Greeks and other suffering European nations should learn, using Euro , freely convertible currency will not get them out of trouble. If Euro is allowed to be traded freely like US$ and US$ is allowed to be used in Europe, the suffering nations of Europe will move like a slow Train wreck and get doomed. The reason is as follows.
Better European nations like Germany, Holland, France will make high margin products for export and sell in Euros. With the export earnings which can be converted to US$ freely can import low end products and services from Asian nations.
So the countries like Spain, Greece , Italy can neither compete with Germany and France in high margin products and against Asian nations in low value products and services.
The PIIGS and rest have only two options to get out of slump.
1. Get out of Euro Zone or else
2. Make Euro like Rennambi / Yuan or Indian Rupee no trade , nor convertible freely out side Euro zone. Ban US$ use in Euro zone...
I would say that banks don't have ANY requirement to do anything socially
useful, except in as much as it is what their customers desire and is therefore
good business, but the bank itself exists to make a profit for its shareholders.
If people prefer a mutual then there are still some left, but most ex-Building
Societies got way out of their depth when they tried to become banks. What we
need though is greater competition amongst retail banks. Virgin now have old
Northern Rock branches but it's not enough. Tesco and Sainsbury both have
banking arms now and I would like to see them offer a full range of services. I
would like to see at least 10 high street banks competing with each other.
'Socially useless' is a poor term, implying that banks are supposed to serve
some kind of 'social justice'. A much better and more accurate term would be
'economically destructive' or 'nationally suicidal'. Banks are licensed by the nation to HELP the nation's economy function, not
to dispense social justice. They have violated their license by DESTROYING the
nation's economy instead of helping it. They do not need moral suasion. They
need to be closed, confiscated, and all major employees hanged for aggravated
treason.
4 comments:
Some weeks ago, I raised the possibility that more challenging conditions in the emerging world might actually have some positives for us by lessening upward pressures on many commodity prices as well as improving competitiveness, and this is indeed looking important.
Not that we should be writing off the larger emerging economies, especially China. As I argued a fortnight ago, if they grow by 7.5pc instead of 10pc, or perhaps even a bit less, it will be even better for us – so long as their consumer spending stays strong or strengthens further. In this light, China’s own monthly PMI indicators also showed a slight improvement in July in both manufacturing and services.
Another factor might start to help more, and certainly reduce one of those risks of things going wrong again, or at least too early. In a number of countries, a new fashion has burst out among central bankers, namely “forward guidance”, which is simply a fancy term to explain that central bankers won’t start raising interest rates until certain conditions have been met – in many cases, unemployment falling quite a bit further.
I wouldn’t want to get overly carried away or be dismissive of the remaining cyclical and structural challenges out there, but recent data have definitely taken a turn for the better in the UK and euro area and, of course, it has been that way in Japan and the US for a while now.
Before I turn to the evidence, let me state for the avoidance of doubt the obvious challenges that remain.
The euro area’s structural problems could burst open at any moment, particularly after the German elections in the autumn, and we have to remain braced for that.
After the elections there are likely to be more frank discussions on a number of significant underlying issues, such as a banking union, eurobonds and, of course, the seemingly neverending austerity in a number of Mediterranean countries.
In Japan, the improved mood could be undone through either an early push to raise consumption taxes significantly or, indeed, the absence of any plan to deal with their huge fiscal debts, as well as a sudden abrupt recovery of the yen.
Three years ago, on May 6, 2010, U.S. capital markets experienced the "flash crash," when the Dow Jones Industrial Average suffered a stunning 1,000-point loss (9 percent) in five minutes, followed by an equally dramatic recovery. It could happen again.
Moments before the 2010 flash crash, individual stocks were trading at a greater than 90 percent discount to the price. Accenture PLC, for example, was quoted at $39 just prior to the flash crash, then had trades clear at $32.62, then $5.34, $4.04 and $1.84 before recovering to close at $41.09. The point decline in the Dow within a single day was the largest since the Dow debuted in 1896.
Despite the attention received from various news groups, economists, and the Securities and Exchange Commission, which published its findings jointly with the Commodities Futures Trading Commission in a study on Sept. 30, 2010, the specific cause of the flash crash remains in dispute. It's bad enough that the flash crash occurred. Worse though, is that the corrective measures have focused on mitigating the effects of the crash, not the cause.
Concerns that Greece will need a new aid package by 2014 have been repeatedly played down by the German government ahead of elections in September, anxious not to alarm German voters.
According to Der Spiegel, the Bundesbank document states that by the start of 2014, at the latest, the Eurozone will “most likely agree a new loan programme to Greece.”
The Bundesbank document also states that the risks of the current rescue programme are “extremely high”, the performance of the Greek government was “barely satisfactory” and there was “substantial doubt” about its ability to implement essential reforms.
In July, Greece secured further aid from the Eurozone on condition that it implemented reforms including cutting public sector jobs and improved the collection of tax revenue. The Bundesbank document suggested this aid was approved due to “political necessities.”
After private creditors were forced to take losses on their Greek debts, Greece’s main creditors are other countries in the eurozone including Germany. The costs of a further bail-out would be borne by European taxpayers.
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