Fears about the finances of eurozone nations will spread around the world to engulf the US and Japan, former Bank of England policy maker Willem Buiter has warned.
Worries about the risk of a sovereign state defaulting on its debt, which thrust the eurozone into crisis, will soon encompass the two major economies as well, according to Citigroup economists led by Mr Buiter, who sat on the Bank's Monetary Policy Committee.The team has published a note forecasting much more strife to come in the wake of Greece and Ireland's recent bail-outs and eurozone governments' borrowing costs hitting record highs.
"Despite the recent drama, we believe we have only seen the opening and second act, with the rest of the plot still evolving," the team wrote. "There is no absolutely safe sovereigns."
There are likely to be several sovereign debt restructurings in the next few years, the analysts said, with Portugal likely to need to access the emergency funding facilities soon.
Against this backdrop, the US and Japan - dubbed the "fiscal sustainability deniers" - cannot keep ignoring the question of how safe their public finances are, the team said.
Austerity ahead
ReplyDeleteBut austerity was the dominant subject on the financial news channel. Faced with massive public spending cuts, European nations are set to experience great austerity in coming years. It should be mentioned that the United States is likely to follow, as American states are in no better shape than European countries.
Germans are not inclined to follow America's example of more stimulus money. The popular idea taught in American schools is that only big government spending programs got the United States out of the Depression in the 1930s. German memories are different.
"The two economic events which were seen as having had the most decisive influence on modern German history were, firstly, the Gründerkrach [Founders Crash] of 1873-4 and the subsequent period of stagnation...and, secondly, the Slump of 1929-32, usually seen as the main cause of the collapse of the Weimar Republic. In the popular mind, however, equal if not greater importance has long been attached to the 1923 hyperinflation, the 'memory' of which is frequently cited to explain the relative stringency of recent...German monetary policy" (Niall Ferguson, Paper and Iron, 1995, introduction).
Of course, there is little "memory" of these events other than what people learn in school or from a book or documentary, just as Americans have learned that the solution to an economic slump is big spending. These are clearly two different approaches. It remains to be seen which one will win out.
Bible prophecy shows that a final union of 10 kings or leaders will form in Europe, a modern successor to the Roman Empire. "The ten horns which you saw are ten kings who have received no kingdom as yet, but they receive authority for one hour [a short time] as kings with the beast. These are of one mind, and they will give their power and authority to the beast" (Revelation 17:12-13).
Eighty years ago, the international financial crisis resulted in significant changes in Europe. The slump that followed the 1929 crash led to the collapse of democracy in a number of countries, not just Germany where Hitler's Third Reich replaced the democratic Weimar Republic. Right across Europe fascism triumphed.
I'm not suggesting that fascism as it was could triumph again, but democracy as it is today is unlikely to weather the severe austerity storms that lie ahead. Greece has seen massive riots and strikes following an announcement of cuts in public spending. Public order will need to be enforced even as people see their standard of living drop dramatically. Portugal, Spain and Greece were fascist dictatorships until the 1970s—it's not inconceivable that they could turn once again to a strong centralized form of government.
Revelation 17:13 shows that such a development will happen among the 10 as "they will give their power and authority to the beast." The "beast" refers to the supreme federal leader, the dictator who will emerge at the top of the new union, as well as the empire he rules.
Whenever I travel through Europe, I like to read The Wall Street Journal's European edition. It has a good feel for developments across the continent. The headlines on June 9 included the following: "Spain's Government Workers Begin Strike"; "UK Should Slash Debts, Says Fitch"; "Budget Fears Take Over Dutch Voting"; "Hungary Moves to Close Budget Gap"; "Greek Inflation Jumps, Lifted by Fuel Costs, Taxes"; "EU Aides Urge Joint Planning." The last item shows the push for greater financial integration.
The French and German leaders met a few days later and agreed on the need for greater control of national budgets to avoid another Greek or Spanish crisis. This would mean a far greater loss of independence than the British would agree to. Others may feel they cannot abide by the strict rules. The outcome could be a very different Europe.
Odds of a prolonged slump are rising
ReplyDeleteFurther food for thought on the global financial crisis, and the implications for Europe and the United States appeared June 18 on the Eurointelligence.com Web site.
Quoting from U.S. economist Paul Krugman in a segment titled "Krugman says it's back to the 1930s," the Web site states: "German deficit hawkery... has nothing to do with fiscal realism. Instead, it's about moralizing and posturing. Germans tend to think of running deficits as being morally wrong, while balancing budgets is considered virtuous, never mind the circumstances of economic logic.
"German austerity will worsen the crisis in the euro area, making it that much harder for Spain and other troubled economies to recover. Europe's troubles are also leading to a weak euro, which perversely helps German manufacturing, but also exports the consequences of German austerity to the rest of the world, including the United States.
"How bad will it be? Will it really be 1937 all over again? I don't know. What I do know is that economic policy around the world has taken a major wrong turn, and that the odds of a prolonged slump are rising by the day."
Eurointelligence.com also quoted from the former chairman of the Federal Reserve, Alan Greenspan, who warned in The Wall Street Journal that "the US might soon face a borrowing limit," which would mean an end to stimulus programs and necessitate austerity measures similar to the nations of Europe.
The BBC's Web site June 18 quoted President Obama as warning other nations not to reduce their debts too quickly, "as it would put economic recovery at risk."
The article later noted, "But Mr. Obama said the US would still aim to halve its own deficit by 2013. The US budget deficit would be cut to 3% of GDP by 2015, the president said" ("Obama Warns G20 Leaders on Budget Cuts").
Interestingly, 3 percent is the eurozone limit rule, which has been in effect for a decade, though countries like Greece did not abide by the rule. This is what's behind the push for stricter controls in Europe.
Looking at the worsening financial situation from both sides of the Atlantic gives an interesting perspective. Whereas approaches are certainly different, the end result may be the same in both Europe and the United States—austerity and a prolonged slump!
Sarah Palin a Loser in Politics, Tv and Life in General, Loses show after one season LOL LOL LOLJohn Moore/Getty ImagesUs Magazine Sunday's season finale of Sarah Palin's Alaska is said to be the show's last episode, Entertainment Weekly reports.
ReplyDeleteThe former Alaska governor's TLC reality series -- which premiered Nov. 14 -- averaged 3.2 million viewers per week, with its first episode delivering the network's best-ever launch ratings.
VIDEO: Sarah Palin hunts for food
Coming under fire for her wildlife exploits, including caribou hunting and fishing too close to bears, Palin's Alaska also showcased the politician's children and husband, Todd.
The Palin family also hosted Kate Gosselin and her brood of eight for an ill-fated camping trip shown on the series.
A Gosselin source tells UsMagazine.com that the reality mom had "zero chemistry" with the former governor while taping the buzzed-about episode in July.
VIDEO: Kate Gosselin has a meltdown while camping
"They didn't speak off camera," the insider adds. "Kate said the food and accommodations were terrible, and it was the worst trip she'd ever been on."
Sarah Palin's Alaska airs its two-hour finale Sunday at 8 p.m. (EST) on TLC.
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As happy as it makes me that people refuse to watch that abuse I don't even like hearing her name dude.
ReplyDeleteSarah Palin, the right wing cheerleader, is evil even though there's no such thing as evil. The only people that believe in evil are Catholics like the Republicans.
I got roasted for putting down Ron Paul, I bet the right wing kooks will be on the prowl tonight.
Looking for brown skinned people Neocons? How bout some more dead deers, grizzlies, penguins, and polar bears? Let's bomb em all boys! Right? I thought so.
Just drop a nuke on em, like that confused idiot first poster believes we should. Just drop a nuke, that saves everything.
Kill all the animals as well. Infinite animals and trees, just kill it all so us humans can have whatever we want on Gaia.
Gaia will tolerate it for only so much longer you greedy corporate scumbags.
Soon she will either freeze over or burn up. What will you do then? What's up now mate!? We need to get to our senses and realize what we are doing to this beautiful, lush planet!
Besides the point, Japan tried to use Raegan's ideas in the 80s when they employed a "make as much as you can" attitude with the citizens.
So much for that. Who will help better the planet?
We have only a few years to get CO2 levels back to normalized levels. We have to employ the green jobs with Agenda 21 before Obama leaves office. Cap and Trade, free healthcare, Wallstreet ban, Amnesty, these need to be done.
We need to hurry up and stop oil rigs from being operated at the least.
Raegan's methods created this mess along with Bush's wars. Much work is to be done if not too late.
The ecological disaster may happen anyday thanks to the BP criminals.
japans premier said last week their economy was truly on the brink of the cliff..maybe they'll be the next shoe to drop
ReplyDeletei dunno about a world based on derivatives trading and leverage..it's just 0's and 1's eh until someone demands payment somewhere in this system..whatever it doesn't seem to be working well from the state level and banks on up to governments, oh well, unless your hope is in this world system and mankind
The article later noted, "But Mr. Obama said the US would still aim to halve its own deficit by 2013. The US budget deficit would be cut to 3% of GDP by 2015, the president said" ("Obama Warns G20 Leaders on Budget Cuts").
ReplyDeleteThat's impossible Entitlement costs now costs more than the gov't takes in tax revenues, and entitlement costs are about to soar (2.8 Million new boomers are eligable for SS + Medicare in 2011).
No way any politican, Democrat or Republic will cut back on entitlements, since retirees and boomers make the biggest voting block. Any politican that presses for entitlement cuts will be commiting political suicide, and will be replace with a pro-entitlment politican.
No question that Congress will increase the debt ceiling. Bernanke will bailout the states just like he did with all of the big banks. Although he might wait until it morphs into a mini-crisis (like he did with the collapse of Lehman). Most likely the Fed will use the primary dealers to buy state and local bonds to prop them up. Fed is already working on expanding the number of primary dealers in order to accomidate more and bigger debt purchases.
If cuts happen, it will not be entitlements, but other depts. sucha major US miltary downsizing by closing bases in Europe, Japan, etc. Unfortunately its the US miltary presence that helps maintain global stability. If the US withdrawls from Europe expect the rise of fascism, as angry Europeans blame outsiders and leaders take advantage to turn nationalism into fascism.
It may take a while before hyper-inflation breaks out. The US is not alone in the debt crisis. its likely that collapses will start overseas, perhaps in Europe and Asia, that don't have the dollar as the worlds reserve currency to help prop up money printing. China's Bubble might pop in 2011 which would redirect attention away from the US debt crisis for a period. Same could happen if Japan defaults, or a major default in Europe.
The US economic crisis was not really created by updating to current events end of the world Armageddon interpretations and warning signs of the work of the Hebrew God in the bible.
ReplyDeleteWe have heard similar, always true, “word of god” , updates for centuries ,the last round about the time of the threat of the big Soviet Bear starting Armageddon wars to destroy the US and rebuild Israel.
Christian doomsayers/truthspeakers , Jehovah’s witnesses , Christian Zionists ,speakers in tongues etc.etc. are like that ,always predicting the latest immanent return of their God/man .
it gives them a meaning in life getting ready for the lord and keeps them busy doing personal interpretation of godspeak work . Its all pretty harmless really ,until they turn to repetitive boring preaching on their great recently updated discoveries on financial blogs instead of discussion it on their own sects website. Somebody has to save our souls I suppose.
Nor was the economic crisis of capitalism
created by the supposed spirit of Nature , GAIA timely creating global warming as more excuses for the ruling elite to impose more taxes to manage their consumer waste and pollution creating economic systems profitability.
Now according to democrat doomer J Troup ,an urgent once in a lifetime Gaia /Obama messiah double combination .
A hope and change spirit of America ,that desperately needs to develop eco nazi brownshirt jobs for brown people to police and save the penguins and capitalism in crisis and the world of America as he once knew it.
As you clearly cannot rely on fascist repugs ,the other wing of the same- same political party in congess, to save the planet and us all !
The Gaia /Obama messiah after all only gets elected once!
Actually, Taoists and Hindus also had an end of the world version like those mean horrible Christians. Read the Tao Te Ching or the Indian writings acquired throughout the thousands of years to see it. Only the fake spiritual authors in today's New Age would deny it. Or that over glorified, pseudo-Buddhist, royal highness (Dalia Lama) wouldn't know something like that.
ReplyDeleteIn Autobiography of a Yogi for example, a true champion of God; Yogananda, gives endless Bible references of how the Gnostics and Yogis were basically the same thing just in different words.
Lau Tzu discussed what is happening right now many times in his writings. Not to mention how the end times isn't a big finale but actually happens over and over. The Hindus gave an interesting diagram for these worlds. Each one goes through five technological periods, we are in number four now supposedly, which is the "Space Warping" age, next comes the "Time Warping" age. That nearly made me flip when I read that. Think about that for a second it's really bogus.
According to the Yogis the spiritual beings that are incarnated in the universe (humans at this time), which they said has a lifespan of 300 trillion years, and has come and gone for eternity), will be able to make it through all of these periods if they can stay close to the Divine Plan. At the end of the periods and with keeping close to spirit, the collective world can "transfigure" and make it to a new realm which transcends the polarity/duality universe of spacetime separation.
But, it is said that if the incarnated souls stray too far from God/Creator/Cosmic Consciousness then an "Emergency Order" is called for in which the world will be destroyed in order to preserve the soul. After that "virtuous beings", or those "born of heaven" would have to start the world over again after it is cleared out.
Yes that sounds very similar to the Bible's version. The Bible of course has been distorted each time the language was translated. Pages were lost, scholars didn't have a full grasp of what was said or the language being interpreted, and of course certain bigots in the church wanted to change a few things for their own benefit.
And the Hopi, Mayans, and even Egyptians had a form that sounded almost exactly like it.
Who would I rather believe... spiritually mastered people that received these writings from incorporeal sages way before this little infant universe came about 12 itty bitty billion years ago? Or some know nothing scientist like Hawking who actually deludes his silly little self that this universe cares what he thinks about it and adheres to his logical biases?
I would definitely take the Divine Hierarch's path to TRUE life and ultimately freedom from the cycles of "life" and death. They gave it to us since we are the Children of God. It is our birthright. But you have eternity, you can use it in this life now or a trillion lifetimes down the road. Doesn't matter either way. Not that our memories stick with our spark.
Final note. A world that progresses technologically or intellectually does not mean that world is progressing. Conversely, if a world does not progress intellectually or even get anywhere with technology it does not mean the world is not progressing. Think of Avatar where the people on the planet were closer to spiritual enlightenment but had dim knowledge. While the humans had sophisticated minds but were far from God.
Jacob Troupe, Jacob Troupe, insane asylum calling, insane asylum calling...
ReplyDeleteDude, you are one sick puppy. You are deeply, deeply disturbed. I'm sure your friends (if you have any) and family members have told you this over the years...you desperately need help. Sam looks completely normal compared to you.
J troupe the lefty is not insane ,or at least no more insane than the supporters of the republican political wing of the same- same left/right two party system.
ReplyDeleteBoth are bailout "recovery" parties.
J.Troupe Simply believes ,as he is correctly aware ,that the end game of the Paul father and son “Austrian economics” “libertarians for capital" politicians school , is acting as an idealogical backbone for Fascist type ‘Austerity”plans to be carried out by republicans and their co-opted T Partyists .
But somehow believes that Obama represents some sort of ‘left” more benevolent liberal more merciful economic alternative in the same-same two party set up that will get the system functioning profitably again !
Paul of course blames the Fed as the "cause" of all the problems of an impure bankrupt capitalism not the systems own bankrupty. and claims that abolishing the Fed and gold money would create a crisis free economic nirvana.
Troupe has a political dream ,not economic analysis and is unwilling to acknowledge that Obama is just another deficit spending warmonger of the Bush type,who only represents the current stage of the ruling elites attempt to try and get their insolvent great ponzi economy / Keynesian war economy back on track.
Troupe prays or believes that green job creation deficit spending will save the American system and the world to boot and shuts his eyes to the continuing bankster bailouts and expanding wars of Obama.
Yet ,Obama/Bernanke GS merely manages in a “left” way the bi-partisan supported TARP financial coup over treasury, voted for, by both McCain and Obama , that was established under the Bush/Cheney Republicans and Paulsen GS.
Printing money to socialize the losses of the banksters.
But ,the problem is it the debt ridden economic system itself that is hopelessly insolvent and still running on deficits fueled by printed paper, counterfeit money , as arranged by Bush/Paulsen .
Obama as manager /tinker leftist and promoter of “Green jobs” recovery ,changes nothing of the essence of that coup ,or the economic problem of insufficien real profits now that the foreign credit supply is drying up. .
Troupe actually believes and tries to convince us with his religious type enthusiasm and faith in Messiah politics , that there are actual differences between the “left” and “right” of the two party political management system and that good management from the “left” is superior, because he believes it is “progressive” money printing that will bring back a recovery of the old ponzi america and promises more jobs.
But, the Ponzi and the dollar hegemony system ,is dead ,long past the bailout stage money printing only creates temporarily the illusion of profits and recovery.
Obamas failures in his impossible role only fuel complaints by the “right” and the T party that the deficit spending on “welfare” to find supporters for the system ,in order to head of any possible rebellion. would be better spent , if it were all directly handed over for the bondholders interests.
So they claim, that Obama is “socialist” failure and that the republicans should re-assume management of the in-solvent economy and the bailouts with “rightist” efficiency in Austerity.
But “right” or “left” money printing cannot fix a debt crisis by printing more money and Austerity cannot cannot get blood from the stone of a now unprofitable system whose industry and jobs were shipped overseas by both republicans and free trade for profits democrats
Troupe only sees his beloved monarchs head on the left side of the coin as rightful king and does not see that the republicans and the Pauls are only the other gold plated flip side face of the same coin.
Just different management styles.