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The Almighty Buck

Journal Jeremiah Cornelius's Journal: The Euro was Created to CAUSE State Economic Collapses 7

The idea that the euro has "failed" is dangerously naive. The euro is doing exactly what its progenitor - and the wealthy 1%-ers who adopted it - predicted and planned for it to do. ...

"It's very hard to fire workers in Europe," [Mundell] complained. His answer: the euro. The euro would really do its work when crises hit, Mundell explained. Removing a government's control over currency would prevent nasty little elected officials from using Keynesian monetary and fiscal juice to pull a nation out of recession. "It puts monetary policy out of the reach of politicians," he said. "[And] without fiscal policy, the only way nations can keep jobs is by the competitive reduction of rules on business."

As another Nobelist, Paul Krugman, notes, the creation of the eurozone violated the basic economic rule known as "optimum currency area". This was a rule devised by Bob Mundell.

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The Euro was Created to CAUSE State Economic Collapses

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  • And the reason that the federal reserve is more concerned about keeping inflation below 2% than about keeping unemployment below 8%?

      Because the 0.1% don't need jobs - but they have piles of money which they do not wish to inflate.

      It's really that simple.

    • by dusanv ( 256645 )

      You are oversimplifying. If you are loaded with debt, you want inflation to wipe all that debt away. If you aren't loaded with debt, you don't want inflation eating your salary and the few assets you may have. Inflation hits poor people more than rich. Poor are less likely to be deep in debt (no income to back it up or assets to act as collateral) and more likely to be spending a significant part of their paycheck on basic commodities that would get a lot more expensive due to inflation. All the rich guys I

      • []
        "You might never think about central bankers quite the same way again, and indeed you could start thinking that they judge themselves according to how assiduously they service the interests of the rich and well-employed."
        In reference to this: []
        "It is fairly obvious, then, that restraining prices in the face of a supply shock effects a transfer from debtors, taxpayers, and marginal workers to

      • Core inflation, in practice, hits a roof if wages aren't increasing in line with it. For prices to rise, people need to be able to afford the new prices. And while unions don't have as much power as they did, there are still enough of them to force wages to rise in key sectors by inflation.

        At this point, with a modern economy in which virtually nobody keeps cash under the bed, and most people keep their long term savings in 401ks, largely in stocks, which are inherently inflation proof), and with most ho

  • Isn't the federal government of the United States also far above this optimum currency area?

Executive ability is deciding quickly and getting somebody else to do the work. -- John G. Pollard