Comment Re:Budgets (Score 2) 218
Okay, the only possible explanation is you are a troll.
Not usually, but I needed to see if it's even possible to dent my excellent karma. I'd like a fresh start in 2012.
With the exception of the United Kingdom and possibly Germany, Europe is in deep trouble. And that is by using many different metrics.
I happen to see it with different eyes. I see the UK as being in trouble next (after Greece, Portugal, Ireland, Spain and Italy) since they are the only country in the EU that plays on both sides.
Consider borrowing costs. The rate the United States pays to borrow just recently (yesterday) inched above 2% for the first time in a month. Romania (one of the better-off EU members) borrows money at 6% interest.
Romania either had visionaries for it's executive (and honestly, I can't see the sailor and his crew as visionaries), or it just made the right bet in 2009 by accident. That being said, it used it's loans mostly to increase the reserves of the central bank in order to increase confidence, as opposed to using them to stimulate the governmental spending in infrastructure projects or others. How they got that part mostly right is beyond me, but I guess good things happen to undeserving politicians.
As an aside, the current rate of return on investments is compelling me to make some decisions that are very good for the local economy: I am paying to do some work on my home. The market is still volatile, there is no action on the treasuries, and a jumbo certificate of deposit only pays 1%. Literally the best thing I can do with my money is pay a professional to perform some efficiency-related home improvements to improve the value of my home.
Investing in real estate is always a smart thing to do after the bubble bursts. It pays off to invest in construction when builders don't have enough projects to feed their employees. An apartment in Central Park in Bucharest that was €230.000 now goes for half that and with a second parking place. The old blocs of flats in Victoriei Square are moving from targeting small business offices to residential and there are a lot of examples like that.
The Euro is certainly at a crossroads, but I am not as enthusiastic as you are about it. Let me be clear that I am not going to dance in the street if it collapses: The Euro is so big that its collapse will be felt worldwide.
I wouldn't be so dramatic. Except for the Brits, all the other EU countries would loose too much if the Euro went bust. They are taking their time coming up with the fixes for two reasons:
1) not to put too much pressure on the population (given the social impact in Greece as an example).
2) This uncharted territory for the EU and especially uncharted territory for a currency that is not (yet) tied together by a fiscal and executive union. They want to take it slow to make sure that there are no unintended consequences.
If the Euro does however break up, make sure that all your banknotes have an X in the serial number. The Bundesbank will only exchange the ones with an X to Deutsche Mark.
My point about the EU not being in as much danger as the US comes from comparing the industry. Sure, they have Apple and Google, but it's hard to compare the other aspects of the industry:
a) Airbus kicks Boeing arse bigtime (1378 orders vs 778 orders)
b) The car industry can't even be compared (heck the small italian Fiat actually is buying Chrysler)
c) EU infrastructure is doing a lot better. Better and newer highways in most of the EU (except for the newly joined). The US hasn't touched it's highway infrastructure from the 50s. The EU has a better, much faster, ever-growing train infrastructure (you just can't compare the two). And fortunately, in the EU we still have public transport.
d) Furthermore, the value of the debt is not even the real problem. The problem is the prospects of the debt. The US debt is ever increasing while the EU is moving slowly to a 0 debt policy (thus decreasing it). In the end, this is the big difference. If you have a constant (GDP wise) rolling debt, it's still acceptable and it means that you're living within you means, but having a 43% budget deficit certainly doesn't put that into any good prospects.
Then again, I'm just an IT guy, what do I know?