I can only respond from a UK perspective - and, as you know, we
have our own special brand of uncertainty this very day. However,
in rough outline I think the problem is as follows:
1. Ultimately, there cannot be a functioning monetary union
without closer fiscal coordination; I suspect an overwhelming
majority of people in Europe, including national politicians, is
unwilling to hand fiscal authority to Brussels.
2. Having a single currency and monetary policy for 'peripheral'
and 'core' Europe always has been long-run untenable given the
institutional and social rigidities which inhibit inter-regional
adjustments.
Points 1 and 2 imply the EUR has been flawed from the outset.
The current crisis is clearly laying bare its conceptual
weaknesses, and these are getting increasingly difficult for the
governing elite to gloss over. Nonetheless, as goes the EUR so goes
the entire post-war European project - so the stakes are high.
3. It seems clear that the outlined bailout for Greece is at
best a temporary bolstering of liquidty for a borrower that is
actually undergoing a solvency crisis. Furthermore, the risk of
contagion will likely remain whatever happens to Greece, simply
because several of the peripheral economies are non-viable as
currently structured. (Incidentally, the guys actually being bailed
out are not the idle Greek public servants, but French and German
banks whose largesse has made idleness so rewarding for so
long.)
4. The pure idiocy of getting Spanish, Portuguese, and Irish
taxpayers (not to mention you generous folks in the US of A) to
bail out Greece is starkly apparent. As for the less profligate
burghers of Bavaria, I cannot speak for them but I can imagine why
they would be unhappy.
So in sum we have a governing elite that can see the post-war
project potentially unravelling and some of whom probably know in
their hearts that bailing out Greece is at best a temporary
palliative which is unlikely to stop the rot either for the PIIGS
or for the EUR itself; nonetheless - they feel they must "do
whatever it takes" (where have we heard that before?). It's notable
that over the last 24 hours some of the more recalcitrant elements
of the German press have clearly received the memo and fallen into
line behind a bail-out which 48 hours ago they were vehemently
opposing. On the other hand, the people who get to vote for those
elements of the elite who are in public office (a small proportion,
it has to be said) are unhappy and angry. An interesting
'stand-off'.
Personally, I would be surprised if the bail-out did not pass
over the required parliamentary hurdles. But the situation is
extremely volatile, and with Europe being something of a headless
chicken anything is possible. Whatever happens over the next few
days will most certainly not draw a line under the rapidly evolving
debate about the long-term viability of the European Union and of
the EUR as both are currently structured - a debate the elite does
not want to acknowledge, let alone lose.
Greece is just a "pass-through vehicle". This is in fact another
bank bailout. (As a sidebar, it's got to be some kind of comment on
the delusional world we're now living in that taxpayers in the
other PIIGS are amongst those who are going to be contributing to
this bailout of,
inter alia, French and German banks. Will Greek taxpayers
- if any can be found - get to participate in a future EU bailout
of, say, Portugal or Spain??)
If the price of physical gold (i.e., the real stuff, not GS's
definition of 'physical') is being surpressed by manipulative paper
trading, and I personally believe that's likely, then surely the
producing countries are losing hundreds of billions each year in
forgone export earnings and tax revenues. Where's the outrage?
China might be perfectly happy to hang onto its own output whilst
at the same time soaking up artificially cheap metal from the
physical market, but there are plenty of other producers that need
current revenue more than they need reserve diversification. I've
long wondered why they've been so silent in this debate. Have I
been missing something?
August 17 update from Australia's Dept of Health reports 460
hospitalised and 100 in ICU. The 7-day moving averages of new cases
and of deaths have both been falling over the last week or so.
Current confirmed total infections 32,224 with 121 fatalaties.
Vaccination programme covering the entire population likely to
begin in September (subject to final tests - but so far, so
good).
'Better than expected'???
Newsletter
Subscribe to our email list for regular free market updates
as well as a chance to get coupons!
The community is delayed by three days for non registered users.
I can only respond from
Curious to know....
Posted by steveh on 6th of May 2010 at 02:08 pm
I can only respond from a UK perspective - and, as you know, we have our own special brand of uncertainty this very day. However, in rough outline I think the problem is as follows:
1. Ultimately, there cannot be a functioning monetary union without closer fiscal coordination; I suspect an overwhelming majority of people in Europe, including national politicians, is unwilling to hand fiscal authority to Brussels.
2. Having a single currency and monetary policy for 'peripheral' and 'core' Europe always has been long-run untenable given the institutional and social rigidities which inhibit inter-regional adjustments.
Points 1 and 2 imply the EUR has been flawed from the outset. The current crisis is clearly laying bare its conceptual weaknesses, and these are getting increasingly difficult for the governing elite to gloss over. Nonetheless, as goes the EUR so goes the entire post-war European project - so the stakes are high.
3. It seems clear that the outlined bailout for Greece is at best a temporary bolstering of liquidty for a borrower that is actually undergoing a solvency crisis. Furthermore, the risk of contagion will likely remain whatever happens to Greece, simply because several of the peripheral economies are non-viable as currently structured. (Incidentally, the guys actually being bailed out are not the idle Greek public servants, but French and German banks whose largesse has made idleness so rewarding for so long.)
4. The pure idiocy of getting Spanish, Portuguese, and Irish taxpayers (not to mention you generous folks in the US of A) to bail out Greece is starkly apparent. As for the less profligate burghers of Bavaria, I cannot speak for them but I can imagine why they would be unhappy.
So in sum we have a governing elite that can see the post-war project potentially unravelling and some of whom probably know in their hearts that bailing out Greece is at best a temporary palliative which is unlikely to stop the rot either for the PIIGS or for the EUR itself; nonetheless - they feel they must "do whatever it takes" (where have we heard that before?). It's notable that over the last 24 hours some of the more recalcitrant elements of the German press have clearly received the memo and fallen into line behind a bail-out which 48 hours ago they were vehemently opposing. On the other hand, the people who get to vote for those elements of the elite who are in public office (a small proportion, it has to be said) are unhappy and angry. An interesting 'stand-off'.
Personally, I would be surprised if the bail-out did not pass over the required parliamentary hurdles. But the situation is extremely volatile, and with Europe being something of a headless chicken anything is possible. Whatever happens over the next few days will most certainly not draw a line under the rapidly evolving debate about the long-term viability of the European Union and of the EUR as both are currently structured - a debate the elite does not want to acknowledge, let alone lose.
Greece is just a "pass-through
Freaking...
Posted by steveh on 3rd of May 2010 at 04:38 am
Greece is just a "pass-through vehicle". This is in fact another bank bailout. (As a sidebar, it's got to be some kind of comment on the delusional world we're now living in that taxpayers in the other PIIGS are amongst those who are going to be contributing to this bailout of, inter alia, French and German banks. Will Greek taxpayers - if any can be found - get to participate in a future EU bailout of, say, Portugal or Spain??)
If the price of physical
Just abut everything you ever wanted to know about the manipulation of the gold and silver markets
Posted by steveh on 29th of Mar 2010 at 05:44 am
If the price of physical gold (i.e., the real stuff, not GS's definition of 'physical') is being surpressed by manipulative paper trading, and I personally believe that's likely, then surely the producing countries are losing hundreds of billions each year in forgone export earnings and tax revenues. Where's the outrage? China might be perfectly happy to hang onto its own output whilst at the same time soaking up artificially cheap metal from the physical market, but there are plenty of other producers that need current revenue more than they need reserve diversification. I've long wondered why they've been so silent in this debate. Have I been missing something?
SteveH
Matt, Steve Is possible to add a few courrencies to the ...
Posted by steveh on 2nd of Feb 2010 at 05:04 am
This would be very useful. I also add my thanks for your work.
Matt - I'll add my
Quick Market Video
Posted by steveh on 14th of Dec 2009 at 06:29 am
Matt - I'll add my thanks as well. Consistently great stuff from you and Steve.
No problem there - just
How True
Posted by steveh on 9th of Dec 2009 at 04:31 am
No problem there - just print some more.
I wonder how Cramer would
Interesting long, long term chart of the DOW: GSIII.png (image)
Posted by steveh on 8th of Sep 2009 at 07:21 am
I wonder how Cramer would spin that one. Buy the - er - dip??
August 17 update from Australia's
H1N1 in Austarlia/New Zealand
Posted by steveh on 20th of Aug 2009 at 09:09 am
August 17 update from Australia's Dept of Health reports 460 hospitalised and 100 in ICU. The 7-day moving averages of new cases and of deaths have both been falling over the last week or so. Current confirmed total infections 32,224 with 121 fatalaties. Vaccination programme covering the entire population likely to begin in September (subject to final tests - but so far, so good).
'Better than expected'???