Euro money, all the ducks in a row

A long read and a boring read. Economics is not for the faint of heart, but it is the ocean us poor fish must swim in. Long story shortened is that the crisis in the past in the Euro zone has been hidden by money games and Germany will be left holding the bag. The author of this article thinks the Euro based money system will collapse on its own and would certainly do so if the US dollar does.

Given that the figure he use for our inflation, about 13 % in real world, and the governmental debt being created, he argues it is when not if it will fail

If his 13 % is right and given interest rates of about 1/2 % being right, that means my 401k lost well over 10 % of its buying power in the last year.

"Rapidly Becoming Untenable" - Eurozone Finances Have Deteriorated | ZeroHedge

Until something like the present end game in Afghanistan, we in the US tend to ignore the rest of the world and act as if it has little impact on us. The whole world is in one lifeboat and the failures that were covered over by the pumps, collapse of countries, growth of China, debt, are reaching the point that the water is coming in faster than the pumps can handle it. At some point it reaches the level that stops the pumps and then chaos rules. In theory the whole crisis that was WW1 with the break up of empires, leading to the depression, the whole disaster, was caused by 1 man shooting another with an old pistol in some out of the way town.

 

I can easily believe that if the USA economy fails and falls all of the first-world countries and many others won't know what hit them because our economies are so linked together. Hell, look at our Depression years. Many forget that our Depression is what caused Germany to spiral down to those days by having to recall our loan to them forcing one to walk around with wheelbarrows full of marks. Think what would happen to China. Think about the Mideast. I think Russia might come out okay - maybe - as I am not sure how dependent they are on their exports of natural gas and mineral resources since they don't sell much manufactured good outside of weapons. The rest of Western Europe would be slammed and as Germany falls so do the rest.

 

Actually, the economic troubles of the German Weimar Republic was due to the post-WW1 government of Germany printing too much money. They were trying to pay war reparations to the Allies, and rebuild their own shattered economy. Meanwhile in America, that period was known as the Roaring Twenties. By the time that the Great Depression began in America, Germany was under the leadership of Herr Hitler and was experiencing an economic recovery....it was actually seen by many people and governments around the world as something of an economic miracle to be closely watched, studied and adopted.

 

Nope....as pointed out by WB. The Wiemar inflation was 1921-22. US depression began fall of 1929 with the market crash and the worst was in 1931. The US Dow Jones average didn't see the high in 1929 regained until in the 50's.

As to who will drag down who, I guess we'll see ! Interesting times ahead for sure.

 

Yes, that is all true but so is the fact about pulling the USA pulling their loan which I threw in there as a mostly unknown tidbit. Things had started to improve things, immensely, but when the global economic crisis hit (~1929), the USA was forced to cancel their loan and with that, the Versailles Treaty payments and everything else, Germany went down the drain and the rest is history. Germany in the 1930's, during the world depression, went to crap to include anarchy in the streets, Left (communists) vs. Right (fascists). The 'economic miracle' of the Hitler era was in fact achieve by a very smart economist/banker, Schacht, that Hitler appointed but who was opposed to many of his political policies to include many of the Reich's economic policies. He ended up in a concentration camp, if I remember correctly, after he was dismissed around 1939. I'm not sure if he died in the camps or not...

It was an economic miracle to include huge advances in worker conditions! And, it scared the crap out of the French and English for numerous reasons. The problem with the economic policy, again going from memory, was it couldn't be sustained for much longer as much of it was based on military production among other things...

History I love it! If only we would use what we have learned from it...