Trillions to save the Euro? World currencies, a house of cards!

The Euro, the common European currency, was bound to fail. One can not bind together nations with totally different economic system, with totally different citizen’s attitudes into one Union. While Germany kept fiscal discipline (well, relatively), German Unions and German workers kept moderation, while other countries took advantage of cheap credit and stable currency and incurred huge debts and huge salary increases like there is no tomorrow. The salaries in the crisis countries are much higher than, for example, in Germany. So underpaid German workers now will bail out the highly paid Greek workers, that have more vacation and retire earlier?

The bail out favors banks, who earn high risk premiums on interest, while the government assumes risk and buys bad credit. All this in violation of the EU no bailout clause. And giving financial incentive for risky behavior by banks.

Greece should have been allowed to go bankrupt. That is market economy. Let someone else buy the failed banks and continue running them. Let the bank managers be arrested for doing unsound business. The bank must not loan money that can not be repaid.

  • Additionally, every nation in the world, including Germany and the USA, have too high a debt.
  • And that a system based on compounded interest can not work in the long run ( 1 cent with 4% interest yield in 2000 years  $0.01 * 1.04^2000=  1.16594643150219980412675240849 e+32=  $ 1165946431502199804126752408490
One should start asking questions why countries can not be run without resorting to debt.

Human-Stupidity is just giving food for thoughts. We are just pointing to the stupidity that might ruin entire populations.

World currencies, country finances, world economy is seriously stupid, based on stupid belief, based on greed of banks, politicians, and yes, the normal citizen who wants his benefits now, on loaned money.

Countries should repay loaned money in times of strong economy. Not increase loans more and more. That is Keynesian economics.

Spiegel Online International: Top Economist on the Euro Crisis; ‘
The German Government Will Pay Up’, June 27, 2011

In a SPIEGEL interview, leading German economist Stefan Homburg argues that euro-zone members should not bail out Greece, discusses who is making a profit from the crisis and explains why he himself is buying Greek bonds. "I believe in the boundless stupidity of the German government," he says.

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All quotes from :
Spiegel Online International: Top Economist on the Euro Crisis; ‘The German Government Will Pay Up’, June 27, 2011

In a market economy, even in the case of a plumber whose customers don’t pay their bills, it’s never a question of getting creditors "involved" (in helping to deal with a bankruptcy). Instead, when push comes to shove, it is creditors, and creditors alone, who have to write off their loans. Only then do they have an incentive to carefully choose who they lend money to. A market economy with no personal liability cannot function. The government bailout initiatives create misdirected incentives that continuously exacerbate the problems on the financial markets.


I wouldn’t call it a strategy. First, states bailed out their banks, now states themselves are being bailed out. But there is no next level to fall back on beyond this bailout. The bailout packages have merely exacerbated the crisis. Last year, if we had adhered to the Lisbon Treaty, which prohibits assistance payments, Greece would have restructured its debt, just as Uruguay, Argentina, Russia and other countries have done over the past 15 years …

 

Many politicians have also come to the realization that the path that we are on ultimately leads to national defaults and currency reforms. This process is already irreversible, but nobody wants to say it out loud and go down in history as the one who triggered the explosion. So we leave the bankruptcy to subsequent German governments and, in the meantime, throw good money after bad. Sooner or later, this much is certain, the system will be blown apart by political and economic factors. And, unfortunately, there is a great danger that, when this happens, it is not only the euro that will fall apart, but also the entire EU.

 

After the Greek bonds have been paid back at full value, the gamblers will turn to the next candidate, such as Portugal. If creditors suffered losses in Greece, however, they would renounce this business model. In this sense, the rescue measures are exacerbating the problem

 

Many politicians have also come to the realization that the path that we are on ultimately leads to national defaults and currency reforms. This process is already irreversible, but nobody wants to say it out loud and go down in history as the one who triggered the explosion. So we leave the bankruptcy to subsequent German governments and, in the meantime, throw good money after bad. Sooner or later, this much is certain, the system will be blown apart by political and economic factors. And, unfortunately, there is a great danger that, when this happens, it is not only the euro that will fall apart, but also the entire EU.

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4 thoughts on “Trillions to save the Euro? World currencies, a house of cards!”

  1. Like or Dislike: Thumb up 0 Thumb down 0

    re the statement “salaries in the crisis countries are much higher than in Germany”.

    What planet does the author come from?

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