The coming US dollar crisis Message Board

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Strategies & Market Trends : The coming US dollar crisis

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To: elmatador who wrote (56881)	1/28/2015 10:26:29 PM
From: sense	Read Replies (1) of 71455

Europe's problem is not what they don't have... Unless you're considering economic freedom. Europe's problem is what they have far too much of... That which causes the lack of economic freedom. The issue in Europe really isn't too much debt, either. The debt problem is more about what they did with the money they borrowed. Using credit cards to cover living expenses... is just a bad idea... for governments as well as people. Borrowing to grow a business... would make more sense than borrowing to buy beer and chips. But, to the degree that debt growth is fueling growing malinvestment... that malinvestment becomes a systemic risk, which transfers risks through the banks making stupid loans to the legitimate businesses who borrow. Ultimately... the argument I made earlier about those taking on more debt than they can manage reasonably while excusing it as "that's your problem"... has real and obvious limits... You are correct... that banks should not be stupid in lending to bad risks... in order to use the stupid lending to stupid people as a tool to enable stupid policy... However, you can't argue with the fact that it works... We see that now... exactly.... as over-lending in stupid loans made to stupid borrowers is now in fact being used as a reason to transfer those liabilities created from the stupid people who made them... to the ownership of the sovereigns to have them cover them... because the banks say that has to happen to save the economy. Reality is... saving the economy requires divorcing it from the banks interest... to allow failed banks to fail.

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