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We Are Reaching The End Game In Europe

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http://www.telegraph.co.uk/finance/economics/11154553/Dam-breaks-in-Europe-as-deflation-fears-wash-over-ECB-rhetoric.html

Dam breaks in Europe as deflation fears wash over ECB rhetoric

We are reaching the end game in Europe. If they dont launch real QE and start reflation by the end of the year or soon after, the consequences are too awful to contemplate

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Its OK, Germany is about to send the tanks into Ukraine to support the local Nazi powerbase. Curiously it seems the french plan to go with them this time, collaborating from the outset presumably being easier somehow.

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OP, no sarcasm intended but could you elaborate what the consequences will be please...for the benefit of an economic novice.

To my simple mind, we (ie those who have not participated in the mortgage orgy) have had enough of QE and could do with money becoming more "expensive" (albeit in the EU) once again.

I might even dust off the old "O" Level French books from 1980.

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QE in the UK appears to have caused massive unreported inflation and contributed to destroying the life chances of a couple of generations. See housing market.

What's wrong with deflation, anyway? Isn't it just another word for rising living standards?

The Germans shouldn't be persuaded by the Anglo-American vultures.

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I think the Telegraph have been reading too much HPC, they've gone full tin-foil hat.

Only a total reset of the debt system will save this puppy from eventually going down. Of course, that would be massively unfair to people like me with no debt and savings in the bank unless people are willing to take a hit on the notional value of their houses.

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What's wrong with deflation, anyway?

It's mainly bad for overleveraged governments and individuals as well as businesses whose business model is built on perpetual growth.

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It's mainly bad for overleveraged governments and individuals as well as businesses whose business model is built on perpetual growth.

People don't make enough to buy or rent a home close to where they work let alone procreate. ;)

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I think the Telegraph have been reading too much HPC, they've gone full tin-foil hat.

Only a total reset of the debt system will save this puppy from eventually going down. Of course, that would be massively unfair to people like me with no debt and savings in the bank unless people are willing to take a hit on the notional value of their houses.

Gone?

Ambrose Evans Pritchard has ways been the tin foil nuttiest on Europe of all the mainstream media since I joined HPC.

I'm surprised he gets any credit but without the HPC is like a stopped clock or if you call Black so often it'll eventually happen barbs.

Edited by 8 year itch

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Guest The Relaxation Suite

Congratulations to Ambrose Evans-Pritchard for writing his 50 millionth End of Europe article.

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Relative to income apparently German house prices are on average significantly cheaper than in the UK. Why should they have to risk that with QE just to benefit the bankers and the politicans and suchlike.

For goodness sake it's a warning from RBS a bankrupt UK bank. Incompetents helping to devastate the UK economy and then bailed out by UK taxpayers - now more than likely wanting Germans in the same mire.

Edited by billybong

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Relative to income apparently German house prices are on average significantly cheaper than in the UK. Why should they have to risk that with QE just to benefit the bankers and the politicans and suchlike.

For goodness sake it's a warning from RBS a bankrupt UK bank. Incompetents helping to devastate the UK economy and then bailed out by UK taxpayers - now more than likely wanting Germans in the same mire.

Exactly,they want europe to QE so they can have first dibs of more freshly printed crap that brings them the commissions and kickbacks they have always enjoyed. The relationship betwen the banking system and the rest of the economy is almost entirely parasitic and increasingly negative.

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Relative to income apparently German house prices are on average significantly cheaper than in the UK. Why should they have to risk that with QE just to benefit the bankers and the politicans and suchlike.

For goodness sake it's a warning from RBS a bankrupt UK bank. Incompetents helping to devastate the UK economy and then bailed out by UK taxpayers - now more than likely wanting Germans in the same mire.

Because they're unhinged lunatics who want project Europe to survive at any cost. The bailouts (of german investments) in Greece et al hasn't been enough. Its just a sticking plaster...that's about to fall off.

Its the idiocy of the EU. Despite all the growth forecasts driving northern investment in the south and east of Europe, foolish germans hoping to retire on the returns on investments in those young dynamic new Europeans...except they're not young. Demographics in south and east Europe are just as crap as german demographics, in some cases worse.

If Germany had spent the last quarter century building links with India or Brazil, rather than being obsessed with the EU disaster, its export based model would have worked. As it stands, they've been exporting BMWs in exchange for government bonds in dying countries, which German taxpayers have had to bail out, and now will have to simply buy back via QE.

That's the irony...that outward looking EU is one of the most insular, narrow focused transnational organizations going. We need to be free of it, the Germans need to be free of it.

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In my mind it is quite simple why we need QE. The 1% has all the money and the 99% have all the debt.

Because the 1% don't spend enough for the 99% to service their debt the only way to keep the system going is for the 99% to take on more and more debt. Lowering the interest rates to zero makes the debt less onerous on the 99%. But eventually you have to do a bail in or QE to put money back into the economy or the banks will fail due to un payable debt.

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Exactly,they want europe to QE so they can have first dibs of more freshly printed crap that brings them the commissions and kickbacks they have always enjoyed. The relationship betwen the banking system and the rest of the economy is almost entirely parasitic and increasingly negative.

Exactly, QE doesn't work because in the end it doesn't reach the people who need it.

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Exactly, QE doesn't work because in the end it doesn't reach the people who need it.

But gf3 thinks that's we haven't QE-d enough. If we just do more, it'll go to the right people.

We just need more.

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But gf3 thinks that's we haven't QE-d enough. If we just do more, it'll go to the right people.

We just need more.

I think he was being sarcastic?

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Draghi needs to decide who he works for.

Either it's the 300m europeans or it's Germany and the Bundesbank.

He can't ride two horses.

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Exactly, QE doesn't work because in the end it doesn't reach the people who need it.

In a nutshell. It's simply allowed the orgy of debt consumption to run on as before. There's been no de-leveraging worthy of the name.

Global debt to gdp:

global-debt-to-GDP.png

selected-country-debt-dynamics.png

Edited by zugzwang

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Exactly, QE doesn't work because in the end it doesn't reach the people who need it.

QE is a temporary solution to buy politicians time to fix the demand imbalances.

Even Bernanke has been quite explicit about that.

The problem is not QE. The problem is that the politicians, in this case Germany, have failed to grasp their responsiblities.

Germany in fact is going even further than that and actively destroying both demand and supply, and shrinking european economies. She's destroying them.

German demographics are horrible. French demographics are reasonably good. Long term Germany is screwed. France will dominate Europe. ECB will have to choose it's future master at some point and it won't be Germany.

Edited by R K

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QE in the UK appears to have caused massive unreported inflation and contributed to destroying the life chances of a couple of generations. See housing market.

What's wrong with deflation, anyway? Isn't it just another word for rising living standards?

The Germans shouldn't be persuaded by the Anglo-American vultures.

Inflation erodes buying power of wage earners and savers. Deflation erodes the buying power of asset holders and money printers. You can see why deflation is scary for the 1%.

Edited by goldbug9999

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I think the Telegraph have been reading too much HPC, they've gone full tin-foil hat.

Only a total reset of the debt system will save this puppy from eventually going down. Of course, that would be massively unfair to people like me with no debt and savings in the bank unless people are willing to take a hit on the notional value of their houses.

Has been mooted before that you simply dump £10,000 in everybodies bank account regardless of their financial status.

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