The recent G8 (actually it was a G7 meeting because Putin had better things to do) meeting at Camp David was a bad joke. At least that is the opinion of this humble observer after reading this news release from Yahoo News. How do I, a Don Nadia, sitting in Venezuela come to this conclusion? Well, there were numerous clues not the least of which was this.
…They declared unanimity in ensuring that Greece, which is crippled in debt and politically gridlocked, remains as part of the 17-member euro currency union.
The last thing the EU needs to do is yo try to keep Greece in the Union. Greece is a basket case. It never should have been part of the EU in the first place. having made that first mistake, they should have cut Greece off two years ago when they found out the Greeks were cooking their books. The Grrk economy is like The Incredible Shrinking Man; it keeps getting smaller and smaller. They can only sell so many olives. But, the EU is going to keep throwing good money after bad and in the end Greece will be buried in a mountain of horse apples.
Here is another clue from the same article:
Obama hailed a debate heading in the direction he likes, with nations now talking of ways to spark their economies instead of just slashing spending.
“Spark” is the new Obama speak for “stimulus”. But the word ·stimulus” was carefully avoided:
Merkel said growth and deficit-cutting reinforced each other and that everyone around the table agreed. “That is great progress,” she said. As for promoting growth, she said investments under consideration include research and development, Internet networks and infrastructure. But she said “this doesn’t mean stimulus in the usual sense.”
U.S. officials agreed, saying growth measures that the Europeans might pursue don’t all require outright public spending, and could be in the form of public-private partnerships or in initiatives designed to loosen credit. And the leaders stayed away entirely from the world “stimulus,” which has taken on an unpopular political connotation, including in the United States.
Clearly the key topic of discussion at the G8 (G7) meeting was the Euro crisis. It would have been the perfect setting for the European leaders to explain how they were going to resolve their problems. What we got wad “hopey-changey”. In other words nothing. The EU doesn’t have a plan.
The new buzz word is “growth”. To these socialist “growth” means raise taxes and spend more. Where will the money come from to finance the added debts? In theory it could only come from Germany and that ain’t going to happen. Germany can not finance the entire EU. So, by one means or another, the EU will keep kicking the can down the road.
Ironically, there are winners in this fiasco. Obama will see himself as a winner and, depending on your point of view, America is also a winner.
I am sure Obama can’t wait to get back on the campaign trail and tell us: “See. All of the G8 (G7) members agree we must
stinulate spark growth. He must have welcomed the new French President, Hollande, with open arms. (I wonder if the Governor of the other Greek nation, aka California, was a special guest at the meeting?)
If you are in the camp that believes Americans needs more time to come to grips with its fiscal and debt problems, then America is a winner of this EU fiasco. Why? Because as long as the EU is in worse shape than the US, and it looks like it will be for the forseeable future, the dollar will strengthen relative to the Euro and US bonds will remain the only save heaven when investors need a place to park their money during down markets. If the contrary were true, if the EU had a plan to solve their debt crisis that the markets could believe in, the dollar would weaken relative to the Euro and Euro bonds would become an alternative to US bonds and there would be great pressure on the US to resolve its own problems. But, because the EU can not get its act together, the US will be able to muddle along in stagflation for quite some time.
Remember Jimmy Carter’s “malaise”? Think world-wide malaise.
Well, that’s what I’m thinking. What are your thoughts?