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Central bankers, central wankers.

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010
by Carrie (migeru at eurotrib dot com) on Tue Dec 7th, 2010 at 06:06:17 PM EST
Well, a massive "unthinking" of existing economic dogma is certainly what is needed. I wonder if any MEP even asked Trichet about the role of (previously) private debt in Ireland and (currently) in Spain.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Dec 7th, 2010 at 11:35:03 PM EST
[ Parent ]
If they did, they probably prefaced it by I know you cannot answer this question because of the press, but I ask you anyway because it is important.

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010
by Carrie (migeru at eurotrib dot com) on Wed Dec 8th, 2010 at 04:24:29 AM EST
[ Parent ]
Unthinking the Single European Unthinking?

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010
by Carrie (migeru at eurotrib dot com) on Wed Dec 8th, 2010 at 04:26:51 AM EST
[ Parent ]
I think a point in which some education is necessary is that, to quote you quoting Robert Parenteau
a country with a current account balance in deficit cannot run both a fiscal surplus and a private sector surplus as a simple matter of accounting definitions.
In other words, regardless of the interest rate policy run by the ECB, the Growth and Stability Pact constraints on public deficits, together with the "Lisbon Agenda" imperative for GDP growth, means increasing private debt in deficit countries. And in the presence of intra-EU balance of payment imbalances without a countervailing redistributive policy introducing a negative feedback loop on the size of the current account deficits (and surpluses), debt bubbles are pretty much guaranteed.

Trichet is ideologically unable to see this, and yet he will chair a Committee to watch out for asset bubbles.

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010

by Carrie (migeru at eurotrib dot com) on Wed Dec 8th, 2010 at 07:23:59 AM EST
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Perhaps Pascal Canfin Could arrange a hearing before the Economic and Monetary Affairs Committee in which both Parenteau and Trichet testify and answer questions, with Parenteau appearing first and presenting his three sector fiscal accounting model. Might be a good idea to invite Jose Manuel Barroso and Axel Weber as well.  

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Dec 8th, 2010 at 11:20:22 AM EST
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It reminds me of a segment title in a 1980's subversive children's program on Spanish National TV: unteaching to unlearn how to undo things.

With a wink to kcurie...

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010

by Carrie (migeru at eurotrib dot com) on Thu Dec 9th, 2010 at 03:43:22 AM EST
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