We’ve warned for some time that the eurozone’s sure-to-fail muddle-through approach to its structural challenges was rattling investor confidence. Worse, its insistence on wearing an austerity hairshirt was not only committing Europe to deflation, but had high odds of sucking the global economy down along with it. Given how fragile the recovery is in advanced economies, and the magnitude of the debt overhang in many nations, a downturn could easily morph into a deflationary downspiral, potentially a full blown depression.
Let’s recap of some of the troubling sightings. First is that Spanish banks in particular, along with other Eurobanks, have been on the ECB drip feed for some time. Recall that the Spanish banking authorities pushed for the release of stress information on their banks precisely because they hoped that it would reassure the market and improve access to private funding. However, in a rather remarkable bureaucratic dedication to deadlines over common sense, the ECB is terminating a €442 billion one year liquidity facility on July 1 (FT Alphaville has been covering this intensively). An unknown but believed-to-be-large portion of the facility was used to fund carry trades within the EU, particularly that of Spanish and Greece sovereign debt (until spread widening late last year started burning fingers). To the extent it has been used to finance bank operations, the theory has been that banks would avail themselves of shorter-term ECB facilities, particularly its three month program.
Wellie, so that should not prove bothersome, right? Theory does not seem to have translated very well into practice. Europe opened badly on Tuesday, and the flight to safety continued in the US, with yields on ten-year Treasuries falling below 3%. There is also evidence of liquidity-hoarding, with an ECB sterilization operation going badly.The lousy US consumer confidence figures are the public face of considerable nervousness about the business outlook. For instance, despite the brave talk of recovery, corporate bond issues have fallen as companies increase cash levels rather than expand operations.
The ECB has retreated a tad in the face of the vote of no confidence from the markets, and will offer unlimited three month loans today, in advance of the termination of its one-year facility. More detail from the Financial Times:
Fears that the European Central Bank was scaling back emergency support to eurozone banks too soon sparked sharp falls in financial markets on Tuesday, with the euro tumbling to an eight-and-a-half year low against the Japanese yen….
“We will make sure that there are no problems and everything goes OK,” Christian Noyer, France’s central bank governor, told Europe 1 radio. But he warned that “there are some banks that are in a less good situation that might eventually suffer”.
Elena Salgado, Spanish finance minister, appealed to the central bank to take into account the liquidity needs of the Spanish banking system. She said on Spanish radio: “The ECB says it doesn’t like governments telling it what to do. I simply say I hope that on this occasion, as in others, the ECB will be aware of the needs of the Spanish financial system.”
Yves here. These visible signs of stress between national bank regulators and the ECB is not confidence-inducing, to say the least.
Ambrose Evans Pritchard pointed to other troubling indicators:
Triple tremors from the banking crisis in Spain, crumbling confidence in the US, and a setback in China’s leading economic indicator all combined with a vengeance on Tuesday. “The market in risky assets has capitulated today amid fears that the global recovery is petering out,” said Gavan Nolan, head of credit at Markit…
China’s Shanghai composite index of equities fell 4pc on Tuesday and is now 55pc below its peak in late 2008. The authorities have been tightening this year to slow inflation and curb property speculation as home prices in Shanghai and Beijing reach 13 times incomes, but it is unclear whether they can engineer a soft-landing in an economy where state-owned banks have built up huge hidden debts…
“Foreign capital flight is under way. This can only make matters worse given the climate of insecurity and the country’s lack of credibility,” said Borja Duran from Wealth Solutions in Madrid.
Spreads on Greek debt have jumped 350 basis points since the EU announced its plan in early May. Portuguese and Spanish yields have both jumped sharply despite direct action by the European Central Bank to force down yields. Private buyers are clearly dumping their holdings onto the ECB as fast they can.
Mr [Hans] Redeker [curency chief at BNP Paribas] said Japanese life insurers and institutional investors are slashing their estimated $700bn holdings of European debt. The funds are being recycled into yen, which reached ¥107 against the euro yesterday, the strongest in nine years.
Reader Swedish Lex early on had pointed to the importance of contagion spreading to Italy, and that is under way, per Evans-Pritchard:
The latest twist is a rise in credit default swaps on Italian debt, which jumped 16 basis points to 203 yesterday. An auction of Italian bonds this week went badly, with low bid-to-cover ratios….
Italy has been largely immune to Europe’s bond crisis until now, thanks to high savings…
Italy’s public debt is the third largest in the world after the US and Japan. Everybody knows that if the crisis ever reaches Rome, the game is up for monetary union.
45 comments
Comments are closed.
Italians strike over Berlusconi’s austerity budget
http://www.reuters.com/article/idUSLDE65O0MR20100625
“Representatives of some of Italy’s 20 regions have given the government an ultimatum: change the budget or take back responsibility for local services like road maintenance.
Mayors from around Italy placed hangman’s nooses around their necks at a Rome demonstration this week, saying the cuts would deny assistance to children, the elderly and disabled.”
Europe’s Strikers Make G-20 Protesters Look Like Sissies
http://blogs.forbes.com/greatspeculations/2010/06/25/europes-mobs-of-strikers-make-g-20-protesters-look-like-sissies/
If the French are angry then the Italians are livid. For over a year, Silvio Berlusconi has been claiming that the Italian economy was not as badly affected by the global crisis as others (even though GDP shrank by 3.0%in 2009, a bigger contraction than in France, Spain and Britain).
The government had persuaded the financial markets that there is no problem with Italy’s public accounts, despite having a primary budget deficit (i.e., before interest payments) and the eurozone’s biggest public debt. Debt to GDP is booked at 115.8% in Italy compared to 66% in Germany. This morning, Italian two-year government debt yields 145 basis points over German two-year paper. Just a week ago it was 117 basis points. In March the spread was only 29!.
I think in Rome, there is a saying, ‘a bubble is not built in one day.’
Maybe the old adage about all roads leading to Rome will come true again in this crisis. Italy can get the Catholic church to bail them out, right? Or throw a little holy water on the debt and it will vanish.
When we finally get to crash land, what will it look like and what can we do about it? Will it really come down to which side the military is on?
Italy is in denial mode. I was there just 2 weeks ago, and I was repeatedly told that Italians weren’t feeling any crisis.
“Wow, they must have been in crisis for 20 years, then”, I thought. And what I saw, in terms of infrastructure and economic activity, seemed to back it. No new shops. No new restaurants. No new roads. No new housing.
Eveything seemed to have been built or last renewed over 20 years ago. And I was supposedly looking at “rich” Florence and Rome; I can’t imagine what the South looks like.
If, at least, Italians had a balanced economy or a healthy balance sheet… but public debt is over twice the Spanish one, and total debt (incl. private debt) is similar to other European countries.
I liked many things in Italy, and I can only recommend a visit there. But I came back to Spain with a very clear vision: if Spain is bankrupt, Italy must be twice so.
Totally wrong, my dear. You can’t infer the level of investments in Italy just visiting the two most tourism-oriented cities. OF COURSE you won’t see renovations of ancient buildings going on, and i can assure you that in the commerce there has been a big churning in the last twenty years… If you want to see where the money flows, go in the industrial regions like Lombardia, Veneto, Emilia.
Sure, we’ve felt the hit, but there is a very strong feeling between the entrepreneurial base that only investing more gets you afloat. And they will, it’s a genetic imperative.
Lucio,
I am not prejudiced against Italy. It’s a beautiful country, with very nice people.
But I was really surprised at the low level of investment and innovation in everything I saw. Rome’s transport possibilities are very limited, whether it’s underground, roads, etc. I am sure you can find a lot of excuses for it, but it obviously points to a lack of public investment. This is surprising, since public debt is so high.
In all Rome (including outskirts), I could only see a single crane. In Florence, I counted only three. To put things in perspective, no matter where you are in Spain, you can find 10 cranes in a 5-minute walk. I mean right now, despite the housing bust!
Italian housing is not renovated. Entrance doors have been painted last 20 years ago. Even at restaurants. Some of the oldest buildings could have been taken from the Cuban capital, Havana.
Florence seemed better organized, with better traffic, public transport, etc. But you couldn’t find new hotels. Nothing was being built. And investments in tourism technology were non-existing.
You could find signs of backwardness at every corner. At every shop. At every ad. At every museum. Rather smallish things, details unnoticed by the untrained eye; but they were very significant to me.
Working children (not many, but it’s meaningful). Ads mainly about furniture (instead of cars or electronic appliances). Many very old (unbeautiful) trucks, like the ones you could last see 15 years ago in Spain. Uncompetitive small shops everywhere (pointing to lack of competition, laws limiting department stores, etc.). Tourism hotspots (museums, historical sites, etc.) with absolutely no new technologies (interactive presentations, etc.).
You could say Italy (at least the part I saw) was just like it was 20 years ago. It’s as if nothing had happened in the meantime.
Well, Italy has that industrialized north, a real tourist industry, as well as somewhat successful agriculture. Not sure Spain can claim any of that.Spain, like Greece, was a costly experiment that is now coming to an end.
Vinny
Spain has both more tourist arrivals and larger tourist receipts than much more populated Italy. On manufacturing, almost every European car manufacturer has a factory in Spain. That’s why Spain produces 4 times more cars per capita than Italy.
Maybe you are right about agriculture and the factories for cheap products (kettles and that) at Brescia. They are still thriving. Just like 20 years ago. That’s the problem.
“Everybody knows that if the crisis ever reaches Rome, the game is up for monetary union.”
Um, the original European monetary union wasn’t going to have Italy in it. The Italians have the euro only because the Italians managed to cheat their way in. So “everybody knows” is, as usual for AEP, a wild exaggeration.
The European monetary union, the one that is in place now is mandatory for every EU member except the two countries that negotiated an exception, aka UK and Denmark.
Sweden fulfills all the criteria but is using a loophole to not fulfill the obligation in its EU treaty, the last step in the process is to participate in ERM before joining the Euro, that is by some reason voluntarily. The ECB is frequently calling for Sweden to fulfill its obligation according to the treaty and remind that there is nothing voluntariness about joining the Euro, it’s an mandatory requirement in the EU treaty.
We have had one referendum on the Euro participation, a charade then we have signed a mandatory with EU. One of many charades and outright lies Swedish politicians perpetrates to the people about what the EU membership imply.
The consequences of the Euro No in the referendum would have been a renegotiation of the treaty or leave EU. But of course nothing of assort is ever mentioned.
Funny you should mention the Swedish aspect of the EMU. A decade ago, or so, I had a bit of an exchange with the editorial page of Svenska Dagbladet, the Swedish daily. I pointed out that Sweden had no excemption from the EMU (as the political leadership wanted us to believe).The editorialists, as I recall, however refused to believe that our dear Swedish leaders could be massaging the truth…….
well they can just leave the EU then, it’s no skin off their back
I am looking forward to the return of the Italian Lira…LOL
Vinny
Is it too much of an exaggeration to suggest that we have a command financial system?
“If a nation values anything more than freedom, it will lose its freedom; and the irony of it is that if it is comfort or money that it values more, it will lose that too.” — Somerset Maugham
Don’t underestimate Italian resiliance. I would be much more afraid of German and French banks condition…
The most of Public Italian Debt is in Italian hands, especially small consumers. That’s why Italy remained, in a certain respect, out of this mess.
The real problems of Italy are:
– idadequate Public services (in the South at African levels)
– too much Public expenditure ( even though able to rapidly swift in surplus as in 2000 if I well remember)
– a too much heavy burden of taxation
– a not so “free” private sector
That’s why Italy is suffering of low % Pil increase since 15 years (I would say that it is a perfect example for Rogoff-Reihnard thesis).
But, again, don’t underestimate the resiliance of Italians (…or the capability of Silvio Berlusconi to put his hands in the pockets of Italian citizens and…as last resort…its GOLD…).
azimut72 from Italy
“The most of Public Italian Debt is in Italian hands, especially small consumers.”
I don’t think this is meaningful. As Yves like to say, domestic investors tend to behave as international investors. If Italians start to understand that they are in a very dire condition and an exit from the euro/lira devaluation may happen in the next few years, they will massively put their money into German bonds.
I should know, that’s what’s been happening in Spain for the last two months…
Maybe you’re right, but till now this crisis teached us that External Debt is THE DANGEROUS ONE.
That’s why Spain is more in troubles than Italy even though its Public Finances are a lot more in better shape.
Italy and Japan (obviously within certain limits) are more able to face a long deflation crisis than Spain and, let me add, America.
Furthermore, you have to evaluate the nature of Italian private savings. It is very “capitalized” (please, look at International statistics).
For example, that means Italians are greatly home owners without mortgages….in a house market not so inflated as Spanish and American ones.
I don’t want to say Italy is safe. I just only want to mark something that is usually negleted in lots of macroeconomic analysis.
That said, even in Italy crisis has had a great impact.
I think what really matters is: 1) total debt as %GDP; funnily, this figure seems to be relatively uniform in EU countries; 2) what did you make with the money.
You go to Italy and you have to wonder where they put all that credit money. After all, Spain is like anew: brand new roads, airports, science parks, housing, etc. Of course, as we do know now, much of it was overbuilt and malinvested. But it’s still there. Who knows, maybe in 10 years’ time all that overbuilding doesn’t feel like malinvestment anymore.
But what does Italy have to show for that huge total debt? They’ve done nothing new (in terms of infrastructure, private companies’ expansion, education or research) in the last 20 years.
Please don’t take offence. Italy is a wonderful country. Stats say it’s as wealthy as Spain. But then you go there, and the whole of it (houses, physical infrastructure, shops, even some cultural traits) looks like Spain in the early 90s.
I couldn’t help but remember Paul Krugman’s words: “You should always bear in mind that when the question is which to believe — official economic statistics or your own lying eyes — the eyes have it.”
“Italy and Japan (obviously within certain limits) are more able to face a long deflation crisis than Spain and, let me add, America.”
I don’t understand how can you compare Italy and Spain with Japan and the US. Japan and the US have full control over their currencies, thus can print and devalue at will. Spain and Italy have absolutely no control over the Euro, and are largely held captive to the German export machine (the only beneficiary of this).
Vinny
Dear “first world champion” Vinny,
look at statistics about Export per nation and you will find other surprising “export machines”…even from Club Med!!
Moreover, look at statistics about TOTAL DEBT (Public + private) and you will have a total different view of the world.
ciao ;-))
azimut72
Proudly from African Union
Senior Manager of Mafia Inc.
azimut72,
What “first world”? I live in Greece 6 months of the year, and in Florida the rest. Both are third world places, if you ask me. :)
Vinny
I am not a financial genius but can someone explain why the US dollar feels safe? Sure the EU is in bad shape; however I fail to see how USA should be in any better shape.
The US has the world by the balls as its dollar is the Reserve Currency.
The US is a country, it has a central government, a constitution, a president, it has good infrastructure, and it has a huge military. The EU as a whole has none of that, yet all are necessary for stability and credibility.
Furthermore, the development discrepancies between the US states is not nearly as large as that between the various EU states, or even different regions of the same nation (i.e., southern vs northern Italy).
When I think of the EU, images of the Frankenstein monster come to mind: A patch-up job gone bad…
Vinny
“Italy has been largely immune to Europe’s bond crisis until now, thanks to high savings…”
Countries that have engaged in more lax fiscal policies like Greece and Italy have low level of private debt, especially household debt. Fits like a glow to MMT and basic aggregate national accounting principles.
total debt – Piigs + UK and Germany
You can have high savings and get ever deeper in debt. There is no contradiction. Spain has a 20% savings rate, but investment was 30% GDP, so we needed 10% GDP financing every boom year.
I think what really matters is: 1) total debt as %GDP; funnily, this figure seems to be relatively uniform in EU countries; 2) what did you make with the money.
You go to Italy and you have to wonder where they put all that credit money. After all, Spain is like anew: brand new roads, airports, science parks, housing, etc. Of course, as we do know now, much of it was overbuilt and malinvested. But it’s still there. Who knows, maybe in 10 years’ time all that overbuilding doesn’t feel like malinvestment anymore.
But what does Italy have to show for that huge total debt? They’ve done nothing new (in terms of infrastructure, private companies’ expansion, education or research) in the last 20 years.
Bingo! One man’s debt IS another man’s savings. A country’s net private debt can be zero, but if a hell of a lot of people owe a hell of a lot of money to a hell of a lot of other people, and look like they won’t be able to pay it back, watch out!
Thats the game…
Who gets paid and who doesn’t..
The ones to get paid are the ones who can transfer the debt to the sovereign before it collapses….
There is a word for what you are describing: corruption.
Spain, Greece, Italy, Portugal, and Ireland have basically stolen most of the foreign investment money. What you are describing as “overbuilt” can better be defined as “giving the highway construction contract to your cousin so you can both steal the EU funds”.
As far as Spain having brand new airports, I’m not sure about that. Maybe by Latin American or African standards. Case in point, Barcelona’s main airport certainly leaves a negative impression: small, dirty, worn out, disorganized, and certainly way out of the way. The airports on some of the smaller Greek islands or in Eastern Europe are in better shape than that.
Vinny
“Case in point, Barcelona’s main airport certainly leaves a negative impression: small, dirty, worn out, disorganized, and certainly way out of the way.”
Have you been there recently? A year ago, a new airport terminal was opened in Barcelona. 550.000 squared meters. It’s probably the largest terminal building in Europe (the other one being Madrid’s Terminal 4) and one of the 5 largest terminal buildings in the world.
But you couldn’t possibly know… it’s brand new! :)
Regarding nations stealing foreign money… have you ever heard about a nation whose investment banks and recommended policies made the world go broke (but its top bankers rich)?
I admit, I haven’t seen the new airport. I haven’t been to Barcelona for almost 2 years.
“Regarding nations stealing foreign money… have you ever heard about a nation whose investment banks and recommended policies made the world go broke (but its top bankers rich)?”
Um… would that be Germany?…LOL
Seriously, are you still buying into the idea that it is the US that caused this crisis? As I recall, 2 years ago, everybody recognized the impending crisis and lowered rates, while the EU raised rates and started pointing fingers. Now the EU got self-imposed austerity, like geez, it’s the end of the world as we know it…
My friend, I spend 6 months a year in the US and 6 months in Europe. While I like Europe, the sad part is that many here have started believing their own bullshit. A truly respectable bullshitter never believes his own BS…
Vinny
Vinny,
it wasn’t the Spaniards who created modern economics; it wasn’t Germans who created CDS and instruments allowing to bet on a country’s bankruptcy; it wasn’t Europe (well, al least not Continental Europe) which pushed for financial liberalization.
Financial deregulation, born in the USA, is not the only cause for the crisis, but it’s made a significant contribution.
66% of Spanish loans wouldn’t have been given to the housing sector, had we not believed the US and its market fundamentalistic doctrines. Before financial deregulation, the Bank of Spain could limit banks giving credit to housing if it thought a housing bubble was being formed. After market fundamentalism (born in the USA) conquered Europe, this was almost a sin. The same goes for pro-cyclical tax policy (cutting taxes during the good times and never raising them again).
We agree that German austerity is another significant contributor.
Diego,
An indefinite Metro strike? Sounds like Madrid, regardless of its first world transportation system, is not going anywhere fast…
http://in.reuters.com/article/idINIndia-49767320100630
Jake,
as your link points out: “It was the first time in two decades that Metro workers had not provided a minimum service”.
Madrid has been truly paralyzed this time. Ordinary strikes are barely noticeable, you get to wait 5 minutes longer than usual, but that’s all. This time they paralyzed the complete system (for the first time in two decades); however, they’ve agreed to provide minimum service starting tomorrow, so the strike is as good as over.
Strikers knew they were forcing a Reagan-syle intervention if they kept on f***ing up with 6 million angry Madrid citizens…
Maybe the Mafia will bail out Italy…LOL
You know, that’s what happens when you start mixing third world nations (or nations that should be third world, like Italy, Spain, Portugal, and Greece), with first world nations that deserve to be first world, like Germany, and the Scandinavian nations… you get a cacophony called the European Union.
Maybe it’s time to separate the sheep from the goats, and allow the Club Med nations to proudly join the African Union, where they rightfully belong.
Vinny (looking forward to vehement replied from proud and offended southern Europeans…LOL)
Considering the pitiful state of the West, joining the African Union may not be so bad, after all…
Whether it is Europe, Asia or the US we are all headed for some degree of depression. One might want to get symantic about it and prefer to say a double dip recession. Nonetheless, however one might describe it we are trending toward a global reduction in living standards.
This denouement of the failure of global fiat currencies is marching inexorably toward some form of a hard currency. The sooner we get there the better. In that, it may be that the best option is to have a full blown depression. Perhaps that is the event that is the necessary condition for an optimal resolution.
Our representaive government has failed us because we have failed it. This is evidenced by the fact that voter turnout has been so low over the past 50 years. Yet even so, we demand a social safety, yet again, we are unwilling to pay for it and too willing to allow the gaming of any safety net that we might construct.
In all the sound and fury we have idealogues rampant in the media and blogosphere. Some would borrow beyond reason, some would demand hairshirts for all. No one comes and says, you know we’ve been kidding ourselves for at least 40 years and perhaps a bit longer. It’s time to deal with the fiercely negative incentive of the continuous erosion of purchasing power. If you prefer you might want to call it inflation. But then, whether diminished purchasing power or increasing inflation, the finanical minions will chase yield by any means. Moreover, there is no regulation for which a trader worth his bonus can’t create a work around. A law, now that is very difficult to evade especially if the government enforces the law. But then why enforce, when after all, the market will correct it on its own. Curious point of view that, what school yard did you play in? No rules? Even children apprehend the necessity of rules. Change the catchphrase to fair markets.
FINREG ignores the shadow banking network werein much of the financial fraud has occurred. Banks scream at any constraint that might be considered. Where’s the rational discourse? Nowhere to be found and why? Well, it seems that they see it as a goring of their ox. And yes it is. And yes it needs to be done. After all, it is that cartel called the Federal Reserve System and its members who create money by way of a loan. Indeed it begins as a loan to the borrower who then spends it as money. In that second transaction it has become money itself.
Now Fractional Reserves are a curious thing. We have a fiat currency which has no inherent value other than the fiat that it is legal tender for all debts public and private. It is only worth what it will buy. What is the sense in holding in reserve that which has no inherent value. Now in light of that and the prenicious and continuing loss in purchasing power it is clear that even reserves must be invested in something that provides as a minimum a return that offsets the loss in purchasing power. But then, inflation (loss in purchasing power) is only 2%. That’s something we can live with. Indeed you can, but then, in 5 year’s time you dollar will only buy $0.90 worth of what you could have bot 5 years prior. Will your net income have increased by 10% in 5 year’s time?
Now whatever the government might spend, that spending must be funded by either or all of the following; taxes, borrowing; or the debasement of currency. In practice what happens? The government will tax and given the fiat currency it will debase the currency.
For all those college degrees and their loans unpaid, we received less than fair value. However else could we have created this cultural and financial mess we are in?
Comes November, vote some poltroons out and lets begin to demand the represenative government we are entitled to by contract and the inherent rights of our existance.
“Nonetheless, however one might describe it we are trending toward a global reduction in living standards.”
Undoubtedly.
We may also be heading toward major military conflict again. These governments that have the power to create money (well, the private central banks do), also have the power to shape, manipulate, and mobilize public perception in order to achieve a certain goal. And, troubled governments have been known for starting conflicts with other nations in order to deflect attention elsewhere. Take the current BP trashing of the Gulf of Mexico. What if instead of BP that were a Chinese or an Arab oil company? Would we now already be at war with China or yet another Middle Eastern nation?
Perhaps this fiat financial system will collapse, and it will be replaced by a hard currency. However, I fear there’s still a long way to go, and it won’t go down without dragging much of the world down with it, and without generating massive conflict. I think we are entering dangerous times.
Vinny
We’ve warned for some time that the eurozone’s sure-to-fail muddle-through approach to its structural challenges was rattling investor confidence. Worse, its insistence on wearing an austerity hairshirt was not only committing Europe to deflation, but had high odds of sucking the global economy down along with it. Given how fragile the recovery is in advanced economies, and the magnitude of the debt overhang in many nations, a downturn could easily morph into a deflationary downspiral, potentially a full blown depression….
I don’t get this opening paragraph. It is replete with non sequiturs. It seems to assume that there is an alternative to an “austerity hairshirt”. It seems to assume there is a more “rational” or “common sense” way forward that promises a less onerous outcome.
Well, there isn’t. Too many people out there no longer believe there is an alternative to austerity. And if the markets don’t believe there is an alternative then there is no alternative that will work.
Countries that adopt a hairshirt get market backing. Those that don’t will just face endless and repeated crises.
America will be forced to follow the same path eventually. Policymaking in America has become a joke, an embarassment.
‘Foreign capital flight is under way’ —- What about the less mobile kind of domestic capital, the kind owned by little guys, sorry, small people? Where can they flee to?
The USA merely recognized that the depression was inevitable and decided that the baggage, the middle classes, was not needed on the voyage…..
The EU was also fully aware. Much of the Inspector Clouseau is to drive the euro down. There is economic warfare going on all the time!
Those who have enriched the rest of us will always be fondly remembered. We will examine them and invite the prettiest and strongest to join us on our Yacht. They better know how to behave!
Depression is a collapse of demand.
We have all we need and will not produce any more for some time. the rest of you, the sheep, can take care of yourselves. What do you mean you did not see it coming? Have you never heard of Japan? They have been in depression for twenty years. You would have to be really American not to have seen that! We decided that we might need more pocket money, so after 1999, we reignited the credit machine, the one at the other end of the yellow brick road. The Wizard was very effective. Lots of money made and we sold the bombs onto to the EU! After what else in the works happens, the last thing people will want is delving into ancient history! We are safe. But those of you who invested in stocks and housing, well…. maybe you are pretty or strong?
MyLessThanPrimeBeef
The small people get to clean up toxic waste and to dream of better times that they will not live to see.
How about a world tour for small people? A visit to the glorious outback?
http://www.sott.net/articles/show/211276-Australia-Aborigine-Cooked-to-Death-in-Prison-Van