€750Bn bailout for Spain and Italy

[Vague_Boy]

LINK

 

Using dreamed up money to buy government debt (cos no one else will).

 

What could possibly go wrong?

 

"Spain is not Greece." Elena Salgado, Spanish Finance minister, February, 2010

Italy 'will not need a bailout': Mario Monti, Italian PM, 12 Jun 2012

“Italy is not Spain” – Ed Parker, Fitch [ratings agency]

 

 

This comment in the Telegraph sums it up.

 

ESM lends money to Spain/Italy who lend it to banks who already lent it consumers who can't afford to pay it back but who also need to start borrowing more to 'refloat' the economy so asset prices recover and bank losses shrink and people can repay the money they owe only they need to borrow more money in order to do so and if they can't borrow more the economy won't recover so they won't be able to repay their debts but if they do borrow more the interest rates and debt will crush them anyway and banks will suffer more losses but ESM money will keep countries afloat which will keep the banks afloat so they can continue to be repaid by consumers who, ironically, are also paying higher taxes, directly and indirectly (through inflation) to cover the borrowing by their governments that is then lent to the same banks who, ironically, lent the govrernments the money that the governments are now lending the banks and who, also ironically, need consumers to borrow more and yet repay it at the same time but they have less money to do so anyway because of the higher taxers and inflation.

 

And if anyone thinks that inflation is "low", you must eat iPods and live in a house made out of DVD players.

 

UK food inflation pushes higher (The Guardian, Wednesday 4 April 2012)

 

And yet Iceland, which chose not to take the bailout route, is out of recession and back to positive GDP.

 

Iceland: A Different Approach To The Recession

 

Iceland Says “No” to Bank Bailouts, Enjoys Economic Growth

 

Unlike the rest of us.

 

Perhaps it's because they're not mired in ever increasing (and unrepayable) debt?

 

And now the Bankrupt of England is poised for more Quantitative Easing (after all, it work so well before).

 

Quick! Let's create more money out of thin air so that the consumer can spend their way to prosperity by buying more Chinese imported tat.

 

And of of course we must get the housing market moving again. Paying ever increasing prices for the same pile of bricks, that's the way to prosperity, not making and selling stuff like those hopelessly misguided Germans do.

 

Get with the program Fritz, this is the 21st century don'tcha know.

[Mecky]

I said ages ago the price of food is largely driving inflation i.e. the most basic cost of living, because we have to pester our bosses for more salary. Since we import most of our food the cost of living in the UK is determined by other countries who will undoubtedly have their own economic agenda.

 

Interesting that the countries that are bailed out are those with a high degree of tourism, if it's not their major industry. Perhaps it's because people from countries likely to holiday are feeling the pinch and not travelling.

[ANGELFIRE1]

Aye, and only a fool would think that a 750 Billion Euro bail out will solve the problem.

 

None of the Countries looking for a bail out will ever be able to repay their debts. So how do we get over that fact I wonder. Close to 1,000 Billion Euro will have been "lent" - with no prospect of it ever getting repaid. Unless this money is a fantasy and does not really exist, there is going to be a bloody huge money hole somewhere.

 

Angel.

[dvp82]

When mind boggling amount of money like this are talked about, I always wonder where the money actually comes from, I mean come on 750 BILLION. Where have they magicked that about up from.