• It has come to our attention that some users may have been "banned" when they tried to change their passwords after the site was hacked due to a glitch in the old vBulletin software. This would have occurred around the end of February and does not apply after the site was converted to Xenforo. If you believe you were affected by this, please contact a staff member or use the Contact us link at the bottom of any forum page.

Eurozone's exit from recession


Ramon21

Active member
Joined
Aug 1, 2008
Messages
129
The eurozone has emerged from recession in the third quarter, boosted by strong growth in Germany, leaving Britain languishing in its longest downturn in history.

The eurozone, which is made up of 16 countries that use the euro, reported that gross domestic product (GDP) — a key measure of economic health - grew by 0.4 per cent in the three months to September. The 27-nation European Union, which is home to half a billion people, also reported growth of 0.2 per cent in the third quarter.

Germany, the zone's biggest economy, confirmed its recovery, after exiting recession in the second quarter, when it said that GDP increased by 0.7 per cent in the third quarter. France also underlined its recovery, with 0.3 per cent growth.

Italy also emerged from recession today, with quarterly growth of 0.6 per cent following five quarters of contraction along with the Netherlands. However, Spain's economy continued to contract, shrinking 0.3 per cent in the third quarter.
 

TradCat

Well-known member
Joined
Jun 5, 2005
Messages
1,992
If this takes interest rates will rise and Ireland will sink.
 

Ramon21

Active member
Joined
Aug 1, 2008
Messages
129
If this takes interest rates will rise and Ireland will sink.
The interest rates will likely stay the same for atleast 6-9 more months.
 

Cassandra Syndrome

Well-known member
Joined
Aug 23, 2009
Messages
16,908
Its all crap. Massive government stimulus and collapsing imports from collapsing consumption affect GDP figures

Y=C+I+G+X-M

When the stimulus runs out the economies will shrink again.
 

Cassandra Syndrome

Well-known member
Joined
Aug 23, 2009
Messages
16,908
Still, I'd rather their slump than our depression.
Ah yeah, even Iceland is faring better!. But there will be no worries about rate increases. They still have deflation and them stimulus programs will end soon.
 

jcdf

Well-known member
Joined
Sep 8, 2005
Messages
3,778
If this takes interest rates will rise and Ireland will sink.
This is ok! The faster we hit the bottom the quicker we will rise.
Its all crap. Massive government stimulus and collapsing imports from collapsing consumption affect GDP figures

Y=C+I+G+X-M

When the stimulus runs out the economies will shrink again.
They will not shrink by the same degree though, so this is good.
 

Cassandra Syndrome

Well-known member
Joined
Aug 23, 2009
Messages
16,908
This is ok! The faster we hit the bottom the quicker we will rise.

They will not shrink by the same degree though, so this is good.
The fundementals are wrong though. Thats why I am always on here giving out stink! Its like the minor growth that occured in 1930 and 1931 in the US under the Hoover administration before GDP collapsed 25% up until 1933. It took a World War to end the depression.
 

tiny tim

Active member
Joined
Sep 16, 2009
Messages
142
The fundementals are wrong though. Thats why I am always on here giving out stink! Its like the minor growth that occured in 1930 and 1931 in the US under the Hoover administration before GDP collapsed 25% up until 1933. It took a World War to end the depression.

The way things are happening here maybe we'll have a civil war and like WW2 we'll cop on to ourselves and start a proper recovery.
 

jcdf

Well-known member
Joined
Sep 8, 2005
Messages
3,778
The fundementals are wrong though. Thats why I am always on here giving out stink! Its like the minor growth that occured in 1930 and 1931 in the US under the Hoover administration before GDP collapsed 25% up until 1933. It took a World War to end the depression.
I do not think there is going to be a World War. Perhaps the World economy will just come to mimics Japans over the last two decades. Zero growth becomes the natural norm and people adjust their expectations to match.
 

Cassandra Syndrome

Well-known member
Joined
Aug 23, 2009
Messages
16,908
I checked out the GDP details on the Eurostat website. Year on year, Private Investment has plummeted 14% in the Euro 27 area.

No recovery can take place unless Private Investment grows. We have the accelerator effect in reverse here and recoveries require Private Investment to grow, have a positive accelator with increased employment, increased consumption and ultimately a positive multiplier effect.

Accelerator effect - Wikipedia, the free encyclopedia
 

jcdf

Well-known member
Joined
Sep 8, 2005
Messages
3,778
I checked out the GDP details on the Eurostat website. Year on year, Private Investment has plummeted 14% in the Euro 27 area.

No recovery can take place unless Private Investment grows. We have the accelerator effect in reverse here and recoveries require Private Investment to grow, have a positive accelator with increased employment, increased consumption and ultimately a positive multiplier effect.

Accelerator effect - Wikipedia, the free encyclopedia
Year on year, Private Investment has plummeted 14% in the Euro 27 area, since when?

Perhaps this accelerator effect being in reverse is normal in developed countries. Could not consumption naturally fall off as people only consume so much in their lives. A typical person buys a house, car, furniture and a wardrobe. These things account for most of a persons life consumption. After wards they will purchase replacement clothes but these will be fewer and more spread out over time.
Add to this the fact that the populations of developed countries are falling.

Would it not be reasonable to say that the accelerator effect in reverse is a normal end phase for developed countries?
 

myksav

Well-known member
Joined
May 13, 2008
Messages
23,546
This is ok! The faster we hit the bottom the quicker we will rise.

They will not shrink by the same degree though, so this is good.
The Titanic went to the bottom fairly quick, she hasn't risen yet.
 

Cassandra Syndrome

Well-known member
Joined
Aug 23, 2009
Messages
16,908
Year on year, Private Investment has plummeted 14% in the Euro 27 area, since when?

Perhaps this accelerator effect being in reverse is normal in developed countries. Could not consumption naturally fall off as people only consume so much in their lives. A typical person buys a house, car, furniture and a wardrobe. These things account for most of a persons life consumption. After wards they will purchase replacement clothes but these will be fewer and more spread out over time.
Add to this the fact that the populations of developed countries are falling.

Would it not be reasonable to say that the accelerator effect in reverse is a normal end phase for developed countries?
Since Q2 2008.
Private investment is mostly related to companies. The accelator principle applies here it relates to the changes of output. The capital - Output ratio is the measure of the amount of capital required for production.

A firm during a downturn may feel its needs more capital expenditure (new machines, computers etc.) not because of consumer demand but of expected consumer demand in the near future.
A firm during a boom is flat out and everyone is busy doing what they are doing. During a slowdown, the firm has a chance to review itself internally in terms of production capacity, faulty old machines that were running 24 ./ 7 and are now depreciated.
In recessions gone past firms would use their savings from the booms and invest in capital expenditure and build up the stock levels.

The accelerator comes from the future need to increase output requires great investment in capital stock. This causes a dramatic increase in Private Investment has many firms are having the same idea. Then word may get around that your competitors are investing and so starts a boom in capital producers of machines etc. They need employees to make capital items which are labour intensive and unemployment falls at the same time Private Investment increases.

As employment rises so does consumption and the firms who orginally invested in the capital goods, have now got demand for the goods they produced during the previous boom. The mulitplier is now moving in the right direction with the accelator incresing in the entrants for the booming capital goods market.

Unfortunately this time around companies have borrowed too much and very few having savings. They can't invest with their savings and they can't get credit.

Rather than surveying the shop floor of their premises with their employees on a shopping capital list, they are having to cut jobs, wages, sell capital items and downsize. They are not worried whether they have enough capital - output ratio in the growth stage. They are worried if they are going to be lucky to be still there.

Downsizing is the accelerator in reverse as there are no orders for capital goods and therefore no employment.

That is one of the reasons why we can't have a jobless recovery and unemployment is not a lagging indicator.
 

jcdf

Well-known member
Joined
Sep 8, 2005
Messages
3,778
Unfortunately this time around companies have borrowed too much and very few having savings. They can't invest with their savings and they can't get credit.
Maybe thye should have saved some money. Some of them will go bust but others will get the capital they need to reinvest.
Rather than surveying the shop floor of their premises with their employees on a shopping capital list, they are having to cut jobs, wages, sell capital items and downsize. They are not worried whether they have enough capital - output ratio in the growth stage. They are worried if they are going to be lucky to be still there.
Some of them will be and some will not. This is the nature of capitalism.
Downsizing is the accelerator in reverse as there are no orders for capital goods and therefore no employment.
That is one of the reasons why we can't have a jobless recovery and unemployment is not a lagging indicator.
Does not the employment increase after the recovery. From what I have heard unemployment is a lagging indicator.
 

Cassandra Syndrome

Well-known member
Joined
Aug 23, 2009
Messages
16,908
Maybe thye should have saved some money. Some of them will go bust but others will get the capital they need to reinvest.

Some of them will be and some will not. This is the nature of capitalism.

Does not the employment increase after the recovery. From what I have heard unemployment is a lagging indicator.

Myth look at the 1930s. It is a coinciding indicator. They mention the recessions of 91 and 2001 as jobless recoveries but they were mini recessions solved by huge monetary and fiscal stimulus that turned the GDP figures around much quicker before more people were employed.
 

DaBrow

Well-known member
Joined
Jan 23, 2008
Messages
416
The only way we could as members of the eurozone and EU exit Recession would be if the Euro weakened significantly..... The Strong Euro is what is strangling us: Business Costs are too high making it more expensive to purchase irish exports which fall and as a consequence jobs in Ireland are lost because profits are low due to the higher cost of producing Irish Goods and Services.

Goods and Services in Ireland have not deflated in Price; property values have dropped but what good will that do if a simple product i.e. Chocolate bar in Ireland is more expensive to purchase than the same one across the border?

If we really want to recover we should leave the euro: We could devalue and become competitive again, a weaker Punt Nua would help us economically than the Euro which is strong and we have no control over it.

One Reason why the EFTA Nations are in a better shape than us..... Iceland had its crisis but they are now making their way back to normal because they can compete, which we cannot.
 

Cassandra Syndrome

Well-known member
Joined
Aug 23, 2009
Messages
16,908
The only way we could as members of the eurozone and EU exit Recession would be if the Euro weakened significantly..... The Strong Euro is what is strangling us: Business Costs are too high making it more expensive to purchase irish exports which fall and as a consequence jobs in Ireland are lost because profits are low due to the higher cost of producing Irish Goods and Services.

Goods and Services in Ireland have not deflated in Price; property values have dropped but what good will that do if a simple product i.e. Chocolate bar in Ireland is more expensive to purchase than the same one across the border?

If we really want to recover we should leave the euro: We could devalue and become competitive again, a weaker Punt Nua would help us economically than the Euro which is strong and we have no control over it.

One Reason why the EFTA Nations are in a better shape than us..... Iceland had its crisis but they are now making their way back to normal because they can compete, which we cannot.
Spot on. Our own currency, backed by gold (although I have discussed this with another good poster here about this) maybe (we don't have much to begin with.

We need to devalue it to export. A new banking system. Not fractional reserve (Boo!) but either full reserve or free banking. Ideally the central bank's base discount rate needs to be between 5 and 10% to

1. Encourage savings. Investment is more solid from savings rather than crazy leveraged derivatives.
2. Deter loans and have people think more in terms of setting up a business from savings and gradually expanding like in the way capitalism should work
3. Provides grace for expansionary monetary policy. If the economy slows down and rates are at 7% there is plenty to play with there to reduce and stimulate the economy. All across the G7 rates are at close to 0% and QE is the last roll of the dice. Terrifying scenario.

For this rate at 5 - 10%, we need some inflation 4-5% is manageable. The Phillips curve is redundant now so I don't think we would have a cost push inflation from wage increases etc.
 

Cassandra Syndrome

Well-known member
Joined
Aug 23, 2009
Messages
16,908
You cannot beat reviewing total tax revenue for a government in testing how well the economy of a nation is performing. Here in Germany, a country many Pollyannas have touted as saying that the recession is over, tax receipts continue to fall. They are 6.5% lower than from this time last year, a post WW2 record. They are also behind in their predictions they made back in May, which was before this so called "growth" occurred.

German tax revenue seen falling short - Boston.com

By the way Ibis this thread is proof that I discussed the Eurozone / France / Germany coming out recession issues. You spoke a falsehood saying I ignored the issue

How please proove your other libelous claim by highlighting the thread that I said Iceland never used the IMF.

Ta.
 
Top