Dutch Central Bank Sale Announcement Imminent? Message Board

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Politics : Dutch Central Bank Sale Announcement Imminent?

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To: philv who wrote (31314)	4/12/2010 4:24:41 AM
From: GUSTAVE JAEGER	of 81130

Re: “Unfortunately there are problems with Germany because it does not want to be the deep pockets helping out the profligate southerners which got into trouble. [But] if that is the case, the euro is in danger and the European union is in danger. I just hope that Germany will be helpful.” That statement vindicates what I just told you earlier: Germany ending up as the sole bankroller of last resort for her fellow EU partners... Things would be much better if the EU were endowed with a SECOND Germany --which would dispel the awkward impression that a single constituency (the Germans) must unfairly make up for all the others' deficiencies. Again, I think economist Paul Krugman sums it up accurately when he points to Europe's lack of GDP growth: So how did the U.S. government manage to pay off its wartime debt? Actually, it didn’t. At the end of 1946, the federal government owed $271 billion; by the end of 1956 that figure had risen slightly, to $274 billion. The ratio of debt to G.D.P. fell not because debt went down, but because G.D.P. went up, roughly doubling in dollar terms over the course of a decade. The rise in G.D.P. in dollar terms was almost equally the result of economic growth and inflation, with both real G.D.P. and the overall level of prices rising about 40 percent from 1946 to 1956. [...] And that means that unlike postwar America, which inflated away part of its debt, Greece will see its debt burden worsened by deflation. [...] So Greece won’t grow its way out of debt. On the contrary, it will have to deal with its debt in the face of an economy that’s stagnant at best. nytimes.com Ultimately, it's Europe's inability to grow (her GDP) that will spell her demise... Gus

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