[evilgenius]

Personally, I vote for a new system which will prove capable. What I think doesn't count, though. What do you think?

I set this to run for 200 days. I enabled changing of a person's vote so that as things go along they can change with the events if they like.

[Sixstrings]

I predict a few states will leave the Euro single currency. They will try to the bitter end to save it though, lots of Euro printing.. people will buy Swiss Francs, the Swiss will just devalue and buy Euros; China will play the US off Europe dangling their wallet. Fiats running around chasing each other.. how long can the shell game last?

[Daniel_Plainview]

The current European model depends upon quarterly GDP growth to sustain the huge govt debts. This model is doomed, and will collapse. Only a small handful of productive European countries will avoid default (Germany, France, and some Scandinavian countries).

Since any "new system" will also depend upon quarterly GDP growth, it will also be doomed to failure.

[Oakley]

Look at it on a personal level.

If you are already in debt up to your eyeballs, and cannot possibly pay, and your income starts declining instead of increasing, you cannot go out and spend money on new things. Your income is committed to paying your debts. So until the debt is liquidated you are just on a treadmill, with your financial condition worsening until you reach a breaking point and default.

The more energy that governments and central banks expend attempting to keep the walking wounded from defaulting, i.e., keeping them in debt, the longer the economic stagnation continues.

This applies to Europe and to the US.

There are at least two fundamental factors at the base of the current crumbling of the world economies.

The first of course is energy. The increase in the cost of energy is essentially a decrease in the net income of the economy. We can produce fewer economic goods as a result, so we have less net income with which to pay our debts.

The second is the monetary system where banks have been granted the privilege of creating money out of thin air and loaning it into existence, charging someone interest on the loan. This is a fraudulent system that results in a huge transfer of wealth out of the hands of the majority into the hands of the financial community. This scheme first inflates asset values like homes, stocks, bonds, gold, etc., and then as the effect of the inflated currency wears off, the economy responds by trying to deflate, as when the stock markets, real estate markets, etc. crash. Since the last major deflation that ended in 1932, the bank/government collusion has inflated the money supply from $50 in 1932 billion to over $9,479 billion today. This created an equal amount of debt that is owed to banks, and it is this debt that is in the process of collapsing as the system is overwhelmed by the deflationary forces. The governments and central banks are desperate to prevent this deflation, using every effort to keep in a position to continue the plunder that is mutually beneficial to banks and governments.

But the only answer these con men have is to create more debt and to squeeze the gullible public even more with "austerity measures" like more taxes and screwing those who have paid into the government Ponzi schemes we call Social Security and Medicare in the US. And if they can't get more taxes directly, they just will create more checking account balances at the Federal Reserve Bank to loan to the federal government, thus indirectly skimming more of the public's wealth by diminishing the purchasing power of the money the public uses.

So this worldwide collapse will proceed until the pain and suffering of the public is so great that they revolt, and who knows where the cards then fall.

The only sane solution is being offered by Ron Paul, at least for the US, but the war mongering wing of the Republican Party is doing what they can to see he does not get the nomination, and the socialist left in the country is likewise unwilling to face a rational workout of this disaster, instead insisting on holding on to the pittance that the government passes out to them in return for voting the status quo. This will not be settled at voting booths, but rather in the streets.

I like George Carlin's take on it:

http://www.youtube.com/watch?v=JChUO4TLjnY

[evilgenius]

Ok, so far after a single day I am tied for last with 'other' at 6 percent. Yeah, one vote, mine, for a new system that will prove capable. 53 percent say break up. The sample is obviously not large enough yet to come to any conclusions about what people think, but initially I am not in the majority.

[peripato]

The US Dollar is looking very, very bullish lately, signifying that whatever happens in Europe it's gunna do so sooner, rather than later, and will most likely be a doozie of a disaster when it does. How disastrous? Enough to take out the entire Eurozone eventually. This is what occurs when conceited old white men try to cheat death and Mr Market.

[Outcast_Searcher]

This applies to Europe and to the US.

...

The only sane solution is being offered by Ron Paul, at least for the US, but the war mongering wing of the Republican Party is doing what they can to see he does not get the nomination, and the socialist left in the country is likewise unwilling to face a rational workout of this disaster, instead insisting on holding on to the pittance that the government passes out to them in return for voting the status quo.

I don't know how it will be resolved. I just am SURE that neither a traditional (or anything close) left or right wing answer comes close to dealing with the core problems. I suspect it will take a long time before things get bad enough to prompt real change.

The "may you live in interresting times" curse is reaching a frightening "in your face" reality these days, IMO.

[Oakley]

I don't know how it will be resolved. I just am SURE that neither a traditional (or anything close) left or right wing answer comes close to dealing with the core problems. I suspect it will take a long time before things get bad enough to prompt real change.

The "may you live in interresting times" curse is reaching a frightening "in your face" reality these days, IMO.

Wouldn't it be great if people valued freedom above government control. I agree totally that people will likely only respond to serious pain to prompt change. I call that the "revolution point", the point where the pain of going along with the current system is noticeably greater than the pain that comes from revolution, whether that revolution is peaceful or the more traditional violent form. Supporters are calling the Ron Paul movement a revolution, but if we don't succeed, I fear the worst. I see the current crisis period becoming much worse; essentially it is the disintegration of the systems of empire, managed economy, debt based money, and welfare state.

[evilgenius]

Two days in and breakup is at 65%.

[cephalotus]

From my perspective it doesn't look bad at all with the exception of Greece which is a huge mess but just a little country.

I don't know if there can or will be a good solution für the Greec dilemma but otherwise the Euro zone looks quite fine to me. Portugal, Irleland , Italy and Spain seem to get their financial problems under control.

Germanys debt to GDP rate will most likely fall from 83% in 2010 to around 81% in 2011 because of the mix of inflation, GDP growth and (only little) new dept. The number of unemployed people is on its lowest since 20 years, people are more happy than the last 10 years and average personal savings are climbing, with a lot(!) more savings than dept per person.

Our political system is still functional despite a few "amazing" decisissions like the quick nuclear u-turn, the Lybia vote and maybe the reaction on the Euro crises.
But overall at least there is a government that seems to be able to do its job.
We have universal health care, (almost) free education at universities, an unlimited welfare system that provides some money and a home (both on a relativly low level after 1 year of unemployment) and a functional infrastructure (for example the lowest black out rate on the electric grid worldwide despite nuclear shut down and 20% renewables in 2011)

As far as I know the US dept rate on the other side is in the same range but skyrocketing and politically your country seems so deeply devided that it looks almost unable to act. Beeing a hostage to the ultraright teaparty doesn't help much.

80% dept rate is a lot more than I would like but on the other side many people manage to have up to 1000% dept/income rates when the buy their house and the new dept rate comes at very low interest rates (at least for Germany with AAA rating)

And only the state is in dept, the private households have (as avarage of course) lots of money and very little dept.

So for me personally everything looks quite good now and despite the huge discussions about the Greec problem it does not have any impact on my yet. If we have to pay 23 billion Euro for ESM my tax rate would -maybe- be a few Euros higher. So what, so far I earn a lot more than I need and I have some money put aside. I just don't want to have put my money into a black hole named Greece to finance huge swimming pools, tax free money in Switzerland and 4.000€/month pensions for 50 year old bus drivers.

(of course this are only few people, but this is a problem, the Greece people/governmant have to solve first imho)

I wonder if this is the American way to put the finger on "doomed" europe to distract from your own (much bigger?) problems? Maybe I'm wrong alltogether and US problems are way overblown by our media?

I don't know.

[nobodypanic]

The current European model depends upon quarterly GDP growth to sustain the huge govt debts. This model is doomed, and will collapse. Only a small handful of productive European countries will avoid default (Germany, France, and some Scandinavian countries).

Since any "new system" will also depend upon quarterly GDP growth, it will also be doomed to failure.

the current system depends on a rate of expansion sufficient to offset capital's tendential self-annihilating negatives.

the structural deficits are a response to a slowing rate of profit - an attempt to keep the national capitals of europe profitable by inducing demand. withdraw this, and the european capitalist system will fail rather quickly; keep it going, and the european capitalist system will limp along for some time until the growth in government spending crowds out the private sector that's left. the same will apply in general to all mature capitalist economies.

so what's it going to be? die now or die later?

[Cog]

As far as I know the US dept rate on the other side is in the same range but skyrocketing and politically your country seems so deeply devided that it looks almost unable to act. Beeing a hostage to the ultraright teaparty doesn't help much.
8

You seem to forget or perhaps just don't know, that the Tea Party was put into office precisely to jam up the gears of government and make it less efficient at taxing, borrowing, and spending. I intend to put even more of these
"ultra-right" people into office next election to continue their good work.

Some of us like inaction at the federal governmental level. Less chance for mischief.

[cephalotus]

Some of us like inaction at the federal governmental level. Less chance for mischief.

Ok, seen that way this tea party is quite effective.

I see no reason for a weak government (especially during crises), but maybe this is one of the big differences between Europe and the US. Last time we had a weak government Hitler had come to power, so we have burned us once...

Rating agencies also do not like inaction at goverenmental level, btw.

Greece also has a very weak government that is also unable to tax the people and you see how far they have come...

[evilgenius]

Three days and 71% for breaking up into factions. This ends my tracking for the beginning of the poll. I'll try to post again as the days tick more toward the middle, unless this thing totally disappears in the chaos of what's to come.

[The Practician]

I went with the somewhat ambiguous "some sort of new system that will prove capable", but I am using very, very loose definitions of "system" and "capable". I basically think its going to go back to individual countries with individual currencies, possibly with an interim period of indeterminate length where the "stronger" countries remain in the eurozone and the weaker leave it. As for how "Capable" this system is going to be, I mean capable only so far as there probably isn't going to be any revolutions, starvation/ crushing poverty, or an inter-European war. It is definitely going to be ugly.

[dolanbaker]

http://www.youtube.com/watch?v=aC19fEqR5bA

In a scary and painfully frank interview a freaked out BBC interviewer is visibly shaken when market trader Alessio Rastani predicts that the "Market is Toast." Apparently there is nothing Euro governments can do.

Prepare for the worst!

[evilgenius]

Thread bump!

This is as good a place as any to openly wonder if one, the banking system in Europe can take much more of this, and two, the banking system worldwide isn't exposed in ways people haven't been talking about much? At the time of this writing I think three European banks have been nationalized in the last week, the biggest being Dexia. The Germans are purportedly angling for a 60% private loss rate on private Greek investments. If they get that then presumably many more European banks might face nationalization. The thing is a move like that would not only affect European banks. I have to think that just one South American or Central American bank taking huge losses could catalyze something unforeseen.

I am worried about the Southern Americas because it is that region which has participated to a very large extent in under the table economic transactions. Right away you are probably thinking drug money. I am too, but not overtly. I think because of the drug money environment quite a bit of tax dodging money has gone into the region. Derivatives essentially have two purposes at that level, to create a forex point and to hide money from taxes. I am thinking that many corporations and wealthy individuals could find their money trapped if Europe goes down. The freeze up that would lock the worldwide banking system could severely hamper their efforts to get at their money. Bottom line is that if Europe goes down US corporations might have however many trillions in cash on their books, but only be able to access a portion of it.

[Outcast_Searcher]

Thread bump!

This is as good a place as any to openly wonder if one, the banking system in Europe can take much more of this, and two, the banking system worldwide isn't exposed in ways people haven't been talking about much?

I am baffled by the markets. A couple weeks ago, people seemed resigned that we were headed for a big mess. Then some European leaders proclaim "Don't worry. All is well. We have a plan. We will announce it soon. Trust us. And, yes, we acknowledge we need to "fix" the banks".

And now the markets seem poised to break out to the upside. It's "risk-on" again for commodites and stocks, globally.

....

I, OTOH, view this more like the Rossi ECAT. i.e. Show me a viable commercial model churning away for long enough to remove any doubt that it actually works. THEN I'll get in line for the personal model when available (with warranty) at Home Depot.

Meanwhile as things zoom up, I'm plenty happy to take some nice profits...

[Outcast_Searcher]

I WILL admit that things look better in the US and even globally (emerging markets) than people had feared, causing many to assume less chance of a U.S. recession. That counts for something.

However, IMO, THAT is predicated on the Eurozone not having its consumerism lapse into a depression-era coma. I wouldn't bet on that.

BTW, I don't trust the financial standing of ANY commercial bank. Their balance sheets are a thicket of assumptions (or maybe lies). No outsider can be confident in what they claim. That's why I've NEVER owned a bank stock and never intend to.

[careinke]

And only the state is in dept, the private households have (as avarage of course) lots of money and very little dept.

cephalotus,

Nice perspective coming from the other side of the pond. Thanks.

I realize Deutch is probably your native language, so don't take this wrong, but the word is debt not dept.