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The Crisis In Spain


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#1 FCP Bob

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Posted 24 April 2012 - 03:50 AM

The crisis in Europe is getting worse as should be expected since the only solution that it being tried is Austerity and that has proven to be a disaster.Something to keep in mind for economic moralists out there is that the problem in Spain wasn't caused by run away government spending. Before the economic crisis Spain's government ran a budget surplus for many years and total Spanish Government debt was decreasing both in absolute terms and as a percentage of GDP. Spain had a housing bubble that burst and in combination with the World wide downturn plunged Spain into a deep recession. Now the normal way a country like Spain would handle this would be that the market would push the value of the Spanish currency down which would make Spanish exports more competitive and Imports less so. Since Spain is part of the Euro Zone that option doesn't exist and the only adjustment mechanism is internal devaluation which doesn't work and results in massive unemployment and deep recessions. The unemployment rate in Spain is 23% and youth unemployment is about 50%.The problems in Europe aren't just about overspending governments and the welfare state. The biggest problem is the single currency and the problems that a country has when it doesn't have it's own currency.This article from BBC is a really good explanation of Spain's situation.http://www.bbc.co.uk...siness-17549970This one is from today.http://www.bbc.co.uk...europe-17826455
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#2 FCP Bob

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Posted 24 April 2012 - 04:29 AM

Europe: A crisis of the centre
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#3 Pot Odds RAC

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Posted 24 April 2012 - 06:27 AM

I haven't seen this covered in the mainstream media, but Spain apparently also banned Business Cash Transactions over 2,500 Euros.That should solve their problems.

#4 FCP Bob

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Posted 24 April 2012 - 06:37 AM

View PostPot Odds RAC, on Tuesday, April 24th, 2012, 10:27 AM, said:

I haven't seen this covered in the mainstream media, but Spain apparently also banned Business Cash Transactions over 2,500 Euros.That should solve their problems.
It looks like they are banning cash transactions for businesses as a way to combat the black market and make large transactions more easy to track and make tax evasion harder.
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#5 Balloon guy

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Posted 24 April 2012 - 08:49 AM

I'm not one to stereotype, but Spain has a continued history of being its own worst enemy.Corruption and self serving decisions have ruined that countries place as a world leader every time they started to rise up.Its ingrained in their culture...and it is too bad.
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#6 FCP Bob

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Posted 24 April 2012 - 09:14 AM

Will Europe's crisis get worse before it gets worse?

Quote

One of the world's most respected finance ministers gave me his take on the eurocrisis in the wake of this past weekend's IMF meetings in Washington in a single word: "Bleak." Moments, later, in a separate conversation, frustration showed on the face of one of the IMF's top officials. He muttered his exasperation with the attitudes of top eurocrats, particularly those "with German accents." They failed to recognize, in his view, that their monomaniacal focus on austerity was sowing the seeds of its own political destruction. The people of southern Europe will only be squeezed so hard, he suggested, before they reject the deals, pending bargains, and economic prescriptions that Europe's northern powers are counting on to save the eurozone. At a party thrown by JPMorgan, former U.S. Federal Reserve Chairman Alan Greenspan reportedly opined that the European monetary experiment was doomed from the start due to the divergent views and national characters of the disparate countries participating in the venture.ARTICLE CONTINUED AT LINK ABOVE

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#7 ShakeZuma

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Posted 24 April 2012 - 04:07 PM

yeah sure the crisis but what about the rain?!I should never post

View PostAmScray, on 30 August 2010 - 12:41 PM, said:

one cannot possibly ascribe themselves to the larger (D) philosophy without first being a poon

#8 DJ Vu

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Posted 24 April 2012 - 04:10 PM

View PostShakeZuma, on Tuesday, April 24th, 2012, 5:07 PM, said:

yeah sure the crisis but what about the rain?!
It's ok, it stays mainly in the plain.

#9 LongLiveYorke

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Posted 24 April 2012 - 07:18 PM

View PostShakeZuma, on Tuesday, April 24th, 2012, 8:07 PM, said:

yeah sure the crisis but what about the rain?!

View PostDJ Vu, on Tuesday, April 24th, 2012, 8:10 PM, said:

It's ok, it stays mainly in the plain.
It's hard to imagine that these forums aren't as popular as they once were.

#10 akoff

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Posted 25 April 2012 - 02:19 AM

View PostFCP Bob, on Tuesday, April 24th, 2012, 9:14 AM, said:

Will Europe's crisis get worse before it gets worse?QUOTE One of the world's most respected finance ministers gave me his take on the eurocrisis in the wake of this past weekend's IMF meetings in Washington in a single word: "Bleak." Moments, later, in a separate conversation, frustration showed on the face of one of the IMF's top officials. He muttered his exasperation with the attitudes of top eurocrats, particularly those "with German accents." They failed to recognize, in his view, that their monomaniacal focus on austerity was sowing the seeds of its own political destruction. The people of southern Europe will only be squeezed so hard, he suggested, before they reject the deals, pending bargains, and economic prescriptions that Europe's northern powers are counting on to save the eurozone.At a party thrown by JPMorgan, former U.S. Federal Reserve Chairman Alan Greenspan reportedly opined that the European monetary experiment was doomed from the start due to the divergent views and national characters of the disparate countries participating in the venture.ARTICLE CONTINUED AT LINK ABOVE
This is shocking to who? Europe in general is a tired old man who won't retire but can't lead anymore...they did it to themselves by creating generations of pussies. Just like our Democrats are doing to US.
"The fact that we are here today to debate raising America 's debt limit is a sign of leadership failure. It is a sign that the US Government cannot pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government's reckless fiscal policies. Increasing America 's debt weakens us domestically and internationally. Leadership means that, "the buck stops here.' Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better."
~ Senator Barack H. Obama

#11 mrdannyg

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Posted 25 April 2012 - 05:10 AM

View Postakoff, on Wednesday, April 25th, 2012, 7:19 AM, said:

This is shocking to who? Europe in general is a tired old man who won't retire but can't lead anymore...they did it to themselves by creating generations of pussies. Just like our Democrats are doing to US.

View PostCaneBrain, on Tuesday, April 24th, 2012, 4:37 PM, said:

you should not waste time more often.

Long signatures are really annoying.

#12 Balloon guy

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Posted 25 April 2012 - 07:20 AM

When they ignore you, they are afraid...David Matrusash
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Most bad government has come out of too much government. Thomas Jefferson

#13 iZuma

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Posted 25 April 2012 - 07:38 AM

so women are afraid of me? makes sense.

#14 FCP Bob

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Posted 25 April 2012 - 12:08 PM

Time to say basta to the nonsense of austerity
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#15 strategy

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Posted 25 April 2012 - 02:41 PM

frowntown is somewhere between 6 and 7I stopped following finance stuff after I quit my job, doubt I'll have time to pick it up again in my new one. so this was all pretty surprising to me.
QUOTE (ShakeZuma @ Wednesday, November 2nd, 2011, 4:25 AM) <{POST_SNAPBACK}>
seriously though, with that grammar it's really like, I mean it doesn't bother me as much that she gets beat, you know?


#16 FCP Bob

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Posted 27 April 2012 - 06:37 AM

Europe. Rinse. Repeat.

Quote

So Spain has got the downgrade and now folks have worked themselves into a lather.The question remains, as it has for the last 18 months: what did you think was going to happen? And the truth is, it's going to happen again.This is not happening, primarily, because Southern European countries refuse to cut spending. Many of the countries may need to cut spending and regulation but these crises are happening because Southern European countries aren't growing and when you don't grow, your deficit blows up. Recessions do that (Mr. Ryan, take note).Europe has a banking crisis from under capitalized banks who hold rapidly depreciating assets (in the form of these government bonds) so there is a constant danger of insolvency and runs on them. It's not so different from the US banks in 2008 in that way. But, rather than directly recapitalize the banks a la TARP, the ECB is giving the banks cheap loans to keep themselves running. They are taking the money and calling in every loan they can to reduce their leverage. So it has set the stage for an awful credit crunch which undermines growth.Europe also has a direct growth crisis/fiscal crisis (depending how you are inclined to describe it).Southern Europe has had low productivity growth and Northern Europe high productivity growth. Normally, a country getting into trouble like that of Southern Europe would have a devaluation and use exports as their growth strategy. But locked in at the high exchange rate, S. Europe can't do that. Without growth and with the credit contraction from the banks trying to reduce their leverage because of the banking crisis, these countries' deficits are awful and likely to get worse. Even the most savage austerity really isn't going to fix this problem.CONTINUED AT LINK ABOVE

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#17 phlegm

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Posted 27 April 2012 - 12:23 PM

Spains biggest problem is that their 2 biggest soccer teams were simultaneously knocked out of the champions league.
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#18 brvheart

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Posted 27 April 2012 - 12:27 PM

"European countries refuse to cut spending."I saw this part.

View PostiZuma, on 20 August 2012 - 11:32 AM, said:

napa I was jesus christing suited, you guys just slipped in before me.

View PostEssay21, on 25 February 2013 - 08:32 PM, said:

.

#19 FCP Bob

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Posted 27 April 2012 - 12:38 PM

View Postbrvheart, on Friday, April 27th, 2012, 4:27 PM, said:

"European countries refuse to cut spending."I saw this part.
Did you read that part on your "IPad" ?
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#20 phlegm

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Posted 27 April 2012 - 12:42 PM

View PostFCP Bob, on Friday, April 27th, 2012, 1:38 PM, said:

Did you read that part on your "IPad" ?
Why? Are IPADS noted for being misleading?
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