EURO and problem solving:


Europe is mired in crisis.

You have not completed a university degree or have studied higher mathematics can be seen to that. But the basics after Adam Riese and a common sense is enough.

This is now all become clear.

To limit the growth of debt in the right direction, but not the right way.
The practice is based on a steady growth strategy and is therefore a dangerous path.

That this policy is a burden for future generations leads to another topic on here that I do not want to go closer.

The aim must be the reduction of debt.

The individual euro countries have high debt and are not able to repay the loans even medium-term.
That the rating agencies downgrade the credit rating now with the threat and have already made is partly true, a logical conclusion for the assessment of financial mismanagement.

Those who survived his circumstances, will have to no longer participate as soon as his creditor, and limit their spending to save the receipts.

The inclusion of economically weak countries in the Union had been allowed to earn as the development of infrastructure in these countries a lot of money. Everything that was to fund only loans, all was clear.

Most of the export-oriented countries which have benefited. Lead the government and the banks of this “poker game” have supported and encouraged although they knew that this debt can not be paid back on time and be redeemed only by constantly new debts.

Now that some countries, even with manipulated economic numbers have been recorded earlier in the Union, constitutes a disqualification of the authorities in Brussels dar.

Countries such as Greece will make it impossible for the survival of monetary union for the following reasons:

The real economic growth is too low

Effective-saving measures are not feasible and also lead to a recession

The interest burden of the absorbed and increasingly expensive loans can not be provided

The sale of state assets would reduce only a small portion of the debt and is therefore the wrong way. On the other hand, are missing from this lucrative business then the revenues, which are for the state budget is required. Consideration here are the social consequences of the conversion of state enterprises in the free market economy. This leads to more unemployment and especially in difficult-to-place people. This additional burden on public finances. When considering the overall impact would be to find more expensive that the reversal of the burden of interest paid back loans would be lower than the previous income from these companies and the services and products, and thus burden the economy, inflation would rise higher and.

Produce a partial waiver of the balance will also be no solution because government spending has grown so strong that they can not be covered by the real tax revenue.

Conclusion: A bottomless pit!

A waiver would bring the other hand, the banks and the lending countries in the greatest difficulties.

The issuance of Euro Bonds would also solve the problem can not. You would only public debt of the individual countries at the expense of the remaining Leveling creditworthiness of the economically strong countries. As a consequence, higher interest rates for all goverment debt is the consequence.

A targeted fiscal union, which also would have domestic political consequences and the sovereignty of individual states would hurt, is also not a sustainable solution because it would only create more revenue in a limited way. But they would in individual countries, especially in the Mediterranean to help better manage the state budget.

Increase the long-term financing of these investments and economically weak countries to sustainable economic growth requires a lot of time, waivers and new loans, which burden the rest of the Union and individual countries would, as already mentioned, bring in great difficulty.

The big problem in Greece is found in a similar way in other countries of the Union and is comparable.

What can we do about the continued existence of the monetary union, ie EURO sure?

Some countries, like Greece have to partially withdraw from the monetary union. You have to find back to their own currency and can for the restoration of their household are applying again for a full membership.

May be at the newly competitive states to consider carefully whether the economic figures also correspond to the reality and afford the community a shot from economic considerations at the desired time. Should also be a “gradual” inclusion.

The expansion of money, the purchase of government bonds by the European Central Bank is to stop.

The issuance of bonds is € defer to the real intrinsic value of individual bonds can not impact negatively on the credit rating.

The spiking of “rescue umbrella” is the “bull by the horns” and will only create more time. It is but on the other hand, the downgrade by the rating agencies and are a burden on government budgets and the credibility in the euro continues.

If these “exclusions” not carried out at short notice, failing which threatens the Union.

In the absence of a sufficient economic growth to the risk of deflation, the “off” time despite winning by parachutes is also inevitable.

Conclusion: There needs to be done quickly so that the credibility in the euro is not lost and true before the rating agencies make their notice, and the costs for the necessary write-downs are not also affected by higher interest rates.

Ralf Guenther
Prophet, visionary, consultant and writer



About jesuschristusmessias

Es gibt nur einen allmaechtigen Gott und er hat verschiedene Namen. There is only one Almighty God and he has different names.
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One Response to EURO and problem solving:

  1. Pingback: EURO and problem solving: | Who really expects a Messiah?

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