Eurozone debt crisis

[superfrank]

people need to realise that it's only stimulus and printing that has caused the bounce in markets since October. the fundamentals for western economies are still dreadful (but maybe not for company profitability in certain sectors who can still grow in this environment).

[Iron]

European stock markets slip on growth fears - http://www.bbc.co.uk/news/business-17662855

Jeff

[superfrank]

Steve Keen On Europe's Delusion And Why The Entire World Is Turning Japanese
http://www.zerohedge.com/news/steve-kee ... g-japanese

Ultimately the Euro has to fail and the longer we continue the farce of believing we can make it function the larger the ultimate crash will be.

You need to have accelerating debt forever to have rising asset prices forever and not even debt can accelerate forever.

[Euler]

It appears France have stuck it all on red!

[Iron]

It's great news for Britain - many of France's wealth creators will be driven overseas, and the British people will get to see what a government run by Ed Milliband would be like!

Interesting developments in Greece too, where the pro austerity parties have taken a drubbing - http://www.bbc.co.uk/news/world-europe-17975370.

Jeff

It appears France have stuck it all on red!

[superfrank]

He said he would push ahead with his pledge to refocus EU fiscal efforts from austerity to "growth".

oh dear, sounds like Ed Balls' solution... keep spending and hoping.

PIIGSF

[Euler]

Studieds Keynes in the past and can understand how lack of demand can create problems. But the problem we have now is during the good times when we should have run a surplus we didn't we ran up debt. We also didn't invest that money, we spent it.

So you can't spend now in the same way Keynes implied, you also achieve less I think because a lot of that debt fuelled spending will be exported.

But I agree it could be a useful result for the UK as the French try and spend their way out of trouble. I don't think the Eurozone as a whole though understands that just racking up more debt isn't the answer, it needs fundamental reform IMHO.

[Iron]

Studieds Keynes in the past and can understand how lack of demand can create problems.

As I understand it, what Keynes advocated was government investment in the economy, ie money spent on improved transport facilities, better work-related education, etc. However, I think that many on the left are under the impression that Keynes was in favour of increased public sector expenditure full stop.

As we saw in the States, simply throwing money into the economy willy nilly doesn't solve anything - it transfers rather than creates wealth. Building a new prison or hiring some equalities officers might boost GDP and create economic activity, but I can't see how it's likely to pay for itself in terms of making our economy wealthier...

Jeff

[Euler]

As I understand it, what Keynes advocated was government investment in the economy, ie money spent on improved transport facilities, better work-related education, etc. However, I think that many on the left are under the impression that Keynes was in favour of increased public sector expenditure full stop.

It's being driven by politics unfortunately, which is where it could all go wrong. The trouble is when so much of the populace is dependant on the state who will vote against it? Just go on strike

[Iron]

It's being driven by politics unfortunately, which is where it could all go wrong. The trouble is when so much of the populace is employed by the state who will vote against it.

I agree. If I were a public sector worker, I'd be tempted for the party that was going to keep me in a job for the next few years, rather than the one that wanted to avoid bankrupting the country...

How else can one explain the fact that Labour are so far ahead in the polls, despite having a leader who resembles a geeky, slightly effeminite sixth former in appearance and manner?

Jeff

[superfrank]

Old Labour (Ed Milliband/Balls etc.) will be thrilled by this result. bad news for everyone else.

the media coverage is a disgrace as usual. they talk about not doing austerity as if it's a simple choice without consequences. THERE IS NO OPTION. LONG-TERM COUNTRIES MUST LIVE WITHIN THEIR MEANS (OR GO BANKRUPT, AFTER WHICH THEY WILL BE FORCED TO ANYWAY).



the challenge for politicians is to rebalance and do the austerity as fairly as possible. it's dangerous though when there are still those around who think we can avoid any pain by printing and spending. that is the road to destruction as history proves.

[Euler]

I think the time has come to let one of these countries go pop and show people what the alternative is. Won't be a pretty sight but it may finally wake people up.

[superfrank]

I think the time has come to let one of these countries go pop and show people what the alternative is. Won't be a pretty sight but it may finally wake people up.

+1

[CaerMyrddin]

Imho, it's really hard to know what to do at this stage. The level of debt is so high that it's impossible for an economy to serve it with the level of growth the austerity measures come with.

If you earn 100, spend 110 but pay an adicional 20 in interest, you can cut your spending but at a given stage you'll be getting lower earnings, and errrr you can see how it's working.

By any means I'm not saying that governments don't overspend, they do and they need to focus on cutting it, but they need to pick investment. As Peter said the problem is that the governments don't have the money to invest when they should.

This reminds me, there's something really intriguing going on. Usually the right wing parties are pro fre market and the left wing try to have a regulatory view on all subjects. Curiously not on the fiscal treaty Germany wants to make other countries sign. It would regulate the overspending, but the left wing parties don't want to regulate this!

[Iron]

Greek election: Antonis Samaras coalition bid fails - http://www.bbc.co.uk/news/world-europe-17984805

Looks like the euro (at least in its current form) may be on the ropes...

Jeff