Why inflation is needed?
The politics every day repeat their anti-inflation mantras. The statistics helps them in hiding the inflation. But let's it 11 sentences explain why politics do need inflation and why it will happen even if they can avoid it.
Read more...Weidmann bravery in a democratic leaderless reality
In a Sunday interview Jens Weidmann - the top banker of Germany (Head of Bundesbank and a member of European Central Bank Governing Council) said the known-by-all truth that everyone tries to keep secret. The truth that EU problems are in politics and not politics is its victim. Being silent for a long time now Mr Weidmann said that EU leaders don't make enough to fight the crisis, and the only way to success is austerity, spending cuts and lowering the deficit and the debt. This is the proven by real life truth that EU politics reject to hear.
Read more...Let's look at the country where "high interest" threat means nothing
10 years ago the finance minister of Bulgaria Milen Veltchev (former Merrill Lynch employee) has made a debt-swap operation by changing the old "Brady" bonds of Bulgaria with new so called "euro" bonds. The new bonds were with fixed interest of above 8% and much critics said Mr Veltchev has made a bad deal and the country will lose millions of euros. Such type of debates continue even today and they become more interesting as Veltchev-bonds are to be repaid in January 2013 and current finance minister Simeon Dyankov (former World Bank employee) is in difficulty of finding money for this. So now Bulgaria plans a new swap operation of issuing new bonds and repaying with them the old ones.
Read more...French leading presidential candidate prays for inflation
The leading in polls presidential candidate in France Francois Hollande obviously is praying for a massive money-print and galloping inflation as a mean to fight the EU debt crisis. In an radio interview he pointed 2 possible ways of going out of crisis. Both ways do not request anything from governments, but charge with responsibility the European Central Bank (ECB). The first way is the interest rates to be decreased (now they are at record low of 1% and in fact much more decrease is nowhere). The second way is to be allowed to ECB to buy directly government debt financing this way the governments.
Read more...The welfare state is poisonous for EU
A very interesting article by Frederic Erixon is published at Bloomberg. It is called "To Thrive, Euro Countries Must Cut Welfare State". It is worth reading it. It is very edifying... I would confirm its thesis, that the main problem of Europe (and USA too, I can add) is the welfare state that stimulates the lazy consumption and represses working and entrepreneurism. It is a logical absurd to guarantee rights (such as minimum income) without guaranteeing obligations against them. In fact the welfare state is a poison for the society. It can destroy the society entirely. The progress and growth are based on real work, and not on government programs and social rights.
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