This is an idea how just unlikely the European situation is to resolve reasonably.<\/p>\n
According to Bloomberg, Anibal Cavaco Silva – the President of Portugal – in trouble but one of the tiny members of the EU – wants the European Central Bank (roughly the Federal Reserve of Europe – and you could at this point replace ECB with “Germany”)\u00a0 – as the “lendor of last resort” to go into the secondary bond market and buy up “unlimited amounts” of bad debt to prevent speculators from driving down the price of the worthless debt.\u00a0\u00a0 This was roughly the same argument that the reason Lehman Brothers was failing was because of short selling, rather than people realizing Lehman had huge worthless investments and was insolvent and were dumping their stock and nobody was buying.<\/p>\n
Being the “lender of last resort” really would mean the ECB might lend money to a country or its banks for a few days to prevent them from imminent failure and keep them able to pay their bills.\u00a0\u00a0\u00a0\u00a0 Trying to control the values of bonds in the secondary market by buying up unlimited amounts of bad debt is a huge moral hazard – as Portugal would just keep selling more bad debt and not address the systemtic problems in their economy.\u00a0 Who do they think they are – the United States?<\/p>\n
I haven’t double checked this, but I remember hearing when this thing started that the countries in the EU that got in trouble the fastest with massive debts were the ones who actually tried to comply with the Kyoto treatyto limit Co2 emissions – shutting down all their “dirty” industry” and spending massive amounts on “green” infrastructure public works projects like solar power farms.\u00a0\u00a0 Who do they think they are, the United States?<\/p>\n
China is declaring victory publicly now.\u00a0\u00a0 I wonder if Al Gore knows he was the cause for World War Three?<\/p>\n
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This is an idea how just unlikely the European situation is to resolve reasonably. According to Bloomberg, Anibal Cavaco Silva – the President of Portugal – in trouble but one of the tiny members of the EU – wants the … Continue reading