Nick, if Europe keeps on the austerity route, it might also adversely affect the Germany-Merkel exports as well.

That's a certainty, Baz; As it stands it will effect everyone's exports right
around the world. But this will come about whether we do or do not implement
austerity measures. You know my stance here, let the whole system collapse now
and write off the debt things will be over in 18 months. Keep pumping money in
and the extra debt will make this all last another 4 years at least. The
UK government has already indicated that it's not in favour of any more quantitative
easing, I suspect their reason is that they know that easing measures
will lead to very high inflation coming back in years to come. I will not be
surprised if once this recession/depression has passed American interest rates
will go higher than those in the UK, but that will depend on the UK holding
back on any more easy money being pumped into our financial system. Bond rates
here, in America and Germany are at their historic lows so don't be surprised
if you start to see them rise again latest by the end of this year.

---

The Kite Fliers

--------------------
Kite fliers: An imaginary club of solo members, those who don't yet
belong to a formal team so "fly their own kites" - as the saying goes.

Banks in a "Zombie Zone

...BANKING BLACK HOLE....

The above link is one reason why Cameron will not sign up to either a
federal Europe nor to the Euro bond or even the new proposed financial
support treaty.

The UK banks may at some stage need to call on the government for extra banking
support especially if the Euro fails or several others countries turn turtle
like Greece. We have the available funds but not enough also to support
European banks and/or their countries too. If the UK banks require another
bailout it's because those abroad have finally failed. We therefore can not
commit ourselves to financially support both Europe's and our own financial
sectors together. For when the piper comes to call in the UK we wont be able
to pay because we had to give it all to that lot in Europe first. No, we're
not going to be that stupid, thank you, when the financial system in Europe
finally nose dives then at least we will still be left standing on our feet
here in the UK, they will be hellishly wobbly legs though.
I have a feeling that if Germany holds back against quantitative easing plus
fails to underwrite a Euro bond several other countries will collapse like
Greece. Now due to resentment against Germany's wealth not only is the Euro
at stake here but also the ECM too for many ECM countries will feel that they
will always be a poor man of Europe and subservient to Germany and it's wealth.
To these's ECM countries being in the ECM is to the Euro currency anyway.
Many ECM countries can't run their financial affairs the same way Germany does.
A complete change of mind think and working ethics would have to take place
here first. So by Germany insisting on a federal Europe where Germany fiscal
policy will be applied throughout all ECM countries will lead to failure again
in years to come.

What we see here today is yet again UK government thinking going completely down
the wrong road. Where as after WW2 we thought Europe was the way forwards,
we now find, "No it was not" for it was the worst route to take. The development
of the Commonwealth was the road we should have taken, inter-developement between
all member countries. Australia is finding it's feet, Canada's found theirs and
India is developing in to a very big global business player. None are trying
to rival one another especially politically and none are a drain on the other.
Take a look at Europe and you see it is slowly dying on it's feet, bar Germany,
and has been doing so since post WW2. Magi Thatcher said, "Europe is history"
with regards to it's prominence in the world and her words are coming to play.
OK, the UK spent post WW2 cementing it's ties with Europe, no problem with that.
But it's mistake was to try and cement itself in financial ways too and this
has shown it'self to have been a very big mistake...the ECM is a millstone
around the UK's neck and it's about time it threw this millstone off.
The Europe basket is not the place to be putting too many of your eggs in for
as the years go on less and less of your eggs are going to be hatching here.

---

The Kite Fliers

--------------------
Kite fliers: An imaginary club of solo members, those who don't yet
belong to a formal team so "fly their own kites" - as the saying goes.

Excellent post Nick.

---

Excellent post Nick.

Ta, Sirius; Europe will go on a boom again one day and I suspect the turning point
leading to this will be just as the ECM union finally breaks up or the Euro
itself finally collapses.....It's a funny old world we live in but some people
in high office have made it more funnier than it aught to have been.

---

The Kite Fliers

--------------------
Kite fliers: An imaginary club of solo members, those who don't yet
belong to a formal team so "fly their own kites" - as the saying goes.

We need this ASAP!

8 out of 10 want referendum

---

Why can't they just wake up & realise that the Euro is dead? Europe can recover now if that issue is dealt with head on instead of burying their heads in the sand with their asses stuck in the skies!

Agreed Spanish bailout not convincing markets

If it's not resolved anytime soon, we will be facing 20 years of grief!

---

My gosh, that was an excellent post too.

Where as after WW2 we thought Europe was the way forwards, we now find, "No it was not" for it was the worst route to take. The development of the Commonwealth was the road we should have taken, inter-developement between ll member countries. Australia is finding it's feet, Canada's found theirs and India is developing in to a very big global business player. None are trying to rival one another especially politically and none are a drain on the other.

Problem is we lost the Empire and have given most of the Commonwealth away. And just look at the state that some of our previous Commonwealth countries are now in since we gave them independence.

Yes, we certainly did not do ourselves any credit in the way we handled some
of these Commonwealth countries. I suspect many of them woke up to the fact that
we were robbing them of their natural resources or just using them and their
populations as a source of very-very cheep labour and in their own countries too.
To this end many of these countries fought for independence at a time when they
really were not ready to manage their own affairs. Same problem occurred in
Britain when the Romans suddenly up-sticks and went. We were not ready to take
on home rule hence take over where the Romans left off so we went through a
long unsettled period known as the dark ages.

---

The Kite Fliers

--------------------
Kite fliers: An imaginary club of solo members, those who don't yet
belong to a formal team so "fly their own kites" - as the saying goes.

3 interesting reports....

Spanish banks downgraded, including a UK arm

UK Prospects improve but under a shadow

Our problems are home grown

---

Sirius, I think the concern is if the Euro is dead and we acknowledge it, we are basically insuring a global recession for the next several years due to market dislocations. Might be the best option, but I suspect many don't see it that way yet.

True & the longer they stay blind, the longer the recession will be.

---

Which is why they might want to put things off -- not saying that would work, but frankly, with the US still dealing with the banking/housing/finance bubble burst and what it did to employment and what the combination did to consumer spending in the US -- mixed with the long term mess in Europe, much of which is demographic in addition to the collection of other issues, some country specific, some continental, I guess there are folks who somehow think injection of spending will fix things (it has in the past in the US -- which is so consumer spending dependent.

True & the longer they stay blind, the longer the recession will be.

Some more interesting reports....

Kingmaker or Dealbreaker?

Cyprus next

Spanish bailout failing already

If Cyprus is given a bailout, that'll make 20% of the Eurozone rescued, so I'm wondering what's the financial danger level?

25% - 30% - 50%

As stated in the Spanish bailout report, where's the money going to come from?

---

Some more interesting reports....

Kingmaker or Dealbreaker?

Cyprus next

Spanish bailout failing already

If Cyprus is given a bailout, that'll make 20% of the Eurozone rescued, so I'm wondering what's the financial danger level?

25% - 30% - 50%

As stated in the Spanish bailout report, where's the money going to come from?

How many more countries to follow suit and fail like Greece,Portugal, Ireland
and Spain? Are we citizens to be taken as FOOLS!! there is not enough money
in the coffers to support any more failures. If Italy fails then all in the
ECM might just as well pack up their bags and go home. If Frances fails, as is
suspected to happen, then the depression has set in so don't walk past any
tall buildings for you might find someone landing on your head.

---

The Kite Fliers

--------------------
Kite fliers: An imaginary club of solo members, those who don't yet
belong to a formal team so "fly their own kites" - as the saying goes.

As stated in the Spanish bailout report, where's the money going to come from?

Well, the USA bailed us out in and after WWII as much as for their own benefit as ours, and the Europe situation isn't helping them much now. But aren't they a bit cash strapped themselves at the moment?

On 31 December 2006, Britain made a final payment of about $83m (£45.5m) and thereby discharged the last of its war loans from the USA.

Keynesian economics got to work in those times and it worked to a high degree
because bond markets were not to advanced and switched in like they are today.
Today, bond markets assess your liabilities as well as your debt when deciding
what interest rate you should be paying on your bonds. To this end no one
can afford to get too far into debt or underwrite other countries debt without
the cost of your debt going up. So if Germany underwrites the Euro bond then
the interest on it's bonds will rise. The Germans don't see why they should
have to pay this extra cost, at the moment, just to bail out the monkey countries.

---

The Kite Fliers

--------------------
Kite fliers: An imaginary club of solo members, those who don't yet
belong to a formal team so "fly their own kites" - as the saying goes.

Shouldn't this be saying - Europe may have to sacrifice Greece?

Another leader in cloud cuckoo land

World Bank Warning

closer to home - how many others impacting?

Already here?

---

The Germans don't see why they should have to pay this extra cost, at the moment, just to bail out the monkey countries.

Why that sounds conservative, maybe even Norquist. Pay your own way. What a concept.

---

Gary, indeed it does. There is also a significant element of 'nose/face' in the German attitude. If southern Europe is excised from the Euro, several things happen for Germany.

1) Those southern Europe euro bonds will get defaulted -- there would be no incentive for the excised countries of the south to make good any pledges on payments.

2) The excised countries would stop paying for any projects in process worked on by northern contractors. They also would no longer be able to import from the north.

3) The revised deutschmark (ah er northern Euro) would rise in value without the south to depress its value, thus undermining German exports outside the Deutschzone.

I think there are folks in Germany who have a clue regarding these issues which is why they are trying to somehow handle things.

Excising the south would insure a depression there and a severe recession in the north. That probably isn't something the Brusselites want.

Sirius, it is possible that Greece will 'excise itself' by the voting later this month.

If they do, it just *may* be possible that other countries in the south will find a way to manage within the Euro.

Makes me sure glad my wife and I got our Greek vacation done last year though <smile>

Nick, here's a solution -- one I swear some Americans are seriously advocating -- eliminate health care for the poor and elderly. They die off a LOT faster, that reduces the pension costs big time as well. Voila, balanced budgets. I suppose free burial should be arranged though.

Barry, a take off IMO from Jonathan Swift.

---