Qui sotto vi riproduco le conclusioni, che iniziano con un lungo commento dell'economista Charles Gave:
Charles: On your comment about my obsession on the “euro being a Frankenstein,” I do believe that the fact that Europe’s polic makers do not seem to know what a currency is, or how it works, is indeed deeply problematic. Let me explain: Our investing business is all about “value”. Why do things have values and why on earth do these “values” move over time? To measure values we use currencies, though it is very hard to explain to me why currencies themselves have any value, since, in our world of fiat money the marginal cost of producing them is zero. So I think that our business has two sides: • The easier one is trying to understand how the values are going to move vs. one another (bonds vs equities, or oil vs coal etc…), making in the meantime the assumption that the value of money will not move. • The more difficult one is trying to understand whether the value of currencies themselves are about to change. Now currencies have two prices: a domestic price (interest rates), and an international price (the exchange rate). Finally, as we have discussed many times in the past, the only way for a fiat monetary system to work is if the different currencies, each one corresponding to a different economic and political system, can compete freely with one another. The problem is that when Jacques Delors devised the common monetary zone, the two most important prices (interest rates and exchange rates) were locked together for countries with very different debt levels, demographics, culture, productivity, institutional set-up, etc. This is why we have argued in the past that the Euro was always going to lead to too many factories in Germany, too many houses in Spain, and too many civil servants in France. Unfortunately, after more than a decade of blatant misallocation of capital, mostly financed by increases in government debt in almost all European nations, the consequences of the capital misallocation cannot be addressed democratically through the structures which have thus far been devised, especially in the countries that have financing problems today. The only answer Europe’s elites have so far come up with is to take away various countries’ sovereignty and give it to an unelected foreign technocracy. This is very dangerous as local populations love their sovereignty (centuries of European wars illustrate that plainly enough). This is why the Euro is a Frankenstein: what started as an earnest attempt to foster greater European integration is instead pitting age-old nations against one another and reviving dangerous nationalisms and populism (watch for Marine Le Pen to make a massive score in the French presidential election, or for the rebirth of the far-left and anarchists in Greece, Italy, Spain, Sinn Fein in Ireland etc.). It is the law of unintended consequences at work! For the above reasons, it seems to me that it is increasingly irrelevant to be talking about “Europe” as an aggregate. What we now have is a Europe of “winners of the Euro” and a Europe of “Losers of the Euro” and instead of convergence between those two Europes, the divergence is getting ever larger. All for One Euro, One Euro for All? I have long said that the euro is not an economic currency but a political one. The question now before the voters and politicians in Europe is whether the EU evolves into something that looks more like the US, with limited state sovereignty and market-imposed limits on sovereign debt, where states and cities can fail and bond holders are at their own risk, and where the ECB takes over regulation of all national banks and becomes the backstop, as with the Fed, or devolves into something else. Have the powers that be in the ECB quietly decided to let Greece go, as they should never have been allowed it into the eurozone to begin with, and because Greece clearly cheated on its statements about its debt and balance sheet in order to get in? You will never hear that in public from the leaders. It is simply not politically correct in “all for one, one for all” Europe. But that may be the outcome if Trichet really means “non!” It really is the political class all over the world we have to watch. I will be glad when we get through the Endgame and can go back to worrying about balance sheets and consumer spending. What a quaint time that now seems. Think it is interesting now? Have you watched Spanish debt spreads? Wait until the market turns on Spain. Stay tuned.
Viviamo in tempi interessanti, auguriamoci che rimangano semplicemente tali e che non diventino qualcosa di molto più turbolento...
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