Posts Tagged ‘Eurozone’

2.4% Is Not High

Wednesday, March 16th, 2011

It’s beyond belief how stupid the world’s central bankers are!!!

With higher unemployment than at any time in the past 70 years, these dolts are worried about 2% inflation!!!

What they should be doing is welcoming 3-5% inflation, but what they’ll do instead is raise interest rates, choke off what little recovery has been achieved, and consign the European periphery to a decade or more of grinding unemployment and deflation.

Gorilla says: “Teutonic deafness as usual!!!”

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A Decent Chunk Of Change

Monday, March 14th, 2011

More than $2.5 trillion, that’s the exposure of European banks to the sovereign debts of Ireland, Greece, Spain and Portugal!!!

And that’s the reason why Angela Merkel insists on phony solidarity through grinding, deflationary austerity: the German banks alone are on the hook for nearly a trillion dollars!!!

Gorilla says: “Not to mention that it doesn’t count exposure to Italy, the last little PIIG going whee whee whee all the way home!!!”

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Extend, Pretend, And Never Decide

Thursday, March 10th, 2011

Another Eurozone summit, another Eurozone crisis!

Sooner or later, preferably sooner, the European peripheral countries will have to decide both whether to default and whether to keep the Euro as their currency. It’s simply not possible for them to grow their way out, particularly when they are slashing public spending and increasing unemployment. For many, the best approach would be to leave the Eurozone and default.

Equally, the Germans have to decide whether they’ll be serious about cleaning up their banking system, which lent much of the money to the peripheral deadbeats. Angela Merkel’s political position at home is very weak, in large part because of her fundamental dishonesty about the sovereign debt issue.

Gorilla says: “It will be fudge all around again, but the markets won’t be patient much longer!”

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Extend And Pretend Goes Long

Monday, January 31st, 2011

Changing the payback period for Greece and Ireland from 3 to 30 years: the newest gambit on offer from the Germans!

It’s all about bailing out German banks, and avoiding the far larger nightmare of contagion spreading to Spain…

And it won’t work, because the price Club Med will pay for all this crippling debt is years of grinding deflation and high unemployment. Ultimately, it would be far better for Greece and the others who are in trouble to default, leave the eurozone, and devalue. But that won’t save the Germans, French, and Dutch, or their bankers, so extend and pretend goes on.

Gorilla says: “It’s not a Hail Mary, but it is a pass!!!”

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Greeks Daring Drifts

Thursday, September 16th, 2010

Whenever a finance minister says:

“Restructuring is not going to happen. There are much broader implications for the euro zone should Greece have to restructure its debt. If Greece restructures, why on earth would people invest in other peripheral economies? It would be a fundamental break to the unity of the euro zone.”

Gorilla says: “You can take default to the bank, preferably one not holding Greek bonds!”

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To Bail Or Not To Bail?

Friday, January 29th, 2010

That is the Eurozone question…

The French say they might help out Greece, the Germans say no way, and the speculators are heading for the exits in Athens.

The crisis comes because Greece, like Iceland and Ireland before it, is basically bust, running unsustainable deficits. The remedy, namely huge layoffs in the public sector and our old friend “fiscal discipline”, falls somewhere between kill and cure.

The crisis also reflects the fundamental, unaddressed problems within the Eurozone: there’s no unified financial authority that might issue bonds to help the Greeks bail themselves out and there’s no ability on the part of weaker member states to use currency devaluation as in the drachma days of yore.

It appears the Eurozone will call in the IMF, but the reality is that weak EU economies like Greece can’t sustain ongoing euro membership without substantial, long-term social and economic instability.

Gorilla sums it up: “Doesn’t matter if you’re Scylla or Charybdis, you will drown in Brussels or drown in the Aegean!”

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