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It Is 1931. We Are Austria. If The Fed Doesn't Save Us Here Comes Another Great Depression...
TBI ^ | 11-9-2011 | Henry Blodget

Posted on 11/09/2011 3:27:31 PM PST by blam

DELONG: It Is 1931. We Are Austria. If The Fed Doesn't Save Us Here Comes Another Great Depression...

Henry Blodget
Nov. 9, 2011, 5:21 PM

How does Berkeley professor Brad Delong feel about what's going on in Europe?

He's freaking out:

Time to Spread Foam on the Runway: The Federal Reserve Needs to Act Now to Firewall Off the Eurocrisis

I have been complaining for some time now that Reinhart and Rogoff think that the time is always 1931 and that we are always Austria--that the great fiscal crisis is about to erupt and send us lurching down toward Great Depression II.

Well, right now guess what?

The time is 1931, and we are Austria.

The Federal Reserve needs to buy up every single European bond owned by every single American financial institution for cash before the increase in eurorisk leads American finance to tighten credit again and send us down into the double dip. The Federal Reserve Needs to do so now.

Professor Delong cites professor Paul Krugman, who is also freaking out:

This is the way the euro ends.

Not with a bang but with bunga-bunga.

Seriously, with Italian 10-years now well above 7 percent, we’re now in territory where all the vicious circles get into gear — and European leaders seem like deer caught in the headlights. And as Martin Wolf says today, the unthinkable — a euro breakup — has become all too thinkable:

A eurozone built on one-sided deflationary adjustment will fail. That seems certain. If the leaders of the eurozone insist on that policy, they will have to accept the result.

Every even halfway plausible route to euro salvation now depends on a radical change in policy by the European Central Bank. Yet as John Quiggin says in today’s Times

(snip)

(Excerpt) Read more at businessinsider.com ...


TOPICS: Front Page News; News/Current Events
KEYWORDS: austria; debtcrisis; depression; eu; euro; eurocrisis; eurozone; feds; krugman; obamadepression; obamanomics; recession; stocks
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To: dfwgator
But I don't even speak Austrian.

Just say " 'Ello, Mate!" a lot.

21 posted on 11/09/2011 3:51:17 PM PST by San Jacinto
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To: blam

Wow. It looks like it may hit the fan tomorrow when Italy tries to sell new bonds.

You’ve got to worry about what the Fed will do when Goldman Sachs and Morgan Stanley give them their new orders with unprecedented desperation.

On the brighter side, maybe a new Cain accuser will come forward and all this silly little financial stuff will just be pushed to the background.


22 posted on 11/09/2011 4:04:05 PM PST by San Jacinto
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To: San Jacinto
"Just say " 'Ello, Mate!" a lot."

And put another shrimp on the barbie ...

klaus barbie, if you got one.

23 posted on 11/09/2011 4:06:13 PM PST by who_would_fardels_bear
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To: who_would_fardels_bear

Some people here need new eyeglasses.

Austrian — ie, “Sound of Music”, Hapsburg, Vienna, Mozart, etc.

Australian — Shrimp on the Barbie, Sidney Opera House, Fosters, Men at Work, etc.

The post says “Austria, 1931” which is a reference to a belief that a run on the banks in 1931 in Austria took the the world into Great Depression. Kinda like we think it started with the 1929 Stock Market crash.


24 posted on 11/09/2011 4:29:52 PM PST by TWohlford
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To: BenKenobi
I knew it from day one... it could not survive the hate that the Europeans have for one another... PC just keeps them from talking about that gorilla in the room.

LLS

25 posted on 11/09/2011 4:30:02 PM PST by LibLieSlayer ("Americans are hungry to feel once again a sense of mission and greatness." Ronaldo Magnus)
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To: blam

“with Italian 10-years now well above 7 percent, we’re now in territory where all the vicious circles get into gear”

Yes and no.

If Italy was using their own currency, they’d be well on their way to a run on their central bank. They don’t though.

When (not if) America gets to that point, we’ll have a run on our currency. No one can back us up.


26 posted on 11/09/2011 4:31:18 PM PST by MontaniSemperLiberi (Moutaineers are Always Free)
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To: BenKenobi
Italy Sparks Market Bloodbath: Financial Stocks Collapse
27 posted on 11/09/2011 4:34:41 PM PST by blam
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To: dfwgator
We'll be okay. Barrack speaks Austrian.
28 posted on 11/09/2011 4:36:12 PM PST by Shqipo (I am AttackWatch parolee #1,237. I am breaking my parole once more.)
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To: dfwgator

“nuff said.


29 posted on 11/09/2011 4:50:55 PM PST by brivette (lol!)
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To: blam

If the fed does act I guaintee we will be in a very long depression!

If they stay out of it, it will be a much shorter depression.


30 posted on 11/09/2011 4:51:31 PM PST by dalereed (uity wise!)
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To: GeronL

They have created a situation for themselves for which there is no solution.


31 posted on 11/09/2011 5:03:21 PM PST by Farmer Dean (stop worrying about what they want to do to you,start thinking about what you want to do to them)
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To: blam
"Yet as John Quiggin says in today’s Times...."

[insert spine tingling organ music]

What will John Quiggin say??? Tune in tomorrow, for.......As The EuroZone Burns!

(gotta love a post that ends with that sort of cliff hanger)

32 posted on 11/09/2011 5:09:08 PM PST by Windflier (To anger a conservative, tell him a lie. To anger a liberal, tell him the truth.)
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To: Farmer Dean

I am almost certain they did it on purpose


33 posted on 11/09/2011 5:09:40 PM PST by GeronL (The Right to Life came before the Right to Happiness)
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To: dalereed

BUMP


34 posted on 11/09/2011 5:10:38 PM PST by GeronL (The Right to Life came before the Right to Happiness)
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To: TWohlford
"Some people here need new eyeglasses."

...and some people need a better sense of the absurd.

35 posted on 11/09/2011 5:13:35 PM PST by who_would_fardels_bear
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To: GeronL

I don’t know if this is the beginning of the end,but if they can’t do something to arrest investor fears then things are going to get out of control very quickly.I think that the next two weeks will be critical.


36 posted on 11/09/2011 5:18:25 PM PST by Farmer Dean (stop worrying about what they want to do to you,start thinking about what you want to do to them)
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To: Farmer Dean

throwing money at it is not helpful


37 posted on 11/09/2011 5:22:50 PM PST by GeronL (The Right to Life came before the Right to Happiness)
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To: GeronL

That would just further weaken this country,which may be the plan.


38 posted on 11/09/2011 5:26:05 PM PST by Farmer Dean (stop worrying about what they want to do to you,start thinking about what you want to do to them)
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To: Leaning Right
The Federal Reserve needs to relieve the banks of the risks they took, and transfer that risk to the American taxpayer.

Nothing the Fed does affects only taxpayers. The Fed exists for one reason -- and one reason, only. To print money.

The Fed will relieve banks of the risks they took, but the burden won't fall only on taxpayers. It will fall on anyone who holds dollars. Inflation, it's the real flat tax.

39 posted on 11/09/2011 5:40:54 PM PST by BfloGuy (Even the opponents of Socialism are dominated by socialist ideas.)
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To: blam
"The Federal Reserve needs to buy up every single European bond owned by every single American financial institution..."

Some quotes from the words of George Washington:

"Why, by interweaving our destiny with that of any part of Europe, entangle our peace and prosperity in the toils of European ambition, rivalship, interest, humor or caprice?"

"Nothing is more essential, than that permanent, inveterate antipathies against particular Nations, and passionate attachments for others, should be excluded...The Nation, which indulges towards another an habitual hatred, or an habitual fondness, is in some degree a slave. It is a slave to its animosity or to its affection, either of which is sufficient to lead it astray from its duty and its interest."

“Few men have virtue to withstand the highest bidder.”

Go away, and shut up, Henry Blodget.


40 posted on 11/09/2011 5:53:14 PM PST by familyop (We Baby Boomers are croaking in a noisy avalanche of rotten politics smelled around the earth.)
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