PPRuNe Forums - View Single Post - Growing Evidence That The Upturn Is Upon Us
Old 27th Feb 2009, 11:41
  #1922 (permalink)  
Wee Weasley Welshman
 
Join Date: Feb 2000
Location: England
Posts: 14,987
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What - I'm morally outraged or something? Nah. Disinterested fascination is closer. I've made my preparations.

Look at Italy as just one small piece of a far bigger jigsaw. They have lost 40% in labour competitveness since joining the Euro. It must lower wages quickly and deeply. But no Greek or Italian government is likely to opt for mass unemployment, or stay in power if it tries. Italy already is in public debt to the tune of over 110% of GDP. If it tries to deflate then the compound interest spiral will cripple it in an unescapable trap.

If they try to issue their own currency and redenominate out of the Euro the bank run will cause all their banks to call in all their loans collapsing all their remaining economy.

The world has changed.


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