|05-27-2010, 07:18 AM||#1|
Join Date: Sep 2009
Location: Denver, CO
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The European Economy
according to one aussie game show:
Last edited by kennyc; 05-27-2010 at 10:45 AM.
|05-27-2010, 10:49 AM||#6|
Join Date: Jan 2010
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|06-04-2010, 06:44 PM||#7|
Man Who Stares at Books
Join Date: Mar 2010
Location: 50th State, USA. Also, PA, NY, CA, and elsewhere.
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In the lending business, cash flow is more important than cash. Nothing improves cash flow faster than a low interest rate.
A blog by Michael Pettis discusses possible solutions to the Euro crisis, and within the chain of replies, someone suggests that China should lend some of the debtor nations around 100 billion USD.
The rationale for this is pretty obvious. China exports a number of products to the European nations. Some examples are solar and wind energy generating devices. Since these are productive purchases, their financing should be viewed differently than frivolous purchases such as beef and pork.
On the home front, it is apparent that the nations in Europe with a surplus current account balance have the wherewithal to fund those with a negative balance. Thus, Germany, with $109.7 MM and Norway, with $58.6 MM could easily float a $100 MM low interest loan to their poorer neighbors. (Figures are based on 2009 estimates by the CIA). And this gets to the ultimate solution, lowering interest rates on the existing debt, to the same discount rate that the Federal Reserve has managed for US banks. I facetiously refer to this as a subprime loan to sovereign nations. Whether this is done by the IMF or some other agency is up to the Europeans (and US) to figure out.
|06-05-2010, 11:24 AM||#8|
Join Date: Feb 2010
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|06-05-2010, 04:09 PM||#10|
Join Date: Feb 2008
Device: Sony PRS-650 (PRS+ alpha - thanks Kartu!)
What puzzles me is this...
Why on earth was nobody hitting alarms when the Greeks were retiring en masse in their early 50s, while the Germans worked on and paid themselves less. Surely some country in the single currency must have noticed?
It's similar to sharing a flat with a group of people, and one of the other people borrowing the rent money from you every month, refusing to work, and spending any money they do get as quickly as possible. Surely you'd notice and say something before it got this bad?
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