Posted on 09/25/2011 1:53:55 PM PDT by Comparative Advantage
Europe, the G20, and the global authorities have one last chance to contain the EMU debt crisis with a nuclear solution or abdicate responsibility and watch as the world slides into depression, endangering the benign but fragile order that has taken shape over the last three decades.
The threat of cascading default, bank runs, and catastrophic risk must be taken off the table," said US Treasury Secretary Tim Geithner over the weekend.
"Sovereign and banking stresses in Europe are the most serious risk now confronting the world economy. Decisions cannot wait until the crisis gets more severe."
Euroland's dysfunctional arrangements are no longer a local affair. As the European Central Bank's Jean-Claude Trichet said in Washington, EMU is at the epicentre of a global sovereign debt crisis that risks engulfing all, and is more intractable than 2008 because governments themselves are now crippled.
China, India, Brazil and the world's rising powers will not escape lightly this time if leaders let events spiral out of control. European banks have lent $3.4 trillion to emerging markets (BIS data), or three quarters of external loans to these countries.
The International Monetary Fund warned last week that emerging markets face the risk of "sharp reversals" or even a "sudden stop" if there is further spill-over from Europe. This comes at a time when Asia and parts of Latin America are already in the topping phase of a credit boom, one of epic proportions in China where loans have doubled to almost 200pc of GDP over the last five years.
(Excerpt) Read more at telegraph.co.uk ...
‘splain to me again, the blessings of a “Global Economy”.
Turbo Tax Timmy (T3) is on the case. Sorry Europe!
What utter rubbish.
As if we can turn off Niagara Falls with a mandate from bureaucrats.
Their isn’t one. We are the economy mover. Obama’s Marxism is trying to crush it.
Did Little Timmy check his numbers on Turbo Tax before telling the Europeans how to solve their problems?
(Pot, kettle)
"Fixing things now" involves one major step: immediately stop all further credit to European governments, so that spending is limited to what tax revenues are brought in. Fire half the public employees, and tell the other half that they will not be retiring at 50, but more like 65 or 70, and telling current under-70 retirees to report back to work or lose all benefits.
Then machine-gun any rioters that are too upset with this.
These fools are the problem! They need to get the Hell out of the way and let Capitalism work.
Since nothing Geithner’s done has helped at all, prepare for the global economic collapse to be even WORSE after he ‘helps.’
So tax cheat Gietner who could not figure out turo tax which caused him to not pay his taxes is going to save the world, funny!
Forgive me for being confused. Can someone tell me which global catastrophe this is the last chance to avoid?
Is it global catastrophe number 482,156, sub-catastrophe D dash 409, section 3? Or is it global catastrophe number 459,112 sub-catastrophe M, section A4?
... and which last chance for that catastrophe? LC#1343998 (LC=Last Chance), LC#ab739gff, or LC#13232? Its hard to keep up with Cloward-piven crisis, last chances, catastrophes and the like...
Even if the €2 trillion "Geithner Plan" does get off the ground, it can do no more than buy time - not to be sneezed at, for sure. The root of the euro crisis is a 30pc intra-EMU currency misalignment between North and South. That structural flaw cannot be solved with debt guarantees or bank rescues.
This crap won't fly in Germany. The German people will unelect any coalition that votes for it and will eventually negate it...even if the current government signs on.
Germany has been burdened with these long, expensive payouts in the past...and it always ended badly.
They will not take the screwing this time.
Basically, there are only two routes out of this situation: Japan or Iceland.
Iceland involves a quick collapse of the economy, where those who hold bad loans simply lose out whatever it is they hold. Very painful.
Japan involves a long and drawn out process, where the bad money slowly gets filtered out over a period of time. One method of doing this would be, as bonds mature, to sell more bonds, but at lower interest rates than previous bonds.
Will he nudge them faster on their current course just as he has been doing to us?
The sticking point is that there is nothing in place that would stop the PIGS from running up another tab.
They had some definitions in place for admission to the Euro but those were almost universally ignored.
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