Liquidity is an immediate issue for the banking system, but the long term issue is solvency caused by the imbalances that have grown, and continue to grow, within the European economy. Deflationary policies that have been pushed onto the periphery are making that worse….
via Europe solves the wrong problem – macrobusiness.com.au | macrobusiness.com.au.
In managing the economy in any country, people and their government have to choose between four distinctly different available paths. Let us define them clearly and in simple terms:
Model A:
Maximize production & export; while maximizing consumption & imports. The results are: fast development; environmental degradation; materialistic corporatism.
Model B:
Maximize production & export; while minimizing consumption & imports. The results are: wealth accumulation; social disparities; and international hostility.
Model C:
Low production & export; while maximizing consumption & imports. The results are: sovereign debts; loss of independence; dysfunctional state.
Model D:
Low production & export; while minimizing consumption & imports. The results are: slow development; low qualities; weak defenses.
Only these models are demonstrated in all countries and the citizens can plainly know which way their country is going to, and argue with their governments the wisdom of their path.
So now what do people want? Do they want to be crazy; greedy; irresponsible; or vulnerable?
If people look deep inside their souls the answer will be definitely obvious.
Model-B: Germany (& China with more social disparities) Mercantilistic Model.
Model-C: Spain, with max-production of “brick”, tons of houses. (example of a pigs-state)
Eurozone=Gold-patron (Buba-patron)
Mix of: Buba-patron with Model-B-Germany with Model-C-Pigs => War!!
Modern war: monetary & fiscal negotiation.
War reparations: Repay yours debt: with my bail-out, ie bail-out to my banks with public debt, socializing losses.
who pays: Tax-Payers of other countries.
In short, a time bomb.
At the edge of the cliff, loosened the creditor.
Far from the precipice, the creditor tightened.
The pigs-states are the “buffer” of the German economic cycle.
History repeats itself, Germany will never learn.
Good luck, we will need.
bye
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Model-D: North.Korea, Irán. (only has atomic defenses) ….
These wars, are still in gestation, in traditional form, lots of blood in the future, not far away.
Germany is a host and an agent only; but the main powers are in the mega banks who are also most of the financiers.
North Korea is a Chinese state so it like China and India; and Iran with oil is Model B like China but at smaller scale.