I liked this one, via the Economist: http://www.economist.com/blogs/grap...de&spv=xm&ah=9d7f7ab945510a56fa6d37c30b6f1709
Yea, I think most people would agree that should Spain not be sustainable, it is pretty much over for the Eurozone as it stands today.
That is a very political statement and like too many political statements, not based on fact. "Unregulated capitalism" was not existent and it is arguable what socialism is to begin with.
It's arguable. If they had control of monetary policy, the government would not necessarily have to spend its way out, if that is even possible (which arguably, it isn't).
Until Spain deals with "Bankia" by something other than borrowing money to buy it...they are on extremely poor footing. I agree that the bankruptcy of Spain will domino the EU (unless they kick it out), but it may very well fail regardless...Germany cannot save it alone.
They probably also can't kick it out because that will be horribly bad too. Stuck between a rock and a hard place in a lot of ways although there are some strategies that can get them out of this- problem is the core countries' citizens will have to pay for it with inflation and that makes those options not feasible politically (although the ECB has done a better job at assuring the market it will act if needed).
Yes, it was meant to be a political statement. Spain was a "booming" economy, up until approx 2008. The "property bubble" burst (just as here in the U.S. from risky capital investment and several banks had to be bailed out (same derivatives that began our cliff diving here in the U.S).
http://www.bbc.co.uk/news/business-17753891
Everything is "arguable" lol.....just look at the GOP hehehehe.....
They had good control of their monetary policy, but lacked "oversight" of risky lending practices.
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Ah, Zoomer, you wouldn't be you if you weren't totally wrong and backwards.
Spain's socialist debt is nearly 100% of GDP. Capitalism produces zero government debt. What has Spain's government been investing in to get this debt, if not creating jobs, stabilizing the economy, and stuffing the pockets of bankers with interest payments?
I am aware of the bubble, but that isn't the whole story. Monetary policy control could have cushioned the blow, for one.
The dichotomy of the market's faith (as told by bond yields) in Spain to bring down its debt before and once the recession hit is also a big variable- the market was probably too optimistic when it came to Spanish (and other periphery) debt in the earlier days of the EU. And then there is the whole issue of how the debt is tangled across the EU. Yea, you can make the capitalist argument with this last point, but if you make that argument, who buys the government debt if they didn't?
If there is uncertainty about factual matters, it is best to state the uncertainty rather than hide it under strong opinions. At least in my opinion.
They didn't control monetary policy...
Oh boy... now we are starting to get the other side of this. My response to Zoomer applies here too. This isn't capitalism vs. socialism- let's leave that to the politicians who are trying to take advantage of us
It is a much more complex issue.It's funny Hammer...I see your point, even agree with it.
Yet, I feel the need to dispute your post...not because it is invalid, but because your attitude and personality seem very unpleasant. This forum is unlike many you may have experienced, as we do not enjoy the negativity choosing instead to focus on actual debate and discussion.
By beginning your diatribe with insult, you set a tone. I imagine most here accept it as the thing you are...but few enjoy it.
I also doubt you have ever dealt with such mild moderation, as you have been treated quite nicely under the circumstances.
Oh boy... now we are starting to get the other side of this. My response to Zoomer applies here too. This isn't capitalism vs. socialism- let's leave that to the politicians who are trying to take advantage of us
Not trying to promote or dis either actually. I think they both have strengths and weaknesses Myp. My comment was less of a condemnation of capitalism, and more of a comment on "how" it's been applied. Maybe I should have "emphasized" the "unregulated". And I suppose the lack of monetary control could be construed as part of the same issue.
Either way, I think focusing on the socialistic countries in Europe that are having problems completely ignores the fact that there are just as many others that have fairly sound systems (Germany, The Nordic countries for example).
İt's interesting that how people are expecting more investments from a country that has lost it's budget balance in a huge debt crisis. New investments require to get into more debts and in this case of losing state and economic credibility, creating job opportunities or prosperity can not be expected from these investments n the long run. Maybe create a delusion for short time. Or in the case of leaving the system of Europe, damage will be greater than now for Spain.
Austerity s simply a part of the debt restructuring and it is necessary in anycase for Spain, if they are not going to declare moratorium soon.
Austerity s simply a part of the debt restructuring and it is necessary in anycase for Spain, if they are not going to declare moratorium soon.
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Of course. A lot of it comes down to monetary policy control at this point due to the disparities in fiscal positions. And the monetary policy is effectively controlled by the core, namely Germany.
I am not sure austerity is the best idea as witnessed with Greece. Keeping a stable budget might be the best course in the short-run (austerity in the long-run of course, but first they need to make the market confident once more).
Zoomer, you should pay me tuition for schooling you. Your link says that in 2007, Spain's debt was 36% of GDP. Since 2007, they've been doing exactly what you say they should have been doing, spending like crazy money they don't have. Now, look where they're at.
Zoomer, do you know what caused the property bubble? Can you say Socialism? The socialist government greased the housing market with under-market home loans, causing home prices to skyrocket. Everyone thought they were getting rich by magic, but it was just an illusion. When the smoke cleared, people realized their homes weren't worth half what they paid, but they're still stuck with the mortgage.
You are inaccurate....period.
Within this thread we have the information to verify this.
I don't agree with you unfortunately, recession is already inevitable for that country at least two financial years.Also only a solid financial structure can provide the confidence to the markets. On the other hand, they can always work for encouraging investment to the country of course.
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