What the hell do we do about the Euro?

[Richard Roman]

Far from promoting growth and political solidarity, which is what the single currency was supposed to do, the euro is in fact achieving the opposite effect, by condemning the eurozone to long term recession and now extreme political infighting. Again, it cannot be right to persist with something which is achieving the opposite of what it was meant to simply because the alternatives are thought to be worse.

 

What does anyone here think? This is serious

[Richard Roman]

We could have a meeting

 

Where will the world be in 2020?

 

get a group of us to discuss what we see as the major trends....... and discussion from the floor?

[Richard Roman]

Interesting points. I agree with what you say which is basically that the West has taken its position for granted and now faces increasing competition from the east and is losing out as it cannot give up its sense of rights

 

I certainly think this is worth an economic forum/discussion as to where the future is heading!

 

BTW - Great to see you here majdi!

[马吉帝 Majdi]

The amount of wealth is growing with development, there is no way we can say that the total earth wealth before 2000 years, with few millions in population, equals to the same wealth of today including all technology products, cities, businesses and the assets held by billions of people. Human creativity can always bring new ideas and add value to the global wealth. 

 

The transfer of wealth is a transfer of manufacturing and service supply base. 

Countries like Greece and Italy are consuming more than what they are producing, the government has to borrow money to support the expenses and increase its deficit. Businesses are moving outside the Euro zone to increase profit (greed), avoid legislation,  tax advantage ... so Italian are becoming unemployed and get paid by the government for being unemployed --> the italian government has to increase tax on businesses to support the unemployment cost and reduction in tax due to unemployment and business movement --> business cost will increase, some will bankrupt, move abroad, increase price or less profit --> less taxes paid to government --> more unemploment ---> more taxes from business --> and so on. This is the brutal fact of open markets. 

An Italian worker who lives in a house worth $200,000 with monthly Salary $3,000 wants to compete with a Chinese worker who lives in the family house for free with a monthly salary of $200... if the Italian can't come up with a product that worth the cost of his/her living/salary vs. the Chinese, the Italian will lose his/her job. Today China become the world 2nd runner in R&D expenditures, so the crisis has just started. 

[Richard Roman]

Interesting ideas majdi - however - it is based on the supposition that there is a limited amount of wealth to be shared. Not sure i agree with this -

 

Time for an economics debate methinks!

[马吉帝 Majdi]

There is a global transfer of wealth from the west to the east. Which means, some rich countries are becoming poor and some poor becoming rich (China).  

Demotion is against our human nature, so the citizens in a democratic nation will always vote for the president who makes them rich not poor, hence, every new president has no choice but to borrow money to support that nation 'temporarily', until the next election, and eventually becoming more poor and so on. 

http://en.wikipedia.org/wiki/Government_debt 

Looking at the map of debt shows the east-west wealth train direction. 

 

Even the great example, Germany, has 83% deficit of its GDP. UK has 76%, Greece is only the tip of the ice berg. The underlying problem is not limited to some countries in the Euro zone, but to the whole Euro zone.

Germany and UK bailing out Greece is for sake of supporting their customers, otherwise, the collapse of Greece, Spain, Portugal, Ireland will have a domino effect on the consumers market for Germany and UK, which will lead to decrease in demand --> decreased production/sales --> growth slow down --> economic crisis in Germany/UK. 

 

[Richard Roman]

Wonderful article from our dear mayor of London:

We are using fiscal bullying to try to turn the Greeks and Italians into Germans. The whole European enterprise is now devoted to keeping the euro alive on the utterly specious grounds that the currency is synonymous with “Europe”. We are nailing shut the exits of William Hague’s famous burning building. British taxpayers going to be shelling out ever more in bail-out dosh, much of which will ultimately go to banks and bankers’ bonuses. And all the while the southern EU members will be put on ever tougher austerity regimes that frankly don’t suit their needs. No matter how hard I diet, I won’t look like a championship athlete. The Greeks can’t become Germans, and it is brutal to force them to try.

[Richard Roman]

OK - I was laying it on - but this could happen

[Richard Roman]

Joshua - on one level I agree with you

 

However - If all your bank savings are lost and your investments are lost and you have 2.4 kids to put through  school and you lose your job....etc

 

This is happening in Europe now!