Skip to comments.EU: IMF still won't admit truth about the euro
Posted on 04/16/2012 5:05:53 PM PDT by bruinbirdman
It is often said that travel broadens the mind. Not so for finance ministers gathering in Washington DC this week for the spring meeting of the International Monetary Fund and G20. For them, the agenda will seem wearily familiar.
Like a bad penny, the eurozone debt crisis keeps returning, seemingly deliberately to coincide with these international summits. Spain's rapidly deteriorating economic and financial position provides the flash point du jour.
With yields on Spanish government debt again above 6pc, and a couple of crucial bond auctions looming, matters are once more coming to a head. Crushed by repeated austerity programmes, the big southern European economies are sinking back into recession, raising new doubts about their ability to meet fiscal targets.
Discussion will therefore once again focus on the creation of a firewall big enough to provide for more, and even bigger, eurozone bailouts, including Spain and possibly Italy, too. This is proving both difficult to achieve, and misses the point, for it presupposes that the crisis is at heart just a confidence issue that can be solved simply by creating a backstop large enough to convince markets they cannot break the euro.
In fact, the underlying cause of the Europe's travails is much more fundamental it is the euro itself, which is ripping the Continent apart in an uncorrected balance of payments and consequent debt crisis. European leaders have yet properly to face up to this inconvenient truth. Their project won't and cannot work in its present guise. It therefore seems most unlikely that the latest gathering of international leaders will provide the "Washington moment" Christine Lagarde, the IMF managing director, hopes for a collective coming together of minds to "seize the moment"
(Excerpt) Read more at telegraph.co.uk ...
The euro was a bad idea from the get go, and it’s going to get worse before it gets better.
The Bank of Spain confirmed the country's biggest institutions borrowed 316.3bn (£260.9bn) from the ECB in March, almost twice the 169.8bn in February
How is a one trillion Euro "backstop" going fix a country that borrows 160 to 316 BILLION EUROS A MONTH to stay afloat? Add Italy and Greece into the mix. This is abject insanity. It is mathematically impossible to keep this up with no hope of balanced budgets in these countries.
All very true.
I wonder who is going to, or who is, making money off of the "crises"? That's the only reason I can see for for this Euro scam is still in place. Banks maybe? Speculators?
But I'm thinking at the root of the matter is the fact that these people have absolutely no idea what to do, so they have convinced themselves that if they just hang on, eventually it will just fix itself.
Look at the numbers for the US. As bad or worse. But we have Tax Cheat Timmy, Helicopter Ben and the magic money machine. We have budget numbers that could conceivably cause a complete collapse of our society if the right event occurs at the right time. Yet we have a Senate full of delusional men with yellow stains on the fronts of their pants arguing about a few million here and a few million there. Arguing about free contraceptives for people that, in reality, should probably just be spayed and neutered.
I remember people on acid in college that could have conversed more rationally about our budget.
It's the political dynamic alone that keeps Germany in.
They could issue the Bund tomorrow at 2% interest and would have to police the line of world capital anxious to get in the door. This even if they repudiated all losses involved in the Euro.
I can see no reason for Germany to stay in this arrangement other than economic conquest.