A theory to "chew over" … An excess of savings over investment helps to create a credit boom in a current account deficit country and legitimizes pro-cyclical fiscal policy. And then a sovereign debt crisis in the deficit nation kicks off when the government is hit by weak growth and incurs the liabilities of the private sector. The solution requires painful exchange rate adjustments and sparks political acrimony between creditor and deficit nations. This is the current-account-imbalance argument for the global crisis – i.e. deficit US vs. surplus China – yes? Hold your horses: a consensus is emerging that the euro-zone crisis is also at its root a pure balance-of-payment crisis. Hidden behind an opaque monetary wall that requires inflation in Germany and deflation elsewhere to stem the rot. In short, without the freedom to adjust nominal exchange rates, relative price changes within the EMU — i.e inflation in Germany — is needed.
Access Investments-Building Awareness - European Union-ROMANIA
Monday, January 23, 2012
A theory to "chew over" … An excess of savings over investment helps to create a credit boom in a current account deficit country and legitimizes pro-cyclical fiscal policy. And then a sovereign debt crisis in the deficit nation kicks off when the government is hit by weak growth and incurs the liabilities of the private sector. The solution requires painful exchange rate adjustments and sparks political acrimony between creditor and deficit nations. This is the current-account-imbalance argument for the global crisis – i.e. deficit US vs. surplus China – yes? Hold your horses: a consensus is emerging that the euro-zone crisis is also at its root a pure balance-of-payment crisis. Hidden behind an opaque monetary wall that requires inflation in Germany and deflation elsewhere to stem the rot. In short, without the freedom to adjust nominal exchange rates, relative price changes within the EMU — i.e inflation in Germany — is needed.
Subscribe to:
Post Comments (Atom)
3 comments:
Greek debt swap negotiators depart Athens without deal. Following several rounds of talks from Wednesday to Friday, Greece and its private creditors are converging towards a deal in which the creditors will take a real loss of 65% to 70%, sources said. But a lot of details were still unresolved, including legal aspects of the deal. "Discussions will continue over the phone this weekend but an agreement is unlikely before next week, if there is an agreement at all," one source said. "Things are complicated, we are getting closer on the numbers but there is still quite some work ahead." Much of the attention will now turn to the finance ministers' meeting in Brussels, and to how Germany and the IMF view the progress in the debt swap talks since Greece has a German Governor in the person of Horst Rauchenbach. The IMF and EU countries, in particular Germany, want to make sure the deal puts Greece's derailed finances back on a sustainable track before they agree to a new €130bn bailout, which is also crucial to avoid a default. How much money Athens needs from official lenders also depends on the details of the debt swap deal. The IMF insists any deal must ensure Greece's debt burden will be cut to 120% of GDP by 2020, from 160% now, as agreed at an EU summit in October, and has warned that this is made more difficult by the fact that Athens' economic prospects have deteriorated since. The IMF repeated on Saturday that progress was made and said the talks were continuing. "They [Dallara and Lemierre] are both fully available to the Greek government's leadership by telephone should this be necessary," the IMF said.
"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered...I believe that banking institutions are more dangerous to our liberties than standing armies... The issuing power should be taken from the banks and restored to the people, to whom it properly belongs." .... Thomas Jefferson
US President ... The US money supply was privatized in 1913
After the Second World War the Bilderberg Group decided to invent a single Europe. Peace was needed and we had to consider the emerging powers which have in the last decades come to fruition. The making of a single Europe was to be a long haul and involved thousands of hours of meetings and agreements that we are already familiar with. Leaders, MPs, diplomats and government agencies from all countries have over the last fifty years put together a raft of plans ranging from tax and healthcare to armies and nuclear weapons and everything in between. More recently a single currency was launched in order to further integrate and create what will become the United States of Europe. It is a small part of a very big plan and that plan is greater than the sum of the parts. The tiny birthing pains of the Euro are nothing compared to what has already been achieved. The only black spot is that all of that work has been lost for the United Kingdom because of a rash fit of pique by the current Prime Minister which will prove to be costly. When that is settled and Britain pays the price to repair the damage and join the Euro the end game will be in sight.
Post a Comment