So the hawks have it. The ECB has raised interest rates. OK, only 0.25%.
This may suit Germany.
But for Ireland, Greece and Portugal, with Spain next, this just increases their woes.
The steps on the path to the next crash are, seemingly inevitably, being taken. Bankers have seen there is much to be amde from crashing the economy at cost to the rest of us. I suspect it is their new business model- as Bob Diamond explained in code when he said Barclays wants to take on more risk at implicit cost to the rest of us.
It's nly time before the Bank of England does the same - and then it's recession all over again.
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Is it time to dismantle the Euro? Maybe Germany should leave?
Let”s be honest Germany and France (the real powerhouses in Europe) don’t really care about Portugal, Ireland and Greece. They care about their inflation levels, which are important to their economies. If they are providing the bailout funds then let them deal with their inflation levels as they see fit. I understand that there is 750Bn euros set aside for this so there is plenty of liquidity.
Dismantling the Euro is not an option for anyone. How would they reconvert into base currencies? Surely people with loans in Euros would not be happy and I can see a large lawsuit following any attempt to reconvert.
I’m not sure what would be worse for the UK economy – high inflation or higher interest rates. Both have their advantages and disadvantages. However, I can only see increasing debt as people try to pay for the essentials in life and surely that will start this recessionary process all over again?
My biggest worry is QE. We will all have to pay for this eventually?
It is time to dismantle the banks, the key drivers of economic instability in the world today.
If I was a banker, or someone else with the power to draw great personal benefit from the way things are currently done, and I was only really interested in myself, then I’d be pushing as hard as I could for another easy payday. I’d be delighted that nothing has been done to deal with why things failed, but wary that after the next crash things could be very different.
Peversely, perhaps, I don’t blame them… they have another opportunity, explicitly or unknowingly, granted by authorities and the populations who give them that authority… and they are taking it. They will make hay while the sun shines, as is human nature (given that some of the more socially-orientated human traits my be lacking in those who get into these positions).
Too much effort has been expended by ‘the public’ (driven by politicians and media complicit in it all) in the blame game… looking for individuals and other easy hate targets (Gordon Brown, Fred Goodwin, Bob Diamond etc). As much as a great number of individuals were responsible, some more significantly and knowingly than others, it was the system that failed… and it is the system that will fail again. If all the effort put into shouting about bonuses had gone into shouting about the inherent flaws of fractional-reserve banking and much of the rest of the financial industry, then we might have smarter people demanding real change. Maybe next time, eh!