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The most enjoyable part of the book is.....
The American minotaur of debt. I have wondered for a long time why America's debt continues to grow without it bothering whoever is in the White House. Yanis explains why brilliantly. The most important part of the book is... 1. Once in you can never leave the EURO. Greece has found this out the hard way. Their economy according to Yanis may never recover. 2. Europe and the EURO is as far away from a democratic European state as it could possibly be. The Ordinary Observation...... I am very, very lucky to be living in an age and in a country where there has never been the possibility of having to have gone to war unless I chose that career path. The European Union and the EURO were conceived under the back drop of two world wars but Yanis shows how deeply flawed they are and how these divisions could eventually lead us back to conflict if they are not addressed. |
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Details and Thoughts
Borders are scars on our planet and the sooner we dispose of them the better” - Yanis Varoufakis
Breton Woods - Tied US Dollar to Gold $35 oz - Relied on US surplus distributed to Europe and Japan
As war and social policies eat into surplus in 60’s relied on Germany and others to redistribute
Britain was US first choice as economy to lead Europe but not strong enough so in 1946 US decided Germany despite French protest
Keynes argued ferociously that not creating world bank and currency to tie Interest rates would end badly. Fed could not handle relinquishing power that linking to dollar gave
Bundesbank became weary of propping up Franc in 60’s. France unhappy at relying on Germany and US. Started threatening to buy gold
1971 Paul Volker persuaded Nixon to cut Europe looseby untying them from the dollar, letting them fend for themselves
1980’s - Volker found a way to control world economy without surplus.
American Minotaur - hidden beast that had to be fed constant sacrifices - debt - acted like a vacuum sucking up surplus from Germany and China.
Had to give greater freedom to Wall St. as consequence to this. Sucked up money by raising interest rates to OMG 20-30%!!!
EEC set up to defend big steel and coal cartels. First attempts at Euro (EMS) failed as there was not enough beurocracy to protect Euro elites, giving them high powered jobs.
Margaret Thatcher correct that Euro was undemocratic in its inception….But wrong that it would lead to Euro nation by back door.
Lack of contingency in Mastericht Treaty 1993 which saw birth of Euro. No central bank to to transfer surplus to deficit economies.
Did not matter early in life of Euro as US Financialisation spread to Europe. Sucked up German surplus.
Cosmic shift in banks in 2000’s from risk managers to loan peddlers. Flight next to German banker!
When Lehman Bros blew up in 2008 it wasn’t long before French and German banks were in same mess.
Euro contributed to the mess as now that Italians, Irish, Greek and Spanish were part of the Euro they could now be treated as having the same level of risk as German and French. At the same time the flow of money much higher in Germany than Greece, Italy etc so loans had a higher yield.
What is the Interest Rate - The Flow of Money
Debt of German and French banks passed to the public debt of countries. Irish reported unable to get answer from head of debt collectors as to why this should be the case.
Greece not allowed to write off debts but also not allowed to leave Euro. No mechanism to leave and any attempt to do so would take sufficient time for a massive run on new currency before it even began.
Lack of strong left party has lead to rise of extreme political groups becoming more popular. Greek Nazis back in parliament and NF making big gains in France.
Borders are scars on our planet and the sooner we dispose of them the better” - Yanis Varoufakis
Breton Woods - Tied US Dollar to Gold $35 oz - Relied on US surplus distributed to Europe and Japan
As war and social policies eat into surplus in 60’s relied on Germany and others to redistribute
Britain was US first choice as economy to lead Europe but not strong enough so in 1946 US decided Germany despite French protest
Keynes argued ferociously that not creating world bank and currency to tie Interest rates would end badly. Fed could not handle relinquishing power that linking to dollar gave
Bundesbank became weary of propping up Franc in 60’s. France unhappy at relying on Germany and US. Started threatening to buy gold
1971 Paul Volker persuaded Nixon to cut Europe looseby untying them from the dollar, letting them fend for themselves
1980’s - Volker found a way to control world economy without surplus.
American Minotaur - hidden beast that had to be fed constant sacrifices - debt - acted like a vacuum sucking up surplus from Germany and China.
Had to give greater freedom to Wall St. as consequence to this. Sucked up money by raising interest rates to OMG 20-30%!!!
EEC set up to defend big steel and coal cartels. First attempts at Euro (EMS) failed as there was not enough beurocracy to protect Euro elites, giving them high powered jobs.
Margaret Thatcher correct that Euro was undemocratic in its inception….But wrong that it would lead to Euro nation by back door.
Lack of contingency in Mastericht Treaty 1993 which saw birth of Euro. No central bank to to transfer surplus to deficit economies.
Did not matter early in life of Euro as US Financialisation spread to Europe. Sucked up German surplus.
Cosmic shift in banks in 2000’s from risk managers to loan peddlers. Flight next to German banker!
When Lehman Bros blew up in 2008 it wasn’t long before French and German banks were in same mess.
Euro contributed to the mess as now that Italians, Irish, Greek and Spanish were part of the Euro they could now be treated as having the same level of risk as German and French. At the same time the flow of money much higher in Germany than Greece, Italy etc so loans had a higher yield.
What is the Interest Rate - The Flow of Money
Debt of German and French banks passed to the public debt of countries. Irish reported unable to get answer from head of debt collectors as to why this should be the case.
Greece not allowed to write off debts but also not allowed to leave Euro. No mechanism to leave and any attempt to do so would take sufficient time for a massive run on new currency before it even began.
Lack of strong left party has lead to rise of extreme political groups becoming more popular. Greek Nazis back in parliament and NF making big gains in France.
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• Started - End September
• Finished - October 22nd |
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Score /40
Cognitive Ease= Technical = Story = Enjoyment = Memorable = Ronseal Effect = Talkability = Longivity =