'What happened to Europe's collapse ?'

Quote from Misthos:
Indiscriminate and irresponsible lending has not fully been punished, IMHO. And what is the result? TBTF institutions that are still calling the shots, setting up the entire system for a more catastrophic collapse in the future.

In a capitalist society, a failed borrower loses the ability to borrow in the future, just as a failed lender should also lose the ability to lend. The TBTFs should have been nationalized and wound down.

Banks create money out of thin air. They lend it into existence. They lose it? New fake money and creative accounting solves the problem (temporarily) while those outside of the banking system feel the real pain.
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We're veering off subject here, Misthos, I believe... We've discussed this issue before. Yes, I am in agreement with you, TBTF is bad and has to be dealt with. Yes, people have not been punished sufficiently for the irresponsible crap they have done. But what else is new?

All I am trying to say is that there is a consensus that the political union is worth preserving. Personally I agree with this view. There's also a consensus that a disorderly default by a European sovereign will put such strain on the political union that there is a small, but meaningful probability that it will collapse. I also happen to agree with this view. Therefore, I speculate that the European powers that be have decided to implement a "disorderly default prevention" mechanism. Do I think it's a good mechanism? Well, I am not sure, but I can't think of better myself, so who am I to say it's a bad idea. What is your view?

BTW, the BIS data you cite is rather stale.
 
Quote from Martinghoul:

Therefore, I speculate that the European powers that be have decided to implement a "disorderly default prevention" mechanism. Do I think it's a good mechanism? Well, I am not sure, but I can't think of better myself, so who am I to say it's a bad idea. What is your view?

BTW, the BIS data you cite is rather stale.
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Shameless plug (and still a work in progress):

http://fiatcollapse.blogspot.com/2010/09/pimcos-el-erian-does-not-believe-eu.html
 
Quote from trefoil:

The article misunderstands the underlying problem: the euro lowers Europe's long-term growth rate, tilts the entire European economy heavily towards benefiting Germany and basically looting the rest of the place, and so makes the kind of imbalances you see in the PIIGS pretty much inevitable.
The politics of the euro mean no one is getting out any time soon. That'll change, but betting on when is like betting on when the RE market would pop prior to when it did. Everyone knew it was a problem, but no one knew when it was going to blow everything up. Ditto with the euro.
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Imbalances are what we are looking for as traders every single day. I hope, there will be more of it ! Every day.
 
...except FX traders coulda had a ball trading Irish pounds and Greek drachmas and Spanish pesetas against German marks and French francs...etc, etc, etc.

And all that trading would've helped correct imbalances between these countries on the fly, instead of going through the clumsy processes we're going through now.
Economists, in the aggregate, most of whom love the euro, are truly dumber than dirt.
 
Quote from Wallace:

"The much anticipated economic demise hasn't happened.
Looks like the Continent's bust was a bust."
Michael Elliott, contributor, On Friday September 17, 2010, 5:30 am EDT
http://finance.yahoo.com/news/What-happened-to-Europes-hftn-1314322966.html?x=0
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LOL ! "anticipated" by who ? :D

You are so funny, and with "you" I mean you american-british.
You believed all the cr@p that your media have been throwing against Europe for years, I remember tons of BS articles.... CNBC, ZeroHedge, Financial Times, Telegraph's mythical anti-euro Ambrose Evans-Pritchard, are all the same.

Ahhhh, but don't despair: like ZeroHedge says, the world will end soon ! Deflation and hyperinflation ! BUY GOLD, hurry ! :D
 
Quote from C6H12O6:

You are so funny, and with "you" I mean you american-british.
You believed all the cr@p that your media have been throwing against Europe for years, I remember tons of BS articles.... CNBC, ZeroHedge, Financial Times, Telegraph's mythical anti-euro Ambrose Evans-Pritchard, are all the same.
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Europe and USA are rivals/competitors in business but they are friends in military.
 
Quote from C6H12O6:

LOL ! "anticipated" by who ? :D

You are so funny, and with "you" I mean you american-british.
You believed all the cr@p that your media have been throwing against Europe for years, I remember tons of BS articles.... CNBC, ZeroHedge, Financial Times, Telegraph's mythical anti-euro Ambrose Evans-Pritchard, are all the same.

Ahhhh, but don't despair: like ZeroHedge says, the world will end soon ! Deflation and hyperinflation ! BUY GOLD, hurry ! :D
More...

The Central Banks and Finance Ministries of the world are despairing - that's why for the first time in over 20 years, they are net buyers of gold. Gold is their insurance against monetary collapse. That's why they own the stuff. Think about it... why else do governments hold gold?

I support the idea of an integrated Europe. But as far as EMU goes, it is far from perfect, and the debt issues have not been addressed, but postponed. Furthermore, a one shoe fits all monetary approach to various economies and cultures I think, may have been a mistake.

Much of the West's wealth these past two decades has been debt driven. That's being corrected now.

Both the Euro and Dollar, as we know them, are doomed. And it shouldn't come as a surprise either. Most modern monetary systems are lucky to last 50+ years. The problem today is that much of the world is over-indebted and also has retirement obligations that will not be met.

Let's face the truth. There are some big bills out there in the global monetary system that will not be paid. Either we kill the currencies to pay off those obligations, or allow for a chain reaction of defaults that will blow your mind. Most people, IMHO, have no idea how fragile the situation is.
 
Lets not forget the Hubbert's peak gold theory.
Soon gold extraction rate will decline and eventually end, and those who don't own it will perish in poverty.
So hurry and buy it at 1300$ per ounce, even when production cost is 450$.
 
Quote from Misthos:

Let's face the truth. There are some big bills out there in the global monetary system that will not be paid. Either we kill the currencies to pay off those obligations, or allow for a chain reaction of defaults that will blow your mind. Most people, IMHO, have no idea how fragile the situation is.
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Of course currencies will be killed. And interest rates will rise exponentially. Haven´t you purchased your piece of land in Argentina or Uruguay ? No ? Hurry up. It´s still reasonably cheap...
 
Quote from C6H12O6:

Lets not forget the Hubbert's peak gold theory.
Soon gold extraction rate will decline and eventually end, and those who don't own it will perish in poverty.
So hurry and buy it at 1300$ per ounce, even when production cost is 450$.
More...


The market will push the gold price for so long. Then Sovereigns will get involved and determine what the gold price is relative to their currencies and reserves. That's how these things play out. Always have.

Thus, your numbers are irrelevant. And I won't rule out gold confiscation either.

All these things I mention are not new. They have been done in the past many times over. And will continue to be repeated. They are part of the monetary evolution/devolution cycle.

It is very easy to mock what I am saying when one is not cognizant of history and how easily it repeats.
 
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