Economy for nooblets : the Euro debt crisis

Understanding the current debt crisis :

The task seems impossible but I'm still gonna try put it down using two tricks, empathy and logic.

First, we got to put ourselves in the shoes of a trader.

Objectives, targets, objectives.

The day of the trader most probably begins with a staff meeting where the Boss will remind you of your targets for the day. Let's be conservative and say the Boss is asking you for a +20%
There you are, at your floor, looking for ways to make cash, usual stuff, the Boss, the economy, everyone wants more, that's the way it works.
If your work is to lend money to states, that's where it gets funky. You're gonna look for opportunities, look for weak spots, gauge the risks... So far all good.
On this market, states come to meet money lenders and make deals. Basically.

So, today, we got this X country coming to the market and asking offers for a 100 billion loan. There is the opportunity we were waiting for. So we look at facts, turn problems into opportunities i.e. cash, and since our Boss is still asking for more, then what do we do, we ask for more.

More ?

But if we go back a little, globalisation, delocalisation, factories closing... that means less. Less production, less salaries, less consumption, that has to appear somewhere, doesnt it ? But less Gross Domestic Product (GDP) is called a recession, and WE CAN'T HAVE THAT.

So, the only way forward is more, just like the Boss says. Then, like any good trader, you're gonna try squeeze more of that country asking for money. Of course, it helps if your fellow bankers agree with your way of doing things, they would be stupid not to.

Wait, what just happened ?

But the game is a little different now that Europe got its own Fed. All we did since the beginning of the crisis is put up in place a system that will lend cash to states when the markets are asking for too much.

Too much ?

There is no such thing as too much ! There is only what the Boss says, and the Boss wants more.
Problem is that now, IMF, ECB stepped in and took away my toys !
I was just about to get a nice deal from that X country and it all vanished under my nose !
Damn them, and the Boss still wants more. So what do i do ? I wait for the next country to come ask for money and I'll try again with them.

And that is my friend, why that so called crisis "bounces" from country to country.

And probably this is why we shouldnt doubt anymore our countries are ruled by Bankers interests. Otherwise, a truly organized and civil society would be enforcing laws to shut down (at least temporarily) all these stock exchange floors.

good OP,
thank you

Once globalisation began, corporations made huge profits through the use of slave labour, keeping wages down but continue to sell their products at high prices even when they 'globalised' - another word for international slavery.

As a result, flushed rich with such funds, they gambled further in the casinoes called stock markets, along with banksters whom had their funds parked there. With its HUGE funds, as most of the corporation's directors are actually the same directors in many corporations. it could control the movement of markets easily in times of peace, fooling the many individual middle class investors with their pathetic lots that formed the mass.

Directing stock market Casinos are often better than to suffer the stress and strain of manufacturing.

But in times of turmoil when truths of flaws in the financial structures are exposed, the critical mass of individual stock buyers flees, and the market collapses. Worse if that mass keep their money under their bed instead of banks. Big players then to will hide their money as well as the going seems risky and bad.

Europe bankers and those rich elites whom formed the lenders of small European states had hidden their money and refused to lend, but are instead calling in their loans, even if it means the people suffer. The saddest part is that the people are the ones that do not have the money, for very often, it had been circulated back into banks or corporations in exchange for goods or services.

So how are the europeans going to pay if they have no money, and worse, dependent on the state to provide the social and infrastructure to keep their economy going, to earn revenue? By cutting spending, the lenders are in effect foreclosing on the borrowers.

It happened by bankers back in the 18th century, whom jews were mostly the lenders, whom foreclosed on farms ruthlessly. And that hatred grew by many europeans starved, exploited in full by Hitler in the 40s as an excuse to murder millions of INNOCENT jews that had nothing to do with banking.

History will repeat itself, but instead of jews, it will be any rich men of ANY nationality and family found marked for extermination by those whom are forced into starvation by the debt crisis.

To avert such fate and repeating history, the debts of European states MUST BE WRITTEN OFF! Investors know their risks, and no one pointed a gun at their head to loan to others. Like a casino, once bets are lost, it stay lost. Fair and square, rule of the dice.

Let these smaller states survive with their small GDP earned to distribute and share wealth, NOT robbed of it. They are not rich resource states or have the critical mass of human capital for future potential returns unlike other big resource rich nations.

Let the banks fall. The countries will still survive, once debt is written off, and are allowed to focus and grow their GDP with no worries.

How does a country 'earn' revenue?

It begins with one man in a civilised community, who offer goods he made or a service he provides to another man within his community or other communities, in return for barter goods, and in our modern world - money. Once he had the money, he pays a 'tithe' or tax to the leader of his community, to protect him and his family, his wealth and continuance of life from the barbarity of other men or nature.

With this tax from not just one man, but every men in his community, forming a pool of money, he uses it for social expenditure in educating the children, hiring of doctors to keep its citizens in good health, create roads and ports to facillitate trade and an armed force to protect his tribe into the future.

As the population grow, so too does the pool of taxes and expenditures. And if it has mineral or agricultural resources, it can be used to grow the community or the excess of it to sell to other tribes to earn more revenue.

Financially strapped small european nations are back at this stage. Even though there may no longer be loans, the nation still exists, with human capital and whatever resources they have - shipping, tourism, trade, etc that will still generate revenue for the nation.

It may only be enough for themselves in the beginning and most certainly not enough to pay off debts, but over time, as post war germany had shown (59yrs) and paid their debts when charitably acted up over a long time, they too can grow strong and prosperous if given the chance to do so ( post war Japan), so long as the will and determination is there, rather than wit low morale to focus every single penny of their earnings today to pay off debts.

Well, the way our economies have transphormed, everytime a company closes its doors, it has to be counter-balanced somewhere if you don't want the GDP to go down.
And sadly, today, in modern economies, it often means increasing the financial revenue.

Another issue is where does your money go ?
- One part goes to the state in the form of taxes.
- One part stays in the bank for various reasons.
- The rest goes in the economy which will also lead to banks and state hands.

The way things are evolving is that banks are putting their hands on a larger part of what usually goes in the state.
It really is a battle of power between the states and the banks.
The only problem is that our states gave up their minting rights long ago and in doing so, lost any kind of serious leverage they had.

It's a losing battle.

reply to post by Chrysalis

It really is a battle of power between the states and the banks.
The only problem is that our states gave up their minting rights long ago and in doing so, lost any kind of serious leverage they had.

What happened is the bankers whispered in the ear of the politicians and convinced them to hijack the state so instead of the state working for the people it now works for the bankers.

The only hope is for the people of the state to realize the state was hi-jacked and take their state back and imprison the thieves.

At least in the USA a contract with no consideration is null and void. All banking contracts where there was no consideration (Zero actual reserve backing a loan) are fraud and not enforcable.

It has been proved in US court: First National Bank of Montgomery vs. Daly (1969)

Tossing out the fed in the USA has been tried before but Congress did not stand behind the wishes of the people or the constitution. It is time to hold their feet to the fire.

State Recall laws at the federal level might just put a bit of backbone into or politicians. www.recalltherogues.org...