Tag Archives | Eurozone

A flap of a butterfly’s wings to freeze the UK economy

The world’s media are increasingly aware that economic growth is being impacted by major demographic change.  Thus the leading UK weekly magazine, the New Statesman, has published this article by the blog last week. It looks at the challenges facing the UK in the next few months.  These are, of course, the same challenges that face all the major economies. “The [UK […]

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Global interest rates surge as Newton’s 3rd Law continues to operate

Newton’s 3rd Law of Motion states, “To every action there is always an equal and opposite reaction“.  Thus the forces of two bodies on each other are always equal and are directed in opposite directions. Policymakers forgot this Law in their response to the 2008 financial Crisis.  Instead they believed that cutting short-term interest rates in the major economies to zero, […]

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Don’t look down

Governments and central banks never spot recessions till it is too late.  Thus after the 2008 Crisis, for example, it was recognised that only a few independent experts such as the blog had forewarned of the danger. Today’s situation seems potentially to be as serious as in 2008.  Therefore as promised yesterday, the blog has decided to present its own analysis of the […]

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Italy’s Grillo calls for referendum on leaving the euro

My words fly up, my thoughts remain below: Words without thoughts never to heaven go These lines from Shakespeare’s most famous play, Hamlet, aptly describe the critical issue in the Eurozone crisis. This issue is very simple, as the blog discussed last July. Monetary union and a common eurozone currency cannot exist without political and […]

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Eurozone politicians have built a Tower of Babel

Last week saw the 20th EU ‘Crisis Summit’. Like the previous 19, it achieved little. Yet everyone at the meeting knew what had to be agreed: • A banking union which operates across national borders • The issuing of joint Eurozone bonds, guaranteed by all euro members • Adoption of a Federal budget and economic […]

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Complacency rises as markets fall

Financial markets are telling us something important about the outlook. Profitable themes over the past month have been expectations of weakness in crude oil prices, in China’s economy, and in the financial sector; plus positive views on long-dated government bonds in the JUUGS (Japan, UK, US, Germany, Switzerland). 90% of market players probably dismiss most, […]

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The Eurozone train crash heads for the buffers

For 25 years, Western policymakers coasted to electoral success on the back of an economic Supercycle. The BabyBoomers’ arrival in the Wealth Creator 25 – 54 age group meant there was just 16 months of recession between 1982-2007. Politics and policy thus hugged the middle ground. Political debate became based on focus groups, rather than […]

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Eurozone sees €789bn capital flight to the North

The blog’s many friends in the petchem industry in S Europe have become more frequent visitors to London in recent months. Often, they are in the process of buying flats or houses. As one long-standing friend commented, “would you want to leave your money in Spain today?” They are not alone. A detailed analysis by […]

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Leaving the Eurozone would be very difficult

Last December, the blog raised the question of how a country like Greece could actually leave the Eurozone. Many people believe this is inevitable. But how would the practical issues be solved? Now Wolfgang Münchau has taken up the challenge in the Financial Times. His research suggests there are only two possible exit routes: • […]

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Greek default just ‘end of the beginning’ in debt crisis

Yesterday saw the world’s largest ever sovereign debt default, when Greece finally carried through a €206bn ($272bn) restructuring. Yet only the eurozone leaders believe this will solve Greece’s problems and those of the other PIIGS (Portugal, Ireland, Italy and Spain). Greece is still left with a debt too large to be repaid. Its economy is […]

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