Too much debt~!

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  • Bigcollapso

    In order to save the financial sector, The financial sector would have to make loans to the promising technology that could enable growth. But this technology is too risky… Very much like Mr. Madoff in the final days.

    • http://overthepeak.com/wordpress/ Mystic

       I can just about agree with the technology thing (just) ….. but that is very unlike Mr. Madoff’s final days (if you think about it).

  • windman3

    You waffled Nick, and I got a bored after France, not that France was guilty. So if any profound insights came towards the end of the video, I’ve missed them.

    I’ve just spent the last hour wondering what all those figures really mean and how to interpret them.Really, just sitting here thinking about them.

    And now I have a headache, so I’m going to take a break. But before I do,

    I have to assume that aggregated the world’s economy is based on debt. This is the underlying fundamental. So for an economy to grow, either 

    1. the internal debt levels have to rise

    or 

    2. the country has to be a net exporter

    or

    3. the velocity of debt/money has to increase (I think that’s true, but its getting late)

    or 

    some combination of those.

    To household debt/income

    Now, it is somehow counter-intuitive to see Germany’s ratio going down, as they are doing well and  so could afford to take out more credit. Their salaries have been held back but still they are paying off debt.

    And then to Greece, these buggers have not only ramped up their salaries but also ramped up the amount of debt they have been taking on board. In terms of EUR, going from 28% of a low salary to 97% of a larger salary is a humongous amount of EUR that has been spent somewhere.

    So I wonder where, and here it is, by jove

    http://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&met_y=ny_gdp_mktp_cd&idim=country:GRC&dl=en&hl=en&q=greek+gdp 

    Hmm, didn’t realise all that data was around on google. Everyday something new.

    I’m off for more thinking. Pity that the table did not display the corresponding public sector debt levels as well.

    • http://overthepeak.com/wordpress/ Mystic

       Not enough growth to pay back the extant debts.
      I could make it into a poem~!!??

  • CSArichardo

    Debt …..

    “All you really need to know for the moment is that the universe  is a lot more complicated than you might think, even if you start from a position of thinking it’s pretty damn complicated in the first place !”
    – Douglas Adams

  • http://www.outoftheboxinsight.org Outoftheboxinsight

    W0w no beard, you look much younger ! Great to see you up and running again.

    • http://overthepeak.com/wordpress/ Mystic

       Hello T bird,
      Yes, must grow it back quick ……….. don’t want to go around looking like I am 21~!

      • windman3

        No chance

  • Paul

    The UK, Holland and most other European nations have followed the Japanese model of burying your head in the sand and hoping for better times.  They’ve now created their own Zombie banking system.  These European banks are insolvent and should be forced into bankruptcy, to clear the markets for some of the somewhat “sound” banks.  Interbank lending is freezing because no bank trusts the other banks’ balance sheets.  For good reason; they’re insolvent~! Banks are not being forced to disclose their true losses.  It is a very similar situation to when the money markets began to freeze up in the United States, in 2008.  Rather than lend capital to business and households, the European banks are hoarding capital, while also paying out hefty bonuses and dividends.  It is an absolute mess, and a disaster waiting to happen.  How long it will last is anybody’s guess.  Don’t count on your govt to fix the mess either.  The banks have the politicians firmly in their pocket.  Europe would do well to follow the Swedish and American corrective path.  They won’t.

    Good piece by Liam Halligan about the bank disclosure problem and its effects on the EU economies:
    http://www.telegraph.co.uk/finance/comment/liamhalligan/9321796/UK-and-Europe-languish-in-a-zombie-bank-malaise.html
    “The “full disclosure” debate has been rolling in the US, American banks having recognized their losses to a far greater extent than we’ve seen in Western Europe.  That’s why the US recovery, while still uneven, has been far stronger.  Europe, meanwhile, the UK included, continues to languish in a “zombie bank” malaise, buying time with QE, summits, and endless can-kicking measures.”

    Good piece describing people’s nervousness with the banks in Spain; get your money out asap:
    http://www.telegraph.co.uk/finance/personalfinance/offshorefinance/9323455/Spanish-debt-crisis-fear-of-a-bank-freeze-is-palpable.html
    “A local restaurant owner complained that her savings bank manager refused to let her take €30,000 out of her account.  The money was needed to get the restaurant ready for the summer rush.  New small print lets the bank block withdrawals, even on instant-access accounts.  It took two weeks for the bank to relent.  Apparently, it could block savings for two years if it wanted.”

    • http://overthepeak.com/wordpress/ Mystic

       The Telegraph does have a few good days.
      They generally only hint that you should open your eyes …… nothing too shouty; but should get away with things in the `told you so stakes` (or get arrested for causing naughty things to happen~?).

      • Paul

        I think you’ll see more and more of these Social desperation articles.  Most people on the streets know what is happening.  A few editors cannot stop the truth from going public.  It already is public knowledge~!  The charade is becoming more absurd by the day.

  • Paul

    Congrats about your good news regarding 100% medical coverage under the “social” scheme.  It was fortunate that you decided to retire to France, instead of Greece.  The social medical system is crumbling over there right now.  You would have been in trouble~!

    “Henry Dunant {hospital} is one of a sharply growing number of Greek institutions and
    companies that aren’t paying because they haven’t been paid. Many employees
    aren’t receiving their salaries—certainly not on time and sometimes not at all.
    Businesses aren’t paying each other. And the government isn’t paying its
    suppliers or refunds owed to taxpayers.”
    http://online.wsj.com/article/SB10001424052702303506404577446302677322614.html

    “The credit freeze means that members of the EOPYY fund — which represents more than 9 million of the nation’s 11 million people — now must pay the full cost of their medication, which the fund normally subsidizes by an average 75 percent.”
    http://www.washingtonpost.com/world/europe/greek-diabetes-group-warns-lives-at-risk-from-pharmacists-protest-over-state-drug-bills/2012/06/05/gJQAqxGzFV_story.html

    France may not be far behind Greece.  Nuclear power exports will only carry you so far.  So, it’s just another lucky reason that you received this operation so early in your life.  In a couple of years, you might not have fared so well in France.  The problem with the “social” thing is that eventually you run out of other people’s money; in the Greek case, German taxpayers’ hard-earned income.
    The entire “social” thing is on its deathbed.  RIP, “Social” thing~!
    Shall we say that it is a “less than best policy”~?!

    • http://overthepeak.com/wordpress/ Mystic

       If congrats are in order, then they are for choosing France, getting into the system and staying in.

      Japan started this `social thing`.  It would have been a good idea if cheap energy was always available (but it wasn’t …… so yes, now the promises cannot be fulfilled).

      I can’t see it being any better in the US.  The insurance premiums will soon become too much to pay.

      So, yes, to get the heart op, in early, should be seen to be a good bit of luck when the history books are written.

      • Paul

        I always try to get the cash price from the docs.  You’d be surprised how often they are willing to give a good price for cash.  For the major stuff, quadruple by-passes etc., hospitals are the only way to go.  So, some form of major insurance will be required, say anything above $1-2K per year.
        The hospitals and the govt’s will have to cut back routine services to the deadbeats sooner than later.  I know a police officer who tells me he routinely gets calls to assist ambulances who are called to some home because the patient has a headache or a toothache.  I am not exaggerating.  Ambulance and police escort to the hospital, emergency room and then overnight stay for a headache or toothache.  Total cost for a toothache around $3-5K.  Generally these Medicaid patients just want more free painkillers, and so they scam the system.  Under current law, the system has to respond.  That will stop.  If it doesn’t, then all bets are off.  Also, when the hospital receives a patient with good coverage, they will order every test under the sun and bill their insurance providers.  These patients are know as “golden gooses”.  They make up for all the deadbeats’ free rides.  It is a silly system.  It won’t last.

        • http://overthepeak.com/wordpress/ Mystic

           Two grand a year sounds like a bargain~!?

          • Guest

            There is a tendency amongst the colonists (and tea drinking party people in general) to assume the healthcare services is “free” – forgetting that the average worker contributes quite a chunk of their wages. In the UK, a person earning the (so called) average salary of £26,000 will pay over £2,500 ($4,000) in National Insurance contributions (which netted the government over £96 billion in 2010-2011 if you believe in that sort of thing). Like you say, $2,000 sounds like bargain! 

            • http://overthepeak.com/wordpress/ Mystic

               Very hard to `unfungify` all that money, but one thing is for sure ………. it ain’t free~!

              (I still pay voly contribs (that have gone from 300 to 600 over the last couple of years)

              • Guest

                My “salary” is too low to qualify for NI and tax contributions, so I haven’t paid any since 2000. 

                • http://overthepeak.com/wordpress/ Mystic

                   The voly contribs at 200/300 were just too much of a bargain to pass up.

                  It is always worth paying in `enough`, so you get `pensioner status` at the end of everything.
                  Even for you, I think I would recommend voly contribs.

              • axionication1

                It ain’t free.

                Some subsidise others. Surely this is common knowledge.

                Ponzi casino ‘win’. Understanding & gratitude however still remain cool.

                I am done. Thanks for ride.

            • windman3

              The NHS is one of the world’s biggest employers, coming after Walmart, The Golden Arches, and the two biggest killing machines (maybe I should lump Big Macs in there too??)

              http://www.bbc.co.uk/news/magazine-17429786 

              Look at the statistics

              http://www.nhs.uk/Livewell/NHS60/Pages/Didyouknow.aspx 

              There is a serious amount of sickness in the UK

              – Each month, 23 million people (more than three times the population of London) visit their GP surgery or practice nurse.

              That’s 30% of the UK population off to the quack every month……

              – In a typical week, 1.4 million people will receive help in their home from the NHS

              I could cut that down dramatically in a day.

              – Fat bastards get handed a bottle of paracetamol and a one sheeter on diet and exercise. “Don’t return until you’ve lost 20 Kgs”

              – Smokers the same, except don’t return until you’ve stopped killing yourself

              • http://overthepeak.com/wordpress/ Mystic

                 There does seem to be something terribly wrong with the amount of Brits going to the docs.
                I believe also that they only get 10 minutes each ……….. Is it possible that that is part cause (as in, they don’t get a proper consultation/diagnosis~?)
                I really don”t know much about this~!

          • Paul

            Two grand is what you will pay out of pocket before your catastrophic insurance kicks in. Then, usually not 100% coverage.  Maybe 8o-90% covered, or total hospitalization but not rehab, PT, etc.  There are many different plans and options.  If you work for a young demographic company, software like Google, then you pay nothing.  If you work for an older demographic company, aerospace like Lockheed, then you pay a few thousand a year, depending on what coverage you choose, how many dependents/family, etc.  The smaller companies may or may not offer a health insurance plan.  It is complicated, but it generally works pretty well.  Medicare is pretty good too.  It’s the Medicaid folks that are destroying the system, with their nonsense and fraud schemes.  You have a common cold, go to the emergency room.  If you have a toothache, call an ambulance.  That’s where the problems arise.  They do not know how to fend for themselves.  They have become completely dependent on the govt as their Nanny.  True Social beings, thinking they are owed all these services simply because they were born.  Pathetic.

          • Paul

            Also, if you are independently employed and have to buy your own individual health insurance, it will cost you anywhere from $6k to $60+K per year for good coverage~!  It depends on your age, heath factors, etc.  Like my doctor buddy tells me, “When did people think that everything should be covered?”  In the old days you paid cash for routine office visits, just like you do when you go to the dentist or even to the garage for auto repair.  Health insurance was really designed to cover major surgeries and hospitalization, not 100% of everything.  That’s where we are headed back to I think.  I pay cash 100% of the time, but I am lucky that I have good health.  Some others are not as fortunate.
            There are tons of scams and fraud in the health-care industry.
            Don’t forget, 30% of the top 1% richest are doctors~! 

            • http://overthepeak.com/wordpress/ Mystic

               It has been my opinion that the US missed out after WWII by not going `social`.
              Yes, we now know that `social` is killing all the countries with it, but then the US way is, price-wise, further out of control than the `socialists`.

              It looks to be one of those `impossible things`.  As in …….. poor people just cannot afford top treatment ………. so `what’cha gonna do wiv ‘em~?`.
              (a civilised country struggles with such questions)

              • Paul

                You are incorrect.  The poor fare much better than the working people under out current system.  The poor receive 100% coverage, the working only partial.  The poor receive insane amounts of home care, the middle class nothing.  The system rewards those who are takers, not those who are payers.
                Everyone, rich or poor, uses the same surgeons, the same hospitals, the same nurses, the same meds, etc.  The only difference is how it is paid for.  It is much better to be a shit-bum on welfare than a a member of the “working poor”.  That is why Socialism will fail.  The working stiffs are either unemployed or underemployed now.  Without their tax revenues, the shit-bums’ taking is reaching a boiling point.  Is it “civilized’ to make one person work, so that another person can stay home, playing video games, eating pizza, watching Oprah, getting fat, smoking and making youtube videos?  The great collapse will be the great equalizer.  Everyone will be at home.  So, who is going to pay for them?  The govt?  MMT?  Magical Money Tree?
                Socialism and Communism only work in theory.  They assume people will do the right thing for the cause~!  Bullshit.  Human nature is does not work for the cause or for the group.  We are all a bunch of greedy little self0serving monkeys.  Capitalism understands human nature.  It allows entrepreneurs to grow businesses, while at the same time enacts regulations to curtail greed and abuse.  The problem started when President Clinton repealed the Glass-Stegall Act, which FDR had put in place to monitor and halt excessive greed and malfeasance.  Once the Act was repealed, we were off to the races and had a fun run until the 2008 collapse.  It was inevitable.  It was the 1920’s all over again~!  That’s why FDR passed the damn act to begin with~!
                I know, I know, peak oil/energy also comes into play.  But, this recent collapse was accelerated by at least 20-30 years, from the ridiculously easy credit supply and the Wall Street/City of London casino gambling activities.  The top 10% AND the bottom 10% are both to blame~!  Unfortunately, the middle 80% are left carrying the load, and they are stumbling under the weight with each passing week.

                • http://overthepeak.com/wordpress/ Mystic

                  I asked `what is to be done with the poor that cannot afford top health-care~?` ……….. that is all.
                  You tell me what the US has done …… and this shows itself to be a problem (exactly as I presumed with, `a civilised country will struggle with this question`).

                  The obvious answer is to keep the level of `shit bums` down to a handleable minimum.  But, if you can’t do that ……….. well `a civilised country will struggle with this question`.

                  I guess we could try and gauge the percentage of shit-bums in the US, as opposed to other countries~?

                  (I have read the last bit a couple of times and can’t make much out of it)……(I don’t think it dealt with the question of what a civilised country does with sick shit-bums though).

                  • Paul

                    I understood your question, but the poor are given top health care~!  There is no affordability issue.  It is 100% Free~!  They do not pay for anything.  24 hour in-home care, Free!  Live-in nurses, Free!  Nursing home, Free!  Education, food, medicine, house, mobile phone, cable TV, internet connection, spending money for booze, cigarettes, drugs?  All Free!  The only criteria:  you must be breathing and you must not be working.
                    “Sick” is a very relative term.  Many people are scamming the system with their “illnesses”.  If you say you are depressed, can’t pay attention, are easily distracted, don’t like other people, etc. then you qualify for full benefits.  And please don’t start with any bleeding heart arguments.  You know that there are many lazy deadbeats and scammers in life~!  It is easy to sit around, pop out 10 kids, and just wait for the govt check to arrive.  Why work if someone else is willing to pay? 
                    The Medicaid money should be spent on the poor elderly and people with real disabilities; blindness, quadriplegic, cancer, debilitating disease like Parkinson’s, MS, Alzheimer’s, etc, etc… 
                    The problem is that there are a shitload of shit-bums scamming the system, to the tune of billions of dollars wasted every year.  Also, there are a shitload of crooked medical “professionals” committing fraud.  Chiropractors giving spinal adjustments to healthy young welfare children in exchange for lollipops.  Don’t laugh, it happened.  One chiropractor used to send a van around the ghettos picking up kids, adjusting their spines, then charging Medicaid.  I could go on and on with all the Medicaid scams.
                    The sad part is that these bastards are going to bankrupt the system so that the folks with legitimate problems will eventually be cut off as well.
                    Welfare was created to get people through a temporary, rough patch in their lives.  Temporary~!  It was not meant to be a multi-generational career~!  Fucking and breeding are not skills, although the govt seems to think they are~!
                    Also, welfare was created for American and European citizens.  Not for illegals.  Someone forgot that part of the agreement.  I know, I know, but what about the children of the illegals?  Pack them up and send them back to their home country.  In case no one has noticed, the Western surplus days are over and gone for good.  It is belt tightening time now.  Big time~!
                    The recognition of the collapse is still not widespread, because people have not yet felt the full brunt of this reality.  But, they will.  We can have a more in-depth discussion of the meaning of “civilized” then. 

                    • http://overthepeak.com/wordpress/ Mystic

                      You write of this seemingly out-of-control `system` as though it was all my fault.

                      I am not a great Forest Gumper, but I would start with – `civilized is, what civilized does`.

                    • Paul

                      I’m not saying any of it is your fault?  Where did that come from?
                      It is not civilized to steal from the production of other people’s labor.
                      Forget capitalism, let’s look at it from a Soviet or Chinese socialist/communist perspective?  What did the lazy, non-productive scammers do under their regimes?  They either starved to death, or they joined The Party and got a free dacha, a BMW and an opportunity to send their neighbors to a gulag~!  Human nature always reigns supreme, no matter the political philosophy.
                      “Life is like a box of chocolates, some are good and some are shit~!” 

                    • http://overthepeak.com/wordpress/ Mystic

                       “It is not civilized to steal from the production of other people’s labor.”

                      I would like to point out to you the childishness of that comment, but of course that is impossible; as anyone who could write it, is too childish to understand just how childish it is. 

                    • Paul

                      So, civilized behavior only applies to certain adults in society.  Other adults will always behave in an uncivilized manner, but it is not their fault, it is ours.  Therefore, it is our duty to care for the spongers, no matter the economic cost or societal consequences.  Utopian thinking in a Dystopian world~!  Now, who is the childish one in this argument?

                    • http://overthepeak.com/wordpress/ Mystic

                      There probably always has been, are, and always will be, roughly 10% of any population that is `not quite up to it`.
                      This must first be accepted ….. and then dealt with.

                      And yes, any civilized country is always going to struggle with this question. 
                      They are going to struggle, because it is a very hard reality to try and deal with. 
                      But, dealing with very hard reality, is part of `being civilized`, no~!?

                    • Paul

                      “But, dealing with very hard reality, is part of `being civilized`, no~!?”
                      Yes, fair enough, I agree.  Also, I agree that there has always been 10% spongers amongst the healthy, working adult population.  This 10% is in addition to society’s other burdens, who are not spongers; the elderly, the sick and the children. 
                      But, what happens to a society when you have an increase from 10% spongers to 20, 30 40% spongers.  We are heading in this direction.  It is unsustainable, no?  Is this not also a hard reality?
                      Again, “But, dealing with very hard reality, is part of `being civilized`, no~!?”
                      What is the civilized response to the increase in the spongers?  My response would be an FDR New Deal type program.  I have no problem spending zillions of dollars on productive programs that provide people with good jobs, food, shelter, and a sense of human dignity.  Let’s do it!  Does that clarify my “politics” for you~?
                      But, with a failing banking system, depleted govt coffers and the end of cheap oil/energy, just how are we supposed to accomplish such a monumental task?  Even FDR would be hard-pressed to find a solution.  The Russian, Spanish, Italian, German and Chinese response to these conditions was to institute a Totalitarian Socialist regime.  All those Socialist regimes failed (even Orwell was disgusted by Socialism following his time in the Spanish Civil War); China is more capitalist than 1920’s America.  So, what are we going to institute?  What’s going to be our next big thing?  I have some ideas, but I like to hear yours first.  

                    • http://overthepeak.com/wordpress/ Mystic

                       “But, what happens to a society when you have an increase from 10% spongers to 20, 30 40% spongers”

                      Well, first it is necessary to admit that your society has been `badly managed`…….then take it from there.  (what to do, I have no clue)

                      Question note:  Do you see this `sponger crisis` in the US~?  (I don’t, but would bow to your greater knowledge).
                      and another:  Do you see this `sponger crisis` in other countries (and which countries would they be)~?

                    • Paul

                      Well, one indicator might be that 47% of American households do not pay income tax.  As for other countries, I am sure that any country with a liberal socialist govt probably has a large number of spongers; so, all of Europe.  Also, govt workers making enormous salaries is a sponger problem too.  Italy, Greece, Ireland to name few.  Remember that article about the Italian govt workers in the small town drinking coffee at the little cafe “doing their job” for the community?  Spongers~!

                    • http://overthepeak.com/wordpress/ Mystic

                       I have let you drag me away from the `permanent 10%` to some other people, who are a completely different subject. 

                    • Paul

                      Sorry about that.  I started researching the permanent 10% types, in various sources, but the subject matter made me angry and depressed.  It’s a cruel world out there.  It’s going to get even harsher.

                    • http://overthepeak.com/wordpress/ Mystic

                      Aye,
                      and I think it will be very rare
                      that the harshness
                      actually helps anyone~!?

              • Paul

                ” It has been my opinion that the US missed out after WWII by not going `social`.”
                Socialism would have been nice.  But, capitalism pays the bills.  Don’t forget, someone had to pay to rebuild Europe~!  Please see your previous Marshall Plan post~!

                Of course, America benefited from the post-reconstructed European consumer economy.
                Maybe that’s the answer to all our problems.  You guys start another war, destroy all your property, then we’ll loan you the money to buy more American stuff.  But, you have to promise to ban the Chinese from your markets with strict American-only tariffs~!  Fair is fair~!

                • http://overthepeak.com/wordpress/ Mystic

                   If you have over a third of an area (25% of a population~?) poor and obese, this is going to cause problems.
                  You can let the market sort it out by selling them more corn syrup, or you can get the government to put an end to it.
                  Let people do what they want …….. and you are going to fall into situations that civilized countries will find hard to deal with.
                  People, unfortunately, are suckers for the slickers~!

                  • Paul

                    Or, you could let these poor adults begin acting like adults, making adult decisions.  Liberals love to treat poor people like they are retarded children.  They’re not.  It is actually quite insulting when you think about it.  Being a Nanny to a 40 year old man?!  They are adults who have received at least 12 years of public education.  They can think for themselves.  They choose to eat fried foods, hotdogs, cheeseburgers because they taste good.  They choose to drink alcohol and take drugs because it feels good; they choose to fuck for the same reason.  What they don’t do is make the hard choices; diet, exercise, contraception, learning a trade and taking responsibility for their illegitimate children~!  Why not?  Because Nanny will provide~!  The problem is Nanny is now broke, but she’s using her credit cards to make up the difference.  She is about to max out those credit cards.  Then what?

                    {Nanny = Govt., since we seem to be having a bit of a communication breakdown today}

                    • http://overthepeak.com/wordpress/ Mystic

                      I think you are having a bit of a `run out of ideas, so will blame government for everything` day.

                      Please don’t forget that I consider `libertarianism` to be the most childish `philosophy` that I have ever come across.
                      It is just an excuse to have a `magic position`, where you can stand and be magnificent on every subject.
                      Unrealistic, unreasonable, pathetic, childish and completely `uncivilized`.

                    • Paul

                      I am not a libertarian, I think they are delusional.  I am all for good govt.  A well run govt is the cornerstone of a successful civilization.  But, at the same time, I am going to adhere to the govt propaganda and tow the party line, if they are full of shit.  The problem is that the govt has run amok, and we are forced to live with consequences.  For example, renewable energies, carbon taxes, cap and trade, global warming schemes?  You know, that i know, that you know, that is all complete bullshit~!

  • Paul

    A question.  If we are looking at this chart and comprehending how fucked the European banking system is, then what is preventing the European money markets from freezing up like they did in America in 2008?
    Surely all the sharp bankers realize how awful the other banks’ books are.  Are they all just pretending everything is hunky dory?  Also, does the ECB and the EU “Treasury” (if such a thing exists) have the power and authority to act as quickly as the Americans did to prevent an “electronic run” on the capital markets, if it were to occur?  We’re talking enormous decisions being made and implemented in a matter of hours.

    • http://overthepeak.com/wordpress/ Mystic

      They are all playing `make believe`.
      The EU `treasury` does not exist.
      The ECB did liquefy the markets to the tune of 1 trillion euro (temporarily buying stuff off the banks, or as they put it – lending collateralised to the banks (at 1%)).
      The point is, what will happen when the banks have to pay that back to the ECB ……….. and the obvious  answer is `they won’t` (the ecb will just continue to roll it over for ever …….. and maybe lend out even more~!).
      With the accountants on side, banking can pretend for an awful long time~!

      • Paul

        It’s amazing, huh?  It is complete fantasy land, but it keeps “functioning”~!  I don’t know how they are continuing to get away with this fantasy.  I can understand that no one is going to step up and say, “Right, the game is over, let’s clean this mess up now.”  But, there has to be someone on “the other side of this trade”, no? Bond vigilantes or FOREX traders or someone~???  Or is it all just a one-sided transaction?  I agree that the banks will never repay the loans and that the ECB will lend more and more.  But, can they really roll it over “forever”?  If there is no Day of Reckoning, what happens to the value of  Euro?  Does it reach parity with the Dollar, or fall far below it?  Last time I was in Europe, July 2002, they were trading at parity.  The Euro has dropped from a high of $1.60 to $1.25 now. 
        If this trend continues “forever”, then won’t the Euro eventually become “worthless”, like the old Soviet ruble or Argentinian peso?  Will foreign enterprises not accept the Euro for payment at some point?  What does that mean for the citizens whose “wealth” is tied to the Euro?  Time to cash out and buy Dollars or Gold, perhaps.
        Sorry for all the questions, but European banking is a bewildering subject.  Just look at Ireland~!  Pure Insanity~!

        • http://overthepeak.com/wordpress/ Mystic

          It must be taken into account that Euro banks are not so much worse than US banks.

          There have not been many `truthin’` moments during this fiasco, but Chuck Prince came out with one –
          “As long as the music is playing, you’ve got to get up and dance……We’re still dancing.”

          • Paul

            Like a dancing bear with a ring thourgh its nose.  You’re right, US banks are terrible too.  Where would the Japanese and Chinese banks fall in your rating estimation?

            • http://overthepeak.com/wordpress/ Mystic

               If the Chinese banks were not `of the people`, then I would put them in the deepest shit.
              Japan has had over 20 years to sort their banks out; but, from what I read, haven’t managed it yet.
              The whole lot are rotten.

              What we are moving to, is the banking system and the government system merging into one.  (China and Japan are already there).
              It is a first roll of the dice for China, but a last roll for everyone else.

              And here we come back to the same old saw – `with growth it goes on ….. without growth, it doesn’t`.

              It is a slow old process, because the `system` is so big; but it perceptibly falling in on itself.

              • Paul

                That’s an interesting observation, Mystic.  A last chance, desperate attempt to preserve stability and cohesion.
                So, govt and a failed banking system will have to merge.  Won’t that be the case for the other failing private industries; health-care (Obamacare/NIH thing), manufacturing (GM and Chrysler), insurance (AIG), real estate (Freddie and Fannie Mac), transportation (trains and airlines), academia (Sallie Mae), pensions (Calpers), etc.  The merger of Govt. and Industry creates an enormously powerful centralized authority.  Do you see where I am going with this~?

                • http://overthepeak.com/wordpress/ Mystic

                   Yes, you are probably trying to get to fascism.
                  Don’t worry ……. they won’t get there~!!

                  In the `good old days`, most of these institutions/entities were probably viable, now it is just a load of drunks coming out of a party. 

                  • Paul

                    Fascism or Bolshevism.  The two are not really that different in the end; both sprung from the same Socialist seed.  They both love to wear uniforms with armbands and medals, hold grandiose parades and rallies, shout slogans, wave banners and build special camps for those who oppose them.  We’ve already stated we are not wearing any uniforms, right~?!  I hope you’re right about the non-viability.  I am not as certain as you.

                    Here’s a few pics of the greatest uniform-wearing Socialists/Fascists.  And one pic of a non-uniform wearing Mystical-looking partizan~!  Perhaps a long lost uncle from Eastern Europe~?!

                    • http://overthepeak.com/wordpress/ Mystic

                       http://www.ft.com/intl/cms/s/0/bfc6959c-b158-11e1-bb9b-00144feabdc0.html#axzz1x7NGFBRb

                      The comments are starting to get a little alarming~!