The torments of the euro would be funny if they weren’t so tragic. At this point the
urgent need is for a big Panzerfaust — a bailout fund big enough to head off a self-fulfilling liquidity crisis for Italy. But such a fund would be backed by the credit of the euro area’s remaining AAA governments, basically Germany and France — yet at this point the euro situation has deteriorated sufficiently that taking on another commitment would undermine French credit. There’s a hole in the bucket,and every attempt to fix that hole ends up being stymied because, well, there’s a hole in the bucket.
The answer to the whole conundrum is to back the rescue, not with French guarantees, but with the power of the printing press — to put the ECB behind the effort. But the ECB won’t and maybe can’t (under current rules) do that.
Saturday, October 22, 2011
Krugman Calls for the "Power of the Printing Press" for the EuroZone
To an interventionist, the economic solution always comes down to printing more money. It is no wonder they hate the one money they can't print. Paul Krugman writes:
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Take away all of the models, the tenured positions, the PhD's, etc, "printing" is all they really know.
ReplyDeletecredit of the euro area = ability to milk and slaughter the tax livestock.
ReplyDeletekrugman is basically a murdering psychopath.
So dumb, when a central bank prints money, over time the money supply devalues by the exact amount that was printed. It's a zero sum game. It also creates bubbles and a misallocation of resources. It also reallocates wealth to wherever it is sent and so steals from the everyone else. It may buy some time because the currency takes time to devalue and so gives the impression of increased wealth for a while. But the peeps in charge aren't fixing the problem with the time they are buying. Which is, all countries need to pay for imports with exports. The trade deficits are these countries problem. But many don't know that, let alone how to fix it and they think all jobs are equal but they're not. If the government created new jobs, digging holes and filling them up again, everyone could be employed but these jobs, like most government jobs, are not productive and having to pay them would be a huge overhead on the economy, again just like most government jobs. So why can't the US and europe compete with china? Its government, land is land, people are people. There is no magical reason why the US and europe can't make stuff and compete. It's just government overhead that makes everything so expensive because it all has a cost. Some people think its due to currency manipulation by china but its not and if it were, its very easy to do, any country can have a weak currency. Its not primary reason. Its the overhead of big government and the high amount of regulations. None of these problems are currently being addressed by world leaders.
ReplyDeleteWhen I read this kind of stuff (seeing as how it comes the minds and mouths of the "well-educated" types and all), I simply don't know whether to laugh or cry.
ReplyDeleteAnd while I'm at it......it's no wonder this buffoon doesn't want to debate Bob Murphy.
Deep inside I believe he knows if it happened Bob Murphy would wipe the proverbial floor with him and he'd be fully exposed for the pathetic pretender he is.
I know; this isn't news to most here, but I needed to vent about it.....it's difficult to even see mention of his name and economics in the same place without choking back the urge to vomit.
@Fetz,
ReplyDeletere: Printing
I concur.
It is truly sad for many reasons....
They are going to print money. These counterfeiting terrorists will never allow failure of the Euro Zone even if they have to murder people. The USA Banksters are going to stuff the global equity markets with money at least thru the end of the year. Count on much higher inflation.
ReplyDeletelol@ the "power of the printing press".
ReplyDeleteWhat power would that be Paul?
Its amazing any one takes this guy serious.