We are about to find out, indirectly, if the FED action in 2009 were necessary

Discussion in 'Economics' started by nitro, Dec 12, 2011.

  1. nitro


    "...It’s actually quite remarkable how many sensible people base their analyses on the presumption that the ECB will do what has to be done. Barry Eichengreen, who is a genuine expert on all things euro, starts his analysis of prospects for 2012 with the confident assertion that Draghi will ride to the rescue.
    But as far as anyone can tell, the monetary cavalry aren’t coming. And the bond market has figured this out.

    What Anglo-Saxon economists need to understand is that the Germans and the ECB really, really don’t share our worldview; they really do believe that austerity is all you need. And all indications are that they will cling to that belief, even as the euro falls apart — an event they will insist was caused by the fecklessness of the debtors.

    Given a choice between saving Europe and remaining righteous, they’ll choose the latter..."


    I hope they don't do anything, because if they don't and in fact all that is necessary is austerity and not massive bailout of banks with main street money and other strategies of the west, well, it will be a game changer.

    I think it might be possible, but Europe will go through a horrible recession with huge amounts of pain for probably five years. But when they come out of it, "Shinny Happy People"...

    The debt of the world cannot be paid it is too humongous. The only option is to print money and inflate your currency. Or is it? This is a colossal chess game being played by continents. Economic history is being written on world scales. The short term being sacrificed for the long term. Quite a gambit...
  2. Eh, it's never worked for people to wait for the long term. The communists kept saying in the long term it'd work. Riight.
    This is just another version of the same thing: sacrifice now and you'll have a better future. Except it's always the small people who do the sacrificing while the connected and well-off just sail on through...
    ...and benefit, of course.