Spain Has Been Shut Out
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Mariano Rajoy, Prime Minister of Spain, made a very interesting comment in the Senate today. He told the politicians that virtually EVERYONE in Spain,
[See the full post at: Spain Has Been Shut Out]What is the problem, too much debt, or being tied to the EURO, or both? Debt problems have usually been solved by inflating it away. If the EURO prevents this it will have to be placed in the another idiotic idea waste basket, which it obviously was and still is. A currency without a country is just to silly an idea to allow a worldwide financial collapse. Let’s get back to German Marks, French Francs, Italian Lira etc. as soon as possible please; preferably before we are all standing in a soup line.
let the games begin!!!!
now lets see how long they will be shut out before they realize shutting out of credit will hit the profit bottom line
I spent many wonderful vacations in Spain in the 1960’s and 70’s – my parents lived there and I went to school and college in the UK.
It was great. Everything was so cheap. I got around 50 pesetas per day of pocket money when I was 16 and I could get one almighty powerful Cuba Libre for 30 pesetas – around £0.25 at that time.
My French Catalunian friends got me into the discos for free much of the time. Their parents had fled Franco’s armies a generation earlier and moved to France – places like Toulouse.
Maybe the future is to be found in the past?
Who knows. Maybe this time is for real. It’s not too surprising that it’s Spain, not Ireland. Ireland was sound until it bailed out the banks, while Spain had big hidden debt in the provinces and municipalities. I do wonder why not Portugal first, though.
I agreed with Stoneleigh that the sucker rally wouldn’t last past 1Q 2010. Despite the TAE pravda, the extra 2.5 years has cost me dearly. I’m responsible for my own choices, and well, 18 months instead of 9, prediction is hard. However, we’re at 27 and the deal isn’t sealed.
I can also understand the change in emphasis from TAE to live talks. Still, S&I presumably have something to say to honest live questioners about the factor of three and counting, and about what 2 extra years of flat out oil pumping does to the 10 year energy outlook. I doubt I’m the only TAE regular that would like to hear them.
There are, or were, more readers here than citizens of the average town, and many of us have readers of our own. The current vacation is well deserved, but I suggest strongly that their overall mission would be well served by deferring a session or two with the East Overshoe district council and using the time to cogently post their current thinking here.
In a debt economy, which you would all agree that we have, Those who are not taking on debts, are enemy of the state, unless you are part of the 01%.
A $10,000 financial transaction by an individual, is to be reported to the gov. to control “money laundering”. Of course, unless companies are considered “individuals”, companies will not be subject to the same scrutiny.
I seem to remember that the supreme court decided that companies are to have the same rights as an individual. Does that include charges for money laundering.@JAL, yes, in theory corporations are subject to the $10k limit. Both corporations and (in theory) individuals can get exemptions for ‘routine’ transactions. The example I saw many years ago was that the Red Sox are not required to file a report after every home game.
Golden Oxen post=2748 wrote: What is the problem, too much debt, or being tied to the EURO, or both? Debt problems have usually been solved by inflating it away. If the EURO prevents this it will have to be placed in the another idiotic idea waste basket, which it obviously was and still is. A currency without a country is just to silly an idea to allow a worldwide financial collapse. Let’s get back to German Marks, French Francs, Italian Lira etc. as soon as possible please; preferably before we are all standing in a soup line.
When money *is* debt, you can’t inflate it away. the debt will *always* grow faster than the money creation, by definition.
They could, however, redefine the money, though. But remember, what occurs depends on where one stands.
In Argentina, their currency was hyperinflated from the perspective of someone in the Argentinian system. From outside the system (where the banksters dwell, BTW), though, it was actually a deflation. American dollars bought a LOT more in Argentina when the people of Argentina were bankrupted.
“Collapse” is really a euphemism for a well marketed societal asset stripping operation by the criminal bankster class.
Triv, In all honesty this entire European mess is much to confusing and has too many variables and possible outcomes to make analysis possible.
I cannot understand it hard as I try. It has been my observation that when a country has a sudden sharp devaluation in it’currency, Argentina, Mexico, Brazil, Bolivia etc. after the short term pain of the resultant inflation passes they seem to go along there merry way without constant suffering and misery. This European mess seems to be going in the other direction of a multi decade desire to suffer and inflict punishment. My idea as it was so nicely put by Nassim, “Maybe The Future is to be Found in the Past” Things seemed to work OK without the EURO before so lets try life without it again. Simple idea and I cannot back up the idea with anything but the observation that the current system is not functioning and the older one did, not perfectly of course but it was functional.Golden Oxen post=2768 wrote: Triv, In all honesty this entire European mess is much to confusing and has too many variables and possible outcomes to make analysis possible.
I cannot understand it hard as I try. It has been my observation that when a country has a sudden sharp devaluation in it’currency, Argentina, Mexico, Brazil, Bolivia etc. after the short term pain of the resultant inflation passes they seem to go along there merry way without constant suffering and misery. This European mess seems to be going in the other direction of a multi decade desire to suffer and inflict punishment. My idea as it was so nicely put by Nassim, “Maybe The Future is to be Found in the Past” Things seemed to work OK without the EURO before so lets try life without it again. Simple idea and I cannot back up the idea with anything but the observation that the current system is not functioning and the older one did, not perfectly of course but it was functional.I think the old system “worked” mainly because there was still so much surplus around of energy and the Industrial Economy was still growing. it was however clearly “inefficient” and there were large differences even back then between the “standard of living” in the PIIGS nations and that of those in Northern Europe. Spain and Italy were very “backward” relative to Germany back then, and the Euro gave them the opportunity through Debt to live more like Germans did. it also gave the Krauts the opportunity to live even BETTER, since they were vendor financing everything they sold to these nations.
Transition BACK to the old currencies in a time of CONTRACTION is not going to solve any problems here. You wanna see Hyperinflation? You will see it in SPADES the minute that Drachma, Lira and Pesetas are reissued. These notes won’t be worth the paper they are printed on no matter how many Zeros they drop onto the note, and they better set the Printers to use Exponents or they will run out of room. They won’t buy any OIL.
The currency problem here is not the CAUSE of the problems, it is an EFFECT of the problem of contraction off the Oil Economy and Industrialization. This problem cannot be solved through monetary manipulation of any kind. All that is being done in either case is to shift most of the Pain of the contraction onto the last folks who bought into the game too late.
It will work its way into the center also of course, but the center will Ringfence as long as possible using the Big Ass Military to force the pain onto the less powerful first.
I have a friend from Spain that lives here in the USA that I see about every 4 months or so. Over the last several years I would ask him about Spain and Europe, and he seemed to think that things were bad, but not significantly worse than here. Following Spain’s victory in the 2010 World cup soccer tournament, he said that the Spanish people were deliriously happy.
When I saw him at a party a few days ago, he didn’t wait for me to ask about Spain. He came right out and said that the situation there was horrible. Apparently, the economy has deteriorated significantly over the last 6 months.
There is no reason they can’t purchase oil. All they need to do is produce something one of the oil exporters wishes to purchase. I don’t think subdivisions of empty houses would fall in that category, nor airports in small cities. Supposedly the soil and climate is almost perfect for growing oranges. Oranges for oil, yeah, that’s the ticket, lol.
Yes, Frank, I agree that timing remains the most difficult hurdle. I take a fair bit of “solace” (and of course, an equal measure of horror) from the fact that everything continues to play out exactly as Stoneleigh has suggested. But the timeframe is confounding. This leaves us with a definite risk that TAE’s underlying message is rejected as listeners are worn down by “waiting”. But isn’t that exactly what the banks and governments would want? If they can’t change the direction of the tide, they can slow it down with such determination that we don’t know which way it’s really flowing. Keep in mind that an incredibly long list of indicators continue to pile up suggesting we are in a downward spiral, while the lack of a precipitous “collapse” mixed in with exhausting “positive indicators” make I&S’s job a lot harder! Too many variables. A huge amount of momentum on the side of the status quo (equal in magnitude to the bubble itself). And so we go bankrupt ever so gradually, and then, in theory, very suddenly.
@ RE
“Spain and Italy were very “backward” relative to Germany back then, and the Euro gave them the opportunity through Debt to live more like Germans did”
No, Italy wasn’t at all “backwards” before entering the Euro, in fact it was a very prosperous country. The spending power of Italians after entering the Euro was suddenly cut into half, in came the temping jobs, factory closures, outsourcing, Silvio Berlusconi and rising personal debt( many of these things were slowly underway already during the ’90s). I can assure you these past ten years have been the most miserable and depressing in the whole history of the Italian republic.Some thoughts here. First the major selling point for the Euro is that it reduces banking fees for international transactions. For countries that are small like Luxemburg, it is a godsend. The reason why countries like Spain or Greece are hesitant to leave the Eurozone is that leaving carries large financial costs for international businesses.
Leaving the Eurozone by itself won’t solve any problems. However one thing it does do is open up the door to greater localization of the economy, and from colleagues in Europe, I understand this is already happening.
The solution is to localize the economies and then leave the Eurozone, but that’s a tough thing to do.
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