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The financial situation of countries such as Greece, Portugal and Ireland (to name a few of the politically correct examples) is unsustainable. And by this we do not merely mean that it cannot sustain itself \u2013 in other words, that these economies are insolvent in their own right \u2013 but also that it is unfeasible for them to be sustained by third parties, as has become apparent in recent months, with bailouts that are clearly ineffective.<\/p>\n
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![\"Page](\"http:\/\/www.rankia.com\/ckeditor\/images\/spacer.gif?t=B1GG4Z6\" "\\"Unknown")
The figures reflecting the harsh reality lay bare the ineffectiveness of the bailouts. Politicians pinned their hopes on a miracle, expecting the bailouts coordinated between the EU and the IMF to miraculously cure the deficits, unproductivity, lack of competitiveness and, ultimately, the structural flaws of societies that had jumped on the bandwagon of a welfare state to which they neither truly belonged nor were entitled. But financial and property bubbles, just like paper, can withstand anything, and are capable of glossing over and concealing these structural shortcomings for years. As the genius and oracle of Omaha said: \u2018When the tide (bubble) goes out, you see who was swimming naked (insolvent).\u2019.<\/div>\nBut returning to the macroeconomic figures and focusing on Spain \u2013 a country presumably in a better position than the three \u2018Marias\u2019 mentioned at the start of the article \u2013 the figures speak for themselves. A fall of -19.4% in personal income tax revenue; a -40% in excise duties; a 22.4% in VAT on domestic transactions; and a -42.7% in corporation tax \u2013 all of this in the first quarter of 2011. These are staggering figures that result in a fall in government revenue of -16.2% compared with the -12.8% budgeted for in the Spanish economic recovery plan endorsed by the EU. And yet the markets have so far been focusing far more on Greece, Portugal or Ireland than on Spain. For example, more than 50% of the Greek deficit is already made up of interest payments on its public debt. And this means that the downward spiral is not only inevitable but also unsalvageable, bearing in mind that after Greece come the accounts of the other \u2018lightweight\u2019 countries, until it is the turn of the the big one<\/em>: Spain.<\/p>\n As we have already said, the budgetary imbalances in the peripheral economies are so irreversible that they cannot even be rescued. Because it is not a question of balancing the books and deficits, but of trying to prevent a house of cards from collapsing with one\u2019s bare hands, once the collapse has already begun. The Greek economy and other peripheral economies have entered, or will do so in a few months\u2019 time, a tailspin. And bailouts can no longer resolve these imbalances in their accounts. The only way out left to them (left to us) is partial default on the debt. That is the reality of being insolvent and going bust. But contrary to those who believe that countries which restructure their debt will never be able to borrow again, the reality is that the markets will have far greater confidence in these economies after their default, provided that such restructuring is used to revitalise their economies and their appropriately devalued currencies. Because the markets lend in exchange for solvency, regardless of whether debt restructurings have previously taken place or not. If the macroeconomic outlook for such economies is positive, solvent and promising, the markets will extend credit to them at the rates they deserve. That is the key difference between politics and economics (revealing videos from a year and a half ago)<\/a>: The former are unable to distinguish between the current collapse in peripheral figures and a potential post-default economic recovery; whilst the markets will focus exclusively on the economic fundamentals that those economies may then merit, and above all on their future prospects.<\/p>\n The markets aren\u2019t stupid, but politicians, unfortunately, are. Let\u2019s hope they stop pointlessly burning money under the guise of \u00abbailouts\u00bb. Because it\u2019s like spitting into a forest on fire in the middle of August, rather than working on building firebreaks and dispatching water-bombing aircraft. This summer, the markets may be on fire<\/em>\u2026 And I find it hard to believe that this time it is the EU, led by Germany, that is singing the tune which we PIIGS have been turning into our anthem since the 1990s. May God grant us good fortune.<\/p>\n DON\u2019T STOP ME NOW \u2013 Queen 1978 (Video)<\/a><\/strong> I\u2019m a shooting star streaking across the sky I\u2019m racing across the sky. Yeah! Don\u2019t stop me now \u2013 I\u2019m having such a good time I\u2019m a rocket ship on my way to Mars I\u2019m racing across the sky. Yeah! Don\u2019t stop me, don\u2019t stop me I\u2019m racing across the sky. Yeah! <\/em><\/p>\n <\/em><\/p>\n Don\u2019t stop me now \u2013 I\u2019m having such a good time Via: Gurusblog<\/a><\/p>\n You may also be interested in:<\/p>\n The Era of Devaluations (y2)<\/a><\/p>\n The Euro: strong or expensive currency?<\/a><\/p>\n Euro: The Robin Hood of the Eurozone<\/a><\/p>\n Reviving the Greek canary in the coal mine <\/a><\/p>\n<\/div>\n The Show Must Go On: Real Estate Defeatism Condemns Us to Mediocrity<\/a><\/p>\n<\/div>\n More information at http:\/\/twitter.com\/ClusterFO<\/a> La situaci\u00f3n financiera de pa\u00edses como Grecia, Portugal o Irlanda (por mencionar los quebrados pol\u00edticamente correctos) es insotenible. Y con ello no s\u00f3lo queremos decir que no se sostenga por si sola, es decir que dichas econom\u00edas sean insolventes por s\u00ed mismas, sino tambi\u00e9n que es inviable que sean sostenidas por terceros, como se ha […]<\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[37],"tags":[],"class_list":["post-22973","post","type-post","status-publish","format-standard","hentry","category-reflexion"],"_links":{"self":[{"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/posts\/22973","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/comments?post=22973"}],"version-history":[{"count":0,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/posts\/22973\/revisions"}],"wp:attachment":[{"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/media?parent=22973"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/categories?post=22973"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/tags?post=22973"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"\"](\"http:\/\/wehavekaosinthegarden.files.wordpress.com\/2010\/02\/socrates-zapatero-berlusconi-papandreou-robinson-piigs.jpg\")
Let us recall, for a moment, the arrogance with which Zapatero himself dared to predict at the start of his term in office that the Spanish economy would soon overtake that of France, whilst at the same time insistently demanding a seat at the G8. What we went through in those years reminds me very much of Queen\u2019s \u00abDon\u2019t Stop Me Now\u00bb from the 1970s, the lyrics and video of which you can see below. The fact is, there is no one more ignorant or oblivious to their own danger than those who think they know it all and are unwilling to learn. And politicians, in general, are economically illiterate; their distorted view of reality makes them more dangerous than Sergio Ramos on Punset\u2019s programme.<\/a> I have always believed that a sound understanding of economics and finance should be a prerequisite for candidates seeking public office, whether at local council, regional government, national or supranational levels, such as the EU. Otherwise, the economic management of government affairs is bound to end in utter chaos; it is only a matter of time. It goes without saying that having studied economics does not guarantee sound financial governance on the part of leaders, but failing to do so does inevitably lead to a catastrophe in public finances. It is as if we were to hand over the financial and economic reins of a large multinational to just any marketing creative or workshop worker for whom numbers have always been a problem.<\/p>\n
\nTonight I\u2019m going to have a really good time
\nI feel alive and the world\u2019s turning inside out. Yeah!
\nAnd floating around in ecstasy
\nSo don\u2019t stop me now, don\u2019t stop me
\n\u2018Cause I\u2019m having a good time having a good time<\/em><\/p>\n
\nLike a tiger defying the laws of gravity
\nI\u2019m a racing car whizzing past like Lady Godiva
\nI\u2019m going to go, go, go
\nThere\u2019s no stopping me<\/em><\/p>\n
\nTwo hundred degrees
\nThat\u2019s why they call me Mr Fahrenheit
\nI\u2019m travelling at the speed of light
\nI want to turn you into a supersonic man<\/p>\n
\nI\u2019m having a brilliant time \u2013 don\u2019t stop me now
\nIf you fancy a bit of fun, just give me a call
\nDon\u2019t stop me now (\u2018cause I\u2019m having a good time)
\nDon\u2019t stop me now (yes, I\u2019m having a good time)
\nI don\u2019t want to stop at all<\/p>\n
\nOn a collision course
\nI am a satellite; I\u2019m out of control
\nI\u2019m a sex machine ready to reload
\nLike an atomic bomb about to
\nOh oh oh oh oh, explode<\/p>\n
\nTwo hundred degrees
\nThat\u2019s why they call me Mr Fahrenheit
\nI\u2019m travelling at the speed of light
\nI want to turn you into a supersonic woman<\/p>\n
\nDon\u2019t stop me, hey hey hey!
\nDon\u2019t stop me, don\u2019t stop me, ooh ooh ooh (I like it)
\nDon\u2019t stop me, don\u2019t stop me
\nHave a good time, good time
\nDon\u2019t stop me, don\u2019t stop me, Ah<\/p>\n
\nTwo hundred degrees
\nThat\u2019s why they call me Mr Fahrenheit
\nI\u2019m travelling at the speed of light
\nI want to turn you into a supersonic man<\/p>\n
\nI\u2019m having a brilliant time \u2013 don\u2019t stop me now
\nIf you fancy a bit of fun, just give me a call
\nDon\u2019t stop me now (\u2018cause I\u2019m having a good time)
\nDon\u2019t stop me now (yes, I\u2019m having a good time)
\nI don\u2019t want to stop at all.<\/em><\/p>\nStrength and weakness in the currency war<\/a><\/div>\nThe Era of Devaluations<\/a><\/div>\n\nEconomy and politics<\/a><\/div>\n\n
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