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Netherlands, The Next Chip To Fall?

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Similar article was posted the other day.

It begs the question where in the west isnt fecked?

Germany is the only one that has maintained a manufacturing base

Australia/Canada/Norway have a good natural resource base per capita.

Everywhere else...

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whats amazing is that the Netherlands enjoys one of the highest GDP per capita rates in Europe and had a sound economy, however by joining the Euro it is taking orders from the rest of the euro members in terms of how best to run its economy, the likes of which members like spain, portugal greece, italy are making the demands. all in the "interests" of the Euro.

why would the Netherlands give in to the ideas and demands of countries that are not as successful as itself about how to run its economy and finances.

the result is that by adopting poorer practices, it is being dragged backwards.

it would be like the USA joining a pan-american currency and taking ideas and orders from the likes of chile and argentina about how to do things.

Edited by mfp123

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whats amazing is that the Netherlands enjoys one of the highest GDP per capita rates in Europe and had a sound economy...

So, essentially, did Spain, before its housing crisis.

The main culprit in both cases appears to be the bursting of a house price bubble, which goes some way to explaining why our government is going to such desparate lengths to keep the UK's inflated.

Edited by The Ayatollah Buggeri

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So, essentially, did Spain, before its housing crisis.

The main culprit in both cases appears to be the bursting of a house price bubble, which goes some way to explaining why our government is going to such desparate lengths to keep the UK's inflated.

And Ireland was the 'celtic tiger'. I think the problem is that the measures used to indicate a successful economy are seriously faulty.

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So, essentially, did Spain, before its housing crisis.

The main culprit in both cases appears to be the bursting of a house price bubble, which goes some way to explaining why our government is going to such desparate lengths to keep the UK's inflated.

Trying to keep the house price bubble inflated is to help protect the lenders.....we can't afford any more bailouts, we can't afford high inflation and we don't want to go down the road of stealing from peoples bank accounts, savings and pensions.......allowing house prices to fall would be a good move if it wasn't for the size of the debt that would have to be written off from people walking away from something not worth the money they borrowed to pay for it. ;)

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there is a divergence now opening between euro and non euro countries.

non euro countries are seeing flat/ small growth in gdp and flat/minor falls in unemployment - essentially treading water.

euro countries on the other hand are all sinking into -ve growth in gdp and rising unemployment.

the 2 speed europe is beginning to emerge and its the other way around to what the EU were expecting.

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http://globaleconomicanalysis.blogspot.co.uk/2013/04/netherlands-next-chip-to-fall.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+MishsGlobalEconomicTrendAnalysis+(Mish's+Global+Economic+Trend+Analysis)

'

Most attention lately has been on Cyprus, Spain, and Italy. Long-time troubles have been brewing in Portugal and I have an update coming up shortly.

First consider Underwater: The Netherlands Falls Prey to Economic Crisis.

The Netherlands, Berlin's most important ally in pushing for greater budgetary discipline in Europe, has fallen into an economic crisis itself. The once exemplary economy is suffering from huge debts and a burst real estate bubble, which has stalled growth and endangered jobs.

"Underwater" is a good description of the crisis in a country where large parts of the territory are below sea level. Ironically, the Netherlands, widely viewed as a model economy, is facing the kind of real estate crisis that has only affected the United States and Spain until now. Banks in the Netherlands have also pumped billions upon billions in loans into the private and commercial real estate market since the 1990s, without ensuring that borrowers had sufficient collateral.

Private homebuyers, for example, could easily find banks to finance more than 100 percent of a property's price. "You could readily obtain a loan for five times your annual salary," says Scheepens, "and all that without a cent of equity." This was only possible because property owners were able to fully deduct mortgage interest from their taxes.

Instead of paying off the loans, borrowers normally put some of the money into an investment fund, month after month, hoping for a profit. The money was to be used eventually to pay off the loan, at least in part. But it quickly became customary to expect the value of a given property to increase substantially. Many Dutch savers expected that the resale of their homes would generate enough money to pay off the loans, along with a healthy profit.

No nation in the euro zone is as deeply in debt as the Netherlands, where banks have a total of about €650 billion in mortgage loans on their books.

Consumer debt amounts to about 250 percent of available income. By comparison, in 2011 even the Spaniards only reached a debt ratio of 125 percent.

The Netherlands is still one of the most competitive countries in the European Union, but now that the real estate bubble has burst, it threatens to take down the entire economy with it. Unemployment is on the rise, consumption is down and growth has come to a standstill. Despite tough austerity measures, this year the government in The Hague will violate the EU deficit criterion, which forbid new borrowing of more than 3 percent of gross domestic product (GDP).

It's a heavy burden, especially for Dutch Finance Minister Jeroen Dijsselbloem, who is also the new head of the Euro Group, and now finds himself in the unexpected role of being both a watchdog for the monetary union and a crisis candidate.

Even €46 billion in austerity measures are apparently not enough to remain within the EU debt limit. Although Dijsselbloem has announced another €4.3 billion in cuts in public service and healthcare, they will only take effect in 2014.'

oh dear.

It all begs the question as to why so manay western govts have fallen into this same trap - failure to control bank lending, almost during the same 20 yr period?! It must be unprecedented that so many fools ruled so many for so long, leading to such a mega lending spree of such idiocy, when it was so unnecessary and has led to so many economic problems which were so foreseeable!!!!!!!!!!!!!!!!!!! I frankly do not understand why no one seemed to have any forethought about the end consequences. People will borrow whatever they are allowed to, whether that is stupid or not. So GOVT SHOULD CONTROL IT VERY TIGHTLY for the benefit of all and the long term health of the economy.

Karen Brady for PM. Me for chancellor. (see her on Piers Morgan chat show) ;)

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Surely the dutch government should bail out the banks by borrowing billion and billions of euros?

..and / or give depositors haircuts...orders from Berlin/Brussels.... :rolleyes:

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And Ireland was the 'celtic tiger'. I think the problem is that the measures used to indicate a successful economy are seriously faulty.

There were two elements to the Celtic Tiger - the rapid rise of job prospects and job quality and earnt income - thanks partly to taxation but also a fair degree of adaptability and ability to perfrom those jobs largely in the tech tech sector; and the housing bubble which did it in for those jobs, providing the high cost base that drove those jobs away, They could have held on to a lot more of those and be in a much better position than they are now, let alone with a lot lower debt burden to burn off.

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It all begs the question as to why so manay western govts have fallen into this same trap - failure to control bank lending, almost during the same 20 yr period?! It must be unprecedented that so many fools ruled so many for so long, leading to such a mega lending spree of such idiocy, when it was so unnecessary and has led to so many economic problems which were so foreseeable!!!!!!!!!!!!!!!!!!! I frankly do not understand why no one seemed to have any forethought about the end consequences. People will borrow whatever they are allowed to, whether that is stupid or not. So GOVT SHOULD CONTROL IT VERY TIGHTLY for the benefit of all and the long term health of the economy.

Karen Brady for PM. Me for chancellor. (see her on Piers Morgan chat show) ;)

You mean like the consumer and banking credit controls that we had before the 1980s.

In the UK people at the BOE were lobbying for their relaxation as far back as 1970 surprisingly against the wishes of politicians and the Treasury.

http://www.bankofengland.co.uk/about/Documents/history/bankhistory1970.pdf

BTW It contains the memorable line

Banking as a legitimate commercial activity often inconveniences the government of the day

You can say that again son.

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I frankly do not understand why no one seemed to have any forethought about the end consequences.

Because, if they had, they wouldn't have been re-elected.

National bankruptcy is the inevitable end-result of mass democracy, because the masses will always vote for more 'free stuff'.

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So, essentially, did Spain, before its housing crisis.

The main culprit in both cases appears to be the bursting of a house price bubble, which goes some way to explaining why our government is going to such desparate lengths to keep the UK's inflated.

It'll be an even bigger bust when it happens! :lol:

Only in Britain, baby!

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Bank runs in Holland and Luxembourg are going to be fun.

Those tulip growers have form when it comes to bubbles............

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National bankruptcy is the inevitable end-result of mass democracy, because the masses will always vote for more 'free stuff'.

I think it depends how intelligent and informed the population is. Democracy doesn't work at all well in most of Africa because the average voter is very uneducated and chooses poorly at election time. Democracy works somewhat better in the West, but apparently still not well enough for the resulting governments to be trusted with a fiat currency.

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It's a heavy burden, especially for Dutch Finance Minister Jeroen Dijsselbloem, who is also the new head of the Euro Group, and now finds himself in the unexpected role of being both a watchdog for the monetary union and a crisis candidate.

Even €46 billion in austerity measures are apparently not enough to remain within the EU debt limit. Although Dijsselbloem has announced another €4.3 billion in cuts in public service and healthcare, they will only take effect in 2014.'

oh dear.

Dijsselbloem has already nailed his flag onto the whatever over Cyprus

abe6ea02-8e53-47f9-85c0-f0a9b0a1c2f5-620x372.jpeg

"If there is a risk in a bank, our first question should be 'Okay, what are you in the bank going to do about that? What can you do to recapitalise yourself?'.

"If the bank can't do it, then we'll talk to the shareholders and the bondholders, we'll ask them to contribute in recapitalising the bank, and if necessary the uninsured deposit holders," he said.

Dijsselbloem, who heads the Eurogroup of eurozone finance ministers, added: "If we want to have a healthy, sound financial sector, the only way is to say, 'Look, there where you take on the risks, you must deal with them, and if you can't deal with them, then you shouldn't have taken them on'.

The Dutch are going to be far more mobile with their bank accounts than the Cypriots , On their bikes ...and all that

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On Declan's radio programme this evening they seemed to be trying to suggest that Portugal was at risk of being the next one.

Likening it to Cyprus although making the point that Portugal would be far more serious for the eu/euro than Cyprus.

Edited by billybong

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Democracy works somewhat better in the West, but apparently still not well enough for the resulting governments to be trusted with a fiat currency.

Mass democracy has only worked better in the West to the extent that the government was prevented by institutional inertia from doing what the masses wanted. Over time, all such restrictions are removed one by one 'for a good cause', and then you're doomed.

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whats amazing is that the Netherlands enjoys one of the highest GDP per capita rates in Europe and had a sound economy, however by joining the Euro it is taking orders from the rest of the euro members in terms of how best to run its economy, the likes of which members like spain, portugal greece, italy are making the demands. all in the "interests" of the Euro.

why would the Netherlands give in to the ideas and demands of countries that are not as successful as itself about how to run its economy and finances.

the result is that by adopting poorer practices, it is being dragged backwards.

it would be like the USA joining a pan-american currency and taking ideas and orders from the likes of chile and argentina about how to do things.

You're totally right. The Netherlends pumped up a housing bubble on instructions from Brussels.

We must have done it as a way of joining the Euro by stealth. How fortunate that Osborne is taking such decisive action to support the housing market instead of actually doing anything about the economy.

Edited by Stainless Sam

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You're totally right. The Netherlends pumped up a housing bubble on instructions from Brussels.

We must have done it as a way of joining the Euro by stealth. How fortunate that Osborne is taking such decisive action to support the housing market instead of actually doing anything about the economy.

So how come the USA had a bubble then ?

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Not yet, just more bail outs.

Vested interests and governments are both so entangled and powerful that they will keep lying to themselves and everyone else until a point is reached where life is so intolerably miserable nobody fails to notice and forcibly demand this madness to stop.

Worse still, when this point comes, people will be conditioned such that they will no longer know what the problem is, nor how to fix it, and probably elect a dictator who promises to make all the pain go away.

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You're totally right. The Netherlends pumped up a housing bubble on instructions from Brussels.

We must have done it as a way of joining the Euro by stealth. How fortunate that Osborne is taking such decisive action to support the housing market instead of actually doing anything about the economy.

its your ability to solve your own problems. you dont think the netherlands having to contribute in bailing out ireland, spain, greece, portugal cyprus will have any knock on effect on its own economy? even germany is starting to get dragged down.

the netherlands cant solve its own problems - it can only follow what it is being told to do, or just act in a pool with all the other countries, not do what the netherlands would ordinarily do i.e its taking on bad practices led by others.

the UK is treading water at the moment but when you compare us to the rest of europe they would much prefer to be in our position.

UK unemployment is 7.7%

France 10.8%

Italy 11.6%

Spain 26.3%

Portugal 17.5%

Greece 26.4%

Ireland 14.2%

netherlands unemployment has always been historically extremely low - in the region of 4-5%

its now the same as the UK at 7.7% and will exceed us in the next quarter.

the UK, sweden (8.5%), denmark (7.9%) (non euro countries) are flat lining, the Euro countries are sinking.

Edited by mfp123

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  • 259 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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