Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
Display:
There is going to be a big realignment in world finance, but this blip is not it.

I suppose it depends upon your horizon, but for those who haven't experienced similar dislocations this one seems to be earth shattering. It isn't.

This will pass in a couple of years, just as the dot com bubble did. At the end of the crisis there will be a bit more foreign ownership of US assets, there will be a few ex-millionaires and the concentration of ownership by large firms will have increased.

The super wealthy who set much of economic and social policy will still be super wealthy. The politicians who they buy will still be bought. In the US a big win for the Dems may lead to a new cycle of consumer protection and some improvements in the safety net. That's about it.

The US will  still  depend upon militarism to (attempt) to rule the world. The EU will continue to get a free ride from this militarism and continue to dodge its responsibilities when it comes to dealing with failed states. China and India will continue to grow, but internal strife will increase and the path will be less smooth than they now believe.

The climate change (both the real one and the metaphorical one), will occur towards the middle of century. How this will play out is beyond by predictive abilities, but unless there are bold steps taken now, it won't be pretty.

Right now some sharp investors are buying up oversold assets and will be seen as wise and foresighted in 2010.

As I always say, "Don't Panic".

Policies not Politics
---- Daily Landscape

by rdf (robert.feinman@gmail.com) on Wed Mar 19th, 2008 at 12:20:29 PM EST
Maybe I should have put up a chart on the CA deficit, and explained that. Maybe I should have put up a chart on CNY v USD and compared it to CNY v EUR to show the PBOC is already in the process of re-orienting.

But the fact of the matter is, when these financial crises to which you allude occurred, the US was a creditor nation with an industrial base to export its way out of the mess. Now, the US is a heavily indebted nation with an enfeebled industrial base, specialized in the sorts of services which cannot easily be exported.

Nope, this might not be the big one, and there certainly are levers to pull the US out of this. Namely, re-institute a progressive federal income tax like before JFK, increase interest rates like Volcker did, or both.

Either way, there are hard times ahead, and unlike all other significant downturns since the '30's, the safety net has also been gutted.

I admire your optimism though.

The Hun is always either at your throat or at your feet. Winston Churchill

by r------ on Wed Mar 19th, 2008 at 12:29:18 PM EST
[ Parent ]
And by the way, I think more than just I object to the "free ride" comment you make. I'd just as soon the US didn't piss away valuable resources on milatary hardware which has been proven useless in Iraq and, ultimately, Afghanistan too.

All that hardware, and the US has made the EU less safe. Nobody's asking the US for anything around these parts, as far as I can see, maybe you can try that argument out on the Canadians.

The Hun is always either at your throat or at your feet. Winston Churchill

by r------ on Wed Mar 19th, 2008 at 12:43:26 PM EST
[ Parent ]
The EU will continue to get a free ride from this militarism

So true, a free ride to - hell.

and continue to dodge its responsibilities when it comes to dealing with failed states

As in the failed state of Irak, I suppose.
What exactly are Europe's or the US - or anyone's for that matter - duties towards failed states ?

by balbuz on Wed Mar 19th, 2008 at 03:53:06 PM EST
[ Parent ]
Actually I was think more of the failed states in Europe like the bits of the former Yugoslavia, Cyprus and many of the former Soviet republics.

The migration from North Africa which is causing consternation in places like Spain might also be better handled if meaningful aid was given to the places the migrants are coming from.

Isolationism has a tendency not to work as desired over the long run. A lesson both Europe and America fail to learn.

Policies not Politics
---- Daily Landscape

by rdf (robert.feinman@gmail.com) on Wed Mar 19th, 2008 at 06:26:30 PM EST
[ Parent ]
rdf:
The migration from North Africa which is causing consternation in places like Spain might also be better handled if meaningful aid was given to the places the migrants are coming from.
Spain has already negotiated with North-West African states and pledged development aid to try to stem the flow of economic migrants.

afrol News - Migration produces EU deal for Mali; Bissau next

The European Union (EU) has granted substantial extra aid to Mali to assure a faster social development of the country and thus halting its large illegal migration outflow. Mali has turned into the largest source of irregular migrant to Spain and Europe, mostly due to rampant poverty and lack of vision for the country's large youthful population. Meanwhile, Guinea-Bissau seems set to be the next to achieve a lucrative EU deal as migrants have started departing from that country.

...

Spanish diplomats, who have travelled frenetically over most of West Africa during the last year, have been able to secure EU assistance in signing migration control and development aid agreements with the main sources of irregular migrants. Especially Morocco, Mauritania and Senegal - the main countries of departure - have already signed agreements worth hundreds of millions of euros, in addition to receiving logistic aid in controlling borders.

...

Spanish and EU authorities have so far been rather successful in closing the main migration routes into Europe. Economic and diplomatic concessions to Morocco assured Rabat's harsh crack-down on Africans trying to use the country as a base to migrate to Spain. Libya and Tunisia are equally tough on those heading for Italy.

Whether these combined enforcement and development aid efforts will be sufficient or not is an open question, but in any case you might want to inform yourself before makign sweeping statements about what Europe has or hasn't done or has considered doing.

It'd be nice if the battle were only against the right wingers, not half of the left on top of that — François in Paris
by Carrie (migeru at eurotrib dot com) on Wed Mar 19th, 2008 at 06:56:56 PM EST
[ Parent ]
Well eurozone-member Cyprus is many things, but a failed state it ain't. The Northern part is still under Turkish military occupation, but efforts are ongoing for reunification.
The failed states in Yugoslavia, one could argue, were (at least partially) the result of US and EU idiocies, crimes and whatever else is part of the construction kit for spheres of influence.

And, in Greece that I know of, the majority of illegals nowadays crossing the Aegean are from Iraq, Afghanistan and Pakistan. In other words the recent upsurge in incoming illegal immigrants is in no small part due to the very energetic policies of the US in various parts of the world.

The road of excess leads to the palace of wisdom - William Blake

by talos (mihalis at gmail dot com) on Thu Mar 20th, 2008 at 09:21:43 AM EST
[ Parent ]

Display:

Occasional Series