Abraxas ;8141288 said:
Damn... Greece is about to default on their debt it looks like. their unemployment rate is already 26%... theyre looking pretty fucked
@Abraxas
Greece, Spain, Portugal, Italy and several others. The EU tried to created the "United States of Europe" and failed (albeit having a long way to go, it's a good idea but the execution and timing was wrong), although I don't believe they will just crumble. I think if Greece ever chooses exit to default they need to do it on their own accord b/c if they get forced out you have to remember they will bounce back at SOME point but that resentment and anger can often become precursors to war in the future, especially if there's gain. The biggest problem with the EU is that many countries gave up their right to print money, so in the event of recession they can't inflate their economies and put money out to circulate. The biggest issue with the EU is also that they have very poor fiscal policy as a result, IMO it's stupid for a country to give up the right to print money. The ONLY country they tried to approach and turned them down was Switzerland & Russia. They were smart not joining them in the long-run, the Swiss franc is still strong, their economy LITERALLY avoided recession and they still have the ability to print money if need be. Russia is Russia and they just have a strong sense of independence, it would take the most extreme political and social reform before they EVER in your lifetime 'bend the knee'. Germany is likely going to have to open it's wallets but that's the issue with Europe, Germans are saying "why should we pay for Greece's problem ?" and that's an issue. You'd never hear a New Yorker say that to a Texan or Floridian, simply because they can identity with each other as Americans.
Another problem with the EU is that they don't all identify as "European" b/c of the connotations it has (aka white). If I go to Spain or Turkey and ask "what are you ?" they will say "Spanish" or "Turkish", same with Germany, France, etc. In America, if I ask a New Yorker, Texan or Floridian they will say "I'm American" OR "African American" or "Latino American". That unity is very important. You'll see congress fight like cats and dogs but in the end when economic maelstroms hit, 9 times out of 10 (and that lonely 1 time I refer to the S&P 500 downgrade when the dumb ass Republicans didn't want to raise the debt ceiling just a little b/c they wanted to spite Obama SMMFH), the 9 times out of 10 tho they agree to do what's good for the economy, whether it's a bailout or stimulus package. America is not perfect but it is a far better economy and political system than the European Union. Part of why it was so hard for Mario Draghi to get the help of the central bank or other countries to co-operate was b/c of this. Things are better in the EU now, but they need to focus more on developing a better fiscal union as opposed to monetary so these things don't happen again. The bigger countries like Spain, Germany, France, Italy, UK basically allowed these countries to use their credit cards to build their countries up and didn't set a spending limit. That came back and bite them all in the ass.
Time will reveal what happens in the EU but longer term I think they will fine. It's not the EU we need to focus on tho it's China. I sense that the shadow banking, wild real estate prices and empty buildings and excessive spending is going to catch up to China and plunge it into recession at some point in the near future. Should this occur it will also pose bad consequences for commodities and trickle into the global economy greatly affecting commodity based countries such as Canada, Russia, Brazil and possibly even Africa among others. I don't think it'll impact the U.S. as much tho, the Americans are probably looking forward to it as it'll allow for them to put money into China and maybe even work to make China a more "democratic" system in a "Chinese-way" so it's easier for foreign investment. These are interesting times but don't be fearful of recession, embrace them, for the prices they create allow for tremendous opportunity. Some economies need to go through it to become better.
