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Germany rejects calls for Eastern Europe bailout

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  • Germany rejects calls for Eastern Europe bailout

    Germany rejects calls for Eastern Europe bailout

    Germany on Sunday rejected appeals for a single multibillion-euro bailout of Eastern Europe, even after Hungry begged European Union leaders not to let a new "Iron Curtain" divide the Continent into rich and poor.

    The swift, strong comments by Chancellor Angela Merkel of Germany dampened hopes that leaders at the EU summit meeting Sunday could forge a unified stance to tackle the worsening economic crisis. more...
    Ed.

  • #2
    Re: Germany rejects calls for Eastern Europe bailout

    Beggar Thy Neighbor

    iTulip, a couple of years ago....

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    • #3
      Re: Germany rejects calls for Eastern Europe bailout

      Well this is certainly another fine mess we've gotten into ....



      Fred, What a world of dominoes we live in. We wipe out foreign bond holders in our big banks (maybe central banks), they can't help the next guy down the line. before the US consumer kept the world spinning, now maybe the US taxpayer? Did the original iTulip thesis consider such a world wide disaster? Thanks for posting the European news, it's a small world at least today.
      "The issue ... which will have to be fought sooner or later is the People versus the Banks." Acton

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      • #4
        Re: Germany rejects calls for Eastern Europe bailout

        This is dollar positive. It's not like the NY and Boston Federal Reserve are going to tell the Dallas Fed and San Francisco Fed to take a hike because an oil price crash hammering Texas and a housing crash hammering California isn't relevant to the New England economy and politicians there. Europe, as I have said, is structurally impaired in a shrinking global economy compared to the USA.

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        • #5
          Re: Germany rejects calls for Eastern Europe bailout

          Originally posted by EJ View Post
          This is dollar positive. It's not like the NY and Boston Federal Reserve are going to tell the Dallas Fed and San Francisco Fed to take a hike because an oil price crash hammering Texas and a housing crash hammering California isn't relevant to the New England economy and politicians there. Europe, as I have said, is structurally impaired in a shrinking global economy compared to the USA.

          Oh. The pop in. Now I have to go back and reread the the hyper infaltion scenerio.

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          • #6
            Re: Germany rejects calls for Eastern Europe bailout

            Geopolitically, the potential winner here is Russia. Putin has been itching to expand Russia's boundaries and influence closer to where they were in Soviet days. This could create an opening.
            Greg

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            • #7
              Re: Germany rejects calls for Eastern Europe bailout

              Originally posted by cjppjc View Post
              Oh. The pop in. Now I have to go back and reread the Road To Ruin.
              The US has many inherent advantages that cause the dollar to be stronger than other currencies. Here I point out one. This advantage of scale and ability to manage a geographically dispersed and varied economy without the kind of political constraints that operate in the European sphere is one of them. It is this advantage that has allowed the massive imbalances in dependence on capital flows, as I mention in the Ruin piece, to develop in the first place. The modern depression is hammering all sectors and geographies of the US, and the desire of all trade partners of the US is for their local currencies to weaken. Further, the groupthink of US policy markers is that the boundaries that determine exchange rates -- especially fiscal deficits -- may be vastly exceeded. The way to interpret a comment such as this, then, is to put it into context: the dollar is dependent on US capital inflows, which flows are by no means guaranteed. However, as the crises that started in the US morphs and grows, particularly in the coming geopolitical phases, a move to dollar assets to address short term crises will tend to mask the greater risk, resulting in short term dollar value gains.


              Last edited by EJ; 03-01-09, 11:09 PM.

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              • #8
                Re: Germany rejects calls for Eastern Europe bailout

                Deutschland uber alles?

                Perhaps germany will take this opportunity to get the DM back, make it the new currency of europe and maybe even buy its territory back from the poles.

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                • #9
                  Re: Germany rejects calls for Eastern Europe bailout

                  I've heard the idea in several places that Germany will in the end bite the bullet & help to save eastern europe, as the alternative for Germany itself would be much worse.

                  Also that the European politicians will quit squabling just in time to enable a pan-European bond market to save the Eurozone from disintegration.

                  Well, I'm waiting . . .
                  Justice is the cornerstone of the world

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                  • #10
                    Re: Germany rejects calls for Eastern Europe bailout

                    Or in the race to the bottom do the Germans wait and see if Eastern Europe can be picked up cheaper before Russia does. I think the Germans loved Eastern Europe just after the wall came down and they could buy real estate and vacation for pennies on the Krone.

                    For what it is worth, Hungarian friends say it is hell for working class people in Hungary.

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