The Best Comment on the European Debt Crisis
The best comment on the European debt crisis comes from Doug Noland:
(Doug writes the weekly "Credit Bubble Bulletin." You can find it by clicking HERE.)
"Interminable" is the correct description of what's happening now. When the crisis focused on Greece, the actual cost of bailing out their much smaller economy led people to think that the crisis could be solved or at least contained. Of course, if you understand what's really going on, you wouldn't have thought that, but no matter.
Now, however, with Spain's much larger economy, the crisis enters a new phase - an interminable one. No one pretends anything's going to be contained, never mind solved. If they do, they're deceiving you or kidding themselves.
Oh, right, the ECB President, Mario Draghi, did announce that everything possible would be done to keep the Euro and preserve the EU. The positive impact on markets lasted - what? - maybe a day, if that long. So I guess "interminable" is really the right phrase to apply to the crisis now.
So what about the idea that the strong EU members will pull together to make sure things don't get out of control? More specifically, what about the idea that Germany - strongest of the strong - will "step up" and provide the financial back-stop to any bail-outs that might be necessary? Lately, it seems everyone kind of assumes they'll just go ahead and do whatever they're called on to do, with the thinking being that they really have no choice.
If you think that, then you ought to read the rest of Doug Noland's article which includes a reprint of an interview with current and former Bundesbank (German Central Bank) officials. If nothing else, you'll get an idea of the sort of thinking and reasoning that guides the Germans. You'll even get some idea of the philosophy that has guided them for decades. It makes for interesting reading, and it may change your own understanding of the way this will all play out.
To really get an understanding of what's going on now and what might happen in the future, you need to get some familiarity with the past and why the EU was formed to begin with. It all started with the idea that the Europeans, after the disastrous world wars of the 20th century, were determined to never ever allow that to happen again. If you don't know that, you'll never understand what's going on now.
There's more to the story, of course, and this article will give you a head start on gaining some understanding.
Of course, you could always just read the daily headlines of how things are looking up...no, they're not looking so good...oh, they're looking up again. But then you'd get caught in an "interminable" loop with no way out.
...with Spain now engulfed in full-fledged financial, economic, political and social crisis, the overall European debt crisis has turned interminable.
(Doug writes the weekly "Credit Bubble Bulletin." You can find it by clicking HERE.)
"Interminable" is the correct description of what's happening now. When the crisis focused on Greece, the actual cost of bailing out their much smaller economy led people to think that the crisis could be solved or at least contained. Of course, if you understand what's really going on, you wouldn't have thought that, but no matter.
Now, however, with Spain's much larger economy, the crisis enters a new phase - an interminable one. No one pretends anything's going to be contained, never mind solved. If they do, they're deceiving you or kidding themselves.
Oh, right, the ECB President, Mario Draghi, did announce that everything possible would be done to keep the Euro and preserve the EU. The positive impact on markets lasted - what? - maybe a day, if that long. So I guess "interminable" is really the right phrase to apply to the crisis now.
So what about the idea that the strong EU members will pull together to make sure things don't get out of control? More specifically, what about the idea that Germany - strongest of the strong - will "step up" and provide the financial back-stop to any bail-outs that might be necessary? Lately, it seems everyone kind of assumes they'll just go ahead and do whatever they're called on to do, with the thinking being that they really have no choice.
If you think that, then you ought to read the rest of Doug Noland's article which includes a reprint of an interview with current and former Bundesbank (German Central Bank) officials. If nothing else, you'll get an idea of the sort of thinking and reasoning that guides the Germans. You'll even get some idea of the philosophy that has guided them for decades. It makes for interesting reading, and it may change your own understanding of the way this will all play out.
To really get an understanding of what's going on now and what might happen in the future, you need to get some familiarity with the past and why the EU was formed to begin with. It all started with the idea that the Europeans, after the disastrous world wars of the 20th century, were determined to never ever allow that to happen again. If you don't know that, you'll never understand what's going on now.
There's more to the story, of course, and this article will give you a head start on gaining some understanding.
Of course, you could always just read the daily headlines of how things are looking up...no, they're not looking so good...oh, they're looking up again. But then you'd get caught in an "interminable" loop with no way out.
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