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Bond market giant Bill Gross attacks austerity


feargach

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The usual prejudices come in when a union leader lists the facts of the indisputable harm caused by austerity. But when the same criticism comes, in the Financial Times from the arch-capitalist at the head of bond market colossus PIMCO, then people pay attention.

Bill Gross said:
The UK and almost all of Europe have erred in terms of believing that austerity, fiscal austerity in the short term, is the way to produce real growth. It is not.

You’ve got to spend money.
Failure to heed this obvious fact has caused the eurozone to shrink by 0.5% this year.

Think of that, in a doomed, pointless attempt to save money, we've actually taken five cents in every tenner from everyone in the eurozone.

And for what? Well, we've slightly, very slightly, shaved down the total deficit of the EZ.

How did we achieve this? By bringing eurozone unemployment to all-time highs!
 


nonpartyboy

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The germans should be ejected from the euro, to let the rest of us get on with it.......
 

Volatire

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but .. but .. the europhiles said that Herr Dr Schauble said that Reinhard & Rogoff said that ..
 

Honecker

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I'm sure Michael Noonan has some hurling analogy lined up to explain this.

"Limerick can still win the All Ireland even if they don't beat Tipperary in the first round" or some sh1te. And RTÉ will think it's brilliant.
 

GDPR

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we need to get people working to improve our and their own standards of living, sweeping the streets and making them safe if they have no jobs etc. Possibly the problem is people want too many useless bits of imaginary paper before they will get off their arses.
 

Boy M5

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Now Barusso wades in and says Europe has reached the limit of austerity, there isn't the support for it from us proles.

Arch fiscal dominatrix Angela's dungeon to be shut? He didn't say the last bit, I did.

Anyway here's the link
Barroso says Europe near austerity limit - FT.com
 

Mad as Fish

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we need to get people working to improve our and their own standards of living, sweeping the streets and making them safe if they have no jobs etc. Possibly the problem is people want too many useless bits of imaginary paper before they will get off their arses.
The councils are getting rid of as many workers through early retirement as they can around here so that ain't going to happen. As for people not wanting to get off their arses what on earth gives you the right to be so stupidly arrogant and superior in your opinion of the unemployed?
 

james5001

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The whole system is totally f*cked up. The consumerist materialist culture needs to end.
 

Mad as Fish

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Now Barusso wades in and says Europe has reached the limit of austerity, there isn't the support for it from us proles.

Arch fiscal dominatrix Angela's dungeon to be shut? He didn't say the last bit, I did.

Anyway here's the link
Barroso says Europe near austerity limit - FT.com
Now that the Guardian has taken a break from Paddy Bashing over the Savita case here's something a little more level headed from them -

This is precisely what Ireland, or Spain, or any of the other troubled southern eurozone countries, cannot do. Since only the German-dominated European Central Bank can print euros, investors in Irish bonds fear default, and the interest rates are bid up accordingly. Hence the vicious cycle of austerity. As a larger percentage of government spending has to be redirected to paying rising interest rates, budgets are slashed, workers fired, the economy shrinks, and so does the tax base, further reducing government revenues and further increasing the danger of default. Finally, political representatives of the creditors are forced to offer "rescue packages", announcing that, if the offending country is willing to sufficiently chastise its sick and elderly, and shatter the dreams and aspirations of a sufficient percentage of its youth, they will take measures to ensure the bonds will not default.

There's no need for all this economic sadomasochism | David Graeber | Comment is free | The Guardian

Is the world at last slowly waking up?
 

westernyelp

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we need to get people working to improve our and their own standards of living, sweeping the streets and making them safe if they have no jobs etc. Possibly the problem is people want too many useless bits of imaginary paper before they will get off their arses.
Says Peter Griffin. Clueless stuff.
 

Mad as Fish

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Unfortunately, I get the distinct feeling that the economic problems facing us can't actually be solved.
Apologies for the doom porn sentiment but that's my evolving view
You wouldn't be alone in that. Economies that depend on people buying stuff above and beyond the basics will eventually run into the problems of people having no where to put it all and an ageing population without the consumer zeal of younger generations.
 

james5001

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Unfortunately, I get the distinct feeling that the economic problems facing us can't actually be solved.
Apologies for the doom porn sentiment but that's my evolving view
I think so too, especially with the massive problem that is climate change. I'm coming to the conclusion that the only system which will stop us destroying ourselves is an extremely authoritarian one (And I'm very libertarian). One that the media hates, as they represent the continuation of the status quo.
 

Mad as Fish

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Says Peter Griffin. Clueless stuff.
I thought Master Griffen was a bit brighter than that. He did at least work out that the old B'stard was a paedo. Our friend here would probably end up with a sore bottom before he sussed it.

Hang on, I might be getting my Griffins mixed up, I'm on about Chris, I think, but that seems even more appropriate.
 

Boy M5

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Now that the Guardian has taken a break from Paddy Bashing over the Savita case here's something a little more level headed from them -

This is precisely what Ireland, or Spain, or any of the other troubled southern eurozone countries, cannot do. Since only the German-dominated European Central Bank can print euros, investors in Irish bonds fear default, and the interest rates are bid up accordingly. Hence the vicious cycle of austerity. As a larger percentage of government spending has to be redirected to paying rising interest rates, budgets are slashed, workers fired, the economy shrinks, and so does the tax base, further reducing government revenues and further increasing the danger of default. Finally, political representatives of the creditors are forced to offer "rescue packages", announcing that, if the offending country is willing to sufficiently chastise its sick and elderly, and shatter the dreams and aspirations of a sufficient percentage of its youth, they will take measures to ensure the bonds will not default.

There's no need for all this economic sadomasochism | David Graeber | Comment is free | The Guardian

Is the world at last slowly waking up?
Polly Toynbee must be in ecstacy
 

feargach

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Spend money is the answer?
But spend whose money?
In case you missed it, the long-standing proposal, blocked by Berlin at present, is to create "Eurobonds", which would be like a little-known financial instrument called the American Dollar. Between Mexico and Canada there are a group of states which issue joint debt obligations, through an institution called the Federal Reserve, which function as a means of exchange for tiny Wyoming and massive New York.

This instrument is issued by the federal reserve. Who the exact issuer of Eurobonds would be is unclear as the Germans are still blocking the deal. But if it was the ECB, for example, then technically it would be the ECB's money.

Another option would simply be to relax the arbitrary Troika deficit targets which have devastated Europe, and let individual countries issue more bonds. In which case the rather weird "whose money" question would be the national institutions of each member state.
 

gerhard dengler

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You wouldn't be alone in that. Economies that depend on people buying stuff above and beyond the basics will eventually run into the problems of people having no where to put it all and an ageing population without the consumer zeal of younger generations.
The problem is more multifaceted tthough

We have massive levels of indebtedness at all levels because credit instead savings fuelled expenditure.

So we're stuck with a problem of no savings, huge indebtedness, no credit and the proposed solution is? People need to spend more to correct the problem :roll:
 
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