said that stroong leader ship was necessary in europe, presumably meaning get gordo back and tell everyone to print money.

Had various commentators on. The concencus was that there are only two possible outcomes: germany effectively agreeing to unlimited underwriting of the PIGs debts or EU breakup and defaults galore.

The view seemed to be that the first option cant happen because merkel could never sell the idea to the (obviously quite sensible) german voters and yet there was head-in-the-sand attitude to considering the other (almost certain) outcome.

There was a guy on there saying austerity isnt working in greece and it cant possibly service the debt and that its enivitable that in the medium term greece with default and revert to its own currency.

After watching in my view is there will be a crisis within the next 3-6 months.

There's already a crisis! The Euro Finance ministers are just trying to find forms of words to calm the markets. For a short time it tends to work as earlier in the summer, but then out come the figures for something and we all remember that the debt is so overwhelming that it can't be paid. The Germans are not going to stand by and pay for 5 other countries debts. It is lunacy. Would you want to do that even if the consequence is a withdrawal of some from the Euro? It would be cheaper to have to put up with a bit of bank struggle and see the end of it that way. Other countries do not have the same cultural behaviour and work ethic as the germans.

We are told there will be no Eurobonds, so that (actually unworkable) solution is dead. Then all there is left is ECB inetrvention with more pretend money. They have pured in 70 billion Euros recently. That's without the truth about Italy fanning the flames very much yet, but it will...

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I don't know why they call it a crisis.

The world and life will go on as we know it if greece defaults. Look at iceland, a lot smaller yes but things aren't so bad. Their currency didn't even devalue by that much.

Even 2008 didn't seem like a crisis. Part of me wishes governments hadn't intervened to see what would have happened. A few banks would have gone bust but they would have been bought up by remaining banks for pittance.

I think they mean a crisis for those left holding the baby. The debtors walk off into the sunset. :lol:

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The Germans are not going to stand by and pay for 5 other countries debts. It is lunacy.

Isn't it argued that China is effectively doing that with most of the Western world? and wouldn't it make sense for germany to do it for similar reasons (stopping the destruction of its markets)? See Paul Mason:

So far Germany's instincts in this crisis have been to stick by the old rules: in a debt crisis, the lender must lose money; don't over-extend a central bank that has no tax base; bear down on inflation because that is what is says in all the treaties we have signed.

But what they stand to lose in any eurozone breakup is their market. It will be damaged cyclically and trade patterns will be restructured. The competitive advantage built into Germany's position in the eurozone will be eroded if southern Europe defaults, exits, devalues.

Peter.

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I think they mean a crisis for those left holding the baby. The debtors walk off into the sunset. :lol:

Germany France Belgium Luxembourg and Switzerland, AFAIK

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The view seemed to be that the first option cant happen because merkel could never sell the idea to the (obviously quite sensible) german voters and yet there was head-in-the-sand attitude to considering the other (almost certain) outcome.

If only the German electorate was as thick and apathetic as their British counterparts, things would be sooooo much easier.

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Yes, but then you will have the Italians etc looking on thinking, hmmm shall we do the same.

indeed, therein lies the problem

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Isn't it argued that China is effectively doing that with most of the Western world? and wouldn't it make sense for germany to do it for similar reasons (stopping the destruction of its markets)? See Paul Mason:

Peter.

Germany will pay by an exit from the Euro in lost trade, but that will be the right and fair way, done on market changes between currency values, not some meeting to see how much phoney money now needs lending. September 15, 2011

Maggie Thatcher, Hard ECUs, and the Eurozone shambles

by P O Neill

House of Commons, 30 October 1990 –

Mr. Terence Higgins (Worthing) Will my right hon. Friend [the PM, Mrs Thatcher] take time between now and the conference in December to explain to her European colleagues what any first-year economic student could tell them, which is that the imposition of a single currency, as opposed to a common currency, would rule out for all time the most effective means of adjusting for national differences in costs and prices? Will she explain that that in turn would cause widespread unemployment, which would probably exist on a perpetual basis, and very serious financial imbalances?

The Prime Minister Yes, I agree entirely with my right hon. Friend. It would do just that. It would also mean that there would have to be enormous transfers of money from one country to another. It would cost us a great deal of money. One reason why some of the poorer countries want it is that they would get those big transfers of money. We are trying to contest that. If we have a single currency or a locked currency, the differences come out substantially in unemployment or vast movements of people from one country to another. Many people who talk about a single currency have never considered its full implications.

But wait, there’s more.

The Prime Minister: I think that I would put it just a little differently from the right hon. Gentleman [Tony Benn], although I recognise some of the force of some of the points that he makes. When the Delors proposals for economic and monetary union came out, it was said immediately by my right hon. Friend [ Nigel Lawson ] the then Chancellor of the Exchequer that this was not really about monetary policy at all but about a back door to a federal Europe, taking many democratic powers away from democratically elected bodies and giving them to non-elected bodies. I believe fervently that that is true, which is why I shall have nothing to do with their definition of economic and monetary union.

We shall continue the co-operation that we have come to establish, as nation states. The Act that enabled us to go into Europe was passed on Second Reading by eight votes and it was made very clear then that we would not surrender our national identity, that it was a matter of co-operation. It was on the strength of that that many people went in. I am afraid that it would be quite different if we went for a single European currency and a central bank and for their definition of economic and monetary union.

Mr. Churchill (Davyhulme): Will my right hon. Friend tell the House how far she believes that, when the moment comes, Germany will be prepared to see the transfer of its monetary policy from the Bundesbank to a European central bank on which it will have one voice out of 12?

The Prime Minister: I think that it is wrong to think that all the Twelve have similar votes or influence in these matters. I think that some in Germany—only some—are backing the scheme because they know that the dominant voice, the predominant voice, on any central bank would be the German voice. If we did not retain our national identities in Europe, the dominant people in Europe would be German. The way to balance out the different views of Europe, as we have traditionally done throughout history, is by retaining our national identity.

Part of the background here was the Tory government’s CRAAAZY proposal that there might need to be a period of a common currency (the “hard ECU”) and national currencies circulating side-by-side to facilitate macroeconomic adjustment and clarify the rules of the game under which the common currency — the future Euro — would be adopted. Totally nuts, right?

21 years ago, this was being debated in the House of Commons. It all seems to be news to the Eurocrats now. Perhaps it got lost in the fact that Saddam Hussein was occupying Kuwait at the time. That was back in the day when governments could handle two crises at once. If we do end up with a northern Europe breakaway currency circulating with the Euro, should we call it the “Maggie?”

This entry was posted on Thursday, September 15th, 2011 at 1:58 am and is filed under A Fistful Of Euros, Economics: Currencies. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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Even 2008 didn't seem like a crisis. Part of me wishes governments hadn't intervened to see what would have happened. A few banks would have gone bust but they would have been bought up by remaining banks for pittance.

I think you are missing the point. All the banks were in serious difficulty (even the ones which didn't get taken over). If you recall credit froze. Hence many profitable companies in the real economy which regularly use a credit line to keep going in the delay between selling and being paid for goods would have gone bust. It would have been carnage. Pretty much the majority of small businesses in this country would have gone bust leading to massive unemployment probably multiples of the current number. Most sensible people agree that governments had to step in - but they could have saved the 'real' economy and still made the bank shareholders and creditors take most of the downside - they didn't and now we (citizens) have been saddled with the bill (sovereign debt).

This was the biggest shakedown in human history .... :ph34r:

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I think you are missing the point. All the banks were in serious difficulty (even the ones which didn't get taken over). If you recall credit froze. Hence many profitable companies in the real economy which regularly use a credit line to keep going in the delay between selling and being paid for goods would have gone bust. It would have been carnage. Pretty much the majority of small businesses in this country would have gone bust leading to massive unemployment probably multiples of the current number. Most sensible people agree that governments had to step in - but they could have saved the 'real' economy and still made the bank shareholders and creditors take most of the downside - they didn't and now we (citizens) have been saddled with the bill (sovereign debt).

This was the biggest shakedown in human history .... :ph34r:

+1

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+1

And our national debt is STILL creeping higher! Good job we can pay back over 50 years (or maybe we can have a world war and kill the people we owe to so we can start over, a side effect of war will be plenty of jobs for the few left and cheap land to build on). Hmmmm......good job our leaders never think like this.....or do they?

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The world and life will go on as we know it if greece defaults.

Not true- you overlook the fiendish cunning of our banker friends. They have ensured through a linked chain of fake insurance scams that any attempt by Greece to default will trigger a worldwide series of implosions as those losses trigger claims on the institutions who 'insured' the debt- claims they could never meet.

The suicide bankers have rigged the global economy to explode if any attempt is made to get out from under the debt mountain they have created- and they have done this using 'over the counter' derivatives that have no oversight, no transparency and as far as I can see no real legal justification.

What should happen is that all those fake derivatives should be wiped- their legitimacy removed and their existence nullified. But the f*cking bankers control the political class and will instead take us all down to try to preserve their own phantom wealth.

Until the world takes on the Bankers and shuts them down this crisis will never end- to the point where we are all scrabbling through the ruins for food.

Edited by wonderpup

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Not true- you overlook the fiendish cunning of our banker friends. They have ensured through a linked chain of fake insurance scams that any attempt by Greece to default will trigger a worldwide series of implosions as those losses trigger claims on the institutions who 'insured' the debt- claims they could never meet.

The suicide bankers have rigged the global economy to explode if any attempt is made to get out from under the debt mountain they have created- and they have done this using 'over the counter' derivatives that have no oversight, no transparency and as far as I can see no real legal justification.

What should happen is that all those fake derivatives should be wiped- their legitimacy removed and their existence nullified. But the f*cking bankers control the political class and will instead take us all down to try to preserve their own phantom wealth.

Until the world takes on the Bankers and shuts them down this crisis will never end- to the point where we are all scrabbling through the ruins for food.

+1

This is why when Greece goes down it is going to hurt us all. We are going to need some serious bomb disposal experts and Merkel and Sarkozy aren't up to it. This is a political crisis as much as a financial crisis.

Edited by CrashingPumpkin

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Newsnight just had some US economist on who was so bearish about global meltdown that he made us all sound like bulls.

Greece going buat, Portugal, Ireland and even France following. Banks going bust. No cash in banks. Soon apparently.

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Newsnight just had some US economist on who was so bearish about global meltdown that he made us all sound like bulls.

Greece going buat, Portugal, Ireland and even France following. Banks going bust. No cash in banks. Soon apparently.

Sounds like an HPC lurker with no sense of irony.

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  • 336 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% +
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      • Even
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      • up 5%



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