Skip to comments.The Collapse Of The Euro: Insights By Joseph Stiglitz And Hugh Hendry - Two Part BBC Miniseries
Posted on 02/11/2010 8:41:14 PM PST by TigerLikesRooster
The Collapse Of The Euro: Insights By Joseph Stiglitz And Hugh Hendry - Two Part BBC Miniseries
Courtesy of Tyler Durden
Must watch two part BBC series recapping recent events from the perspective of the other side of the pond, including some much needed on location reporting (as opposed to persistent theorizing of what may happen). The first part provides the background on the currency crisis and how hedge funds are profiting from shorting the euro. As a commentator points out, the dilemma is moral hazard or austerity measures. And while countries certainly prefer the former, sovereign bond and currency vigilantes are making the second the only viable outcome.
The sovereign debt crisis has exposed a flaw in the design of the Eurozone. To make a currency strong you dont just need bank notes and a central bank, you need central authority and political will. Some in the markets, are beginning to see the euro not as a permanent currency for all time, but as temporary and fragile, as, well, Lehman Brothers.
The second part is a great exchange between Nobelist Stiglitz and the ever outspoken, and conversation dominating, Hugh Hendry.
Hello, can I tell you about the real world. Greece is paying 7% on 2 year money. Greece has debt which is 107% of its GDP. It never used the good time to save money. Therefore it finds itself compromised in the difficult economic environment of today cause it spent all the money in the prosperity.
” It never used the good time to save money. Therefore it finds itself compromised in the difficult economic environment of today cause it spent all the money in the prosperity.”
That sounds like.... us.
This could really screw Soros! :)
Stiglitz should return to the IPCC where he was around like-minded IDIOTS.
Nobel Putz Stiglitz couldn’t convince a CUNY audience when Hernando de Soto handed him his lunch (Naomi Klein was just along for...eye-candy-rots-your-brain or mental viagara for the flaccid Stiglitz) in that forum.
HOORAY Hugh Hendry!
He certainly can't be related to Hugo.
I dunno. They both deserve a red star on their forehead.
Sanders, the austrian economist at George Mason, predicted the collapse of the Euro back in 1999 or 2000. He called it a Wild card event where one or more Euro countries would behave so badly that the Euro would collapse. He made a US analogy and predicted that CA and other Democratic states would fiscally misbehave and destroy the dollar.
I thought he was full of ot when I heard him speak in 1999. Roubini also spoke and said Sanders was fuLl of it too. Roubini and I were both wrong.
Sanders also predicted the off balance sheet assets would wreck the US economy. Search for Anthony Sanders and “Banks: the Next Enron” and articles in CFO Magazine. I am writing this guy to see if he is interested in commenting on Freep! It would be nice to have a real Austrian, free market economist on here.
For all those giddy about the collapse of the Euro... it will cause catastrophic effects on our market - so you should not be so giddy. Actually, with all the problems in Europe AND the problems with our own States pending bankruptcy (California, New Jersey, New York, etc.), you should not be jumping on any bandwagons. We are still facing major problems regardless of what the market is doing now.
I expect major drops in the world economy within the next few months which will make today’s market look like a bull. Hang on, the worst is not over.
Who is giddy about currency collapse? The only good thing from this condition is put the Neo-Keynesian failure of Big Gov in its rightful place. Oh and it might demolish the reps of fools like Stiglitz, Krugman, etc!
Tyler Durden @ ZeroHedge has written a terrific summary piece I have yet read and ends with this:
‘Today we finally saw a crack in the 30 Year Auction. And as the crack belongs to an ever more brittle wall holding back trillions in debt just begging to be revalued to fair value, and to an unmanipulated supply and demand curve, more and more fissures in the smooth and fake facade of sovereign debt will soon appear, only this time not somewhere out of sight and out of mind like Greece, but in our own back yard. At that point the financial oligarchy will very much wish the Methadone had been administered sooner (roughly about March 2009, when we first suggested it). It will however be far too late, and the decades of self delusion will finally end.’
Yep...and it is headed our way. The world economy is in big trouble and the fiddlers are doing their thing...
~~Ludwig Von Mises
They are as vulnerable as U.S. So is China. We have sad spectacle in all three regions where so-called experts, politicians, and many ordinary people are in denial. Euros think they are less vulnerable and avoid the wort effect. China think they can deflect the crisis and prosper. U.S. thinks that they can solve this problem by printing money indefinitely.
The resolution of this crisis can only start when all three finally give up their denial. Then there will be major political fallouts, causing social unrest and international conflict.
The crisis is still at opening stage.
Hey, not to worry - our government will save us (okay enough of that stupid gibberish).
Yes, unfortunately, the Euro will probably go first - heavy decline, followed by the US dollar going up (some safe haven I’d say - ha). Of course that means that our exports will be too expensive which will only increase our trade deficit. China (which already has monetary problems) will have to finally increase the value of their currency. That in turn will cause higher prices of many goods that the US buys, which will cause high inflation...etc... It just goes downhill from there...
In short, world chaos...
I’m not giddy about it. I wish everybody would behave responsibly so we can all prosper together... Unfortunately, we’ve screwed it all up. I think this is the financial equivalent of WWI. We going to see the wealth of generations wiped out.
“The dilemma is moral hazard or austerity measures.” There is a saying, “A problem has a solution; a dilemma has two horns.” In this case, what everybody will eventually get stuck with is austerity.
Yes, you’re right... Really only saying that the decline of the Euro has major effects on the dollar and our market. Just don’t want anyone to get the idea that the collapse of the Euro is a good thing.
Every single forex trader who is maxxed out his margin short the Euro.......like me.
Is that a german mg-42 he is holding?