HEADS, UP !!!
Let's be frank, The EU ( European Union ) is the economic step-child of NATO ( North Atlantic Treaty Organization ), the U.S. concoction of nations aligned against the then U.S.S.R.. NATO is nothing short of political arbitrage, with the U.S. at the helm; the EU is an economic derivative without direct U.S. control, spawned from the 12 protocols of the Treaty of Rome, 1957. A neat idea at the time, 1957, and for a short time thereafter while then participant nations, lead by Germany, were experiencing unprecedented economic growth. The focus was on economic growth experienced by the core nations: Germany, France and Italy; Germany doing the heavy lifting. Things were humming along when U.S. Financial Institutions, the pied-pipers of greed, lead the world into a financial depression. The U.S. lead depression exposed the weakness and flaws of the Euro and left the 17 Euro subscriber states to flounder.
Greece was the tip of the iceberg engendering chatter from the ECB ( European Central Bank ) resulting in leveraged support for European Banks holding sovereign debt, in short the bail-out of Greece. Portugal, Spain and Italy are on the short list, and next in line. Forget the economic pundits, media pundits and the like, simple population demographics reveals the fundamental flaw when 17 EU /Euro nations with disparate populations and productivity, subscribe to a single currency, the Euro.
Aside from the gibberish of economists and bankers, it all boils down to population and demographics: how many working German's will be willing to support the life styles of 130 + million people in the non-productive nations of Greece, Portugal, Spain, Italy + 11 other Euro subscribers like Ireland. Perhaps it's to early to include Italy, but things are not well in Italy. So take Greece, Portugal and Spain with combined populations of around 70 million and compare it with the population of Germany 82 million, 26% under 18 and 21% who are over 65, leaving an estimated workforce of 44 million minus 5.7% unemployment or 41.5 million working German's to carry the load and support the lifestyles of 70 million Greek, Portuguese and Spanish, with 61 million Italians soon to follow. Okay, France, with an estimated workforce of 30 million but 10% unemployment, 27 mil net [ 72% of the French workforce is in Services, i.e., non-industrial ], may be of some help, but neither Germany or France can sustain the burden of 15 failing member state economies. Just how many people can one working man or woman [ mainly German ] carry on their shoulders: two (2), three (3), four (4); say goodbye to the Euro.
Showing posts with label Euro. Show all posts
Showing posts with label Euro. Show all posts
Saturday, April 21, 2012
Thursday, August 4, 2011
PHANTOM GDP
All eyes were on the U.S. , while the U.S. House, Senate and President Obama
jockeyed for position on raising the U.S. Debt Ceiling. The Dollars position, as the principal world trading currency, was at stake while those in Washington [D.C.], and in academic circles, squabbled over they way, means and impact of raising he debt ceiling. Drama aside, it was a forgone conclusion that a "deal" would be done and the
debt ceiling would be increased to accommodate U.S. deficit spending.
The side-bar to Washington's theatrics, economic growth [ measured in GDP ], was hinted at in the House passed [H.B. #2560] Cut, Cap and Balance bill, but never brought to the floor by Senator Harry Reid, for Senate vote. Gross Domestic Product, GDP,is the benchmark measure used internationally to snapshot a nations economic growth. The U.S. snapshots GDP on a quarterly, basis; and, during the quarter, when the debt ceiling drama was playing in Washington, the U.S. GDP had stalled at around 1%. Without growth, government revenue, remains stagnant, absent an increase in taxes, often masked as fees, to offset government spending.
The way GDP has traditionally been calculated [ all goods and services ] essentially is a miss-measure that overstates real economic growth by a factor equal to the amount of government costs and services included in the GDP computation. Since the miss-measure GDP computation has universal appeal, true economic growth remains phantom to the delight of Wall Street, London and world financial markets. The GDP miss-measure is a harbinger for future financial melt-downs.
Among the minority of others, China, appears recognize the GDP anomaly, by its recent downgrade of U.S. debt obligations. Others will likely realize the U.S. has been and will continue, for the foreseeable future, to experience negative GDP. This has ominous consequences for todays inter-connected world, and is one factor in the flight to gold and other precious metals. Absent an accurate measure of a nations economic growth, and a stable benchmark currency, the surplus capital necessary for economic growth, will be locked in gold and precious metals, and world economies will unravel.
This U.S. and U.S. dollar, can no longer serve as a benchmark currency. The failure of the U.S. to balance its budget, per the U.S. Balanced Budget Act of 1985, yes 1985, was the first signal to the world that new measures and new benchmarks would be necessary if sustainable, shared, economic growth were to be achieved on a world basis. The latest U.S. budget antics [yr. 2011, 26 years later ] are a signal that the U.S. is in a downward economic spiral and can no longer be viewed as a stabilizing force, and the U.S. dollar, a reliable currency.
The U.S., as a system of governance, has displayed it's inherent flaws; arrogance, fashion, feelings, and ego, trump reason. New measures and a new type of benchmark currency will be needed before financial stability can be achieved on a world basis; otherwise,one country will fail, followed by the next, and by the next; signs of which are appearing in Europe and with the Euro.
jockeyed for position on raising the U.S. Debt Ceiling. The Dollars position, as the principal world trading currency, was at stake while those in Washington [D.C.], and in academic circles, squabbled over they way, means and impact of raising he debt ceiling. Drama aside, it was a forgone conclusion that a "deal" would be done and the
debt ceiling would be increased to accommodate U.S. deficit spending.
The side-bar to Washington's theatrics, economic growth [ measured in GDP ], was hinted at in the House passed [H.B. #2560] Cut, Cap and Balance bill, but never brought to the floor by Senator Harry Reid, for Senate vote. Gross Domestic Product, GDP,is the benchmark measure used internationally to snapshot a nations economic growth. The U.S. snapshots GDP on a quarterly, basis; and, during the quarter, when the debt ceiling drama was playing in Washington, the U.S. GDP had stalled at around 1%. Without growth, government revenue, remains stagnant, absent an increase in taxes, often masked as fees, to offset government spending.
The way GDP has traditionally been calculated [ all goods and services ] essentially is a miss-measure that overstates real economic growth by a factor equal to the amount of government costs and services included in the GDP computation. Since the miss-measure GDP computation has universal appeal, true economic growth remains phantom to the delight of Wall Street, London and world financial markets. The GDP miss-measure is a harbinger for future financial melt-downs.
Among the minority of others, China, appears recognize the GDP anomaly, by its recent downgrade of U.S. debt obligations. Others will likely realize the U.S. has been and will continue, for the foreseeable future, to experience negative GDP. This has ominous consequences for todays inter-connected world, and is one factor in the flight to gold and other precious metals. Absent an accurate measure of a nations economic growth, and a stable benchmark currency, the surplus capital necessary for economic growth, will be locked in gold and precious metals, and world economies will unravel.
This U.S. and U.S. dollar, can no longer serve as a benchmark currency. The failure of the U.S. to balance its budget, per the U.S. Balanced Budget Act of 1985, yes 1985, was the first signal to the world that new measures and new benchmarks would be necessary if sustainable, shared, economic growth were to be achieved on a world basis. The latest U.S. budget antics [yr. 2011, 26 years later ] are a signal that the U.S. is in a downward economic spiral and can no longer be viewed as a stabilizing force, and the U.S. dollar, a reliable currency.
The U.S., as a system of governance, has displayed it's inherent flaws; arrogance, fashion, feelings, and ego, trump reason. New measures and a new type of benchmark currency will be needed before financial stability can be achieved on a world basis; otherwise,one country will fail, followed by the next, and by the next; signs of which are appearing in Europe and with the Euro.
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