The blog Let's talk about our stuff in a links an input opinion entitled: "The crisis in the euro zone has never existed." This is my response to the request for our opinion that Alvaro, the author of the blog, you ask us.
I read the news you've bonded very closely. And I describe my impressions.
I find an article very superficial and very difficult to maintain claims. Let's see:
The author argues that this crisis is "a crisis of customers, where the recession is caused by the lack of customers in the domestic market (not government debts), caused by the fact that the English suffered unemployment and therefore do not have enough private demand, nor could hold or lift the economy based on exports and rising wages. "
Here it is clear that ignores the true origin of the crisis is upon us, which has gone through several stages which also confuses. The birth of this crisis is the clear involvement of financial and banking markets by central banks when determining the volume of money supply. I left two links to two great videos that explain the core of a clear and concise. The first is a rap and the second teacher of Soto Huerta .
Write the author at another point: "None of the PIGS, even Greece, had come in default of payment, to discuss debt crisis ..." There is no need to fall into default to talk about a debt crisis. What is important in the market where you money is if you are able to return, that is, if your economic structure is sufficiently stable to implying hold back the principal plus the amount of what you have borrowed. In business terms, the market looks attentively at your cash flow, your ability to generate cash to meet payments. An economy that breaks the unemployment statistics, he had no plans to stop spending or raising taxes, as was the case of Spain before the wake-up call, is running for that every time you leave money, asked more type interest, which plays against because it increases their final debt. That was the problem of Spain and Greece. There was confidence that they were able to meet payments. The market would not be against them but that they were implementing incorrect policies.
go on. I quote again: "Deutsche Bank bet on Spain to fall short. If I could fall, the bank earns a lot of money." No, here the author is confusing the stock market short positions, which affect companies with a "debt default" by a country like Spain. The Deutsche Bank opted for certain companies would fall in the market price of its shares, which will accrue benefits for their short positions. This has nothing to do with about 202,000 million dollars that the German bank has on government debt bonds of the Kingdom of Spain. If Spain goes bankrupt, the bank literally run out of money.
A great idea, but badly interpreted and discussed is the one mentioned here: "The deal was that U.S. banks borrow from the Fed at a rate of almost 0% and buy bonds of European countries in crisis are between 3% and 10% and removed speculative gain "Yes, that's a big deal for any bank. But the fault here is the first of the Fed, and after European governments for breaking Fiscal Stability policies agreed in Maastricht.
The real problem is not that European debt buying U.S. banks, but the effect is known as "crowding out or crowding out. That means U.S. banks have closed the tap private investment have been decided by public investment. In short, do not lend money to entrepreneurs and people like you and me, because they are leaving the state.
addition, here is an overwhelming logic shows that the author does not understand very well what he is talking. Imagine you are a senior executive of Goldman Sachs, you borrow money to buy bonds and the Fed and European debt. What we want is that these bonds will get paid. If the euro goes bankrupt and not pay, you owe money to the Fed and even above, you worthless worthless bonds in the form of European government debt.
I think an article, as I said, very weak, confused and with an intention that I can not see.
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