Comments on: Technocrats can’t cure the contagion

By: Beethoven

Beethoven — Thu, 17 Nov 2011 11:39:21 +0000

I hope that we can agree that the Euro problem is more political than a clash of economic theories. Having seen the unsightly spectacle of Greek politicians squabbling like a bunch of autistic children (before being sent away) while their house is on fire, having seen Berlusconi-the-buffoon sit back, looking at underage girls while Italy disappears under the waves, and Italian politicians acting as if nothing is the matter, having seen this and more, one wonders how to have a single currency with this kind of nations. In both countries, old guard politicians are already clamoring to get the reins back, so you already can see failure or disaster coming. Democracy is wonderful, but it doesn´t work the same way everywhere. Just try ´increasing integration´ under these circumstances.

By: pavlaki

pavlaki — Thu, 17 Nov 2011 10:13:37 +0000

There appears to be an opinion that if only the ECB would act as a lender of last resort then all will be well. I would like to know exactly how that is going to work without there being a transfer of wealth from north to south Euro zone, paid for by the German tax payer. An ECB guarantee isn’t going to turn the Greek or Italian economies into the Germans model overnight, if ever. All of the fundamental problems causing the countries to be under bond pressure will still exist and the incentive to fix them will reduce as ‘the Germans will pay’. I’m not German, but if I were I would resist this scenario with as much force as I could muster. The ECB buying up bonds would cause huge resentment and conflict. Weidmann is absolutely correct – it is up to the individual countries concerned to get their house in order. This may not be possible for Greece and it should leave the Euro but Italy most certainly could restore confidence if it really tried.

By: scythe

scythe — Thu, 17 Nov 2011 07:44:40 +0000

An alternative view of the technocrats. Informative while remaining critical.

http://www.presseurop.eu/en/content/arti cle/1177241-our-friends-goldman-sachs

(quote) “Mario Monti, Lucas Papademos and Mario Draghi have something in common: they have all worked for the American investment bank (Goldman Sachs). This is not a coincidence, but evidence of a strategy to exert influence that has perhaps already reached its limits.”

Add to that network Otmar Issing (Germany) and Peter Sutherland (Ireland)

By: SeaStar1

SeaStar1 — Thu, 17 Nov 2011 06:10:09 +0000

OK, James Saft, you cranky ole pessimist. It’s time to earn your salary and tell us something we don’t know.
Tell us something useful, such as where is a good place to make some decent profits given the current environment?
Cmon, hang it out there. Be brave and put an opinion on the table for once.
And don’t tell us to short the euro. We’re already doing that. What else?
Your friend from Alaska!
Not Sarah Palin’s neighbor but I can see Russia from my porch too!

By: robb1

robb1 — Wed, 16 Nov 2011 23:01:32 +0000

The markets are telling the world that inflation and rates are heading towards the 7% mark.

That is actually a healthy yield for fixed income instruments (bonds) and to stimulate at least a “perception” growth out of asset deflation.

Is there any other way out?

By: txgadfly

txgadfly — Wed, 16 Nov 2011 17:12:36 +0000

Europe is better off without a centralized single State, with a centralized single military and a centralized single Ruler or Dictator. And make no mistake, centralization is the enemy of freedom, the inevitable enemy of liberty and dignity for the mass of humanity. A centralized, strong State is the source of wars of aggression. Look at the USA and what it has become.

A free Europe is better than a Europe in chains again.

By: simpletruths

simpletruths — Wed, 16 Nov 2011 16:25:06 +0000

I applaud the germans for sticking to their guns on fiscal responsibility. This is democracy in action, each party has something different and unique to gain or lose in “their solution”. In the end the ECB will print money after the germans get some fiscal sovereignty over other countries in the euro. Thats how creditors are. Even if germany left the euro, they’d still have to print money like switzerland, to keep their new mark low enough relative to the euro as a lot of their credit and customers are in euros. In a fractional banking system only 10% of your money is available, the central bank has already committed to print the other 90% under the guise of “liquidity”. We have a bank run going on in europe, so liquidity will have to happen. I wish we had some of the european democracy and discussion here, but instead we have 12 guys behind closed doors ignoring the biggest issues, as if the voters aren’t paying attention

By: scythe

scythe — Wed, 16 Nov 2011 15:37:52 +0000

@ Ian_Kemmish The point of argument is quantitative easing, an argument repeated ad nauseum by the non-euro member. And for whose purpose? The tedium of browsing this level of propaganda – it is not news – is beginning to wear thin. Unless broken record is a new form of journalism.

Perhaps James could remain on point and discuss the ramifications for England´s economy if the Eurozone ultimately resists implementing quantitative easing.

Irrespective of the solutions the eurozone and ECB offered, they were never to the liking of the market’s journalists. Consistently the option of quantitative easing has been ruled out, but this appears to be the only journalist thread running in the non-euro UK and US camp. Decidedly anti-German divide and rule to boot.

So when you receive a comment from the back saying “Give it up James”, that is an invitation to try the other side of the page for a change. Even if it is the antithesis of his predilection.
The reader is not just a pair of reluctant ears.

By: battersea2

battersea2 — Wed, 16 Nov 2011 15:00:47 +0000

Germany should leave the Euro ! Or if they don’t want to accept that the money they lent various countries , to buy German goods , in the first place won’t be coming back .
Either p**s or get off the pot I think is the phrase
Yes the technical solution , i.e.let the ECB live up to it’s name and act as such either by printing money or by guarantees is valid for a few more days but realistically not much longer before the damage is irreparable . James and others are telling it as it is and the majority including Ms Merkel seem to have their hands over their ears and are shouting not listening !

By: Ian_Kemmish

Ian_Kemmish — Wed, 16 Nov 2011 14:34:06 +0000

To be fair, “scythe”, whoever you are, James is continuing his practice of looking further ahead than other columnists. He is the first I’ve seen to actually credit the notion that a rational fear of moral hazard might be what is preventing Germany from acting, rather than an irrational fear of history.