Europe stumbles blindly towards its 1931 moment – Telegraph
To be honest I think that the author of this article is clueless. Neither the European ECB, nor the USA Fed Reserve should be printing money i.e neither should be involved in this Quantitative Easing. It is an inappropriate move which is more than likely going to end in disaster – hyperinflation.
It would seem to me that the author of the article has not heard about the hyperinflation in Germany that preceded the 2nd World War. It was so serious that an overseas stamp was overprinted with the value of millions of marks (I have some of these overprinted stamps in my stamp collection). Look how badly the German hyperinflation ended.
There is much that can be done to bring matters under control. For example it would be a good idea if European nations stopped with the Watermelon aka Green Party ideology and stopped wasting money on wind farms and other alternative energy that is so wasteful with resources, and especially wasteful where money is concerned.
Despite the flaws in this article there is some good analysis (it is just that the proposed solutions are plain dumb). For example:
The writer is pushing to make the same mistakes that were in fact made in 1931, and this is the real problem with his analysis, and why he is so hopelessly wrong. Ireland and Spain have been in trouble for some time. This is inevitable where there is a welfare state.
What is needed in Europe is a reduction in the population dependence on the welfare state. Since the second world war there has been an alarming increase in the dependence upon government to provide for health, social security, education etc. As the population has aged there has been an increase in the number of people receiving pensions. There is the provision of free education, as well as the provision of “free” health services. Of course none of it is “free” because citizens pay through their taxes for the things provided by government, that could in fact be provided by the private sector.
However, the massive increase in the welfare state cannot be simplistically explained in this way. There are other reasons to consider, and like it or not Muslim migration into these European countries has been an overwhelming factor in the burgeoning welfare sector, in the U.K. (including Ireland), in Europe, in Australia, and in the USA, as well as in Canada and some other nations.
The growth in the Welfare State is only one facet that needs to be examined, and it is not the only reason that Europe has been moribund with its failing economies. Another sector that needs to be examined, and the wastage reduced is that of the Green ideology that has been sweeping through Europe; the contagion has been reached in Australia, Canada, Asia to a lesser extent and in particular the USA. These Green policies are not only a disaster, their implementation has led to a massive waste of money.
Take Spain for example, it is one of the countries that is languishing. Prior to the election of Zapetto Spain had begun to thrive, but the election of the Socialist Zapetto has seen Spain backsliding into oblivion. As well as money that has been spent on roads and bridges, there is the massive amount of money spent on the building of wind farms, which has not led to cheaper electricity, but has actually increased the cost of supplying power to Spain, which means that people and businesses are burdened with these increasing prices for utilities, which in turn leads to a reduction in the money available for employment… and so the spiral goes downwards. Windfarms do not generate jobs, and in severe winter conditions they break down totally.
What this author ignores is the fact that the global economy is lurching towards another period of stagflation, just like in the 1970s. The conditions for Stagflation are: high unemployment (check), high interest rates and high inflation. At the present time interest rates are being kept artificially low. The low interest rates actually discourages investors, and keeps them out of the market (meaning that they are looking for alternatives for the money that they have available for investment). The higher government taxes are also having an impact. On the other hand we do not know the real rate of inflation because of the meddling with the basket of goods. In the USA for example there have been items taken out of the basket of goods that would indicate that inflation is higher (items such as higher utility costs and higher medical costs have been removed). As for unemployment, this is also a dodgy figure because a lot of the unemployed leave the market because of the poor job prospects – that 9.6% unemployment rate reported in the USA is probably more like 12% or higher. The measure is usually based upon those claiming unemployment benefits (food stamps) which means it does not capture older people who are unemployed or younger people who would like to be employed.