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Will Eurozone Austerity Cause Eurozone Deflation


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Widespread eurozone austerity looks imminent, will this not cause eurozone deflation though ?

Or...are the putting all the banking experts in charge of the eurozone countries so they can all agree to print print print ?

I foresee people power voting against that in Italy and Greece...very soon.

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As both Greece & Italy are within the Eurozone, and hence unable to devalue National Currencies in order to make their exports cheaper Internationally, then they will need to introduce "Internal Devaluations" to make their economies more "Competitive" on the Global stage.

see youtube link : http://www.youtube.com/watch?v=088TtLfWpfA

Such "Internal Devaluations" should lead to lower labour costs, lower input costs, etc.

Unfortunately, standards of living will fall for majority of population due to lower disposable incomes, rising taxes, falling Government expenditure on schools, hospitals, pensions, etc.

As to the European Central Bank (ECB) becoming "Lender of Last Resort", I don't think the Germans will go for this as they have the Northern European "Mindset" of Fiscal Discipline and want countries such as Greece to introduce long lasting Structural Reforms as opposed to the "quick fix" of unlimited cash injections.

However the downside is that such structural reforms will increase social tensions......... and result in years of falling GDP.......... years of falling per capita income.

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As both Greece & Italy are within the Eurozone, and hence unable to devalue National Currencies in order to make their exports cheaper Internationally, then they will need to introduce "Internal Devaluations" to make their economies more "Competitive" on the Global stage.

see youtube link : http://www.youtube.com/watch?v=088TtLfWpfA

Such "Internal Devaluations" should lead to lower labour costs, lower input costs, etc.

Unfortunately, standards of living will fall for majority of population due to lower disposable incomes, rising taxes, falling Government expenditure on schools, hospitals, pensions, etc.

As to the European Central Bank (ECB) becoming "Lender of Last Resort", I don't think the Germans will go for this as they have the Northern European "Mindset" of Fiscal Discipline and want countries such as Greece to introduce long lasting Structural Reforms as opposed to the "quick fix" of unlimited cash injections.

However the downside is that such structural reforms will increase social tensions......... and result in years of falling GDP.......... years of falling per capita income.

Don't European social laws prevent things like wage cuts and reduced benefits that are needed to allow internal devluations to work?

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As both Greece & Italy are within the Eurozone, and hence unable to devalue National Currencies in order to make their exports cheaper Internationally, then they will need to introduce "Internal Devaluations" to make their economies more "Competitive" on the Global stage.

see youtube link : http://www.youtube.com/watch?v=088TtLfWpfA

Such "Internal Devaluations" should lead to lower labour costs, lower input costs, etc.

Unfortunately, standards of living will fall for majority of population due to lower disposable incomes, rising taxes, falling Government expenditure on schools, hospitals, pensions, etc.

As to the European Central Bank (ECB) becoming "Lender of Last Resort", I don't think the Germans will go for this as they have the Northern European "Mindset" of Fiscal Discipline and want countries such as Greece to introduce long lasting Structural Reforms as opposed to the "quick fix" of unlimited cash injections.

However the downside is that such structural reforms will increase social tensions......... and result in years of falling GDP.......... years of falling per capita income.

So that's a yes then. I thought so. :lol:

I really believe the puppet masters have been put in place to vote for euro printy printy ( le Imprimery Imprimery, or ze druckeny druckeny ) _

Edited by TheCountOfNowhere
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Widespread eurozone austerity looks imminent, will this not cause eurozone deflation though ?

Or...are the putting all the banking experts in charge of the eurozone countries so they can all agree to print print print ?

I foresee people power voting against that in Italy and Greece...very soon.

It should certainly cause deflationary effects in the EZ countries that impose austerity as available cash gets scarce.

If the government can't borrow large amounts to spend, and the central bank refuses to print money for the government to spend into the economy, then combined with tight bank credit conditions deflation is inevitable.

Assuming those countries stay in the EZ, this means that people and businesses from other EZ countries will be able to come into Italy and Greece and take advantage of remarkably cheap Euro-denominated prices to spend their Euro savings. That should help those economies recover but it's unlikely to endear the impoverished populations to the concept of the Eurozone.

Still, since when do they have a say? As we've seen from recent events, democracy is absolutely not encouraged when it comes to matters of European integration.

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Widespread eurozone austerity looks imminent, will this not cause eurozone deflation though ?

Or...are the putting all the banking experts in charge of the eurozone countries so they can all agree to print print print ?

I foresee people power voting against that in Italy and Greece...very soon.

No,the demographics will.Europe will be in deflation for 20 years,UK too but less so.US probable.1 billion people scared,ageing saving.There will be no inflation.

Be long cash,short gold and silver,when the sell off hits next year go long quality corporate bonds( after they get hit with equities).As the equity markets fall more into late 2012 move out of the bonds into East Asia/India equities.Thats where the demographics for growth are.

This is and will be a demand problem,not a supply problem.IMO silver then gold will hit hard,then harder.Thats how im playing it.Right or wrong il know by early 2013.

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  • 441 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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