politics

Japan hails Spain lifeline as 'major first step'

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Despite the fact that economies worldwide are somewhat interdependent, the FM Azumi has constantly been speedily overreacting to other people's issues and kept throwing comments that sounded 'teaching' others from a high moral ground !? Moral ? If something that the Europeans could 'learn' from Japan on this subject..( Olympus for example ?)

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Europe is a major market that needs to be restored to a healthy state.

Get it together Europe.

And don't pay any attention to the UK and their finance industry sponsored politicos.

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The eurozone's troubles have sent investors flocking to the safe-haven yen by dumping the single unit and the dollar

No, it hasn't. Investors have been buying U.S. treasuries, as indicated by their record low yields.

http://online.wsj.com/article/BT-CO-20120530-710774.html

Nobody buys currency when their economy is tanking. They buy the safest investment possible. In this case, U.S. bonds. They don't go speculating on a foreign currency.

This article (http://www.mises.org/daily/6059/The-Danger-of-External-Debts ) explains why Japan's trade imbalance is the real cause of the strong Yen. It's got nothing to do with speculators. They are just the standard scapegoat clueless government agents like to blame for their poor economy.

Of course, Japan, as always, likes to blame other countries for its problems.

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And where is all this money coming from????

Out of thin air-what a party trick?

I just hope the taxpayers in Spain don't mind being in debt for years to come.....!

-2 ( +1 / -3 )

The ONLY way out the Euro mess is to abandon the failed Euro project and return to national currencies, either completely or at least partially.

It is truly saddening to the politicians squandering taxpayers wealth by continuing to prop up these endless "help" schemes, while economists (except those employed by lender banks) are not united in the assessment that the Euro has failed.

I so much hope that the Greek election on June 17 will lead to the "Grexit" (Greek exit), follwed then by other exits.

-3 ( +0 / -3 )

The money system is broken. Expecting endless growth financed by endless debt can't work on a planet with finite resources. This seems to be plateauing and debt financing will no longer be possible. The banking systems will have to adjust to a value system I suppose

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Bailing out the incompetent banks likes putting gasoline on bush fire. The root cause of Spanish debt criis was bankers screwed real estate bubble. They speculate the property market wildly. When the boom is over, banks have no more liquidity. If Europe & US are printing more and more money, banks will become spoiled and kids. Higher inflation too. No wonder savers lost faith in the banking system. Zero interest rate means no Point for depositing in the banks. Failed banks are explosive hazards of economy.

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what I don't get is why banks are bailed out but not the people who are stuck with the loans. It was their tax money so the banks look to be double dipping: paid once by the bailout then again by the person. Better to pay the loan off which the person uses to pay off the bank. Then that handles both at once rather than just stiffing the person who paid the taxes.

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This is not Greece. This is simply financial. Bail them out and move on.

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@ gaijinfo

Ahhh you did my work for me. Looks like I won't be alone in Linking Mises articles for statist here any more. :) +1

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**But of course he would hail it...lol...how much risk did it entail for nippon...lol ?

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gaijininfo, Thank you for your excellent post and the link to the mises article. The statists and Keynesians will soon begin their Alinsky-influenced attacks, but that nonsense is so predictable.

This monetary injection to the Spanish bankers is worse than throwing money out the window. At least in throwing money out a window, some "little people" would stand a chance at getting some. But with this plan, only the bankers(cronies) benefit.

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the japanese finance minister is just interested in stability, as systematic problems are placing a heavy drag on the real economy across the interlinked world.

it is other countries that are involved in untoward politicking.

cameroon called the finance sector his countries most important industry.

and he threatened to defend the british finance sector's interest in the euro zone market--by trying to undermine it!!!

mr. cameroon is very worried that fiscal integration is going to negatively impact that so-called industry, which is really just a funny-money facade.

at any rate, for the prime minister to make such a statement certainly indicates where his priorities are, and how bad a shape the overall economy in the uk is, too. the finance sector is hardly an industry.

the finance industry in the uk--and the usa--are praying that the euro zone fails, because their illicit market manipulating tactics are going to be greatly curtailed on the continent otherwise.

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Global watcher:

" This is not Greece. This is simply financial. Bail them out and move on. "

Yes, this IS Greece, only several times bigger. And "moving on" means (like in Greece) moving on the next bailout very soon.

Remember, the current disaster of the Euro zone was predicted EXACTLY by the Euro critics from the start.

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@WillB, I do not think so. The problem of Greece is related to poor public policy unlike Spain, and Greek are not willing to change. If ECB, France, Germany cannot find the solution, well it may be handed over to IMF. Or just let it go.

Remember, the current disaster of the Euro zone was predicted EXACTLY by the Euro critics from the start

Yep,I thought it was so stupid from the beginning.. I could not believe these countries were willing to throw a right to raise their own Government bonds. And they did not even set up a EU bond for Euro.. I said to myself, "are you serious?" Whole idea was set up for failure by amatures. I am actually surprised it lasted this long.

PM Margaret Thatcher did very good. She saved UK. I just love her and she will be remembered as the greatest PM of UK in history.. .

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@WillB, and furthermore, that's the reason I was not for Hatoyama and Ozawa who are so strong advocates promoting "One Asia" concept inviting China (130 million population). China's success today (basket currency system) will be a big headache as a big bubble will burst within 10 to 20 yrs, the event is already predictable what is coming. No "One Asia", please.

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ubikwit do a reality check, the UK has no wish for the EU to fall as most of the UKs trade is with the EU, it would cripple it, across the Anglo Capitalist system -check commonwealth, India, Aus, NZ, US, Canada, etc they have largely gotten back to their usual boom bust periods model. The UK is dragged down now only by the EU, the EU refuses to accept that one currency on independant economic countries is never going to work and instead just blame the Anglo Finance model. And why did Cameron wish to protect the banking sector of the UK, because if he had agreed to their deal all that banking economy would have just gone through the EU instead. I could argue that Germanys successful manufacturing industry is the reason for Europes problems and thus it should be taken away and given to the Med, how is that any different from the UKs successful finance industry being blamed for it. Dozens of learned people have been predicting and waiting for the EU crisis to happen and here it is. Arguing that the finance industry isnt an industry is silly, who will keep your money and change its value based on interest rates and such without it. You save all your money under your mattress for 50 years and at the end I think you will find that it will be largely worthless. 20 years ago one pound would get me a coffee and a doughnut, today it requires 5, this is seen globally.

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@Thomas Michael Lewis

i'm not calling for an end to finance, which as you point out is an integral part of a free-market economy. however, that assumes that it is well regulated, so that the finance sector does not create phantom creations through window dressing and collusion with politicos looking to make a good short term impression on the electorate by presenting a booming funny-money economy.

the problem with cameroon and all of the ruling class cronies in the uk is that they have basically hollowed out the real economy by trying to collaborate with their counterparts on wall st. across the pacific in EMPIRE FINANCE!!!

http://www.guardian.co.uk/business/2012/jun/07/eurozone-rescue-david-cameron-veto?newsfeed=true

cameroon's objections relate to the so-called banking union. since you mention that most of the UKs trade is with the EU, it begs the question about the relationship of finance to the economy overall in the UK and EU (not to mention the USA and the world)

If it weren't for the USA generated sub-prime crisis, with heavy input from the UK finance sector, there would be no crisis in the Eurozone at present. it might have happened eventually, as closer fiscal union is necessary to facilitate the political union, but it is complicated.

what is going to happen if cameroon tries to veto something that the EU decides to undertake?

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@Thomas Michael Lewis

could argue that Germanys successful manufacturing industry is the reason for Europes problems and thus it should be taken away and given to the Med

The discussion is getting more interesting. German sucessful manufacturing causing a mess to Euro? You know something I do not know. Would you like to share your thoughts with us?

You save all your money under your mattress for 50 years and at the end I think you will find that it will be largely worthless. 20 years ago one pound would get me a coffee and a doughnut, today it requires 5, this is seen globally

Same here. After all dusts are settled, then we all will be heading to a hyper inflation. Yikes!

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It sure does not seem the life line given over the Weekend is long enough to help Spain.. What I believe is needed is to CUT GOVERNMENT SPENDING and too start reducing the WORLDS POPULATION.

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@canadianbento

i think that those proposals aren't worth the electrons expended in transmitting them.

what we need to do is empower the government to seize all of the ill-gotten gain by every cretin in the finance sector to replenish the public coffers.

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My argument with the German manufacturing industry is to represent the fact that Finance itself is an industry and to blame Britains Finance industry saying "it has grown too large and powerful" as many Europeans do, is no different from saying Germany' manufacturing has grown too large and powerful. If Germany had not succeeded in its manufacturing the whole of the EU would be on a similar page eceonomy/market size wise and the massive difference between economies would no longer exist creating this huge problem with one currency for both very strong and very weak countries.

The Europeans fail to admit the real problem is having one currency for such different systems at different magnitudes and simply seek to constantly seek the blame on the Anglo world -as usual. France persuaded Britain to join the early EU trade agreement as a counter balance to Germany' power, now the team together and blame all the woes on Britain while the Med falls ever deeper in sh%ts creek.

The entire EU system as we see it today was snuck in the back door, and the only referendums had were a mockery of democracy -Ireland voted no and the EU commission responded by saying "you voted wrong do it again". They should have stuck to trade agreements, thats what the people signed up for. I dearly hope Britain gets reduces the relationship back to trade agreements, for a start, it means Britain could revive the old massive Free trades with the Commonwealth, all that Canadian Energy, I smell the sweet succulent meat of NZ lamb getting ever closer.

Many people dont know that the EU forcing Britain to cut its trade ties with the Commonwealth nearly destroyed the entire wool industry in Australia, cutting off all that trade overnight. And this is not the only case.

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If it weren't for the USA generated sub-prime crisis, with heavy input from the UK finance sector, there would be no crisis in the Eurozone at present. it might have happened eventually, as closer fiscal union is necessary to facilitate the political union, but it is complicated.

You make it sound like the entire Anglo model is to blame when the reality of the blame lifes in the hands of a few very greedy individuals. Europes intended rules for the finance industry would have basically relocated Britains finance industry into the heart of Europe. If Europe feels it has the right to take an industry a country has built up I suggest that Germans manufacturing also be taken and spread across Europe.

Not to mention the Common Fisheries offence. 80% of Europes fish in British waters and the British are only allowed to fish a marginal amount, I stand on the coast seeing fleets from European countries that are landlocked fishing more fish from British waters than the British themselves are allowed. If we are legally obliged to share our fish, I argue that Germany should be legally obliged to share its coal. Daylight robbery.

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Thomas Michael LewisJun. 13, 2012 - 01:32AM JST. If it weren't for the USA generated sub-prime crisis, with heavy input from the UK finance sector, there would be no crisis in the Eurozone at present.

The difference between U.S. subprime bubble and the Europe is that Europe was concentrated in a few countries where the government and financial institutions conspired to misuse the borrowing capacity they derived from membership in the monetary union to turn the local economy into a Ponzi scheme. Greece is now bankrupt, with its debt worth 20% to 30% on the dollar.

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I don't know that it is the fault of the model, just the faulty regulation (and deregulation) brought about through corruption of the political process for private gain by financiers.

As to limiting the blame to a "few very greedy individuals", I think that this scenario sort of exceeds the level of greed on the part of the individual, and involves conspiracies and secret societies among financiers to undermine the regulatory framework, and then undermine the economy, in the end plundering the treasury through bailouts.

What actually contribution to productivity in the real economy can you point to from the finance sector in recent history? All this crap about "wealth creation" is hogwash, as my grandfather would have said.

In theory, you only succeed in the freemarket economy when you contribute something that is recognized by the public and purchased for its utility, quality, aesthetic appeal, etc.

Since the end of the crisis the finance sector has shed thousands of jobs, and continues to do so.

Europes intended rules for the finance industry would have basically relocated Britains finance industry into the heart of Europe.

I don't understand the meaning of that statement, but perhaps you could elaborate.

I do recall the objections by the UK to the so-called transaction tax on speculative trades. That objection seems ludicrous to me, and the vast majority of firms in the finance sector are less than superfulous to the real economy, they are parasitic.

And that is why governments need to take action against them.

Japan's manufacturing industry--the heart of its economy--is being hollowed out by the high yen brought about by predatory speculation that shouldn't be possible to undertake, and won't be once there are better regulatory measure implemented, such as the transaction tax.

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