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German model is ruinous for Germany, and deadly for Europe
Topic Started: 10 Oct 2014, 06:29 AM (2,778 Views)
newjez
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Dam
10 Oct 2014, 02:26 PM
it could be as soon as 2018 but certainly (if the Euro survives until then which is far from certain, almost unlikely I would say) 2023.
I wasn't after a date.

What series of events would need to happen in order for France to leave.

I'm not having a go, I just can't see how it would happen. They would need an anti Europe govt, or at least a strong movement and a referendum.

The UK will have theirs in 2015. If this goes through (and it is a big if) then it will be the first piece on that roadmap.
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
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Dam
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newjez
10 Oct 2014, 04:50 PM
I wasn't after a date.

What series of events would need to happen in order for France to leave.

I'm not having a go, I just can't see how it would happen. They would need an anti Europe govt, or at least a strong movement and a referendum.

The UK will have theirs in 2015. If this goes through (and it is a big if) then it will be the first piece on that roadmap.
Front national ( or under another name) is almost guaranteed to win big before 2022 ( 2017 is unlikely but it will be very influential from then).The blind obvious will be obvious to all pretty soon.French have been brainwashed like mad about Euro/Europe but they are waking up slowly how stupid it has been to gibe up their sovereignty to unelected apatrid lawyers who have the agenda to crush their identity/specificity/freedom/history.
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Sober
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peter fraser
10 Oct 2014, 09:43 AM
I was surprised to read " written into the constitution as a balanced budget law from 2016 onwards"

That's like imposing a regulation on a business (that currently has a good cash flow) that says they can never have an overdraft in the future, which means the minute they have a cash flow problem they are stuffed even though most cash flow problems can be managed with a come and go facility.

I had no idea that Germany had decided to suicide financially in this way. It's sad really.
It's a recipe for a non-Keynesian approach to fiscal management, one in which the government share of GDP will not grow, and may well shrink, unless there is a plausible case for increasing taxes, to cover any enlarged and/or increasing heads of government expenditure which have a political consensus behind them.

That's an unusually disciplined approach to seeking political mandates for increased expenditure, but it is not self-evidently a Bad Thing. Leave it to the private sector to compete for and use available investment capital for leveraging purposes, and have the government get out of the way, i.e. not attempt counter-cyclical "pink batt"-style stimulus measures of dubious merit.

Remember, there is no sign whatsoever that this approach has been "suicidal" for Germany. Even including the 2009 decline, its longterm GDP growth has averaged to a steady if unspectacular rate, and there have been no drastic cutbacks to its extensive social welfare programs.

The main complaint of Krugman and the other neo-Keynesians is that Germany may have done *less well* than it otherwise could have by failing to take a big Bogart on the stimulus bong, and by not jacking up the EU delinquent family back up to happy days accordingly.

That case for "otherwise" is, at best, unproven.
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peter fraser
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Sober
10 Oct 2014, 08:58 PM
It's a recipe for a non-Keynesian approach to fiscal management, one in which the government share of GDP will not grow, and may well shrink, unless there is a plausible case for increasing taxes, to cover any enlarged and/or increasing heads of government expenditure which have a political consensus behind them.

That's an unusually disciplined approach to seeking political mandates for increased expenditure, but it is not self-evidently a Bad Thing. Leave it to the private sector to compete for and use available investment capital for leveraging purposes, and have the government get out of the way, i.e. not attempt counter-cyclical "pink batt"-style stimulus measures of dubious merit.

Remember, there is no sign whatsoever that this approach has been "suicidal" for Germany. Even including the 2009 decline, its longterm GDP growth has averaged to a steady if unspectacular rate, and there have been no drastic cutbacks to its extensive social welfare programs.

The main complaint of Krugman and the other neo-Keynesians is that Germany may have done *less well* than it otherwise could have by failing to take a big Bogart on the stimulus bong, and by not jacking up the EU delinquent family back up to happy days accordingly.

That case for "otherwise" is, at best, unproven.
Thanks for the explanation. I guess my thinking has been influenced by living in a geographically large country with a small population, and burdened by a very large almost arid centre. Many projects here have needed government involvement because private enterprise just hasn't been strong enough to be involved and the level of profitability from many projects hasn't attracted enough foreign investment. Things have changed but that's the way it was for a very long time.

The compactness of the country and the more even spread of population gives Germany a significant advantage.

I don't think that I could put away the cheque book if I was in charge though. I'm a victim of my environment and experiences.
Any expressed market opinion is my own and is not to be taken as financial advice
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Its the rest of us that are commiting economic and financial sucicide Peter. But you still cannot see this.

The thing is, the Germans actually have an economy. And as we all head into further decline, the Germans are positoned better than all of us. Because they have not bubbled their house prices through the worst economic times ever faced.

Unlike the rest of the western world, who made house prices and debt their economy and completely forgot about the REAL economy and future. All temporary ,short sighted greed measures , adopted and copied from the other idiot western governments around the world.

Our silly ponzi scheme over the last forty years has finally run out of puff, run its course, hit a brick wall, when the GFC arrived in 2008, and now there is noway to pay for it or deal with it without it all ending in tears one way or the other.

You might be able to hold it off a bit longer, but you can't stop it, and that is the very reason the GFC surfaced, because it arrived hard and fast, and all they could do was jam rates at zero and pump an extra 10 trillion in counterfeit money into the system for more than six years now.For idiots unaware, that is not an economy or how one works or ever will. It is an economy on the verge of complete collapse. It might not happen tomorrow or next week or next month, but it will just get worse and worse .

If you could see the bigger picture here, you would be able to understand this.
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Sober
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peter fraser
10 Oct 2014, 09:37 PM
Thanks for the explanation. I guess my thinking has been influenced by living in a geographically large country with a small population, and burdened by a very large almost arid centre. Many projects here have needed government involvement because private enterprise just hasn't been strong enough to be involved and the level of profitability from many projects hasn't attracted enough foreign investment. Things have changed but that's the way it was for a very long time.

The compactness of the country and the more even spread of population gives Germany a significant advantage.

I don't think that I could put away the cheque book if I was in charge though. I'm a victim of my environment and experiences.
Really, the economically active part of Australia is quite compact as well. An overwhelming proportion of the Australian GDP is produced within 50 km of the ocean shoreline. An equally overwhelming proportion of the economically active Australian population resides within that same radius.

There are certainly individual towns / mines / farms / stations / or other enterprises that are well-further inland than that coastal radius, but their economic output generally seeks a trading path to the coast in the most economical fashion possible.

Really, Germany's economic geography is not as dissimilar as one might think to Australia; it simply contains fewer vast stretches of land that are economically inert.
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peter fraser
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Sober
10 Oct 2014, 10:12 PM
Really, the economically active part of Australia is quite compact as well. An overwhelming proportion of the Australian GDP is produced within 50 km of the ocean shoreline. An equally overwhelming proportion of the economically active Australian population resides within that same radius.

There are certainly individual towns / mines / farms / stations / or other enterprises that are well-further inland than that coastal radius, but their economic output generally seeks a trading path to the coast in the most economical fashion possible.

Really, Germany's economic geography is not as dissimilar as one might think to Australia; it simply contains fewer vast stretches of land that are economically inert.
Except if you want to send parts by rail or truck from Perth to Cooktown. Then that big inert bit in the middle becomes quite apparent.
Any expressed market opinion is my own and is not to be taken as financial advice
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Sober
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peter fraser
10 Oct 2014, 10:18 PM
Except if you want to send parts by rail or truck from Perth to Cooktown. Then that big inert bit in the middle becomes quite apparent.
But really, how often does any such move need to happen at considerable frequency and scale?

And if such need did arise, on an ongoing basis, wouldn't Townsville (or Brisbane) soon become the POE hub for the shipment?
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newjez
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Dam
10 Oct 2014, 04:59 PM
Front national ( or under another name) is almost guaranteed to win big before 2022 ( 2017 is unlikely but it will be very influential from then).The blind obvious will be obvious to all pretty soon.French have been brainwashed like mad about Euro/Europe but they are waking up slowly how stupid it has been to gibe up their sovereignty to unelected apatrid lawyers who have the agenda to crush their identity/specificity/freedom/history.
UK got it's first UKIP member today, and nearly got two. They are becoming a force. The referendum will be a very ugly affair. Like the Scottish vote, I doubt anyone is really sure what it means. Does it mean all the Polish will have to leave? How will it affect trade? Obviously the UK will always have very strong links to Europe, but moving out will mean that the European laws do not govern them. It will be an interesting time.
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
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peter fraser
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Sober
10 Oct 2014, 10:27 PM
But really, how often does any such move need to happen at considerable frequency and scale?

And if such need did arise, on an ongoing basis, wouldn't Townsville (or Brisbane) soon become the POE hub for the shipment?
Do you not think that the sheer distance involved rules out any opportunity for that to happen

Here is a map of the drive between Hamburg and Munich - just 7 hrs and 44 minutes.
Hamburg/Munich

Here is the map of the drive from Perth to Cooktown - all 62 hours of it.
Perth/Cooktown

Infrastructure projects connecting over large distances must require greater funding for less return especially given the population difference, and at the end of the project the opportunites are less due to that distance.

I could manufacture parts at one end of Germany and transport them to the other end for assembly in maybe 8 hours. The time cost plus the fuel cost must be less than a country with a time cost 8 times higher and probably a similar ratio in fuel costs.

To get the same ratio or scale we would need a population of maybe 640 Million people spread more evenly, and we will never have that. the infrastructure cost per capita in Australia will always be higher than European countries, and the ROI will be less.

I don't see any other possible outcome.

Any expressed market opinion is my own and is not to be taken as financial advice
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