Europe

[Guest lazyphil]

KS for global prez!!!!

[khunsanuk]

Hi,

 

Fuck that! I have enough trouble on my hands dealing with you lot

 

Sanuk!

[think_too_mut]

 

...This the jist I get from some of my readings. European countries in the union have a lot more social programs than we have in American. There seems to be a social contract of sorts that no one should be left out.

 

What it appears is that the only way some of these financial problems can be fixed is that the social welfare state as we refer to it in America has to be greatly reduced and in some cases ended.

...

 

What do you all think is the main problem and some possible solutions? I want to understand the situation better.

 

All that stems from an unstainable idea: one currency, one interest rate with no control by EU Central Bank who prints and sells their bonds.

 

Poorer (peripheral) countries in the Euro Zone (17 of 27 use Euro, Greece, Portugal, Spain, Ireland included) rushed for cheap money by printing and selling their Bonds. And made a debt they could not have otherwise made.

 

Japan has all that - but their debt is internal, only 5% is owned by non-Japanese entities.

 

With Greece and others in trouble, their debt is a market debt, at any time any (non-domicile) bond holder can sell. Then what? No money.

That is how we have what we are seeing now.

[Steve]

Some of you mentioned war and I have to assume you were joking. Can't see war as a possibility. Civil unrest within some countries but nothing between states.

 

It just seems like there has to be changes to the national healthcare, retirement, etc. systems nations have and the people are saying no way and the government is saying if we keep it we'll be bankrupt. Is that it in a nutshell?

[Guest lazyphil]

not enough money to wage a war....though germany seem pretty flush hehe

[Flashermac]

They could go to the border and stick their tongues out at each other.

[kamui]

They could go to the border and stick their tongues out at each other.

 

We don't have border anymore...

This combined with one currency make travel (and business) so very convenient within Europe.

[kamui]

All that stems from an unstainable idea: one currency, one interest rate with no control by EU Central Bank who prints and sells their bonds.

 

Poorer (peripheral) countries in the Euro Zone (17 of 27 use Euro, Greece, Portugal, Spain, Ireland included) rushed for cheap money by printing and selling their Bonds. And made a debt they could not have otherwise made.

 

Yep, everybody bought Greek bonds, because nobody could ever imagine that a European country could go bankrupt. Actually bonds issued by European countries seemed to be so much more secure than buying for example US bank stocks, especially after the recent crash.

 

But this seems to be a sign of the time, so many things are happening which were absolutely unthinkable - until they happened (like the Arab spring or the rapid decline of the USA).

 

Japan has all that - but their debt is internal, only 5% is owned by non-Japanese entities.

 

With Greece and others in trouble, their debt is a market debt, at any time any (non-domicile) bond holder can sell. Then what? No money.

That is how we have what we are seeing now.

 

As you say, Japan is a different matter, even though it is the Western country with one of the highest debt (or the highest debt?) Hedge fonds can't attack Japan, because as TTM said most of the debt is kept inside the country. Moreover, contrary the the Americans or the Koreans Japanese didn't buy so much on credit. Japanese had huge savings on their bank accounts, which means the banks had a lot of money they can work with.

 

But the future for Japan is very bleak. The population is aging fast, soon there will be a serious lack of workers, low- and high skilled, and the costs for pensions and health care will explode.

[Steve]

Doesn't Europe have a low birthrate as well? Or are the immigrants into Europe (Turks and Africans for example) having babies to nullfiy that? Will many of the people in Europe, specifically Greece, Italy and Spain (and possibly Portugal) be forced to give up a lot of the social benefits such as parts of national health, pension, etc.?

[think_too_mut]

As you say, Japan is a different matter, even though it is the Western country with one of the highest debt (or the highest debt?) Hedge fonds can't attack Japan, because as TTM said most of the debt is kept inside the country. Moreover, contrary the the Americans or the Koreans Japanese didn't buy so much on credit. Japanese had huge savings on their bank accounts, which means the banks had a lot of money they can work with.

 

Average 150,000US$ of savings per head. Others may also come close to that mark - but in debt.

 

The debt is illusory, most of it. It comes from the days when 1sqm of real estate was 100,000US$. Today it says on paper 100K but in reality it is 5K. When you remove that (the cross held papers) the real debt is ~60%, pretty much like Britain. That is why nobody gives a shit here. At worse, raising GST (now 5%) to 10% woould kill that debt in 9 years.

 

But the future for Japan is very bleak. The population is aging fast, soon there will be a serious lack of workers, low- and high skilled, and the costs for pensions and health care will explode.

 

Journalists like to say sensations like that, it sounds plausible.

 

What I can tell you is - my daughter won't live long enough to see that. Still there is 5% unenployment (that did not exist in the boom years with growing population).