Mrs Merkel -- or La Signora No in Italy -- doused hopes of a break-through
on proposals by the "Latin Bloc" leaders of Italy, France, and Spain to deploy
the funds (EFSF and ESM) to cap the bond yields of "virtuous" countries
vulnerable to contagion, or to re capitalize banks directly to take the strain
off sovereign states. "If I give moneystriaght to Spanish banks, I can't
control what they do. That is how the treaties are written," she said, before
racing off to Danzig to tonight for Euro 2012 quarter final between Greece and
German.. Christine Lagarde, the head of the IMF, warned before the summit that
the eurozone is under "acute stress" and at risk of a downward spiral. "The
viability of the European monetary system is questioned. There must be a
overcapitalization of the weak banks, with preferably a direct link between the
EFSF/ESM and the banks, in order to break the negative feedback loop that we
have between banks and sovereigns."
"Angela Merkel defies Latin Europe and the IMF on bond
rescue". The headline says it all - AEP seeds hate between European nations to
obfuscate the fact that people the as well in Latin Europe as in Germany are
enslaved by a financial system that plays dirty against the people. And the
people can't win the game because mathematics always wins, no chance against
compound interest on hot-air-money. But wait - the lenders are only a few, and
the people are millions, and the lenders reside in big buildings in the center
of towns. Just like Alexander solved the Gordian knot without dealing with the
mathematical intricacies, the people of Europe might solve their problem with
extremely leveraged private banks that enslave whole populations to pay compound
interests on money that was simply created by a keystroke with no productive
effort whatsoever - with the sword.
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America faces a combination of tax increases and spending cuts in January which risk plunging the world’s biggest economy back into recession if they are all allowed to happen, he said.
“There are so many political battles ahead that the likelihood we avoid all of these elements that will then avoid the fiscal cliff is very problematic,” Mr Stiglitz told The Sunday Telegraph. “It’s a real danger.”
The warning comes as concerns grow that the US will embark on a fiscal squeeze that economists estimate will be between 3.5pc and 4pc of the country’s gross domestic product. By contrast, the International Monetary Fund has said that Britain’s fiscal contraction amounted to 1.7pc of GDP last year and a further 1.6pc is due this year.
“It’s unambiguously the case that these measures will slow down growth,” said Mr Stiglitz. “If there is European turmoil, there is a significant probability of going into a recession.”
In his new book, The Price of Inequality, Mr Stiglitz argues that growing gaps in wealth and income in the US pose a rising threat to the country’s economy and democracy
There is need to redenominate contracts from euro into new currencies....euro is gone already
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