ARmy Rumour SErvice

Originally Posted by bokkatankie

It could be worse, some may even think that you know what you are talking about

In between delivering pizza's in Wolverhampton, there is plenty of time to read the FT and perfect the bluff.....works fine on Telegraph readers at least....

Originally Posted by geezer466

Anyone else noticed the last couple of days the BBC has started treating the Greece and Spanish stories with a little more urgency, despatching their best correspondents to report live. Peston fronts up a program tonight called the Great Euro Crash.....

Strange you should mention that, because I've just watched it. The BBC used to be one of the cheerleaders for the euro. Now they've done a 180 degree turn and are saying the euro is doomed in its present form. Indeed, we had a succession of the euro good and great (including Trichet and Gerhard Schröder) saying the euro had gone badly wrong. The tenor of the program was that the euro has two choices:

-- Full political and financial integration
-- Bust

There was nothing in the program which you, I or FF haven't pontificated about in this thread - if anything the Beeb was even gloomier...

Wordsmith

There are signs of the money supply drying up in Club Med. The more thoughtful commentators have been flagging up contractions in M0/M1 for some time now - and those tend to be good leading indicators of economic activity.

M0, M1, M2, M3, M4 definition from Financial Times Lexicon

M0 and M1, also called narrow money, normally include coins and notes in circulation and other money equivalents that are easily convertible into cash. M2 includes M1 plus short-term time deposits in banks and 24-hour money market funds. M3 includes M2 plus longer-term time deposits and money market funds with more than 24-hour maturity. The exact definitions of the three measures depend on the country. M4 includes M3 plus other deposits. The term broad money is used to describe M2, M3 or M4, depending on the local practice.

What this means is that money is going out of circulation. This can be for many reasons including bad debts, people hoarding money outside of the banking system or money being withdrawn from banks and being taken overseas. In general it indicates growing financial problems and a lack of confidence in the economy. The problems flagged up by those leading indicators now seem to have arrived. And when money dries up, the economies it lubricates grind to a halt.

I suspect this problem is only going to get worse in the short term - particularly in Greece and Spain. I think we might see another spectacular intervention in the markets in the next few weeks - maybe in the form of another blast of LTRO or a co-ordinated recapitalisation of the banks. This will not solve the problem, but it will kick the tin can down the road for another few months.

In the meantime, Germany and the other richer European nations are going to have to make up their mind whether to pour money into saving the euro or see it go bust. Either will be eye-wateringly expensive.

Wordsmith

And throwing petrol on the flames.

Greek Leftist Leader Throws Down Gauntlet on Debt - WSJ.com

ATHENS—The head of Greece's radical left party says there is little chance Europe will cut off funding to the country and if it does, Greece will repudiate its debts, throwing down a gauntlet that could increase tensions between Greece's recalcitrant politicians and frustrated European creditors.

A financial collapse in Greece would drag down the rest of the euro zone, says Alexis Tsipras, the 37-year-old head of the Coalition of the Radical Left, known as Syriza, and potentially the country's next prime minister. Instead, he says, Europe must consider a more growth-oriented policy to arrest Greece's spiraling recession and address what he calls a growing "humanitarian crisis" facing the country.

"Our first choice is to convince our European partners that, in their own interest, financing must not be stopped," Mr. Tsipras said in an interview with The Wall Street Journal. "If we can't convince them—because we don't have the intention to take unilateral action—but if they proceed with unilateral action on their side, in other words they cut off our funding, then we will be forced to stop paying our creditors, to go to a suspension in payments to our creditors."

Mr. Tsipras says that, if push comes to shove, Greece can manage on its own. By not paying its debts, the country will have enough cash to pay its workers and retirees, he says. He also proposes cuts in defense spending, cracking down on waste and corruption, and tackling widespread tax evasion by the rich.

"Whatever we do, things will be difficult. But it will also be difficult at the same time for all of Europe because the euro will collapse" if Greece's funding is cut off, says Mr. Tsipras. He adds that both sides should step back "before we reach that point" and find a "European solution."

Looking at the nervousness about the Spanish economy at the moment, its going to take a brave Merkel to call Tsipras's bluff.

And if he does totally repudiate Greek debts, take an axe to defence spending (no Leopard tanks) and really clean out the Aegean stables of corruption and tax evasion, he might just be able to balance the internal Greek books. (Although a 50% fall in the value of the drachma and the resulting high inflation are not going to be fun).

Syriza - the party he leads - is doing well enough in the polls to win at present.

Wordsmith

Funny this "structurally flawed" idea. Many big political enterprises are "structurally flawed" and some of the most successful resemble rare forms of madness.

The chattering classes were probably deeply worried about the economic diversity of the clans of Sumer seven millennia ago and they were probably right to be worried. If there is a lesson in history its that mankind proceeds by fucking up, we'd all still be in grass huts if it wasn't for the human tendency to push the envelope of the big dumb idea.

The US certainly was cracked, so poorly conceived by its pampered planter founders turning coat from Englishman to American in a few short years that it implodes a lifetimes breadth later and half of it is still sulking about Gettysburg and Civil Rights. In the meantime a lot of folk got on with making a mostly honest buck while constantly pissing and whining about the country going to hell in a handbasket.

That's not to say the EU won't go the way of the way of the Polish–Lithuanian Commonwealth but it might be worth considering it has, a perplexed US mentor that observes its sulky adolescent charge rather indulgently and only pint sized disadvantaged enemies in China and Russia. In the scale of things the EU's troubles look at the moment like a bunch of spoilt rich brats bickering over who had a starter and who takes the cheque this time, that of course can end messily there being no adults present.

As we say in Ireland: get a grip.

"The Prime Minister David Cameron talks about fiscal sanity but is borrowing like a drunken Keynesian."

"http://www.telegraph.co.uk/finance/financialcrisis/9272356/Turn-off-your-iPad-David-Cameron-and-start-dealing-with-Britains-debt.html"

By the time the Euroscroats have shafted their economy Cammeron will have well and truly Flucked UK's.

john

Originally Posted by Alsacien

You may have noticed, my persona in this forum is peculiar to this forum - but it is surprising to me how often I do get interrogated on a topic which I do find rather dull......

There, much more appropriate.

No charge, I'll get my reward when I meet Allah (May he rest in peace in the beautiful gardens of Eden surrounded by virgins, chickens, goats, donkeys and camels).

Oh and little boys and girls.

As we say in Ireland. Cash in hand.