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Gene Ellis

Has the U.S. Economy Been Permanently Damaged? : The New Yorker - 0 views

  • Although the study uses some sophisticated statistical methods, its basic point is straightforward: in the long term, economic output (G.D.P.) is constrained by the quantity and the quality of economic inputs (labor, capital, and technology). If the growth rate and quality of these inputs decline, the potential growth rate of G.D.P. will fall, too—it’s just a matter of arithmetic.
  • With hiring rates down, many workers have given up searching for jobs and have dropped out of the labor force.
  • With budgets tight, corporations and government departments have cut back on investments in new plants and machinery, computer hardware and software, and research and development.
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  • The authors come up with a variety of numbers, including one that has received a lot of attention: potential G.D.P.—broadly speaking, the level of G.D.P. consistent with stable inflation—“is currently about 7 percent below the trajectory it appeared to be on prior to 2007.” According to the latest figures from the Commerce Department, the G.D.P. is now close to seventeen trillion dollars, and seven per cent of that figure is $1.2 trillion. This is a lot of money to have gone missing, especially if it will never be recovered. Hence Krugman’s dire conclusion: “By tolerating high unemployment we have inflicted huge damage on our long-run prospects …. What passes these days for sound policy is in fact a form of economic self-mutilation, which will cripple America for many years to come.”
  • As well as figuring out the current level of potential G.D.P., the authors estimate its growth rate. This is the more important figure, because it’s what determines living standards over the long term
  • In the period from 2000 to 2007, the paper says the average potential growth rate of G.D.P. was 2.6 per cent.
  • For 2012, the authors estimate the potential growth rate at only 1.3 per cent.
  • In the nineteen-eighties, Larry Summers and Olivier Blanchard, who is now the chief economist of the I.M.F., resurrected the idea and gave it a new name, which they borrowed from engineering: hysteresis. Blanchard and Summers examined hysteresis in Europe, where high rates of unemployment have long been a problem.
  • The good news is that things aren’t quite as bad as the figures in the Fed paper might suggest. If we can get policy right and sharply increase the level of over-all demand in the economy, most of the damage done in the past five years is reversible.
  • At the moment, sadly, there is no prospect of any more fiscal stimulus, let alone a war-sized one, and the onus is falling on the Fed to gee up the economy.
Gene Ellis

Banks' Fire Drill for Greece Election - NYTimes.com - 0 views

  • In New York and London, banks have set up dedicated crisis teams, and rehearsed elaborate responses.
  • Citigroup has $84 billion in loans, bonds and other types of exposure to troubled European countries, plus France. The bank’s filings indicate that all but $8 billion of that exposure is offset with collateral it has collected and hedges on the portfolio.
  • Some banks are testing their systems to deal with the possibility of new currencies and preparing guidance for clients on how to operate in such an environment.
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  • Banks like Goldman Sachs and Morgan Stanley are also looking into the severe legal challenges that would arise if a country exited the euro. Contracts that govern loans, bonds and derivatives in Europe rarely take into account such a situation.
  • Consider an Italian corporation that owed a foreign bank 5 million euros, with a loan agreement struck under Italian law. If Italy left the euro, the bank might have less chance of getting euros back after the exit. In that case, the financial firm might be exposed to a new, less valuable currency.
  • Recognizing that threat, some banks are trying to move contracts into new jurisdictions like the United States or Britain. By transferring such loan agreements to English law, the banks may increase the chances of getting repaid in euros after an exit, according to legal experts.
  • The banks are also trying to protect their balance sheets if they do get stuck with large amounts of assets denominated in a new, weaker currency.
  • By doing so, they can better match their assets (the loans) within a specific country with their liabilities (the deposits). Then if a country left the euro zone, the value of the loan might fall in euros, but the banks wouldn’t owe as much to depositors in euros.
  • Mr. Lim notes, however, that some large banks, including Deutsche Bank, still have a lot more loans than deposits in countries like Italy and Spain.
Gene Ellis

Productivity: Technology isn't working | The Economist - 0 views

  • Technology isn’t working
  • Technology isn’t working
  • n the 1970s the blistering growth after the second world war vanished in both Europe and America. In the early 1990s Japan joined the slump, entering a prolonged period of economic stagnation.
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  • Between 1991 and 2012 the average annual increase in real wages in Britain was 1.5% and in America 1%, according to the Organisation for Economic Co-operation and Development, a club of mostly rich countries.
  • Real wage growth in Germany from 1992 to 2012 was just 0.6%; Italy and Japan saw hardly any increase at all.
  • And the dramatic dip in productivity growth after 2000 seems to have coincided with an apparent acceleration in technological advances as the web and smartphones spread everywhere and machine intelligence and robotics made rapid progress.
  • A second explanation for the Solow paradox, put forward by Erik Brynjolfsson and Andrew McAfee (as well as plenty of techno-optimists in Silicon Valley), is that technological advances increase productivity only after a long lag.
  • John Fernald, an economist at the Federal Reserve Bank of San Francisco and perhaps the foremost authority on American productivity figures, earlier this year published a study of productivity growth over the past decade. He found that its slowness had nothing to do with the housing boom and bust, the financial crisis or the recession. Instead, it was concentrated in ICT industries and those that use ICT intensively.
  • Once an online course has been developed, it can be offered to unlimited numbers of extra students at little extra cost.
  • For example, new techniques and technologies in medical care appear to be slowing the rise in health-care costs in America. Machine intelligence could aid diagnosis, allowing a given doctor or nurse to diagnose more patients more effectively at lower cost. The use of mobile technology to monitor chronically ill patients at home could also produce huge savings.
  • Health care and education are expensive, in large part, because expansion involves putting up new buildings and filling them with costly employees. Rising productivity in those sectors would probably cut employment.
  • The integration of large emerging markets into the global economy added a large pool of relatively low-skilled labour which many workers in rich countries had to compete with. That meant firms were able to keep workers’ pay low.
  • By creating a labour glut, new technologies have trapped rich economies in a cycle of self-limiting productivity growth.
  • Productivity growth has always meant cutting down on labour. In 1900 some 40% of Americans worked in agriculture, and just over 40% of the typical household budget was spent on food. Over the next century automation reduced agricultural employment in most rich countries to below 5%,
  • A new paper by Peter Cappelli, of the University of Pennsylvania, concludes that in recent years over-education has been a consistent problem in most developed economies, which do not produce enough suitable jobs to absorb the growing number of college-educated workers.
Gene Ellis

Ex-Italian PM Berlusconi proposes new currency to tackle economic crisis - RT News - 0 views

  • Ex-Italian PM Berlusconi proposes new currency to tackle economic crisis
Gene Ellis

Squash Seeds Show Andean Cultivation Is 10,000 Years Old, Twice as Old as Thought - New... - 0 views

  • Seeds of domesticated squash found by scientists on the western slopes of the Andes in northern Peru are almost 10,000 years old, about twice the age of previously discovered cultivated crops in the region, new, more precise dating techniques have revealed.
  • The excavations also yielded peanut hulls and cotton fibers — about 8,500 and 6,000 years old, respectively
  • Their research also turned up traces of other domesticated plants, including a grain, manioc and unidentified fruits, and stone hoes, furrowed garden plots and small-scale irrigation canals from approximately the same period of time.
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  • The article also noted that 10,000-year-old cultivated squash seeds had recently been reported in Mexico, along with evidence of domesticated corn there by 9,000 years ago. Scholars now think that plants were domesticated independently in at least 10 “centers of origin,” including, in addition to the Middle East, Mexico and Peru, places in Africa, southern India, China and New Guinea.
  • In the Fertile Crescent of the Middle East, an arc from modern-day Israel through Syria and Turkey to Iraq, wheat and barley were domesticated by 10,000 years ago, and possibly rye by 13,000 years ago. Experts in ancient agriculture suspect that the transition from foraging to cultivation had started much earlier and was not as abrupt a transformation as indicated in the archaeological record.
  • The distribution of building structures, canals and furrowed fields, Dr. Dillehay said, indicated that the Andean culture was moving beyond cultivation limited to individual households toward an organized agricultural society.
Gene Ellis

New Truths That Only One Can See - NYTimes.com - 0 views

  • New Truths That Only One Can See
  • Given the desire for ambitious scientists to break from the pack with a striking new finding, Dr. Ioannidis reasoned, many hypotheses already start with a high chance of being wrong
  • Taking into account the human tendency to see what we want to see, unconscious bias is inevitable.
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  • The effect is amplified by competition for a shrinking pool of grant money and also by the design of so many experiments — with small sample sizes (cells in a lab dish or people in an epidemiological pool) and weak standards for what passes as statistically significant.
  • If one of five competing labs is alone in finding an effect, that result is the one likely to be published.
  • Among them is a paper in which C. Glenn Begley, who is chief scientific officer at TetraLogic Pharmaceuticals, described an experience he had while at Amgen, another drug company. He and his colleagues could not replicate 47 of 53 landmark papers about cancer. Some of the results could not be reproduced even with the help of the original scientists working in their own labs.
  • Scientists talk about “tacit knowledge,” the years of mastery it can take to perform a technique. The image they convey is of an experiment as unique as a Rembrandt.
  • The problem stands to get worse. It has been estimated that the corpus of scientific knowledge has doubled in size every 10 to 15 years since the days of Isaac Newton.
Gene Ellis

Utilities Switch Off Investment in Fossil Fuel Plants - NYTimes.com - 0 views

    • Gene Ellis
       
      Note:  a LARGE power station =s 40 direct jobs.
  • workers at the large power station known as Keadby 1 are preparing to shut it down at the end of the summer, with the loss of about 40 jobs.
  • fluctuations in global energy markets have made the natural gas power plant unprofitable
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  • It has also delayed new energy investments and is planning to close almost a quarter of its fossil fuel power plants,
  • European energy companies, struggling to respond to weak demand in a flatlining economy, say they need guaranteed pricing to keep open unprofitable plants or to invest in new ones.
  • Their revenue is being hit by dwindling demand for electricity and by new wind and solar projects that undercut the price of the energy produced from many fossil fuel plants.
  • At the same time, record-low prices on carbon emissions trading markets, which were introduced to encourage clean and efficient energy production and use, have perversely become a disincentive to investment.
  • Many of the Continent’s aging power stations, particularly those that burn highly polluting coal, are earmarked for closure by 2020 to meet stringent local environment regulations.
  • Without these investments, industrial companies in Europe may face higher energy prices when local economies eventually recover,
  • “Energy utilities are facing a perfect storm,”
  • In a bid to generate 20 percent of the European Union’s electricity from renewable sources by 2020, Germany, Spain and other E.U. countries have provided hefty subsidies to wind and solar farms, which now constitute a sizable minority of daily electricity generation, often surpassing the 20 percent target.
    • Gene Ellis
       
      In effect, a cheaper overall form of energy (non-renewables) had to compete with heavy subsidies to renewables, which, once built, had low operating costs.  They cannot compete and do not invest, and there are major problems w/investing more in renewables (they are overall more expensive, and they have built-in faults, producing electricity erratically, or during the wrong times.)  The high costs of energy also lie with government, who cemented long-term deals with the ex-USSR linking other energy prices to the price of oil.  In short, they shot themselves in the foot.  Several times.
  • Despite the upfront costs associated with green energy projects, they are inexpensive to run. In contrast, Europe’s gas and coal plants, which also provide backup power when renewables cannot operate, need constant spending on fossil fuels.
  • European utilities like E.On of Germany have announced plans to shut down less-polluting natural gas-fired plants that have been undercut by dirtier coal-burning generators benefiting from a flood of low-cost coal imports and low carbon emissions prices.
  • Policy makers are debating a system of support payments to keep uneconomic power plants open,
  • “Without long-term signals of energy prices, investment won’t happen.”
  • Some analysts also expect domestic regulators to eventually create financial incentives for companies
Gene Ellis

Steel Industry Feeling Stress as Automakers Turn to Aluminum - NYTimes.com - 0 views

  • Steel Industry Feeling Stress as Automakers Turn to Aluminum
  • For nearly a century, Ford’s River Rouge factory and its neighboring steel mill have worked in close harmony
  • Now, they are trying to respond, making lighter, stronger steel in a bid to retain one of their most important customers, the automakers.
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  • chief executive of Severstal North America, the United States subsidiary of Russia’s Severstal Group, which now owns the Rouge steel operations.
  • At Severstal’s Dearborn factory, for example, carmakers including Ford and others account for 70 percent of sales,
  • The shift to aluminum is gaining momentum. Automakers are under increasing pressure to meet strict new fuel-economy standards by 2025
  • United States Steel has invested $400 million in a joint venture with Kobe Steel of Japan to make advanced high-strength steel in a Leipsic, Ohio, factory expected to produce 500,000 tons annually.
  • Inside Severstal’s steel mill on a cold January day, hissing heavy machinery removed oxides from steel sheets, reducing their thickness to the equivalent of five human hairs.
  • These are headed for Mexico, to Navistar’s stamping plant there.Continue reading the main story
  • Steel makers argue that they still have advantages in price — aluminum can cost as much as three times more — and flexibility, both for the manufacturer and the mechanic who will be fixing the car.“When you build a mass-produced vehicle, you really need to think about the consequences of the supply chain and repair and insurance costs,” Mr. Dey said.
  • new federal fuel-efficiency standards that will require a fleetwide average of 54.5 miles per gallon by 2025, a significant boost from the roughly 25 m.p.g. that vehicles average today.
  • “Sometimes there is a push from the aluminum side, and they win over with a particular model, and steel tends to be the comeback kid, with more innovation,” said Felix Schuler, a Munich-based partner in the Boston Consulting Group’s metals and mining practice.
  • What seems certain is that ordinary steel is likelier to lose out to its new and improved cousin than to aluminum, Mr. Schuler said.
  • Novelis is investing nearly $550 million to upgrade plants in Oswego, N.Y., and Nachterstedt, Germany, and to build a new factory in Changzhou, China, to triple its capacity from a year ago to 900,000 tons annually.
  • Alcoa, the country’s biggest aluminum producer, is investing about $670 million in its Iowa, Tennessee and Saudi Arabia facilities.Continue reading the main story
  • “Henry Ford was a control freak, and he wanted to control as much of the manufacturing as possible,” Mr. Casey said. “He made the steel, he made the glass, he made the tires.”
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    "said"
Gene Ellis

How Putin Forged a Pipeline Deal That Derailed - NYTimes.com - 0 views

  • How Putin Forged a Pipeline Deal That Derailed
  • The pipeline, known as South Stream, was Mr. Putin’s most important European project, a tool of economic and geopolitical power critical to twin goals: keeping Europe hooked on Russian gas, and further entrenching Russian influence in fragile former Soviet satellite states as part of a broader effort to undermine European unity.
  • The bill that Parliament took up on April 4 was arcane. But it swept aside a host of European regulations — rules that Mr. Putin did not want to abide by — for a pipeline that would deliver gas throughout southern Europe. Continue reading the main story Related Coverage In Diplomatic Defeat, Putin Diverts Pipeline to TurkeyDEC. 1, 2014
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  • In France, the leader of the far-right National Front, Marine Le Pen, recently acknowledged that her party had received a loan for 9 million euros, or about $11 million, from a Kremlin-linked bank.
  • Faced with punishing sanctions, a petro-economy pushed to the brink by plunging oil prices and the wildly gyrating value of the ruble, Mr. Putin this month halted the project.
  • Geological surveys suggested that Bulgaria could be sitting atop an underground ocean of natural gas, enough to be self-sufficient for years, enough to eclipse the advantages of South Stream.
  • On April 4, 2014, soon after Mr. Putin annexed Crimea, Bulgaria’s Parliament gave initial passage to a bill that effectively exempted South Stream from a number of European Union regulations, most important, the one that would have forced Gazprom to allow non-Russian gas to flow through the pipeline.
  • “If I hear one more word about competition, I’m going to freeze your you-know-whats off,” Mr. Putin reportedly shouted.
  • The anti-fracking movement became so broad that in January 2012, Parliament banned not only the extraction of shale gas, but even exploration that would quantify the country’s reserves.
  • When the Bulgarian government refused, the European Union cut off tens of millions of euros in regional development funds.
  • In desperate need of the European funds, the prime minister announced the next day that South Stream would be halted until it had full European Union approval.
  • While “he overreached, and he underestimated the response” to his intervention in Ukraine, said Mr. Gray, the former American diplomat, the Russian leader has been “quite effective” in countries like Bulgaria.“He won a great deal by getting Nabucco stopped,” Mr. Gray said. “Ultimately, his goal is to keep as much control over the former parts of the Soviet empire as possible.”
Gene Ellis

The Debate About GMO Safety Is Over, Thanks To A New Trillion-Meal Study - 0 views

  • The Debate About GMO Safety Is Over, Thanks To A New Trillion-Meal Study
  • The Debate About GMO Safety Is Over, Thanks To A New Trillion-Meal Study
Gene Ellis

Is Europe's gas supply threatened by the Ukraine crisis? | World news | The Guardian - 0 views

  • Is Europe's gas supply threatened by the Ukraine crisis?
  • more than a quarter of the EU's total gas needs were met by Russian gas, and some 80% of it came via Ukrainian pipelines. Austria, France, Germany, Hungary, Italy and Poland soon reported gas pressure in their own pipelines was down by as much as 30%.
  • While it was eventually resolved through a complex deal that saw Ukraine buying gas from Russia (at full price) and Turkmenistan (at cut price) via a Swiss-registered Gazprom subsidiary
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  • But three years later, the same row erupted again: Gazprom demanded a price hike to $400-plus from $250, Kiev flatly refused, and on New Year's day 2009, Gazprom began pumping only enough gas to meet the needs of its customers beyond Ukraine.
  • Again, the consequences were marked. Inevitably, Russia accused Ukraine of siphoning off supplies meant for European customers to meet its own needs, and cut supplies completely
  • several countries – particularly in south-eastern Europe, almost completely dependent on supplies from Ukraine – simply ran out of gas.
  • Bulgaria shut down production in its main industrial plants; Slovakia declared a state of emergency
  • Many industry experts, though, point out that the world has changed since 2009, and that there are any number of reasons why Moscow's natural gas supplies may not prove quite the potent economic and diplomatic weapon they once were.
  • higher than normal temperatures are forecast to continue for several weeks yet, significantly reducing demand for gas and leaving prices at their lowest for two years
  • since the first "gas war" of 2006, many European countries have made huge efforts to increase their gas storage capacity and stocks are high. Some countries, such as Bulgaria, Slovakia and Moldova, which lack large storage capacity and depend heavily on gas supplies via Ukraine, would certainly suffer from any disruption in supplies
  • New Gazprom pipelines via Belarus and the Baltic Sea to Germany (Nord Stream) have cut the proportion of Gazprom's Europe-bound exports that transit via Ukraine to around half the total, meaning only about 15% of Europe's gas now relies on Ukraine's pipelines. Gazprom is also planning a Black Sea pipeline (South Stream), expected in 2015, meaning its exports to Europe will bypass Ukraine completely. Ukraine itself has cut its domestic gas consumption by nearly 40% over the past few years, halving its imports from Russia in the process.
  • Europe is increasingly installing specialist terminals that will allow gas to be imported from countries such as Qatar in the form of liquefied natural gas – while Norway's Statoil sold more gas to European countries in 2012 than Gazprom did. "Since the Russian supply cuts of 2006 and 2009, the tables have totally turned," Anders åslund, an energy advisor to both the Russian and Ukrainian governments, told the Washington Post.
  • Europe accounts for around a third of Gazprom's total gas sales, and around half of Russia's total budget revenue comes from oil and gas. Moscow needs that source of revenue, and whatever Vladimir Putin's geo-political ambitions, most energy analysts seem to agree he will think twice about jeopardising it.
Gene Ellis

Arctic Shipping Soars, Led by Russia and Lured by Energy - 0 views

  • Although the Arctic provides a shorter route around the world than the traditional course through warmer waters, it is not necessarily cheaper.
  • The ships were expensive to build and operate,
  • The first commercial Chinese vessel and first container ship to transit the NSR, the Yong Sheng, commissioned by state-owned Cosco shipping, arrived in Rotterdam on September 10 laden with steel and industrial machinery. Its 33-day journey from the Chinese port of Dailan was nine days and 2,800 nautical miles shorter than the conventional voyage through the Suez Canal
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  • The Arctic Council's 2009 report estimated that the NSR offers from a 35 percent to 60 percent savings in distance for ships traveling between Europe and the Far East. Ships also can circumvent regional conflicts and the risk of piracy near the coast of Africa or in the Straits of Malacca off Malaysia.
  • Hiring charges for mandatory escort by Rosatomflot's icebreakers vary, but the average cost is about $200,000,
  • the cost of escort through the NSR is roughly equivalent to that of passage through the Suez Canal.
  • Because "container" shipping of goods, (as opposed to bulk shipping of raw commodities like ores and fuel), relies heavily on on-time delivery, Carmel thinks it unlikely the NSR ever will become a major pathway for this kind of global commerce.
  • primary focus on the 22 percent of the world's remaining undiscovered oil and natural gas resources to be found in the far north.
  • Just last month, Novatek signed a deal to supply China National Petroleum Corporation for 15 years with fuel sent from Yamal by tanker
Gene Ellis

Irish Charm With Germans Leads Nation Out of Bailout Wilderness - Bloomberg - 0 views

  • Before the new government could go on the offensive, it needed to play defense. It fended off an attack on Ireland’s 12.5 percent corporate tax rate, the cornerstone of an economic policy that transformed Ireland from a financial backwater into a European hub for companies such as Pfizer Inc., the maker of Viagra, and Google Inc.
  • Two days after commencing his premiership, Irish Prime Minister Enda Kenny, 62, became embroiled in what he called a Gallic spat with French President Nicolas Sarkozy after refusing to raise the tax rate in return for an interest-rate cut on aid.
  • “The attitude was: ‘You misbehaved and here’s what you have to do’,’”
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  • Within months, the central bank injected more than 1 trillion euros of three-year loans into the region’s banking system
  • The economy emerged from recession in the second quarter, unemployment dropped for six months in a row, and house prices in Dublin are rising again. The yield on 10-year bonds is down to 3.5 percent, lower than Italy and Spain.
  • Noonan then ramped up his efforts to broker a deal on banking debt. He had a consistent line: it was payback time. The government hadn’t imposed losses on senior bank bondholders, preventing contagion spreading across the euro region from the Irish banking crisis.
  • Banks used the cash to buy sovereign debt
  • “The Germans disagree all the time until the very end, and then they agree,” he said. “Once you realize that, you keep talking, you keep chipping away.”
Gene Ellis

After Bangladesh, Seeking New Sources - NYTimes.com - 0 views

  • Bennett Model helped pioneer the exporting of garments from China in 1975, the year before Mao Zedong died,
  • Buying from Bangladesh, said Mr. Model, “has been politically incorrect ever since problems started there, so a lot of major players had already been looking for alternatives.”
  • Western executives are checking on potential new suppliers in southern Vietnam, central Cambodia and the hinterlands of Java in Indonesia.
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  • “Right now, the name of Bangladesh just gives a bad rep to a company,”
  • Bangladesh, which is the world’s second-largest garment manufacturer after China
  • Garment manufacturing makes up a fifth of the economy in Bangladesh and four-fifths of its exports,
  • “People are on the one hand looking at contingency plans in case the unrest gets worse,” said Bruce Rockowitz, the group president and chief executive of Hong Kong-based Li & Fung, one of the world’s largest sourcing companies.
Gene Ellis

Op-Ed Contributor - The Greek crisis shows why Germany should leave the European Moneta... - 0 views

  • THE European Monetary Union, the basis of the euro, began with a grand illusion. On one side were countries — Austria, Finland, Germany and the Netherlands — whose currencies had persistently appreciated, both within Europe and worldwide; the countries on the other side — Belgium, France, Greece, Italy, Portugal and Spain — had persistently depreciating currencies.
  • Rather than pulling the lagging countries forward, the low interest rates of the European Central Bank have lured governments and households, especially in the southern part of the euro zone, into frivolous budgetary policies and excessive consumption.
  • the solution is clear: the only way to avoid further harm to the global economy is for Germany to lead its fellow stable states out of the euro and into a new and stronger currency bloc.
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  • Unlike their northern neighbors, the countries in the zone’s southern half have difficulty placing bonds — issued to finance their national deficits — with international capital investors. Nor are these countries competitive in the global economy, as shown by their high trade deficits.
  • If Greece were outside the euro zone, for example, it could devalue its currency
  • Instead, the fiscal strictures of the euro zone are forcing the country to curtail public expenditures, raise taxes and cut government employees’ salaries, actions that may push Greece into a deep depression and further undermine its already weak international credit standing.
  • In short, th
  • e euro is headed toward collapse.
  • hat opportunity and pull out of the euro, it wouldn’t be alone. The same calculus would probably lure Austria, Finland and the Netherlands — and perhaps France — to leave behind the high-debt states and join Germany in a new, stable bloc, perhaps even with a new common currency.
  • If Germany were to take t
  • A strong-currency bloc could fulfill the euro’s original purpose. Without having to worry about laggard states, the bloc would be able to follow a reliable and consistent monetary policy that would force the member governments to gradually reduce their national debt. The entire European economy would prosper. And the United States would gain an ally in any future reorganization of the world currency system and the global economy.
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