The video above is a good introduction to the European debt crisis.
Showing posts with label Europe. Show all posts
Showing posts with label Europe. Show all posts
Friday, February 24, 2012
Video: Understanding the European Debt Crisis
The video above is a good introduction to the European debt crisis.
Monday, December 19, 2011
Policy Prescriptions for the European Economic Crisis
In Professor Anthony Sanders' testimony before the U.S. House Committee on Oversight and Government Reform Subcommittee on TARP, he outlines three main causes of the current European fiscal crisis: 1) excessive government spending leading to 2) excessive government debt coupled with 3) slow GDP growth.
Sanders also addresses how fiscal integration in Europe could affect the purchasing of U.S. Treasuries. Although Fed Chair Ben Bernanke recently announced that the Fed stands ready to provide further easing based on Eurozone risk, Sanders notes that the Fed and Treasury should save their bailout tools for the U.S. In fact, retirees and people living on fixed incomes will be further harmed by the Fed’s reaction to the Eurocrisis.
In addition to Fed operations, the International Monetary Fund (IMF) of which the U.S. is the largest stakeholder, is also active in the Eurozone bailout. The U.S. has a line of credit approved for an IMF crisis fund in the amount of $100 billion.
Sanders concludes his testimony by saying that the Eurozone's problems are structural, and cannot be solved by low interest loans and guarantees from the Fed and the IMF. The best way to protect U.S. taxpayers is to increase transparency at the Fed, take back the $100 billion line of credit at the IMF, and undertake spending cuts ourselves in order to reduce our deficit and massive debt loan.
Sunday, December 18, 2011
Financial Armageddon to begin in London
ZeroHedge: Psssst France: Here Is Why You May Want To Cool It With The Britain Bashing - The UK's 950% Debt To GDP:
While certainly humorous, entertaining and very, very childish, the recent war of words between France and Britain has the potential to become the worst thing to ever happen to Europe. Actually, make that the world and modern civilization. Why? Because while we sympathize with England, and are stunned by the immature petulant response from France and its head banker Christian Noyer to the threat of an imminent S&P downgrade of its overblown AAA rating, the truth is that France is actually 100% correct in telling the world to shift its attention from France and to Britain. So why is this bad. Because as the chart below shows, if there is anything the global financial system needs, is for the rating agencies, bond vigilantes, and lastly, general public itself, to realize that the UK's consolidated debt (non-financial, financial, government and household) to GDP is... just under 1000%. That's right: the UK debt, when one adds to its more tenable sovereign debt tranche all the other debt carried on UK books (and thus making the transfer of private debt to the public balance sheet impossible), is nearly ten times greater than the country's GDP.
Saturday, November 19, 2011
Sunday, October 30, 2011
Understanding Europe's TARP: EFSF is an Empty Box
Zerohedge: An Empty Box Filled With Promises Of Money:
Some amusing weekend observations from TTMYGH's Grant Williams: "The EFSF is basically an empty box filled with promises of money - many of them from the very people who are most likely to need to borrow that same money. Should they need to borrow the money, they won’t be able to make good on their promises so there will be less money for them to borrow. Now the brain trust running Europe have decided, in their collectivewisdom, to applyleverageto thenon-existent money in the empty box that they have yet to actually borrow, so it can backstop even more of the hundreds of billions of Euros of sovereign debt issued by countries whose finances are in such dire straits that they either require the kind of robust growth that is hardly likely to materialize any time soon or the forgiveness by the holders of that debt of a large part of it....
Wednesday, September 28, 2011
Eurozone: Your Market Will Crash
From the YouTube Description:
In a scary and painfully frank interview a freaked out BBC interviewer is visibly shaken when market trader Alessio Rastani predicts that the "Market is Toast." Apparently there is nothing Euro governments can do.
Monday, December 6, 2010
Government is Bankrupt
Eric S. Raymond blogs about the sovereign debt crisis:
From overseas, we hear endlessly of the threat of sovereign default in Portugal, Italy, Ireland, Greece and Spain – the so-called PIIGS countries. The financially stronger EU countries (by which I mean, basically, Germany) have organized bailouts designed to give bond investors confidence that the PIIGS merely have a temporary cash-flow problem, but the markets aren’t buying it; the rush to unload Irish paper wasn’t even slowed down by the loan to Ireland. Analysts are now wondering if Belgium might be next.That pretty much nails it. During the Great Depression, the West setup transfer systems that looked like they were moving money from "the haves" to "the have nots". Unfortunately, they did this on credit which means that in fact they were transferring money from tomorrow's children and grandchildren to yesterday's "have nots". As a result, tomorrow's children and grandchildren will have naught but debt.
What’s actually happening here is that bond investors are catching wise about the largest political truth of the post-Cold-War era: government is bankrupt.
Friday, November 12, 2010
'This is just the beginning'
Those were the words The Guardian reported hearing from someone at the student fees protest in London the other day:
Ministers and protesters acknowledged that the demonstration – by far the largest and most dramatic yet in response to the government's austerity measures – was 'just the beginning' of public anger over cuts. Police, meanwhile, were criticised for failing to anticipate the scale of the disorder.Why not put the college curriculum on YouTube and then shutdown the universities? This would make it possible for anyone to get an education at practically no cost. Obviously, it would put a lot of faculty and staff out of work, but they could be retrained as corporate cubicle dwellers from one of the YouTube-based curricula outside of the humanities.
Tuesday, July 6, 2010
Banks: Too Big to Bail
Dr. Doom, Nouriel Roubini, has coined a new phrase: Too Big to Bail:
'A year ago we had all these policy bullets,' he said. 'We could push down rates to zero, we had (quantitative easing), we could do a budget deficit of 10 percent of GDP (or) backstop the financial system.'Rome didn't collapse in a day, but Rome didn't have interdependent banks lined up like dominoes. What's the over-under on the European Union unraveling in a day?
'Banks at this point are too big to fail, but also too big to be bailed, especially in Europe where the sovereigns are in trouble and therefore the ability to backstop the financial system is not there,' he said.
Saturday, June 19, 2010
The Rending of the European Union
Charles Moore in the Telegraph: The euro's inevitable failure will be horrendous for all of us:
The unthinkable idea that the eurozone might break up is now being thought. And the version of break up gathering ground in people's minds is not that the poor, indebted countries would fall out – they are prostrate and helpless – but that Germany would rise up like Gulliver, snap the insubstantial euro-ropes tied round its body, and walk away. Offering a foretaste, a German stockmarket website called Borsenews has now started pricing shares in Deutschmarks as well as euros.
Wednesday, May 26, 2010
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