Posted on 02/09/2010 7:49:11 AM PST by blam
Euro-Zone Debt Default Risk Crisis, "UR ALL PIGS FROM HELL!”
Economics / Global Debt Crisis
Feb 09, 2010 - 04:45 AM
By: Gordon T Long
Whether you’re in Central Europe, such as Ukraine or Romania, the Med countries such as Portugal, Italy, Greece, Spain, or from Hungary to the Baltic States of Estonia, Latvia or Lithuania, you all have one common problem ---The hell that is the Euro!
“Euro members drew down their benefits in advance – ‘ex ante’ -- when they joined EMU and enjoyed "very easy financing" for their current account deficits. They cannot expect ‘ex post’ help if they get into trouble later. These are the rules of the club” (1)
Jean-Claude Trichet, President, European Central Bank
The Euro is still an experiment. Like any experiment it needs to withstand the results of testing under stress conditions. The present stresses within the PIGS have pushed the Euro and the viability of the EMU onto the global stage with all the attention of “The Emperor has no Clothes”!
Whether the Euro is your domestic currency; or you peg your currency to the Euro; or you are significantly influenced economically by the Euro, you are now infected by the possibility of contagion.
[snip]
Heh.
We’re going to see what the Euro really means.
And it won’t be pretty - which ever way it shakes out.
But while they’re shaking the tree, some very interesting things are falling out... like this, for example:
http://www.spiegel.de/international/europe/0,1518,676634,00.html
"Sounds like the U.S." as Roubini and Bykere discuss Europe (underlines mine):
THE CORE ISSUE:
Under close examination, the one striking similarity of all the countries with heavy bond shorting is that they also all have an electorate that has a history of socialist legacy expectations. This is not a political statement but rather an observation of the likely resistance to the implementation of tougher austerity measures that are certainly ahead.
I can just hear the Democrats screaming now.
As growth slows and debt rises in these countries, government largess for university fees, secure government jobs and lifetime pensions will come under increasing pressure.
>I can just hear the Unions screaming now.
“We’re going to see what the Euro really means.”
A .80$ Euro means I get to travel very inexpensively to see Normandy Beach
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