We have had a gloomy couple of years with the financial crisis that is continuing to cause global concern and downturn in GDP. It is now even affecting China, India and Brazil. They may still be growing but the rate of growth is slowing down all the same.
This goes to show that the economic policies and strategies that are being used are not really working. Let's not be too cheered up with the minimal growth that appears as bumps in the road because we are nowhere on the way to recovery. However, with the appropriate policies we can be. Let's not continue to only feed the banks that caused the problems but let us support consumers to achieve growth.
It can be done and the sooner we support consumers the sooner growth will return. WE can spend our way out of this recession regardless of the current belief that we cannot. Strong consumer effect can get industry working again; without it industry will continue to struggle. We, therefore need to increase consumers spending power. This can be done in several ways; a reduction in purchase or value added tax, an increase in wages and job creation in the service industry and public sectors as well as promoting growth in private industry. This can be easily achieved by quantitatively easing consumers instead of the banks and financial institutions. Consumers in their turn can and will quantitatively ease industry, the banks and the financial institutions.
A farming analogy is apt at this point. Your land is not going to give you a good harvest if you just throw tons of seeds on arid land. By clearing weeds, and giving your plants, sufficient room to grow in with adequate amounts of water and fertiliser, they will give you a more abundant harvest. Unfortunately our modern politicians no longer come from a solid industry or work related background. Their life experience consists of nothing but a protected upbringing having only experienced theories about life and economics during their academic years and their friendship with financial institutions or their financial supporters. Alas poor us and we have voted them in.
There is only one solution out of this economic downturn and that is
SPENDING OUR WAY OUT OF IT and IT WILL WORK.
Best Wishes.
Good luck and Good Bye until the next time.
Knight Owl.
Sunday, 25 December 2011
Tuesday, 13 December 2011
Solving the Euro Crisis
The meeting of leaders of European Economic Community went ahead last Thursday night, 26 countries joining forces to tackle the problem and the United Kingdom, or Mr David Cameron, decided to stand on the sidelines. Does this, therefore, mean that the Euro is going to survive or is it heading for its demise; particularly as the rumours in the British press is suggesting that the German government is printing Deutsche Marks as a precaution.
In my opinion, the Euro can survive and is likely to become stronger as a result of the current crisis. However, to make this happen, the 26 countries need to explore some policy changes alongside harmonising taxation and regulation of the finance industry. In the main, for the benefit of all the Eurozone countries, the Euro needs to be devalued by 10%. There is likely to be some disadvantages of taking this approach, but the benefits will be much greater, and far outweigh the disadvantages.
The advantages of devaluing the Euro will benefit all the 17 Eurozone countries and also the remaining 9 or 10 if the United Kingdom decides to join the club. It will help enhance growth by making it easier to export goods produced in the Eurozone as it will be cheaper for none Eurozone countries to import these goods. It may increase the cost of imports but if played well home produced goods will become more attractive to consumers. It will also be enjoyed by local and Eurozone consumers. Therefore, growth will increase further adding to GDP. More demand will create more jobs, and more people working will increase tax revenue. There has been a decline in industries producing white goods in Europe, this can be rectified and these goods can be rolled out locally at a competitive price. Europe will once again take pride of place in the world markets.
France and Germany has already got an industrial base and so has some of the newer countries that have joined the European Economic Community. Some countries have allowed there industries to collapse; it will be an opportunity to redevelop them. The Eurozone governments can also harmonise corporation tax to enable varied and appropriate industries develop in all areas of the Eurozone and European Economic Community as long as they all co operate to make this work. The corporation tax can also be tailored to be competitive with other industrial nations. The Eurozone countries should also assist poorer former dependencies to participate with them in making this plan work. They can create additional jobs is these former dependencies and also agree favourable trade deals.
The world as a whole will benefit. However, we need someone to have sufficient courage and conviction to make this happen. Someone to be prepared to take the risk and have the authority and wherewithal to make it happen. It can work and will work; action speaks louder than words. Meetings on their own are not going to solve the problem, action will. Let's hope somebody is brave enough to take the steering wheel and guide this train in the right direction. ACTION is needed now not next year or the year after, if we do not want to look back at at the next ten years as a lost decade.
Good Luck and Good Bye until the next time.
Knight Owl
In my opinion, the Euro can survive and is likely to become stronger as a result of the current crisis. However, to make this happen, the 26 countries need to explore some policy changes alongside harmonising taxation and regulation of the finance industry. In the main, for the benefit of all the Eurozone countries, the Euro needs to be devalued by 10%. There is likely to be some disadvantages of taking this approach, but the benefits will be much greater, and far outweigh the disadvantages.
The advantages of devaluing the Euro will benefit all the 17 Eurozone countries and also the remaining 9 or 10 if the United Kingdom decides to join the club. It will help enhance growth by making it easier to export goods produced in the Eurozone as it will be cheaper for none Eurozone countries to import these goods. It may increase the cost of imports but if played well home produced goods will become more attractive to consumers. It will also be enjoyed by local and Eurozone consumers. Therefore, growth will increase further adding to GDP. More demand will create more jobs, and more people working will increase tax revenue. There has been a decline in industries producing white goods in Europe, this can be rectified and these goods can be rolled out locally at a competitive price. Europe will once again take pride of place in the world markets.
France and Germany has already got an industrial base and so has some of the newer countries that have joined the European Economic Community. Some countries have allowed there industries to collapse; it will be an opportunity to redevelop them. The Eurozone governments can also harmonise corporation tax to enable varied and appropriate industries develop in all areas of the Eurozone and European Economic Community as long as they all co operate to make this work. The corporation tax can also be tailored to be competitive with other industrial nations. The Eurozone countries should also assist poorer former dependencies to participate with them in making this plan work. They can create additional jobs is these former dependencies and also agree favourable trade deals.
The world as a whole will benefit. However, we need someone to have sufficient courage and conviction to make this happen. Someone to be prepared to take the risk and have the authority and wherewithal to make it happen. It can work and will work; action speaks louder than words. Meetings on their own are not going to solve the problem, action will. Let's hope somebody is brave enough to take the steering wheel and guide this train in the right direction. ACTION is needed now not next year or the year after, if we do not want to look back at at the next ten years as a lost decade.
Good Luck and Good Bye until the next time.
Knight Owl
Friday, 9 December 2011
Euro Zone Crisis
Although this is referred as a Eurozone crisis, it is a Global Economic crisis but some nations are trying to see themselves as being out of it. Even Europe, particularly the countries in the European Economic Community who do not have the Euro as their Currency are seeing themselves as being separate from this crisis. This being so, the Eurozone countries should work to protect themselves and their interests and let Europe and and the rest of the world flounder.
The crisis in the European Economic Community, particularly the Euro zone is getting worse. The politicians are trying to stop the Euro crashing down the cliff and disappearing like Atlantis. Hence the meeting yesterday in Marseille and last night and today in Brussels. The problem is solvable but how likely are to solve it? It depends on whether they work in the interest of the European Economic Community or National (Self) interest. When I refer to interest of the European Economic Community, I mean the all the people that form that community and not individual nations, the politicians or their masters the financiers.
The peculiar set up of the European Economic Community into Euro and none Euro zones is also adding to the problem because the none Euro zone countries are trying to protect their own currency and markets thus adding extra pressure to the Euro and the Euro zone countries. The English Media and Euro-sceptic members of the conservative party are acting as doom mongers and praying for the Euro to fail. They have asked David Cameron, a financier by birth and upbringing, to protect the financiers and stab the Merkozy plan to death so that they can dance round the funeral pyre of the Euro as a result.
In my opinion, if all the countries in the European Economic Community cannot agree to a consensual agreement, then the 17 Eurozone countries should work together as a Eurozone Community to defeat this crisis and save the Euro. It is going to make them and the Euro a lot stronger in years to come. The none Eurozone countries of the European Economic Community should remain on the fringe and stop interfering in the progress of the rest. If it means a two tier European Economic Community, an inner sanctum and an outer sanctum, so be it.
The Eurozone Community should start by working together by creating a level field where all 17 nations can work and play under the same rules. The referees should also come from the Eurozone Community and not from the none Eurozone Community for fear of undue interference. They should start by halving the European Commission Budget. The European Economic Community (and the nations in it) and the people are more important than a bunch of overpaid, over-privileged, bureaucrats who spend their time giving the impression that they are members of a special cosy gentleman's club instead of a bunch of civil servants serving the European Economic Community. After all most of the people are having to contribute towards the deficit and are subject to austerity measures. They are facing higher taxes, lower wages and increasing living costs.
The bankers and financiers should also be treated in the same way. They are the ones who got us in this mess and they are still walking with their heads in the air and their hands in their reinforced pockets, jingling their lose change, and whistling "what a happy day". They will also have to contribute to the deficits, but all we have done is lined their reinforced pockets with quantitative easings and taxed the nation a bit more. Do not be taken in by and give in to their threats. Whether it is Standard and Poor or David Cameron, they are just a bunch of financiers protecting their own interests.
The Eurozone problem is solvable and it can be solved. As a Community let us stand together and fight the predators whoever they may be and wherever they may come from. Let us work together, share the pain together and we can then savour the joy together. Also remember, we are all in together, everybody including the financiers, the politicians, the privileged bureaucrats and the people that is the community (and the nations). For now we must all suffer the austerity in equal measures and later as a result of our hard work share the gains equally.
Good luck and good bye until the next time
Knight Owl.
The crisis in the European Economic Community, particularly the Euro zone is getting worse. The politicians are trying to stop the Euro crashing down the cliff and disappearing like Atlantis. Hence the meeting yesterday in Marseille and last night and today in Brussels. The problem is solvable but how likely are to solve it? It depends on whether they work in the interest of the European Economic Community or National (Self) interest. When I refer to interest of the European Economic Community, I mean the all the people that form that community and not individual nations, the politicians or their masters the financiers.
The peculiar set up of the European Economic Community into Euro and none Euro zones is also adding to the problem because the none Euro zone countries are trying to protect their own currency and markets thus adding extra pressure to the Euro and the Euro zone countries. The English Media and Euro-sceptic members of the conservative party are acting as doom mongers and praying for the Euro to fail. They have asked David Cameron, a financier by birth and upbringing, to protect the financiers and stab the Merkozy plan to death so that they can dance round the funeral pyre of the Euro as a result.
In my opinion, if all the countries in the European Economic Community cannot agree to a consensual agreement, then the 17 Eurozone countries should work together as a Eurozone Community to defeat this crisis and save the Euro. It is going to make them and the Euro a lot stronger in years to come. The none Eurozone countries of the European Economic Community should remain on the fringe and stop interfering in the progress of the rest. If it means a two tier European Economic Community, an inner sanctum and an outer sanctum, so be it.
The Eurozone Community should start by working together by creating a level field where all 17 nations can work and play under the same rules. The referees should also come from the Eurozone Community and not from the none Eurozone Community for fear of undue interference. They should start by halving the European Commission Budget. The European Economic Community (and the nations in it) and the people are more important than a bunch of overpaid, over-privileged, bureaucrats who spend their time giving the impression that they are members of a special cosy gentleman's club instead of a bunch of civil servants serving the European Economic Community. After all most of the people are having to contribute towards the deficit and are subject to austerity measures. They are facing higher taxes, lower wages and increasing living costs.
The bankers and financiers should also be treated in the same way. They are the ones who got us in this mess and they are still walking with their heads in the air and their hands in their reinforced pockets, jingling their lose change, and whistling "what a happy day". They will also have to contribute to the deficits, but all we have done is lined their reinforced pockets with quantitative easings and taxed the nation a bit more. Do not be taken in by and give in to their threats. Whether it is Standard and Poor or David Cameron, they are just a bunch of financiers protecting their own interests.
The Eurozone problem is solvable and it can be solved. As a Community let us stand together and fight the predators whoever they may be and wherever they may come from. Let us work together, share the pain together and we can then savour the joy together. Also remember, we are all in together, everybody including the financiers, the politicians, the privileged bureaucrats and the people that is the community (and the nations). For now we must all suffer the austerity in equal measures and later as a result of our hard work share the gains equally.
Good luck and good bye until the next time
Knight Owl.
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