European Debt Crisis or Posture?

Discussion in 'Europe and Russia' started by Godless-Kafir, Feb 16, 2012.

  1. Godless-Kafir

    Godless-Kafir DFI Buddha Senior Member

    Joined:
    Aug 21, 2010
    Messages:
    5,829
    Likes Received:
    1,799
    I thought i start a thread on the issue to understand what all this mean and what is the road ahead, this concerns India to because a strong and prosperous europe only helps our industry to supply demand and help growth in India.

    There are some however that claim this debt was knowingly created to stop the development of emerging markets. The huge trade deficit from China may as well go unpayed. Is this a strategy to control the growth of poorer nations or where politicians really that dumb to allow so much debt to grow before takeing action?


    Euro crisis: What went wrong with the currency - The Economic Times
     
  2.  
  3. Godless-Kafir

    Godless-Kafir DFI Buddha Senior Member

    Joined:
    Aug 21, 2010
    Messages:
    5,829
    Likes Received:
    1,799
    Last edited: Feb 16, 2012
    Frenchguy likes this.
  4. nrj

    nrj Stars and Ambassadors Stars and Ambassadors

    Joined:
    Nov 16, 2009
    Messages:
    9,252
    Likes Received:
    3,347
    Location:
    Brussels
  5. Godless-Kafir

    Godless-Kafir DFI Buddha Senior Member

    Joined:
    Aug 21, 2010
    Messages:
    5,829
    Likes Received:
    1,799
    Our problem is not because of Euro crisis we where always an import market not an export market oriented economy like China. In our case it is because of the old socialist dogs in the helm and their mindset of taxing business more and ineffective and slow policy change like the issue with high turbine fuel prices in India that bankrupted the Indian aviation industry. They still have not changed the turbine fuel price and made it to global pricing levels, these sort of slow policy changes is some what maddening and frustrating for on lookers. I wish all these old trolls on the helm like Pawar just lied down and died.

    This thread is however about Europe, let some of the european members contribute here.
     
  6. sky

    sky Regular Member

    Joined:
    Aug 12, 2009
    Messages:
    340
    Likes Received:
    25
    I wouldn't expect to much from europe in the near future,growth is dismal debt is to high and going higher ,it's tax payers and overwhelmed by how the greedy state is constantly asking from them.

    Then you have the very lazy who milk a corrupt system so they never have to work. If you have no job and lot's of kids you really can live of the fat of the land ,and the human right's laws will be on your side.

    What India need' to do is send some very smart young kid's from your IITS to study our system then make sure you don't copy us. If you do the opposite India will get very rich quick..
     
  7. Godless-Kafir

    Godless-Kafir DFI Buddha Senior Member

    Joined:
    Aug 21, 2010
    Messages:
    5,829
    Likes Received:
    1,799
    But that is how West in general has grown? Even after WW2 there was massive borrowing, may be that is how Europe developed by borrowing excessively to develop infrastructure and living standards and then buying extremely cheap raw materials from Africa and other countries when world inflilation was very low and Oil prices where dirt cheap. We missed that boat now we cant even pollute! So i feel we have been handed the rough end of the deal when it is our time to grow. Oil prices are to high, inflation is very bad and now they also want to impose Pollution norms. So its become extremely hard for India to develop in this environment with a huge population.

    We should have liberalized in the 50s and we would have been a developed nation like Japan, its so sad that Socialism was the favoured way back then.
     
    Frenchguy likes this.
  8. LETHALFORCE

    LETHALFORCE Moderator Moderator

    Joined:
    Feb 16, 2009
    Messages:
    20,553
    Likes Received:
    6,565
    Euro was created to challenge the US dollar. Euro lost.
     
  9. Godless-Kafir

    Godless-Kafir DFI Buddha Senior Member

    Joined:
    Aug 21, 2010
    Messages:
    5,829
    Likes Received:
    1,799

    The europeans are always jealous of the USA even though they wont admit that in person. All european economies are in more debt than the US yet they talk more of the US debt crisis than their own! :D
     
    nrj likes this.
  10. panduranghari

    panduranghari Senior Member Senior Member

    Joined:
    Jan 2, 2012
    Messages:
    1,790
    Likes Received:
    1,245
    Really?

    Think again.


    Don't believe all the noise, and there's a tonne of it right now. They don't know what they are talking about. The euro survives and thrives regardless of how the European debt crisis is ultimately resolved, and no countries will leave the euro. In fact, there are countries trying to get in, and none that will leave short of a coup, revolution or state failure, which isn't even a consideration right now. And even if that happens, the euro will still survive and thrive while the country that leaves will suffer greatly, the local hyperinflation that will ensue being the least of their problems.

    Spend some quality time with the Eurosystem's balance of payments and marvel at how remarkably balanced Europe is with the rest of the world. Then compare that with the US (AND UK) balance of payments. As just a quick example, in April (one month) the Eurozone imported only €4.1 billion more goods than it exported. The US, on the other hand, imported $58 billion more goods than it exported, and April was the lowest month yet this year for the US. Of course that's just goods. For services, the US exported $14.5 billion more services than it imported. How much of that do you think was "Wall Street financial services"? Europe also exported more services than it imported, but only €2.8 billion.

    So for goods and services combined, the Eurosystem ran a trade deficit of €1.3 billion in April, while the US ran only a $43.5 billion deficit (down from its previous normal $50 billion, but back up in May). Looking back at 2010 (just to get a full year's picture) the US ran a $500 billion goods and services deficit for the year. The Eurosystem (even with those lazy PIIGS) actually ran a trade surplus for the year, exporting more goods and services than it took in! So how can that be? As a currency representing a community of more than 300 million people, the euro is quite healthy compared to the dollar!

    Of course there is a huge imbalance inside Europe between the states running a large surplus and those running a large deficit. But with a shared currency the adjustment pressure for such an imbalance is foisted elsewhere, not on the currency. It lands squarely on the politicians, who couldn't be a more deserving bunch of Aholes. For the dollar, the structural deficit and debt of the US places a massive devaluation pressure directly on the dollar. But for Europe the currency is balanced with no (or very little) adjustment pressure.

    The economic flow of goods and services within Europe will of course have to contract as the imbalance retreats. If the euro weakens on the global currency stage Europe will start running an overall trade surplus again, like China, which will soften the blow of a contracting internal economy. If the euro strengthens, things like cheaper oil will help soften the contraction. Internally the politicians have their hands full. No doubt! Externally, the euro is just fine. To the euro the politics of the PIIGS and Germany are little more than a sideshow.

    And notice I didn't even mention gold yet. Anything that would appear to seriously threatens the euro, like an outright sovereign debt default, would explode the price of gold which would simultaneously rescue the euro balance sheet and kill the dollar.
     
    LETHALFORCE likes this.
  11. panduranghari

    panduranghari Senior Member Senior Member

    Joined:
    Jan 2, 2012
    Messages:
    1,790
    Likes Received:
    1,245
    The situation with Greece and the euro presents us with a fresh opportunity to explore what is really wrong within the system from a macro perspective. And I am not talking about the euro system. I am talking about our global system of savings that are value-fixed directly to a transactional currency unit whose value doesn't even matter in the context of its primary function.

    FOFOA: Greece is the Word
     
  12. Frenchguy

    Frenchguy New Member

    Joined:
    Feb 21, 2012
    Messages:
    2
    Likes Received:
    3
    Location:
    Paris
    If we have so much debt here, it is because our democracy is turning bad. Politicians are used to promising lots of demagogic and irrealistic social programs so as to be elected, and I think that 's why debt is mostlyan "Occidental" problem.
    Moreover, here, nobody was asking governments "where do you find that money", because people were happy to receive money from the government and to have a large welfare ! You know, in one of our History schoolbooks, I remember there was a map of the world, showing endebted countries, like the map posted on the top of the page. Nonetheless, Western countries (USA, UK, France...) weren't coloured, they were let in grey, like for instance Somalia in your map. So, in class, we spoke about the Indian debt problem, the Brasil debt problem, but in fact, the debt issue was our. And we are realizing it only now !
    I hope it is not too late...

    Sorry for my bad English, I'm French !
     
  13. Godless-Kafir

    Godless-Kafir DFI Buddha Senior Member

    Joined:
    Aug 21, 2010
    Messages:
    5,829
    Likes Received:
    1,799
    This is a problem with all democracies. Even in India they promise free TV, Fridge, food etc., and use the tax money and bankrupt the state. There must be some checks and measures so as to not let the politicians over spend to get elected in the next elections.

    Your english is good dont worry. :)
     
  14. Frenchguy

    Frenchguy New Member

    Joined:
    Feb 21, 2012
    Messages:
    2
    Likes Received:
    3
    Location:
    Paris
    So you are also bound to have the same problem as us in Europe...
    But maybe it is not the case, because as we (Europeans) thought we were dominating the world, debt was not seen as a problem for us, whereas you may be more realistic. However, Greece was really a little country, Greek people knew they weren't powerful, but politicians turn democracy to demagogy using debt. That's why I think that debt is deeply rooted in the democratic regime...
    But, maybe this crisis will make politicians and people aware of this problem. I hope so !
     
  15. no smoking

    no smoking Senior Member Senior Member

    Joined:
    Aug 14, 2009
    Messages:
    3,174
    Likes Received:
    423
    No, that is impossible. Just look at what kind of country Japan was before 1945: a country which could built advanced fighter, battleship. In other words, Japan was already a industrilized country before ww2 while india was still a backword developing country. So, the best you can hope for india if you liberalized in 50s is: south korea, which I still highly doubt if you can reach that level.
     
  16. W.G.Ewald

    W.G.Ewald Defence Professionals/ DFI member of 2 Defence Professionals

    Joined:
    Sep 28, 2011
    Messages:
    14,140
    Likes Received:
    8,529
    Location:
    North Carolina, USA
    Still looks close. :-(
     
  17. LETHALFORCE

    LETHALFORCE Moderator Moderator

    Joined:
    Feb 16, 2009
    Messages:
    20,553
    Likes Received:
    6,565
    It's not close California economy is bigger than all the bankrupt PIGS of Europe put together
     
  18. sehwag1830

    sehwag1830 Tihar Jail Banned

    Joined:
    Dec 23, 2011
    Messages:
    495
    Likes Received:
    275
    US public debt to gdp ratio has crossed 100 % . So this chart is outdated.
     
  19. sehwag1830

    sehwag1830 Tihar Jail Banned

    Joined:
    Dec 23, 2011
    Messages:
    495
    Likes Received:
    275
    How euro lost when euro has better value than US dollar ? America is in bigger problem than EU. It is just using its media to not highlight the problem.
     
  20. pmaitra

    pmaitra Moderator Moderator

    Joined:
    Mar 10, 2009
    Messages:
    31,663
    Likes Received:
    17,163
    Location:
    EST, USA
    ^^

    1 Kuwaiti Dinar = 3.33745 US$. So KD has more value than US$. What can be concluded from this?
     
  21. sehwag1830

    sehwag1830 Tihar Jail Banned

    Joined:
    Dec 23, 2011
    Messages:
    495
    Likes Received:
    275
    But how can you conclude that euro lost ?
     

Share This Page