Washington Post:
The financial crisis in the United States may have tipped the world into a global recession, but the biggest obstacle to a full-scale recovery may now lie on the other side of the Atlantic -- in Europe.
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What is really troubling is Treasury Secretary Geithner still insists a U.S. recovery is dependent upon a recovery in the rest of the world. The rest of the world is in worse shape than the U.S. It is not possible for the U.S. to export its way out of this crisis.
The U.S. needs to look to fix its broken credit markets and stabilize its own economy. The book How America Can Escape the New Great Depression says the only way out of the crisis is for the U.S. to print money and buy back almost all of its outstanding Treasury bonds.
http://www.esacpethenewgreatdepression.com
That just means the rich will fly in their private jets. And don't worry you will pay for that the way the tax code is written to make the rich richer.
Finally, someone is talking about Europe and Eastern Europe. Maybe now all those IMF people and academics from across the pond can stop telling us how to fix our system.
The Brits lost, their AAA bond rating so will happen to the US? Panic-stricken investors in the Euro and the Pound are spreading all sorts of rumors about our absent inflation and Oil as a currency and getting away with it.
Many hedge funds that bought futures on Oil at 147 a gallon last year are desperate to get out of their positions only down 50%. They are trying hard (can we say Soros and Gross?) to crash the Dollar by manipulating the markets short term. Follow the rhetoric.
Everything is worth half today from just three years ago. 7 years of 10%, inflation and we still will not get to even! And that has never, to any modern US economy. Ever.
So if we get like 3-5% for a couple of years so what?
Oil as a currency! Ha. What is really happening is that there is so much oil and gas stored everywhere these greedy people want to get rid of it at a high price before anyone notices. 123s in Pump and Dump manipulation.
Historically Oil has been 6x the price of Gas. That should make Oil around 18 dollars. It is now 60 dollars! Totally artificial and manipulated. Long-term investors will be sorry if they fall for this.
Many hedge funds that bought futures on Oil at 147 a gallon last year are desperate to get out
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Barrel?
What is really happening is that there is so much oil and gas stored everywhere these greedy people want to get rid of it at a high price before anyone notices. 123s in Pump and Dump manipulation.
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Where is all of this oil and gasoline stored by these greedy people. Do you have any evidence or is this just your "feeling" or theory?
Do your research my friend. There are tankers floating all over the world filled with billions (yes billions) of gallons of oil waiting to sell it if the price goes up. The storage facilities in Oklahoma are overflowing. Many are now manipulating for the price to go up since they are stuck. This is called Contango. Look it up.
Also, look up the IAEA data with is skewed toward the industry and they confirm.
To think anyone would post comments of which they are not aware of the facts seems foolish. Hmmm?
Soros and Gross are not trying to crash the dollar. The American government and Fed are trying to crash the dollar by following the recipe for hyperinflation. Your beliefs on inflation are completely false; the US has had 3-5% inflation for the last thirty years, and before that we had double digit inflation for a decade. Inflation destroys the value of money, not the other way around like you think. Before Nixon shut the gold window in 1971, American wages rose with the economy, but since then people have been getting poorer.
Once Nixon took us off the gold standard, the quality of life in the US skyrocketed. The worst inflation in modern times was 3 years of 10%+ during Carter. This was exactly when our administration neglected to understand how supply manipulation worked.
Soros and the dollar... Hmm. I say he crashed the Pound (confirmed by everyone, when he lived there) and he is looking to crash the dollar now and lives in NY. He just apologized for manipulating the national bank of his birth country. Trust him?
To crash something because of fundamentals is one thing. To manipulate rhetoric and lever money to do it is another. Both Soros and Gross have not been playing fair nor by the rules. So much media time under their belts you just know they are manipulating the facts for selfish advantage.
The good thing is that cheating only works when the other side plays by the rules (letter and spirit). In the case of the US, we will not play by the rules if it is in the nations interest and we will not stand by and get nailed by vultures and big money manipulatiors lying down.
The first and last time we will ever say “there was nothing we could do” started and ended with the last Treasury secretary.
What Obama is doing to American auto industry has a direct negative impact on our economy. It is the big story and it is not being told.
Our economy will permenently get worse after Obama forces both Chrysler and GM into bankruptcy. When I learned the details of Obama's car czar demands, I am beyond disgust. Obama is turning into a bigger destroyer of American jobs than Osama bin Laden.
If you get a chance watch Dennis Kuchinich on CSPAN reveal the dirt happening behind the scenes. Obama does not have to let his Wall Street appointees destroy the US car industry under the guise of helping it recover.
If Obama follows through with his Wall Street henchmen's plan, then I do not need to know anything more about him. If he claims he is saving the car industry I will puke. (and I voted for Obama)
It's really a pity President Obama didn't take YOU as his Secretary of the Treasury. everything would be fixed by now.
I am not defending watchTVgetSTUPID for his entire post. I will however say he is correct concerning the domestic auto industry. Please do some unbiased research into this very critical issue and you may very well reach the same conclusions many of us have. Our manufacturing infrastructure is the key component to our economic recovery effort and it is being sacrificed for the interests of the banks and Wall Street. There will be huge sums of money made as a result of any GM bankruptcy filings.
Best regards
Japan has also seen a dramatic decline in GDP. The common thread is both economies rely heavily on exports. It is our economy that relies on over consumption of imports based on borrowed money. Further, since so much of their economies are based on exports their recoveries will have little impact on our economy.
The article has many fallacies or half truths.
“United States, where the pace of job losses has eased”
Initial claims fell below 600,000 only once recently when the Census hired 70,000 people.
“Ireland, are so cash-strapped that they've raised taxes”
Ireland doesn’t have the luxury of being able to print $100 bills. We’re printing the deficit our taxes would double otherwise.
“stress tests on their financial institutions, similar to the ones on major U.S. banks”
Our stress tests were a joke. The worst case scenario pegged unemployment rising to 8.9%. It also reduced capital requirements so they’d pass.
“Federal Reserve has cut interest rates much more aggressively”
Yes, but as some predicted investors seeing the huge amount of debt and debasement of the currency are now cutting back on purchases and interest rates are rising and the dollar is falling. It becomes more expensive to service our enormous debt requiring tax hikes, spending cuts or more borrowing.
One thing was true.
“Millions of European workers have been spared”
As many pointed out Europe didn’t need as much stimulus because they already had health care and benefits that were a part of our stimulus.
Obama was right, he told Europe if they didn't act they would feel the worst part of the economy slow down, yet they didn't listen. And, he told them it would be a few month down the road. Europe this is your time to act, Bush might have cause this mess, but it will be Europe fault it it last any longer than it should.
exactly somebody has to be guilty.
Somehow I expected that the Americans in the end would blame other countries for the disaster they caused...
Of course,everything is our fault.The rest of you are sterile robots who do our bidding and are not responsible for anything..
Yeah right, the rich f_ucks whose greed brought down this country were all Canadian.
I'm not placing blame for the financial crisis in the first place - that rests squarely on the shoulders of the transnational corporations and banking system, but President Obama presented a recovery plan at the G20 Summit, most European countries refused to fully commit, and now they are seeing the consequences. When it comes to the world economy, we all have to work together - whatever the method - in order for things to run smoothly.
The Washington¨Post mentions the elephant in the room (the ECB is concentrating on inflation and not lowering interest rates enough), but omits to say why it's there.
It's there because when the European Central Bank was created, the Germans insisted that it should only look at inflation, and nothing else, when determining its policy. This incredibly stupid rule, against which many economists warned, is so firmly entrenched in the ECB's statutes that you almost need to blow Europe to smithereens to change it. This means that even if higher interest rates kill off European business and leave not a blade of grass standing, the ECB still has no choice: it has to raise interest rates every time it sees a hint of inflation.
In short, if the US pursues an inflationist policy (as I suspect it does), some of that inflation will inevitably blow over the ocean and lead the ECB to impose punishing interest rate hikes: precisely the opposite of what is needed during a depression, particularly one which is caused by debts.
We Europeans are in for a long, dark ride, and we have only ourselves to blame for it. It's all so stupid that it blows the mind. And will the superior-feeling Germans in this thread please shut up, because it's you who forced it down everyone else's throat.
The Global Economy is a completely interlinked construct that is also completely interdependent. There is no decoupling possible ... whether you are speaking of the US, Japan, the EU, India, China, England, Brazil, Singapore .... name it. (perhaps you could leave out Burma, North Korea, and Zimbabwe). In short, "it's all for one, one for all" in terms of global economic prosperity or global economic crisis.
I think of what we are seeing with the Global Economy in terms of people doing the wave at a sports stadium. The wave starts in one section then flows, section by section, around the stadium until it ultimately returns to the section that began it and so forth. There is a point where one section is idle, but can view the section across from it performing the wave. That's how I see Europe. or Asia, or South America, etc in this crisis. We can see Europe in a seemingly precarious position from the perspective of the US, in terms of economy, because our stage in the crisis is, relatively static, but in time it will be the US on center stage of this economic nightmare again and the Europeans, in their stadium section across the pond, will be remarking, yet again, how the US is the cause of the extended crisis.
Europes economic slump, Obama causing us to lose out triple A credit rating, coupled with out of control spending by the Obama Admin. will cause recovery to slow. It won't be all because of Europe.
Jeez, teh stupid never stops. Amnesia, buddy? Don't you remember the US being in recession even as teh B u shi tes screamed "there's no recession"?
Pointing fingers doesn't solve your problems, America.
We Europeans are doing well, thanks. It's YOU who is really in the bin, actually - not US.
But you are right: We are not stumbling over each other in an attempt to get you out there again.
You created this economical downturn - now you own it.
Good luck with solving it - on your own.
Regards,
Mogamboguru, German
Yes, we know the economy can't be that bad in Germany. If it was you'd just start another world war to get out of it.
Really stupid comment. If there's a country that starts stupid wars just to make the rich richer it's only us.
Bush started an illegal war to get Iraq's oil....
This is a hoot. so funny it makes me roll over and laugh...If Europe is having trouble it is because of the INTEGRATION of the 70 million EASTERN Europeans from the Russia Satellites.... They all still have healthcare, 6 weeks of vacation and stable jobs...If 100,000 families in France were foreclosed because of HEALTHCARE issues, they would have already GUILOTINED the bankers....
We working slobs are loosing pay and benefits as we speak and for 60% of us the interest rate and housing slump have cost us big time....Let alone the drop in the 401ks.... We are in much worse trouble than Europe and it will be deeper and longer...Unless you are in the top 5%, then you wiill be getting fatter and more bloated than you already are.....We could not give a damn about the poor slobs in Mexico, we will never put a hand out to them, the way the Europeans did to the Eastern Bloc....
The good news in all this is that we'll be able to blame someone else for our troubles.
Heck, they blame us for everything, so why not jump on the bandwagon?
First. I am an American and proud that the Stars and Stripes are planted on the Moon. This self loathing on this blog about how bad we have it has to stop. Does anybody remember our Cival War? Should we really try to compare the American quality of life in 2009 versus 1863? Take over these mismanaged institutions for now. Fire the CEO's that got us into this mess. Put regulations back in place to keep it from happening again. Get back to building things. Get back to work. Sell the institutions back when things get better.
Germany is the largest European Economy and the largest European Exporter with there main exports being Machine Tools and Automobiles. We are the largest Importer of German Machine Tools and German Automobiles. Our Imports of both are down over 40% with no near term improvement expected.
Were broke as a country.. No need for new Machine Tools cause were not building any manufacturing plants. In fact, were closing the largest ones owned by GM.
No need for expensive BMW's and Mercedes when a less expensive Toyota or Honda or Ford will do plus all three get better gas mileage.
As long as we continue to ignore the need for a positive growth oriented Industrial Policy, I don't see how things will change anytime soon.
From the link:
"In the first three months of the year, the German economy shrank at a startling 14.4 percent annualized rate, compared with 6.1 percent in the U.S."
What? How can Germany be declining faster than the USA? Germany has better health care, better regulations, better infrastructure, better cars and better blah, blah, blah that liberals love. Yet, Germany is going down faster than the USA.
Because much of the German economy was based on selling stuff to............us.
I doubt many Americans are ponying up $40,000 for a 3-series BMW right about now.
I know Germany. I'm from there and currently living there. I'll tell you right off the bat that the "economic miracle" has been a thing of the past for a long time now. Way before this current crisis. Most Germans will tell you the same thing. There has been almost systemic dismemberment of the social safety nets in this country. Opel, a long-standing German institution, is in deep trouble and looking to possibly go over to Fiat. Many companies have closed shop. Joblesness has been soaring and, unfortunately, so has right-wing extremism. Here in Dortmund, for instance, a group of about 300 right-wingers stormed out of the main train station on May 1 (worker day) and attacked a peaceful demonstration of the DGB (Deutscher Gewerkschaftsbund, an umbrella organization of about eight trade unions). They beat up a ten-year-old boy who was playing a guitar in the demonstration. People are incredibly unhappy right now and they're beginning to blame it on the European Union, and feel they have basically been shafted in the whole deal. Merkel, who is from the former East Germany, has been pumping tons of tax dollars into Eastern infrastructure while the western part of the country (where most of the industry lies) has been neglected. If her party wins this September things will get even worse. It's not lookin' good in the Fatherland, at all.
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First Posted: 05-23-09 08:32 AM | Updated: 06-23-09 05:12 AM