Some countries like Portugal have had a trade deficit for the last 60 years. That predates EZone and EU membership.

Trying to keep your currency overvalued will produce the trade deficit, and then the devaluation crisis. An overvalued currency, however, is great for the local elite to take their rentier income out of the country.


I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS

It must be solved by fiscal policy, and it can only be solved by fiscal policy if monetary policy doesn't work against it.

The EU allows no industrial policy, no independent fiscal policy, and has a monetary policy conducive to deflation, depression and unemployment.

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS

That is a structural problem that won't be solved by exiting EZone/EU

how can it be solved, in your opinion?

keynesian job creation? government investment of citizens' taxes to provide employment and teach skills to make them productive?

whose fault is it they don't get smart like the germans and invent more saleable stuff for the world economy, or price their labour cheaper than asia's?

if we are in a painful transition period between old and new capitalism, what is the goal the suffering is for?

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

Anyways, jobs in the South are lost to China and the emerging economies not to the North.

The simple fact of the matter is that countries in the South have priced themselves out of low-cost manufacturing without managing the transition to high value added production. That is a structural problem that won't be solved by exiting EZone/EU. That problem cannot be solved by monetary policy.

- Jake

Friends come and go. Enemies accumulate.