This shows you how the Europeans just don't get it. Already strict budget rules created this crisis as it limited the normal fiscal response of running deficits counter-cyclically to sustain output and employment.
Now, member nations of the EU, like Greece, can't pay their debts because their economies are weak and constrained.
So what do the Europeans do?
Make the budget rules even tighter than they were before!
Out of the frying pan and into the fire!!!
HI MIKE OR MATT :
ReplyDeleteYOU ILLUSTRATE SUCCINCTLY HOW ARGENTINA GOT BURNED WITH RISE IN US AND EU INTEREST RATES AND HAD TO DEFAULT.
COULD THIS HAVE HAPPENED ALSO TO ENRON - DID INTERESTS RISE AND TRIGGER ENRON's DEMISE ?
( PUT ASIDE 911 )
THEN BACK UP A BIT AND TELL ME ... DID CLINTON'S WITHDRAWAL AND RETURN OF FED MONEY FROM THE REAL ECONOMY AND BACK INTO THE TREASURY IN ORDER TO "BALANCE THE BUDGET" INITIALIZE THESE TWO COLLAPSES ?
THEREFORE - THE EUROPEANS KNOW WHAT THEY ARE DOING !?! - ARE THE PURPOSEFULLY FOLLOWING THEIR ECB CHARTER SO THAT THEY CAN ON-PURPOSE DISPEL GREECE AND PORTUGAL FROM THE EURO ?
Your point gains support from the fact that “the markets” to a significant extent consist of credit rating agencies, a collection of institutions to which Warren Buffet pays no attention.
ReplyDeleteThe Telegraph wrote that the far left parties are gaining traction already after only a few months of tough budget rules. If we can keep up the market turmoil for a couple more years, we may get to experience something really profound once again. Wonderful.
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