So the PIIGS get out of their high debt situation by strong Euro states joining together and lending the PIIGS more money , even though they cant afford the debt they already have, and this money printing to stop default will go straight into bankers hands and the money will only be advanced if the country that needs support introduces austerity measures that absolutely cripple the countries who borrow the money.....and this is going to cure the situation?
Simply put fiscal easing DOES NOT WORK its theoretical , it didnt work in Japan and its not going to work now, it can put the day of reckoning off but it cant solve the cause ,lending money to countries who cant borrow money because their credit stinks and expecting this to create a recovery is ludicrous. Lending it to them on the basis of implementing austerity measures, which in turn reduces incomes , which into turn reduces tax revenue to the govt which in turn weakens their a tax base to pay the debt they couldn't afford.
A whole bunch of gold commentators will now wail hyper inflation, hyper inflation, the trouble is the money supply is actually shrinking
Folks look at this fiscal easing thing and simply assume it works, it solves all these troubles, all you have to do is print money , the trouble is its never worked anywhere in history, the only hyperinflation happened when a soverign country printed money to buy gold (Wiemar Germany) or USD (Zimabwee) , the Greeks are not printing money to buy something they are simply selling their bonds to the EU in exchange for Euro , its only trickling o the economy , because the money is being fed via Greece to their bankers (which are German and French in the first place ), so the Euro is just covering the poor credit decisions the banks have already made, again the people will be saddled with the bankers bad decisions. its the stuff of revolutions eventually, this could totally destablise democratic Europe over the long term
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