Posted on 11/09/2011 4:24:26 PM PST by bruinbirdman
As we watch Italy's 10-year bond yields near 7.5pc and threaten to detonate the explosive charge on €1.9 trillion of debt, it is time for the world to reimpose order.
You cannot allow the biggest bankruptcy in history to run its course – with calamitous domino implications – before all options have been exhausted.
One can only guess what is happening in the great global centres of power, but it would not surprise me if US President Barack Obama and China's Hu Jintao start to intervene very soon, in unison and with massive diplomatic force.
One can imagine joint telephone calls to Chancellor Angela Merkel more or less ordering her country to face up to the implications of the monetary union that Germany itself created and ran (badly).
Yes, this means mobilizing the full-firepower of the ECB – with a pledge to change EU Treaty law and the bank's mandate – and perhaps some form of quantum leap towards a fiscal and debt union.
Germany will of course try to say no. But it will pay a catastrophic diplomatic and political price, and will fail to save its economy anyway if it does so.
Having followed the German political scene closely for the last five months, it is clear to me that almost the entire German political establishment is out of its depth, ideological, sometimes smug, apt to view the EMU debt-crisis as a Calvinist morality tale, and lacking in deep understanding of what it has got itself into.
One can understand German worries about money printing – and especially the loss of fiscal sovereignty and democratic control – but matters have already moved on. It is too late for that.
As for the EU authorities with their mad contractionary fiscal and monetary
(Excerpt) Read more at blogs.telegraph.co.uk ...
Are you sure the 2011 dateline is correct?
I agree.
More idiocy from AEP (as usual). The monetary union was the price Germany *paid* (by France's insistance) for the reunification back in 1990. AEP has jumped the shark so many times now that it looks like a ping-pong game.
Germany would be smarter to just leave the EU altogether and go back to the Deutsche Mark. Yes, I know they get near term benefit from the EU, but it is doomed to failure and Germany will be asked to pay the bill over and over and over again.
Germans are actually industrious and generally hard workers. Being in an economic union with the lazy Greeks, Italians and others is a recipe for disaster. Get out now Germany, get out while you still have a chance!
Exactly! The Germans have to look long-term, and see that you cannot have hard workers and lazy workers + bloated socialist governments with no productive private sector within the same currency. It is simply unsustainable. Printing money does nothing to fix the structural and cultural problems that are killing the PIIGS.
The quicker the Europeans fix their problems, the faster the world can concentrate on the ticking time bomb that we have ourselves.
No bailout.
Let it collapse. It’s better in the long run. Let the badly run, inefficient ones go away and be replaced by something more efficient.
I really think it would be better to team up with Germany to fight off China.
The US President is bowing to China’s Hu Jintao? A picture of a 1000 words. If tea party backed elected politicians don’t use this picture to get reelected, shame on them.
Ambrose seems to be aching for another European war.
AEP’s column makes him appear unhinged and economically illiterate.
As you point out, the Euro was pushed on Germany, and the overall financial problem is ultimately just a mature phase of the welfare state. The banks have largely been doing the bidding of their political masters, who, in turn, have been using the borrowed funds to buy votes from corrupt and largely dependent populaces.
We all have the same problem....except the Swiss - the most “calvinist” of all peoples. AEP, I am beginning to think, really isn’t perceptive enough to merit a column.
"Hu's your daddy?"
“It’s 1931 and we are Austria”,
And HEY!
It’s 1941 and China are the USSR.
It don’t get much better thasn that.
AEP has nothing but contempt for the EUtopian, failed, welfare state.
He has always offered the above not as a solution for socialist succcess but, rather, a means to avoid anarchy/revolution while the failed states restructure and worldwide financial calamity is avoided.
yitbos
[recycled joke alert] Ambrose Evans-Pritchard has to see a proctologist about his headaches.
I can see how China — which has been ploughing its huge trade dollar surpluses into US gov’t debt vehicles — and Zero — the Stim Freak — would have a lot to contribute about gov’t meddling in other gov’ts’ overspending.
Thanks bruinbirdman.
Germany should button up and protect her resources and productivity, BTW. Austerity now while continuing trade with Asia, the USA, Israel and others.
Gotta note that there are almost 1400 comments on the Telegraph article already.
"and perhaps some form of quantum leap towards a fiscal and debt union"
Yeah, like that'll help, Ambrose. How is wrapping it in an EU flag make Greek's deadweight debt any more appetizing than in a Deutschen pretzel wrapper...
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