2012年6月19日星期二

August started the Battle of finance

In modern history major and tragic mention the most important thing to mention one of how the assassination of an Austrian prince sparked the First World War, due to the disaster spawned Nazism and Soviet Communism most areas are thus involved in the 1914 war. This is concerned, the answer is both simple and surprising. Along with the rise and large-scale military expansion of the railway, the European countries to develop the scheduling system of military action, it can not be reversed. In fact, before you realize that has exceeded that point of no return, they are drawn into the war.

During the Cold War, more bad, then this doctrine is sure of each other destructive (appropriate to say that is crazy), meaning the risk of any confrontation between the two poles will be braving all mankind was destroyed. The United States and the Soviet Union established a series of strategic systems, the practical utility is the automatic end of the world switch to ensure that the outbreak of nuclear war would not have been terminated.
We have to avoid the destruction, and now to imagine what will be the threats to stability systems work together. Undoubtedly, if this reflects a rational, as it is encountered good luck. If it is handled by different people, a little bit of the process deviation, then the Cuban missile crisis can easily evolve into a full-scale nuclear war, the Hungarian crisis of 1956 and the Yom Kippur War in 1973 is the same reason.
The problem is that such a system is built on the premise of deterrence, and auto-response in the normal period, once a crash occurs, it will quickly lead to a catastrophe. In a crisis, all of them tend to conceive of what other people come forward to reverse this disastrous situation.
Europe is experiencing a financial crisis, the development seems to be being in the same direction. All major parties to upload the autopilot, and expect others to solve this problem.
Greek political system has obviously could not cope with further monetary tightening, but even possible the orderly exit from the euro and lack of fundamental support. The only exit channel is the so-called troika, namely the European Commission, IMF and the European Central Bank, the banking crisis forced the Greek exit. This action is equivalent to the economic mobilization order.
At the same time, the institutions of central Europe a number of different views on the response to Greece's exit, some bad results, such as similar to Greece, the country's refusal to continue the implementation of this failed policy of austerity, will automatically appear. This is not a rule of practice will make them no longer to think about further effective method to reduce the budget.
Another obvious alternative is to adopt the policy of fiscal expansion, but have to face two obstacles, one has been fully discussed, and the other is ignored to the maximum extent. The obvious impediment to the German people do not want to assume more tax revenue, in their view, this is only conducive to the extravagance of Southern Europe. The fact is that the biggest beneficiaries of the emergency assistance to the banks of Germany and France, it almost never been mentioned.
The bigger problem is that European governments can not issue their own currency, any finance expansion through debt financing, while any increase of public debt is almost always a new crisis. European governments supported the proposal would expand on the turn to the issue of the European debt crisis will not solve the problem.
With the United States is similar to the potential problems of the European crisis is the excessive accumulation of debt, public debt, but most of the private debt. Friction produced in, although the United States through quantitative easing policy (the U.S. Federal Reserve Board, large-scale purchase of public debt) to solve the most critical issues, but Europe can not make the same choice, because the ECB's refusal to buy government debt, and also continue to cling to control inflation.
In retrospect, the European Central Bank looks like a replica of 1914 to establish the system of military mobilization, or the crazy control system to switch to the end of the world. ECB set response to a stereotype of the nineties, is the greatest degree of believe that low inflation will ensure macroeconomic stability, and worry about the common currency will encourage countries to squander. These stereotypes makes this institution to carefully cut off from any form of national internal management, clearly rule out any behavior that will support the financial stimulus. As long as the European Central Bank to maintain its current mode of operation, that disaster is inevitable.
But even in 1914, Franz Ferdinand Archduke was assassinated in June and the end of July, the national mobilization has a few weeks time to resolve to take action, through determined action to stop the war. This is the same short, only there are very few signs of hope. But still there is time for European leaders to take action to save their own.




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