Thursday, 14 July 2011

Euro Drama - self-inflicted pain thanks to lack of democracy

The Euro has no democratic legitimacy, it is a construct created by (mostly unelected) bureaucrats, with unintended consequences (they are always the ones that count in the end).
Government spending in most countries is on an upward trajectory since early 1970s, no end in sight, in every election, in every country and from every party/politician you only hear about new 'projects', 'laws' etc that mean more spending.
But government can never spend 100% of the whole GDP, a limit will be reached and we are near it. Sooner or later those paying the bills will realise that more money does not buy more happiness in a finite life, why not make do and withdraw some of one's services.
That governments cannot cut 5 or 10 percent of GDP from their fiscal programs is an indicator for the lack of courage, best to cut all spending by an equal percentage, quick and avoids endless bickering.
Recommendation: avoid all banks in weak member states of the Eurozone, even check that any Euro Notes are not issued by central banks of these countries. Remember that 100 British Pounds in 1951 are worth only £ 4 in purchasing power today. It is a bit better in 'hard' currency countries but even worse in other countries. Germany's Mark (Euro) lost nearly 80 per cent of its purchasing power in the same period.

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