Spain in state of total emergency

[EternalOptimist]

For the hard of thinking like EO and BB - here it is in simple terms:

Inappropriately low interest rates for most of Eurozone over the last 10 years = low Euro = Good for German exports = Cheap money for unproductive PIIGs to buy German goods.

Rinse and repeat till predictable denoument.

HTH, BIDI.

exactly, thats what I said. A mismatch in the eurozone plus there was cheap money around, but nobody forced them to spend it.

[Mich the Tester]

People who read the quality papers can be just as misguided and conned by politicians, as Big Brother watchers, if not more so.

Well we can all be misguided. However, I think it's less likely, but still very possible, that people who read and understand more sources of information will take stupid decisions that do damage to millions of others. I'm talking about reducing problems, not eliminating them. there is always a risk of clever people taking decisions that turn out to be wrong. Some big decision like 'Euro in or out or in a bit at a time' is very complex and only time will tell if such a decision is right, even when the decision's made by very clever and well meaning people.

However, the decision to elect a politician who promises to spend money that isn't there and allow debts to continue to rise or pick fights with other countries instead of sitting down and talking through disputes is not very complex; it's stupid, dangerous and irresponsible, and yet too many people are voting to do stuff that will obviously lead to disaster.

[BlasterBates]

exactly, thats what I said. A mismatch in the eurozone plus there was cheap money around, but nobody forced them to spend it.

Indeed and Slovakia, Estonia and Malta didn't did they.

The argument is they had more access to cheap money, but then Hungary is in the same mess.

So is the problem being in the Euro or is the problem incompetent governments.

Lets look at a cross section of European countries

Uk - in a mess not in the Euro
Germany - doing well in the Euro
Estonia - doing well in the Euro
Italy - overspending in a mess in the Euro
Iceland - in a mess not in the Euro
Hungary in a mess not in Euro
Greece in a mess in the Euro

etc etc etc

Do we see a pattern here?

[sasguru]

Well if you take a random collection of countries then some will do well others won't.

All down to how a government runs it's own affairs. A currency is simply a means of exchange of goods, no more no less. You want to sell cheap, you earn cheap, your currency does not stop you earning "cheap".

Slovenia, Malta, Slovakia and Estonia have no problem with the Euro. You could hardly have a more different economy than coming from the East. and Malta is prime example that club Med can indeed do alright. These countries have much lower wages than other EU countries.

No-one forced Greece to overspend. No-one forced Spain to fuel an unstainable property boom. They could have left the Euro at anytime. No-one forced employers to overpay their employees, look at the Slovaks.

Any country can gorge themselves on cheap debt, they don't have to be in the Euro to do that. Global markets mean banks will flock to speculate on your boom knowing it's unsustainable but also thinking they can pull out on time ...and who cares as long as they get their bonus this year ( the reason for the unsustainable US property boom).

The countries you quote are so small as to be negligible, even smaller than Greece.
Was it a good idea to have cheap money in countries that historically had high interest rates?
No but the problem was swept under the carpet, by politicians with egos bigger than their brains.

PS A cursory study of human economic history show that cheap money always leads to credit splurges.
If that wasn't the case interest rates would not be the big hammer of economic policy that they are.

And that ends the economic lesson for today - I can't be bothered to waste my own time educating morons who didn't do too well at school.

[Mich the Tester]

politicians with egos bigger than their brains.

...elected by citizens with shopping lists bigger than their brains.

[BlasterBates]

...bla bla...moronic b"llsh*t bla bla....

And that ends the economic lesson for today - I can't be bothered to waste my own time educating morons who didn't do too well at school.

I think you forgot to put the paragraph on economics in your posting.

[sasguru]

I think you forgot to put the paragraph on economics in your posting.

Must be quiet in reception today, eh?

[EternalOptimist]

sasguru - 'Blooming heck love, our bank accounts empty'
Mrs sas - 'Do you like my new fur coat ?'
SG - 'WHAT. ARE YOU MAD WOMAN'
Mrs sas - 'But it was cheap, and the interest on the extra repayments is low'
SG -'Low !! well thats ok then. its human nature after all, to spend all my money on a fur coat in the summer if the interest rates are low. You should have picked up a mercedes as well'


Mrs sas - 'er....about the garage doors'

[sasguru]

sasguru - 'Blooming heck love, our bank accounts empty'
Mrs sas - 'Do you like my new fur coat ?'
SG - 'WHAT. ARE YOU MAD WOMAN'
Mrs sas - 'But it was cheap, and the interest on the extra repayments is low'
SG -'Low !! well thats ok then. its human nature after all, to spend all my money on a fur coat in the summer if the interest rates are low. You should have picked up a mercedes as well'


Mrs sas - 'er....about the garage doors'

Senile AND thick. Not a good combo.

[Mich the Tester]

sasguru - 'Blooming heck love, our bank accounts empty'
Mrs sas - 'Do you like my new fur coat ?'
SG - 'WHAT. ARE YOU MAD WOMAN'
Mrs sas - 'But it was cheap, and the interest on the extra repayments is low'
SG -'Low !! well thats ok then. its human nature after all, to spend all my money on a fur coat in the summer if the interest rates are low. You should have picked up a mercedes as well'


Mrs sas - 'er....about the garage doors'

Senile AND thick. Not a good combo.

Don't blame him; you married her.