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Could somebody expand on why it is that the U.S. is going to collapse but Europe isn't? Personally I see China as the elephant in the room, but the idea that Europe is somehow in better long-term shape than the U.S. seems like wishful thinking to me...

Apologies in advance for being so 'merica-centric...  :-)

by asdf on Tue Sep 29th, 2009 at 03:16:34 AM EST
Smaller MIC, better (thus far) current accounts situation, more heavy industry left, less serious oil addiction. Also a slightly more functioning version of democracy.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Sep 29th, 2009 at 04:41:10 AM EST
[ Parent ]
Much of Europe, particularly Germany, France and the Nordics, did not suffer from the property bubble, and their economies therefore do not have an inbuilt monetary Black Hole.

"The future is already here -- it's just not very evenly distributed" William Gibson
by ChrisCook (cojockathotmaildotcom) on Tue Sep 29th, 2009 at 06:00:56 AM EST
[ Parent ]
France certainly had a property bubble...

Un roi sans divertissement est un homme plein de misères
by linca (antonin POINT lucas AROBASE gmail.com) on Tue Sep 29th, 2009 at 06:13:38 AM EST
[ Parent ]
Not in the same order of magnitude I suspect.

"The future is already here -- it's just not very evenly distributed" William Gibson
by ChrisCook (cojockathotmaildotcom) on Tue Sep 29th, 2009 at 06:39:52 AM EST
[ Parent ]
Property prices have doubled in Paris in the last 10 years.

Un roi sans divertissement est un homme plein de misères
by linca (antonin POINT lucas AROBASE gmail.com) on Tue Sep 29th, 2009 at 06:42:56 AM EST
[ Parent ]
That's not a bubble, that's just credit creation as usual :-)

"The future is already here -- it's just not very evenly distributed" William Gibson
by ChrisCook (cojockathotmaildotcom) on Tue Sep 29th, 2009 at 06:46:47 AM EST
[ Parent ]
Doubling in Paris over a decade is not equivalent to doubling in an American state - France is more the size of one of the bigger states - CA / FL / NY. AFAIR, there are specific urban markets in the US where property prices trebled and quadrupled.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Tue Sep 29th, 2009 at 09:21:24 AM EST
[ Parent ]
Actually, property prices have more than double in France overall, and even more than this in places like Paris or the Riviera. Back in 2008, the Economist quoted an IMF study where the French real estate was overvalued by more than 20% (30% for the UK).

The bubble has just barely started to pop.

In contrast, there was no such bubble in Germany.

by Bernard on Tue Sep 29th, 2009 at 04:28:04 PM EST
[ Parent ]
That's very much like the information I was referring to where comparing European national figures to US national figures is highly misleading ... US real estate being overvalued by 12% seems extremely low in the face of the current foreclosure crisis, but if half of that comes from 10% of the market, its 60% over-valued in the worst affected markets.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Tue Sep 29th, 2009 at 05:11:37 PM EST
[ Parent ]
Same goes for Sweden.

I saw "take out a loan on your property value increase" ads, fortunately this was when the US bubble was already breaking which meant that there was not enough time for swedish real estate to get into that loop.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Tue Sep 29th, 2009 at 06:59:43 AM EST
[ Parent ]
Add the fact that except for the UK and Ireland, private debt (and therefore global debt) is much lower than in the US. Also saving rates are around 15% in the Eurozone.

"Dieu se rit des hommes qui se plaignent des conséquences alors qu'ils en chérissent les causes" Jacques-Bénigne Bossuet
by Melanchthon on Tue Sep 29th, 2009 at 08:15:23 AM EST
[ Parent ]
... of the EU trade balance - savings (domestic private accumulation of financial assets) is investment (domestic creation of private financial assets) plus the government deficit (domestic creation of public financial assets) plus the trade surplus (domestic acquisition of financial assets from abroad).

So if there is investment in productive capacity, and a trade balance, and even modest deficit, that will generate the income in excess of consumer spending to buy the newly generated financial assets, which is saving.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Tue Sep 29th, 2009 at 09:16:51 AM EST
[ Parent ]
... we just had China and the other pegging nations stop propping up our exchange rate.

But a drop of the external value of a currency by 50% is far from an economic collapse.

As to why the US$ should need propping up to trade in the neighborhood of purchasing power parity against the €, that has been covered above - 30 years of doing nothing but pushing the wrong direction in basic economic policy tends to weaken your economy's future prospects.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Tue Sep 29th, 2009 at 09:12:20 AM EST
[ Parent ]
Medium term for the reasons everyone else has listed, long term I think the US is in better shape:

higher arable land to population ratio

we have far more oil internally than Europe does (and while we use far more per capita we'll have more available to keep the minimum energy required to keep urban societies operating)

when things are getting quite bad the world over (when we're steep on the downslope of oil production) I see tribalism making a vengeful return, and for geographic reasons I think that bodes worse for Europe (it will certainly be bad for someone in north and south America, but no one can compete with American power locally, whereas Europe has a number of countries with equal weight to throw around, in my opinion meaning higher risk of social breakdowns, war, and thus damage to infrastructure that will be harder to repair post peak-oil).

Hard to know, though, as now days "little" proximate events like a nuke launch can easily wind up defining the next 10,000 years of human existence.

you are the media you consume.

by MillMan (millguy at gmail) on Tue Sep 29th, 2009 at 03:48:15 PM EST
[ Parent ]
US: Footprint 2.8b ha, 9.4ha/ca, Biocapacity 1.4b ha, 5ha/ca
Germany: Footprint 0.35b ha, 4.2ha/ca; Biocapacity 0.16b ha, 1.9ha/ca
France: Footprint 0.30b ha, 4.9ha/ca; Biocapacity 184.4b ha, 3.0ha/ca
Japan: Footprint 0.62b ha, 4.9ha/ca; Biocapacity 0.08b ha, 0.6ha/ca
China: Footprint 2.8b ha, 2.1ha/ca; Biocapacity 1.1b ha, 0.9ha/ca

So sorting in terms of per capita footprint deficit:

China (-1.1)ha/ca, France: (-1.9)ha/ca, Germany (-2.3)ha/ca, Japan (-4.3)ha/ca, US: (-4.4ha/ca)

But sorting in terms of biocapacity per capita, as an index of domestically sustainable standard of living at current population levels and biocapacity:

US 5ha/ca, France 3ha/ca, Germany 1.9ha/ca, China 0.9ha/ca, Japan 0.6ha/ca


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Tue Sep 29th, 2009 at 05:30:18 PM EST
[ Parent ]
Sweden 10ha/ca, Finland 12ha/ca.

Pity there is no values for the EU, looking at the future that will be more decisive then the values for the membercountries. I would guesstimate to a lower value then for the US and a higher then for Germany.

(Btw, Russia 8ha/ca)

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Wed Sep 30th, 2009 at 06:13:54 AM EST
[ Parent ]
There are EU figures, they just aren't in the nation trends pages. You just have to download the spreadsheet to get them.

Footprint: 4.7ha/ca, biocapacity 2.3ha/ca, surplus (-2.4)ha/ca.

The surplus countries are Estonia, Finland, Latvia, Lithuania, and Sweden, Bulgaria about balanced.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Wed Sep 30th, 2009 at 07:28:30 AM EST
[ Parent ]

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