1. Stevie b. says

    Hi Marshall.

    I confess I’m getting a bit tired and yes, I admit a bit bored with everything. But for example,whatever the niceties of the correctness of the downgrade of a Country, I feel the point with the U.S. and other sovereigns is that yes, they can print til well after the cows have come home and will always be able to pay off the debt – but with what size of shrunk dollar bills? Maybe that’s the message of the gold price, nevedr mind the downgrade.

    I also admit I haven’t read your whole piece so really my comments may be misplaced, but “we appear to be entering (the) most dangerous time for Europe since World War II.”
    Eh??? Are you serious?? Were you around in 1974 or so? I was a broker & nearly joined the UK Teritorial Army so I could be more sure of feeding my family. Do you realise how low markets got to? I could go on, but suffice to say I think this time just like the 70’s the West is going to muddle-through for all sorts of reasons I’m not going to bore you with or repeat from those I’ve spouted before elsewhere. I’ve been bearish for well over 10 years, but now I think one should be buying towards DJII 10,000 and then keep buying. Time to start being an optimist – after all, who else is?


  2. Zac says

    This is the best article that I have read in the last three years!
    It has long been evident that the biggest problem of the euro area was Germany, as was the largest beneficiary of the “weak” euro.
    It’s a shame that readers learn from politicians and journalists, because these are people who know everything but nothing concrete. It would be good that general audience was introduced with the term : “Fallacy of composition”, the champions of not to borrow does not understand – what’s good for the individual is not necessarily good for the community that is, if every person on this planet just save, human race would never have emerged from the Stone Age. There must be order, but no one mentioned, regardless of the ponzi schemes or malinvestments, how much we have accomplished on the basis of the debt even though we were not able to eradicate hunger, poverty and wars. But empathy was never a strong point of human civilization.

  3. David Lazarus says

    One solution for the periphery is the elimination of much of the debt under Odious Debt provisions, That will ease the problems pretty rapidly for the periphery especially Ireland and Iceland’s debts would be wiped out. Many of Greece’s debts could be eliminated. Also extend the definition to loans and mortgages up to €500 000 in a foreign currency taken out by non finance specialists ie householders and Eastern Europe could eliminate much of its problem debts. That would ease problems in Eastern Europe like Hungary, and the Baltics. The real problem arrives when many of these banks loans are written off and the losses return to the core. That was where the problems should have been dealt with.

    Longer term if banks are restricted to national lending and avoid overseas expansion they might actually provide a more competitive market and not endanger the economies of both lenders and borrowers. Also without banks being able to export their surpluses it will eliminate the problems of nations finding their currency becoming too strong because surplus nations are flooding it with liquidity. This would mean that the US exchange rate would be lower and it would assist exporters. Additionally an independent Germany would also have a stronger currency so reducing its exports.

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