I was living in Europe when the European common currency, called the Euro, was implemented. It was great for me since I lived in the southern Netherlands, and both Germany and Belgium were less than 20 minutes away on the freeway. It meant that all of a sudden going out to eat, or going shopping in these “foreign” countries became far more practical. After the introduction of the Euro I did very little shopping in Holland. I did almost all my shopping in Germany or Belgium.
But even back then it was clear to anyone who had any academic foundation in Economics that the
concept of the common currency couldn't possibly work over the long term. Closer political integration via the European Union was a political idea, and probably a very good idea at that. But establishing a common currency, and then letting all the little individual countries keep full control of their own national budgets (and borrowing) meant that the Euro was built on a very shaky foundation indeed. A house of cards. Nothing but an illusion or a big con game.
This morning when I got up my email in-box contained a note from a dear friend of mine who still lives in Europe. I have known this guy for almost 20 years, and he was even the best man at my third and final wedding. The massive financial fraud perpetrated by the Greeks has made many smart and powerful people worldwide wake up to the basic weakness in the Euro common currency. This is causing very real turmoil and problems for my friends in Europe. Unfortunately this is only the beginning.
Deleting all the parts of his email related to personal things, this is what he had to say about the financial situation:
“Over here there is great turmoil and fear has struck due to the problems with Greece and fears for Spain and Portugal. When the German Secretary of Economy outed his doubts about the salvation plan (the 750 billion euros) the stock went down sharply. Funny that a small sized economy as the Greek can cause so many problems. Kinda of an indication how "carefully" the EU was planned. I sense this uncertainty in meetings with managers. It seems as if the economy is improving slightly but companies are still very careful in hiring new personnel.
Funny that this could lead to a situation where one could go broke after 22 years of hard labour. The attitude of the banks sucks. First they take irresponsible risks, go broke, become rescued by tax money that was payed by companies and citizens and then they refuse to lend money. Absurd situation.”
I have recently begun seeing more forecasts that Europe will suffer a double-dip recession. When (not if) the Euro currency union finally falls apart, there is going to be real chaos in Europe. This will cause horrible suffering. As integrated as the world's major economies are, I doubt that America will escape from the effects of this financial chaos.
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But even back then it was clear to anyone who had any academic foundation in Economics that the
concept of the common currency couldn't possibly work over the long term. Closer political integration via the European Union was a political idea, and probably a very good idea at that. But establishing a common currency, and then letting all the little individual countries keep full control of their own national budgets (and borrowing) meant that the Euro was built on a very shaky foundation indeed. A house of cards. Nothing but an illusion or a big con game.This morning when I got up my email in-box contained a note from a dear friend of mine who still lives in Europe. I have known this guy for almost 20 years, and he was even the best man at my third and final wedding. The massive financial fraud perpetrated by the Greeks has made many smart and powerful people worldwide wake up to the basic weakness in the Euro common currency. This is causing very real turmoil and problems for my friends in Europe. Unfortunately this is only the beginning.
Deleting all the parts of his email related to personal things, this is what he had to say about the financial situation:
“Over here there is great turmoil and fear has struck due to the problems with Greece and fears for Spain and Portugal. When the German Secretary of Economy outed his doubts about the salvation plan (the 750 billion euros) the stock went down sharply. Funny that a small sized economy as the Greek can cause so many problems. Kinda of an indication how "carefully" the EU was planned. I sense this uncertainty in meetings with managers. It seems as if the economy is improving slightly but companies are still very careful in hiring new personnel.
Funny that this could lead to a situation where one could go broke after 22 years of hard labour. The attitude of the banks sucks. First they take irresponsible risks, go broke, become rescued by tax money that was payed by companies and citizens and then they refuse to lend money. Absurd situation.”
I have recently begun seeing more forecasts that Europe will suffer a double-dip recession. When (not if) the Euro currency union finally falls apart, there is going to be real chaos in Europe. This will cause horrible suffering. As integrated as the world's major economies are, I doubt that America will escape from the effects of this financial chaos.
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