Spanish unemployment rate hit record high

[flonky]

It doesn't if you have economic autonomy and you set the price of all goods and services.

Controlling an economy like that never actually works.

I think we need to come to the realization that money has value and only fear and speculation chances its worth so long as those objects are changing hands that is all that matters.

Money has no value (other, of course, than the cost of printing it). It's relative 'worth' must be backed up by the wealth of the issuer etc.

Printing money means literally nothing unless you are some small euro childstate absolutely and totally dependent on others like in the EU yet want to act like a nation with power and resources due to your delusions of grandeur.

Look up the Wiemar Republic, printing money didn't do them very good .

[Basil II the B.S]

Spain had a huge housing bubble and bragged for a while about how good their economy was doing. The bubble bursted, and everything went down the toilet. The govt failed to reorganize, they are not coming out of it any time soon. It's even worse for young people. If I remember correctly, 1 out of 2 is without a job. You waste 3-5 years in the university and then end up in the unemployed list.

[caratacus]

Spain had a huge housing bubble and bragged for a while about how good their economy was doing. The bubble bursted, and everything went down the toilet. The govt failed to reorganize, they are not coming out of it any time soon. It's even worse for young people. If I remember correctly, 1 out of 2 is without a job. You waste 3-5 years in the university and then end up in the unemployed list.

I recently spoke with a Spanish girl whilst staying in a hotel in England. She was a cleaner and waitress and told me that she was a fully qualified architect with experience working in a architectural practice but now couldn't find any work in Spain, even the type of work she was doing there. Of course many graduates need to do some kind of work like this at some time and you could say given the situation she is lucky to have at least that. But this was a girl at a stage in her life that badly needed work experience in the profession she had studied hard for. There are thousands of graduates just like her, not just in Spain but throughout Europe and for me it seems that you can refer to them as a betrayed generation.

[Manuel I Komnenos]

And all this when Europe could:

a) create a European credit rating agency that will allow the European states to get loans
b) allow the European Bank to hand loans with 1% interest

We can then give time to all the problematic countries such as Italy, Spain, Greece, Portugal etc which they can use to stop their public deficit, without having to adopt harsh measures that kill growth.

[alhoon]

Yes, but then there is an even greater risk that we will take those economies down with us in my opinion.

[Manuel I Komnenos]

Why?

[Sarissofoi]

[Basil II the B.S]

And all this when Europe could:

a) create a European credit rating agency that will allow the European states to get loans
b) allow the European Bank to hand loans with 1% interest

We can then give time to all the problematic countries such as Italy, Spain, Greece, Portugal etc which they can use to stop their public deficit, without having to adopt harsh measures that kill growth.

You tell that to our German leaders. Unfortunately the German voters seem to be more interested in saving earth from an imminet nuclear catastrophe and global warming, thus they must waste their precious taxes in that direction. Who the cares about Southern states. Until we decide to replace German products with someone else's and bring German voters back to reality.

[flonky]

a) create a European credit rating agency that will allow the European states to get loans

There are already plenty of credit rating agencies, why create another?

b) allow the European Bank to hand loans with 1% interest

Has been done, and it's not a long term solution. The PIIGS will have to learn how to pay market rates in the long term. ECB can't afford to bankroll them with cheap money forever.

We can then give time to all the problematic countries such as Italy, Spain, Greece, Portugal etc which they can use to stop their public deficit, without having to adopt harsh measures that kill growth.

Too late!

[alhoon]

Why?

Because let's say that Greece goes to ECB and says "100B Eu loan" and then Spain goes and says "600B Eu loan" and Italy says "300B Eu loan" ... that's 1 trillion Eu with 1% interest.

Where do you think the ECB will find 1 trillion? They will have to borrow them from somewhere.
I doupt EU countries could cough up enough, so the ECB would have to turn to private investors like the JPMorgan, Goldman Sachs etc. Do you think they would lend billions to ECB with just 1% interest? That's far less than inflation so these institutions would get hard loses.
Not finding the money there for 1% would mean they would have to give incentives, i.e. increase the return to find the money.

For 1 Trillion EU for countries like the PIGS, I doupt they could find enough investors with even 3.3% interest... i.e. they would need to give more than that. like 4%, srpeads would rise and the ECB's credibility takes a kick.

Let's assume that ECB borrows 1 Trillion with like 4% interest and lends it for 1% interest. In 10 years ECB would owe to their investors 1.48 Trillions while if we don't default would take 1.1 Trillions from us, for a net loss of 380Billions.

[Principe Alessandro]

It doesn't if you have economic autonomy and you set the price of all goods and services.

Economic autonomy? Does exist such thing? And how you can set the price of goods and services unless you adopt communism?

Look at the US we print as much money as we want and we still have all the guns and awesomeness that we should have. Want a new Jet? Heres a newly printed $100 billion that didn't exist before. I think we need to come to the realization that money has value and only fear and speculation chances its worth so long as those objects are changing hands that is all that matters. Supply and demand doesn't apply to money if the people and the government don't want it to.

10 years ago when my car came to the US for the first time it was worth $26k. Today, same car, same features aside from more horsepower, it cost $25k new. We spend trillions more on wars in printed money, the purchasing power is near the same or exactly the same. If manufacturing was forced to be here we wouldn't have any issues. Printing money means literally nothing unless you are some small euro childstate absolutely and totally dependent on others like in the EU yet want to act like a nation with power and resources due to your delusions of grandeur.

I'm not sure what you're trying to say but if you know enough the manufacturing industry you should know that the same product in 10 years becomes cheaper because the productivity increases dramatically for better manufacturing processes, if the car is cheaper only for 1k $ then we can safely assume that in fact you have a inflationary problem. In reality you should look at the prices of commodities like gas or gold which aren't tied to the productivity factor to have a real measure of the value of the currency.

The aggressive US monetary policy in reality is something new so you don't know yet how effective really is, in Italy we have experienced this for a long time and while it in the short-medium time can effectively relieve your economy in the long time cannot fix the structural problems.

The problem of the monetary policies is that they give you the illusion that the problem is gone but yet is here.

[Manuel I Komnenos]

There are already plenty of credit rating agencies, why create another?

No, there's no European credit agency. Most of them are in the USA and if anything, they definitely don't serve Europe's interests.

Has been done, and it's not a long term solution. The PIIGS will have to learn how to pay market rates in the long term. ECB can't afford to bankroll them with cheap money forever.

Sure. What I'm saying is that the problematic countries need time to implement measures. For example Europe can say to Greece, in 2020, you should have X number of public servants, your corruption should not exceed Z% of the GDP, your wages should not exceed Y number and your public deficit should be under 4% of GDP. By trying to implement harsh measures in a period of a few months, you make things worse, unemployment rises and growth does not occur.

Because let's say that Greece goes to ECB and says "100B Eu loan" and then Spain goes and says "600B Eu loan" and Italy says "300B Eu loan" ... that's 1 trillion Eu with 1% interest.

Where do you think the ECB will find 1 trillion? They will have to borrow them from somewhere.
I doupt EU countries could cough up enough, so the ECB would have to turn to private investors like the JPMorgan, Goldman Sachs etc. Do you think they would lend billions to ECB with just 1% interest? That's far less than inflation so these institutions would get hard loses.
Not finding the money there for 1% would mean they would have to give incentives, i.e. increase the return to find the money.

For 1 Trillion EU for countries like the PIGS, I doupt they could find enough investors with even 3.3% interest... i.e. they would need to give more than that. like 4%, srpeads would rise and the ECB's credibility takes a kick.

Let's assume that ECB borrows 1 Trillion with like 4% interest and lends it for 1% interest. In 10 years ECB would owe to their investors 1.48 Trillions while if we don't default would take 1.1 Trillions from us, for a net loss of 380Billions.

But it's not like the money is needed right now. Currently, with the implemented measures, the PIIGS can sustain paying their wages and running costs and their problem is limited to their inability to pay the interest and debt. Whenever a bond needs to be payed, the European Central Bank can loan the country in need. Needless to say, if the harsh measures stop, Southern Europe will experience growth that can reach even 4-5% of GDP. This additional money can be then used to pay the rest of the debt.

[Justice and Mercy]

a) create a European credit rating agency that will allow the European states to get loans

HAH!

And while we're at it, I'll make a credit agency called "JaM". My credit rating from JaM will always be AAAA (that's right, FOUR As), then I'll be borrowing money left and right.

b) allow the European Bank to hand loans with 1% interest

Who doens't need another bubble or two, hmm?

We can then give time to all the problematic countries such as Italy, Spain, Greece, Portugal etc which they can use to stop their public deficit, without having to adopt harsh measures that kill growth.

Government spending pulls resources away from profitable fields. Government spending does NOT generate economic growth.

[Manuel I Komnenos]

HAH!

And while we're at it, I'll make a credit agency called "JaM". My credit rating from JaM will always be AAAA (that's right, FOUR As), then I'll be borrowing money left and right.



Who doens't need another bubble or two, hmm?

Read the rest of what I said please. We are not looking for a sad excuse to keep things as ed up as they were in the South, but to have an easier transition to economies that can sustain themselves.

Government spending pulls resources away from profitable fields. Government spending does NOT generate economic growth.

What generates growth is lower taxation and certainly not lower wages.

[flonky]

Sure. What I'm saying is that the problematic countries need time to implement measures. For example Europe can say to Greece, in 2020, you should have X number of public servants, your corruption should not exceed Z% of the GDP, your wages should not exceed Y number and your public deficit should be under 4% of GDP. By trying to implement harsh measures in a period of a few months, you make things worse, unemployment rises and growth does not occur.

So, in a nutshell, you think the austerity shouldn't be happening as fast as at the moment?

[Manuel I Komnenos]

So, in a nutshell, you think the austerity shouldn't be happening as fast as at the moment?

Yes. The transition should be less painful.

[flonky]

Yes. The transition should be less painful.

Yeah, I agree. But this is only one side of the problem. For example in Spain, the austerity perhaps should be slower to enable a better recovery (or even any recovery!), but the government also has yes to properly wrestle the regional governments into accepting austerity at all. They missed their EU deficit target by a mile due to that.

[Justice and Mercy]

Read the rest of what I said please. We are not looking for a sad excuse to keep things as ed up as they were in the South, but to have an easier transition to economies that can sustain themselves.

Doesn't matter what you're "looking for", what matters is that no one is going to care what a credit agency created solely for the purpose of giving favorable ratings to particular entities says.

Credit rating agencies are supposed to be removed third parties with no skin in the game. That's kind of the idea.

What generates growth is lower taxation and certainly not lower wages.

"Lower wages" can very well generate growth, if they're lower in certain sectors, namely GOVERNMENT sectors.

Incidentally, it's those sectors which austerity lower wages in.

[Thorn777]

And all this when Europe could:

a) create a European credit rating agency that will allow the European states to get loans
b) allow the European Bank to hand loans with 1% interest

We can then give time to all the problematic countries such as Italy, Spain, Greece, Portugal etc which they can use to stop their public deficit, without having to adopt harsh measures that kill growth.

You tell that to our German leaders. Unfortunately the German voters seem to be more interested in saving earth from an imminet nuclear catastrophe and global warming, thus they must waste their precious taxes in that direction. Who the cares about Southern states. Until we decide to replace German products with someone else's and bring German voters back to reality.

Such things would only make sense in a quasi closed EU market and in such a case many more things could be done as it would also force conssesions of other markets in their dealings among other stuff, but that is pretty much not in tune with the rules of the game.

Your barking at middle-management of USA/UK Incorporated, which is France and Germany. They could just get fired and build their own company and do all these wants of you, but thats srs business. They dont want competition, they want a market and a political ally.

[Claudius Gothicus]

You're joking, right?

Also, see Bernanke's ''printing like boss'' policy in the FED during the last 3 years: almost a 0% interest rate and 2% inflation on an annual scale.