Hard times

Anything else you want to talk about.
Post Reply
RobertsonN
Member
Posts: 192
Joined: Wed Jan 05, 2011 9:47 am

Hard times

Post by RobertsonN » Wed Nov 30, 2011 7:41 pm

British politicians of the 1930s are frequently criticized for not modernizing ships such as the Hood, Repulse and the R class battleships. Yesterday's statement by George Osbourne was like a flashback to the 1930s, which makes their (in)actions more understandable. Osbourne announced that the Government's four year austerity programme will now last six years. And this is on the optimistic assumption of no further shocks from abroad, such as a breakup of the eurozone, which now seems quite possible. Since the start of the Industrial Revolution there have been three Great Depressions, during the 1870s, the 1930s and now (started in 2007). In these circumstances, it would seem that only a madman would significantly increase defence spending.
As in the 1930s, Germany has gone its own way. However, failing to provide adequate support to the euro is much less dangerous than spending so much on what we now call defence that by 1937 it was bankrupt and then balanced the books by annexing other countries and confiscating their financial and economic assets, a policy which worked well till the end of 1941.

ede144
Member
Posts: 149
Joined: Mon Oct 10, 2011 5:09 pm

Re: Hard times

Post by ede144 » Sat Dec 03, 2011 8:55 pm

What is your point?
Regards
Ede

RobertsonN
Member
Posts: 192
Joined: Wed Jan 05, 2011 9:47 am

Re: Hard times

Post by RobertsonN » Sun Dec 04, 2011 1:10 pm

Two points:

(1) It is difficult to increase defence spending when the State is threatened with bankrupcy. This puts the predicament of politicians in the 1930s in perspective.
(2) The main events are playing out in continental Europe and again Germany is the main player. Neither Obama nor Cameron want the eurozone to break up but only Germany can save it. They can only look on aghast at the severe political and financial problems in Europe - Italy, for instance now has a government without a single democratically elected member in it - but they are powerless to influence the outcome.

User avatar
RF
Senior Member
Posts: 7593
Joined: Wed Sep 20, 2006 1:15 pm
Location: Wolverhampton, ENGLAND

Re: Hard times

Post by RF » Sun Dec 04, 2011 6:11 pm

This isn't so much a problem of countries ''going bankrupt'' as one of drficit financing. In Britain we now have ''Quantitative Easing'' which to you and me is printing more money to keep the economy going.

And the problems of the eurozone are largely the creation of its authors, as even Jacques Delors has now come to publicaly recognise. But as you say the Germans will bale it out, and try also to put some of the costs of doing so on to the British taxpayer.
''Give me a Ping and one Ping only'' - Sean Connery.

RobertsonN
Member
Posts: 192
Joined: Wed Jan 05, 2011 9:47 am

Re: Hard times

Post by RobertsonN » Mon Dec 05, 2011 10:16 am

I agree with your point about deficit financing. A country in trouble can either borrow more money if they can simply print it. The problem with eurozone countries (Greece, Spain, Italy, ... ) is that they don't have their own currency and so can't print or do QE.
The advantage to Britain of not being in the euro (i.e. being seen as a 'safe haven' and therefore being able to borrow very cheaply) is so great that it might actually be worth it to pay a small contribution to keep the euro going.

User avatar
RF
Senior Member
Posts: 7593
Joined: Wed Sep 20, 2006 1:15 pm
Location: Wolverhampton, ENGLAND

Re: Hard times

Post by RF » Mon Dec 05, 2011 6:42 pm

The ''small contribution'' is a very big one, cleverly concealed within official figures that are dressed up to show that because the UK isn't in the eurozone we aren't subsidising it. All ''smoke and mirrors'' in the best Tony Blair and Gordon Brown tradition so beloved by our Blairite Prime Minister.

The real answer is to replace the euro with some of the previous currencies prior to its inception, and to allow a free float. It is not in the interests of the UK, or indeed the USA, to have European economies in a permanent state of fiscal and monetary crisis because we trade with them. And certainly not in the interests of any of the individual eurozone members. The problem here is that the political nomenklatura that runs the EU are doing it for their own political benefit, and not for the benefit of individual nation states which they want abolished.
''Give me a Ping and one Ping only'' - Sean Connery.

ede144
Member
Posts: 149
Joined: Mon Oct 10, 2011 5:09 pm

Re: Hard times

Post by ede144 » Mon Dec 05, 2011 7:47 pm

RobertsonN wrote:Two points:

(1) It is difficult to increase defence spending when the State is threatened with bankrupcy. This puts the predicament of politicians in the 1930s in perspective.
(2) The main events are playing out in continental Europe and again Germany is the main player. Neither Obama nor Cameron want the eurozone to break up but only Germany can save it. They can only look on aghast at the severe political and financial problems in Europe - Italy, for instance now has a government without a single democratically elected member in it - but they are powerless to influence the outcome.
I agree with no. 1. The German Bundeswehr suffers this problem since years.
Your second point, Germany is the biggest country in the EU and the Euro zone. We take the share of the burden, because we benefit from the Euro. However there is a limit what Germany can take on ad in addition what German polititians can explain to the voters. We still put a lot of money into the former DDR.

regards
ede

User avatar
RF
Senior Member
Posts: 7593
Joined: Wed Sep 20, 2006 1:15 pm
Location: Wolverhampton, ENGLAND

Re: Hard times

Post by RF » Tue Dec 06, 2011 8:57 am

ede144 wrote: Your second point, Germany is the biggest country in the EU and the Euro zone. We take the share of the burden, because we benefit from the Euro. However there is a limit what Germany can take on ad in addition what German polititians can explain to the voters. We still put a lot of money into the former DDR.
Germany shoulders the burden, along with the British, so the EU nomemklatura and all the supporting politicians and bureaucracy benefits from the euro. For the ordinary German there is no benefit from the euro. He or she would be better off by reintroduction of the deutschmark. And that would include the areas of Germany in the former DDR.
''Give me a Ping and one Ping only'' - Sean Connery.

Byron Angel
Senior Member
Posts: 1136
Joined: Sun Mar 06, 2011 1:06 am

Re: Hard times

Post by Byron Angel » Wed Dec 07, 2011 12:40 pm

Ede,

Has any substantial progress been made in socially and industrially re-integrating the old 'Ossi' East zone into a united Germany? If memory serves, this makes about twenty years that West Germany has been committing huge amounts of development money to the East.

As for the EU, the prospects for long-term viability are not good. Too many of the member nations have developed into fundamentally unsustainable, deficit-financed social welfare organisms. Now that the confidence of investors/lenders has been so profundly shaken by recent events in Greece, Italy, Portugal, etc, the supply of loans so essential "to keep the party going" has now become VERY expensive. When the first sovereign defaults occur (no matter what sort of party dress the EU bureaucrats try to dress it up in) the current financial problem will seem like small potatoes indeed. According to my investment friends, Greek, Italian and Portugues defaults are pretty much foregone conclusions in their eyes.


B

ede144
Member
Posts: 149
Joined: Mon Oct 10, 2011 5:09 pm

Re: Hard times

Post by ede144 » Wed Dec 07, 2011 9:43 pm

Byron,

yes of course there is a progress. We have built the best infrastructure in the world. Most streets, a lot of buildings are build new, reconstructed or renovated. The western part of Germany ( the used states) benefited from the new states, because a lot of people moved into them. Today we have some industrial areas around Dresden and Leipzig which are world class. As an example, the majority of ship propellers are coming from East Germany.
Socially it's still weird but it get's better.

The Euro crisis turns more and more into a self fullfilling prophecy. In my opinion some bankers found it easy to make money with it. That will go on, until some of our leaders get the balls and tell the banker who is on the long end of the stick. It would not be the first banker who ends up bankrupt because he got to nosy.
regards
ede

Post Reply