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Author Topic: Europe?  (Read 28271 times)

OfflineFletch

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Europe?
« on: November 11, 2011, 08:34:31 PM »
Europeans, are you concerned?

My understanding is you have some key countries, Greece, Italy, Spain, Portugal, Ireland (please name more) that have been spending far more than they earn for a long time. They no longer can service their debt and when asked by creditors to reign in spending (which obviously means a much lower standard of living for the average citizen) there are massive political problems, leading, unfortunately to riots.

I don't know if the powerful economy of Germany is strong enough to bail all the debts, but obviously they don't want to if the same countries don't reform and make the same mistakes.

So.... If the markets crash (they are!) and investment is pulled from Europe in the short to medium term, there may be extreme social implications.

How do you feel?
Id be Stocking up a few cans of food and know how to defend my family.


Edit - italics
« Last Edit: November 11, 2011, 09:04:38 PM by Fletch »
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Offlineds1984

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Re: Europe?
« Reply #1 on: November 11, 2011, 08:59:38 PM »
I am not sure that this is the  right place for this type of discussion.
Very complex indeed. If Europe sink, the world econonomy sink with them because everybody is trading with everybody and need somebody able to buy your production...
Rule is as simple as that  : everybody needs to stay afloat.





 
« Last Edit: November 11, 2011, 09:54:15 PM by ds1984 »
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OfflineFletch

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Re: Europe?
« Reply #2 on: November 11, 2011, 09:02:01 PM »
Why can we not discuss this? There are many Europeans on this site, I'm interested in how you feel and your point of view.

Hey, i`ve got a truffle dog - finally a song the ordinary man can relate too!

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Re: Europe?
« Reply #3 on: November 11, 2011, 09:50:06 PM »
I think it is totally legitimate to bring up this complex theme in the right section, as "General Discussion". It is just a sign how informed, intelligent and interested AMIT people are. But as ds1984 said,  it is very complex, and very tiring, too. I am from Germany, and I know of course about the special role that Germany has in this "game" (or "gamble"), but to be honest: After reading/hearing/listening almost every day to this in the News/Newspaper/internet/train/lunch break and so on, I for my part get the crisis myself when this theme comes up. I know I shouldn't, because it is obviously the most important issue that affects Europe since WW2, but I can't help myself. I am working, every day, every week, trying to get a life and see that it is a quite humble, modest one, not more. But I am happy with it and don't want to complain. Do I fear the future when it comes to things like retirement, money, wealth? Yes I do. But I try not to get dragged down by this and keep up good spirit and working. The only thing I know is for sure that I am looking for an oasis of bliss and relaxation occasionally, and this forum is for sure the best possible object for this claim. So I feel a little uneasy discussing this matter at this place, mainly because it was long ago that I lost understanding about all the details and issues of the financial crisis.

So, Fletch, please feel free to discuss this matter here, but I will draw back from this. Not that I could add something of valuable content...


LE

OfflineFletch

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Re: Europe?
« Reply #4 on: November 11, 2011, 10:15:43 PM »
LE, eloquently put, understandable and ultimately, as I said, I really am interested in how you feel over there.
Hey, i`ve got a truffle dog - finally a song the ordinary man can relate too!

Love Expresso

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Re: Europe?
« Reply #5 on: November 11, 2011, 10:36:09 PM »
Like a man who smokes heavily for 40, 50 years and reads about lung cancer... You know the disaster must break down in the nearer future, but you close your eyes and deny the truth. (No, I am not (and have never been) a smoker.  8) ). Helplessness. When I hear about those amounts of money, milliards, billions, whatever, I think the right proportions and dimensions got lost a long time ago. The same goes for things in the other direction, when the poor ones are not able to bring up enough for living, and some bank people just... gamble. But you see that in the way I mix up bank and financial crisis and the European crisis, it all starts to get diffuse...

Another fact is that I never had too much confidence in our German chancellor Mrs. Merkel, but after all I know she did rather well the last weeks.
So what I try to describe here is helplessness, turbulence and fear to a certain extent when it comes to the nearer future. But "after 2000 came 2001...."
So the world did not collide, and thing were going on. Let's hope it will turn out the right way this time again!

LE
« Last Edit: November 11, 2011, 10:39:20 PM by Love Expresso »

Offlineds1984

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Re: Europe?
« Reply #6 on: November 11, 2011, 10:49:59 PM »
How do I feel?

Enjoy today, tomorrow will be worse!





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OfflinePottel

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Re: Europe?
« Reply #7 on: November 12, 2011, 01:07:05 AM »
this place is perfectly ok to discuss this topic.
i sit back and look at it all...
any Knopfler, Floyd or Dylan will do....

Offlinevgonis

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Re: Europe?
« Reply #8 on: November 12, 2011, 01:23:26 PM »
Fletch, I was about to start a similar topic myself (I have done so in a book forum a year ago), but I was rather intimidated since many people, think that Greece is the guilty party, and since I am Greek, that might seem peculiar, like the best defense is offense. Anyway, I can only write here what I know or understand, and I can also tell you that more and more people feel the same way each passing day.

OK, let's take things from the very beginning. In case you have any questions I will be very happy to answer. The omission of details and explanation in many cases is done on purpose, since I don't know how much of the history is known and in order to save time. As I said, happy to answer and add info. As a matter of fact I prefer more the targeted questions, since the original question is so general, it requires pages and pages.

In the late 70ies-early 80ies, Greece entered the European Union, from what I have heard for two reasons: as a favor and out of guilt. In a today's logic, that everything has to be calculated and profit made, this sounds irrational, so for those believing in conspiracy theories, a third reason can be added, PROFIT.
Thirty years later, Greece is the first nation in Europe to be forced by the other members to seek funds through IMF.  This is weird, since the EU, had the necessary funds and ways to solve the problem at once without outside help before the spreads for the 10 years bonds skyrocket. Two years after, and they still blame Greece for not agreeing to the new colony-like treaties they are forcing the government to sign. The debt two years ago was half of what we owe now, and now they promise us a 50% haircut! It is a bank trick, as it is plain to see. The same stands for the rest of the countries in trouble, that the stock market has named PIIGS. (Portugal, Ireland -I added Italy, Greece, Spain)


The people of the PIIGS  are not to blame, at least not entirely. At a consumers world, all western countries consume more and more and the only thing that keeps Germany and France afloat, is the simple fact that they are the biggest countries of Europe, with the biggest industries and ways to force their will to the smaller countries. They sold technology, pharmaceuticals and many other products in high prices, while their governments agreed in lending the money to these countries willing to buy, turning the blind eye.  At the same time they voted laws that completely ruined the infrastructures of smaller countries, introducing the laws of an international market without limits, thus making all local business to expensive to keep. The same goes for the USA, only the USA has also the military power to enforce their will. 
But wait a minute. How can some countries that actually regulate the things in the whole world and Europe, allow their banks to buy bonds from the same countries in order to profit and when this doesn't work, try to bail out the banks? I mean the spreads are way too high because there is danger in buying them. If you are willing to take the risk, you should expect to lose. And if you lose you should not force your will through your powerful government. It sounds weird, isn't it? But let's see a simple fact. While all this lack of immediate actions from the EU skyrocketed the spreads of PIIGS bonds, and the greedy banks made a fortune overnight,  the IMF was called in and a series of treaties were signed. Apart from all these treaties being bad, leading all the countries that signed them (without asking their people) into worse trouble, Greece (that I know of) is forced to receive help only from them. Which is weird because we could ask from the Chinese or the Russians, that were eager to help in exchange of the use of ports and airports. So it is a power play among the countries of the world. The prime minister Papandreou, was rather USA inclined. Anyway, while we sustained substantial pay cuts, pension cuts, health care cuts and unemployment skyrocketed, with their blessing, they (mainly Germany and France and less USA) still FORCE us to sign new deals to buy WEAPONS, worth more that 4 billion Euros. The interest we have to pay for the loans in 2011 are 6 million Euros. So actually they lend us money to buy their toys. And in case we don't?
Back in the 80ies the EU was more of and named European monetary union. But with the new EU treaties and the passing of a European constitution which is actually stronger that the constitution of each country, we are more than a monetary union. Or at least that is what they claim. The trouble in Balkans are constant and although Greece is the only stable country in the region, with the added bonus of being an older EU member with the EURO, they never backed it up, forcing it to buy weapons and other things in form of PROTECTION. Why don't they send army to prevent the Turks from being a constant threat? Maybe because they sell GUNS and technology to them as well, and also because they are a bigger market than Greece? (Turkey 70 million people, expected to reach 100 millions by 2100, while Greece has about 11 millions, that are to become 10 million by 2100. If you are a small nation, with enemies all around, you are bound to be the victim of a constant blackmail. Greece owes 300 Billion Euros, Italy 1,9 Trillion Euros and the USA 15 Trillion Dollars. Do the math and you will understand that Greece just is the test lab for the new type of economical colonization, that if it works will be forced to the rest of the world.

That is all in a nutshell.
Come on, it is not funny anymore.

OfflineFletch

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Re: Europe?
« Reply #9 on: November 12, 2011, 08:13:32 PM »
Thanks for the detailed thoughts from a person 'on the ground' so to speak.

If questions are ok, I'd like to ask, why would Germany and France want Greece to fail if they are the ones using their budget to patch up each market crisis? Is it about keeping the status quo and denying help from elsewhere as you have suggested?

If your thoughts are accurate in the bigger picture, who are the players, banks or governments?
You are right about the US, in my opinion. Because they have the most amazingly potent Navy and of course nuclear arsenal, their own failure, economically, is distorted. However it seems riots will happen anywhere the common man is asked to lower his standard of living.

Thanks for discussing this mate, I appreciate it!
Hey, i`ve got a truffle dog - finally a song the ordinary man can relate too!

OfflineFletch

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Re: Europe?
« Reply #10 on: November 12, 2011, 08:20:46 PM »
If it helps, my Australian perspective (although I grew up in the UK), is that catastrophe in Europe leads to less exports from Asia. China buy enormous amounts of resources from our mines and this was a key factor in keeping us relatively safe during the GFC, when markets crashed. Our unemployment is quite low and in Western Australia there is much well paid skilled work available.

So because we are all linked in the global market, we all face change. I have a feeling things will become more radical if the Chinese ever overthrow their government and demand higher wages, which would be moral really. There will then be a huge adjustment in markets and western world standard of living.
Hey, i`ve got a truffle dog - finally a song the ordinary man can relate too!

OfflinePottel

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Re: Europe?
« Reply #11 on: November 12, 2011, 09:05:52 PM »
germany and france do NOT want greece to fail, got way too much bank money in that country,..especially commerzbank, BNP paribas etc..
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OfflineJustme

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Re: Europe?
« Reply #12 on: November 12, 2011, 10:59:31 PM »
Yes, and that bank money is the money that belongs to
a) the ultra-rich whose income consists of accumulated interest generated out of their huge wealth
b) normal people who are made to believe that they should invest in life insurances in order to provide for their retirement

In my view the recent, since 2008 ongoing crisis had been started ~ 20 years ago. To cut a long story short, I suppose that unequal ownership conditions is the germ cell.

In order to develop the necessary competitive ability - as the embraced and equalized "free" press told us - the neoliberal capitalism brought us gigantic growth in the low-wage sector of the economy. All that came hand in hand with cuts in government spending, one aspect is that people can be forced to accept any job if they are unemployed. Health insurance funds and public pension funds are being plundered.

A change to service economy has been announced, producing fulltime-jobs with wages so low, that these people have to apply for basic social care whilst working fulltime. Another point is the ongoing triumphal procession of contingent work: people can be rented by business companies, of course the prospects are quite bad, just as the wages are. They are the modern day-taler in my humble opinion.

Businesses have been benefiting from substantial cuts when it comes to taxation (f.e.: corporate income tax in 2000: 40%; in 2011: 15%), the same applies for people who are able to live off their working capital (f.e.: income tax on salaries: up to 48%; income tax on returns on interest: 25% [interest barrier]).

We, the people did not live beyond our means! It is the ongoing maldistribution  that is responsible for all this.
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OfflineJustme

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Re: Europe?
« Reply #13 on: November 12, 2011, 11:30:55 PM »
I think it is totally legitimate to bring up this complex theme in the right section, as "General Discussion". It is just a sign how informed, intelligent and interested AMIT people are. But as ds1984 said,  it is very complex, and very tiring, too. I am from Germany, and I know of course about the special role that Germany has in this "game" (or "gamble"), but to be honest: After reading/hearing/listening almost every day to this in the News/Newspaper/internet/train/lunch break and so on, I for my part get the crisis myself when this theme comes up. I know I shouldn't, because it is obviously the most important issue that affects Europe since WW2, but I can't help myself. I am working, every day, every week, trying to get a life and see that it is a quite humble, modest one, not more. But I am happy with it and don't want to complain. Do I fear the future when it comes to things like retirement, money, wealth? Yes I do. But I try not to get dragged down by this and keep up good spirit and working. The only thing I know is for sure that I am looking for an oasis of bliss and relaxation occasionally, and this forum is for sure the best possible object for this claim. So I feel a little uneasy discussing this matter at this place, mainly because it was long ago that I lost understanding about all the details and issues of the financial crisis.

So, Fletch, please feel free to discuss this matter here, but I will draw back from this. Not that I could add something of valuable content...


LE

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Offlinevgonis

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Re: Europe?
« Reply #14 on: November 13, 2011, 12:16:11 AM »
As I was trying to send my reply to Fletch, Justme sent his own reply. If you have no time reading a long reply, read the one by Justme. I totally agree.


Why would Germany and France want Greece to fail if they are the ones using their budget to patch up each market crisis? Is it about keeping the status quo and denying help from elsewhere as you have suggested?

First of all, we have to define fail. Then clarify what we mean when we say Germany or France and even Greece.  

Failure to all three, means the inability of Greece to pay back the money owed. In turn for each country that means several different things.
For Greece it will mean that since we don't have cash and nobody will trust us with more money, almost automatically, we will have to release our own currency. Unfortunately the stock market of the worlds will be the ones to set the exchange rate, so in the end we will only be able to use it for domestic purposes. Unfortunately we don't produce enough oil to cover our needs for either vehicles or heating purposes. And the same goes for medicines. Also food will become a bit hard to find, but if there is careful planning, nobody will die of hunger. And of course we are not talking about the 10% of people that got filthy rich the last 30 years, that own big business and media. We are talking about the majority. And to top all this, our savings will be lost in a wink. The banks will collapse since they hold a great deal of the bonds.
For Germany, it will mean that since their banks were wise enough to turn in the bulk of the bonds with the aid of the German government, stalling for two years when there were many solutions to stabilize the entire EU , during these two years, the cost of rescuing Greece will fall on the shoulders of the poor tax payers, in the form of the German contribution in the EU supporting fund.
For France it is a bit harder because apart from the contribution in the EU supporting fund, their banks have a great deal of Greece's bonds. That might ruin the credibility of France   to borrow money, and what this means is clear, no need to elaborate.  
But then you have to think that Greece has a relatively small debt, compared with Italy. 1,9 trillion will surely be hard to find, if Italy falls victim like Greece. EU fund is not ready to cover such amounts.

Now let's see what we mean when we say Greece, France and Germany. In simple words, all countries have two faces. The face of their wealthy people which usually account for less than the 10% of the population, but have more than 80% of the wealth and then they are the rest that are called to pay for the damages when the system fails. The system is easy enough to understand but complex enough to be able to get rid of. Banks are part of the system, and for least the past 50 years people thought of them as the system itself, just because it was easier for greedy people to own a bank and do the business directly. And at the same time having a newspaper, a TV channel and radio stations were helpful in order to influence people's mind, casting new ideas, ethics and in fact control minds.  The final frontier is always a fabricated hatred among nations. The second world war had its origins at the terrible war compensations that were asked from Germany. The Germans are proud people, and the inflation and unemployment was so great after the WWI, that Hitler seemed a good idea. Giving jobs to everybody and giving back to the Germans their lost self esteem and promising old glories in a post colonization world. Unfortunately many other factors, like corruption of power, mental issues, the general state in Europe with at least 5 countries under dictatorships - fascism, and the stupidity of the countries that were the keepers of peace to understand that you can't have peace in such a bleak environment when proud people suffer or made to suffer.
  
But I think I am getting a bit obscure here, so a bit of a parenthesis. Money is nothing but a trading tool, it has no value on its own. Pieces of paper, or numbers on our screen. In order to have any kind of value, at least one person have to believe in the value. The seller. So I am willing to buy from you oil, but you don't believe that my money is any  good. You won't sell. But what makes money some currencies better accepted than others? A belief. A belief of stability. US dollar used to be the strongest currency in the world. Even today that its reign is somehow lost to Euro, oil is still linked to dollar. The sense of stability comes from the fact that US is a mighty strong country, but it has become apparent the last 3 years, that the continuous  issuing of new dollar bills is  not backed up by anything valuable or productive.  Now it is becoming clear to many people, that money (and gold for that matter) should never have become values on their own. But it is too late. People in many parts of the world die of hunger, not because there is not enough food, but because they can't afford it! They prefer to stock the crops in warehouses or destroy it, in order to keep the price up, instead of giving it away! Also something else: with the new technology only the 20% of the working force in the planet is needed in order to do all available work. So does this mean that the rest will have to accept their fate, and die of hunger, since they won't be having any money? It is very strange that simple ethics like that (only the men that work deserve to be fed) are unburied by the greedy people in order to justify the way things are going.  They have turn food in stocks and they play with them in the stock market, while people die of hunger.
Maybe it is time a new set of ethics, beliefs and values are set. I find that communism failed because it was a forced system, a dictator ship in all but name, while capitalism keeps going because it feeds from the flesh of the poor dreaming that they will make it some day. But surely there is a way between, and new technologies should have made this passing easier, but alas...

So, they don't want Greece to fail, and if there is no other option they will try to do it on heir own terms. It is clear that you get nothing out of a dead donkey.You have to keep it working with less and less. But since the fraudulent tower of believing in money as a value on its own collapses rapidly, the greedy people will try to exchange the money with other values that have deeper roots in the history of man, like land. Greedy people may be eponymous to anonymous, but it doesn't make a difference. Also it doesn't make much difference if what I call greed comes from a peculiar mental obsession, a game if you like to gather more and more when you don't need so much, or it actually comes from a desire to gain control over people for purposes too far fetched to even consider or mention.
Now I guess you have heard of the new "deals"Greece has signed with EU and IMF (and here I mean the politicians that rule Greece in a not so democratic way). The average Greek lost most of his savings in the last couple of years, and at the same time the value of the land and housing is dropping, but apparently not fast enough. Obama, rescued the banks that had many housing loans for exactly the same reason. The average American has only one asset. His house. If Obama hadn't saved these banks, the housing industry would have collapsed. You would be able to buy a house for a thousand dollars! And the common American would have bought a house a couple of years ago and have a mortgage to pay for 300,000 dollars, and an asset worth 1000 dollars! The bank will demand 300,000 dollars and the poor guy won't be able to have anything of value (even if he had a spare 1000 dollars to buy another house, in fear of a personal bankruptcy!) Greeks population was living in almost a 50% in the countryside, and nearly 30% made their living as farmers. All that until the 80ies.  The EU, and that means mostly the bigger counties that could pass more laws since they had more representatives, decided that Greece's farmers should be reduced in less than 15%. They gave money to reduce some traditional farming products and never let the market regulate the supply and demand. And that was pretty weird if you ever consider that they also tried to break the monopoly of public companies (like the electric company) when it was obvious that the price for electricity was the cheaper available, because it was public and the factor of profit and greed wasn't getting in the way (remember the USA west coast blackouts created by Enron?) So this is the next  question.


If your thoughts are accurate in the bigger picture, who are the players, banks or governments?
Governments and banks are nothing but tools in the hands of the greedy people. The way they behave is pointing to this direction, and the only thing that do not allow us to be exact, is the lack of evidence admissible to a court. Which by the way is totally corrupt, on its own,  anyway. But the intent is there, the motive is there and the way things are going, the victim will be there as well, and it won't be just Greece.

Sorry for the long and in several points confusing answer. It is hard to set the foundations of thoughts in a few words, in order to give clear answers. But by all means you are welcome to ask anything.

As for the Chinese, it is a hard nut to break. I mean, that the tradition of China is deeply rooted in the people, and that is why, even though the mighty USSR collapsed, China insists being a communist country (even in nothing but name and slave wages). That is why they try to spend their cash, investing and buying all over the world, because they fear that in a little while money will have no value whatsoever. They still produce like crazy, when sales and exports have generally decreased. They produce cheap products, but nobody has the money to buy.    Economists don't have a definite answer for that. China stores all these products, for the time being, but eventually they will have to come up with a solution. Either pay their people more money in order to be able to afford the products of their own hands, or well that is the case, or what?
And please remember, although I spent a great deal of time writing this, I still believe that the number one issue for all people is ECOLOGY. What good is economy, if we turn earth into a desert?
Come on, it is not funny anymore.

 

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