Posted on 11/20/2011 5:22:16 PM PST by bruinbirdman
Let us all extend our sympathies to the Spanish people. They face the greatest national emergency since the Civil War yet their vote for drastic change is palpably useless, even if democracy has in this case at least been respected.
As union leader Javier Dos put it, the EU-imposed austerity plans of the incoming Partido Popular are “nothing more than the continuation of policies leading Europe toward disaster”.
The new government of Mariano Rajoy has precious few policy levers at its disposal and cannot alone do anything at this late stage to prevent a death spiral within the strait-jacket of EMU.
The immediate destiny of his country lies entirely in the hands of Germany, the AAA creditor core, the EU authorities, and the European Central Bank, the nexus of policy-making power that together dictates whether Spain will be thrown a lifeline or be pushed further into depression and social catastrophe.
What can the quiet Galician do to stop Spain’s 22.6pc unemployment rate – or 46pc for youth – from ratcheting higher this winter as the combined effects of fiscal austerity and a credit crunch together do their worst? How can he stop real M1 deposits contracting at a 5pc rate.
Spain is a disquieting story for northern neo-Calvinists, still clinging their morality tale of what went wrong with monetary union, a belief that feckless Greco-Latins borrowed their way to disaster, and that Teutonic virtue for all is the path to redemption.
Philip Whyte and Simon Tilford argue in a paper for the Centre for European Reform (CER) that this is a “damagingly partial and self-serving” version of events.
“It wrongly assigns all the blame for peripheral indebtedness to government profligacy; it makes no mention of the far from innocent role played by creditor countries in the run-up to the crisis
(Excerpt) Read more at telegraph.co.uk ...
The future of the EU has run its course. It never had a chance to succeed. These countries need to go back to what they were. I feel for people in Europe but......we need to look to ourselves and work on our own country now. We cannot support the world or we will become just like them. I believe there are some at the top of our government that would enjoy this if it were to happen.
Oh,the huge manatee! Those evil Germans and French — they gave poor widdle Spain cheap loans.
Almost the entire article is b.s. — but, that sentence is a zinger.
The article comes close to making sense, when it mentions the lack of monetary policy tools. If there were no Euro-zone; the currencies of Spain, Italy, Greece (and the other PIIGS, Portugal and Ireland) would floated downward to reflect the relative strength of their respective economies. (That happened here in Canada, where our $ slid to 62% of the U.S. dollar, before rising again to parity — more or less.) In retrospect, it's plain to see — the PIIGS would have been better off, if they had never been allowed in the Euro zone.
Just when I was feeling a bit hopeful about the defeat of the Socialists in Spain, Mr. Evans-Pritchard (who is quite conservative, at the right-hand edge of the British Tories) injects this nasty bit of realism into the mix. He seems to approve of the Spanish voters' choice, whilst simultaneously saying it's likely too late.
I read all this gloom and doom, and agree with much of it, but am left to wonder whether we are faced with fire (hyper-inflation), or with ice (deflationary depression). In the first instance, gold would be a good option; in the second, cash or near-cash. The path we are on now seems to be a nasty combination of both, and will hurt a lot of people: inflation in life's necessities (food and fuel), and deflation in assets (housing and equities).
I may be becoming as gloomy as Mr. Evans-Pritchard.
The US has a way out. It is call natural resources. This nation is blessed with soft coal, natural gas, timber and oil. Standing in the way for us to exploit this resource to employ the unemployed, and generate revenues for gov to pay down the debt is environmentalists. The other aspect of American life that must change is immigration. Open borders plus welfare state equals bankruptcy. Look at CA. US should shut down immigration when unemployment reaches a certain percentage. We accept 1 million legal immigrants a year. That is crazy if 14 million Americans are unemployed competing with 12 million illegals. Get rid of the environmentalists and open borders crowd and the working man in this country has a fighting chance of a future.
Per British comedian John Cleese
The Spanish are all excited to see their new submarines ready to deploy. These beautifully designed subs have glass bottoms so the new Spanish navy can get a really good look at the old Spanish navy.
Germany put a gun to their heads and FORCED THEM to borrow the money. :)
Yes, a major deflationary depression is coming to Europe, then probably the world.
What can the quiet Galician do to stop Spain's 22.6pc unemployment rate -- or 46pc for youth -- from ratcheting higher this winter as the combined effects of fiscal austerity and a credit crunch together do their worst?
No one put a gun to our head either... If we keep it up the whole US will look like Detroit.
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