The European financial crisis


The European financial crisis began in 2008, when member countries of the European Union were hit by debt crisis. The country’s worst hit by the crises included Greece, Italy, Spain, Portugal and Cyprus. In 2001, Greece experienced a debt load of more than 100%, at the time it was joining the European Union (EU). During that time, Greece lowered interest rates on mounting debts and this led to an economic boom. However, in October 2009, the conservative establishment was pushed out of power by the socialists. The new government revealed that the country’s deficits were actually more than twice the estimates. This revelation led to a debt downgrade; a move that worsened in February 2010, when credit rating agencies and institutional bond owners began selling debts.

On April 2010, Greece debt was downgraded to junk status by S&P. The government followed these developments with a string of austerity measures designed to stem the slide. In April 2010, Greece Prime Minister George Papandreou requested the EU and IMF to rescue the country. The European Central Bank (ECB) and the E.U, through the European Financial Stability Facility (EFSF) promised the country a bailout package worth $145 billion. The bailout was tied to the country adopting austerity measures. Despite the intervention, the country’s financial crisis continued to worsen. To date, Greece is still under a bailout program.

Portugal’s management of the situation was relatively smooth during the onset of the European financial crisis. However, towards the end of 2009, the Greece debt crisis created panic in the country. This panic emanated from fears that the country wouldn’t be able to grow its economy over the long-term; even as fears concerning the growing deficit continued to plague the economy. By November 2010, interest rates rose so high that the country became a candidate for bailout. The government requested a bailout from the E.U on April, 2011. The bailout package totaled $116 billion. Portugal opted out of the EU bailout on 18, May 2014, despite a staggering debt burden.

Spain’s financial crisis stemmed from a real estate bubble burst; the crisis hit the country’s growth prospects despite a sound banking sector. In May 2010, Spain adopted a series of austerity measures to curtail higher than expected deficit. Fitch later downgraded the country’s debt from AAA. On 9 June 2012, Spain was granted a bailout package by Eurogroup totaling €100 billion. On 23 January 2014, the country withdrew from the IMF/EU bailout after making a full recovery.

Italy became a victim of the European financial crisis as a result of slow growth and huge debt to GDP ratios. Even before the Euro-crisis, there were fears that Italy would fall victim to its own debt crisis. In May 2011, S&P downgraded the country’s debt outlook and in July 2011, Prime Minister, Silvio Berlusconi rushed through an austerity package aimed at starving off the crisis.

In Cyprus, the country’s economy was demoted to junk status in 2012 by International rating agencies. The small island nation’s government requested for bailout from EFSF in June 2012. The government cited its inability to stabilize its banking sector due to exposure from the Greek debt crisis as the main reason behind the request. The terms of the bailout, agreed upon on November 2012 were tied to implementing cuts in social benefits, civil servant salaries and pensions as well as increasing VAT, property and fuel taxes.

Most economists believe that the Eurozone economies have to stay on their feet to stem another Eurozone crisis. Specific signs of trouble include German losing faith on the Euro-project and doubts about the ECB’s ability to intervene in future crisis.

A Fundamental Misapprehension of Human Nature


Throughout the process of our being exposed to the causes of our current, global financial crisis, the thing that has astounded me most is that our leaders… not just President Bush… nearly every single one of them… predicated their actions that led to this upon egalitarian ideals that simply do not correspond to human nature. It is this sort of inculcated Leftist stupidity that leads normally intelligent men to presuppose a whole raft of dangerous notions that simply are not so.

Here’s my short list of dangerous fallacies:

  • All men are not only born equal, but are always equal. If they are not, then something, someone, or some group in the “system” is to blame, and government must fix it.
  • Multiculturalism is a de facto good.
  • Diversity is a de facto good.
  • Basic human nature is benign.
  • Innovation is de facto good.
  • Individual or group “rights” must always trump broader cultural or societal responsibilities.
  • “Equal access” to anything or everything is a de facto good.
  • Egalitarianism must always trump tradition.

And so, considering that most of the above absurd propositions are things that contemporary leaders believe and act upon in ways that surely would astound their predecessors of generations past,  government has striven mightily in its hunt to assassinate all anti-egalitarian snipes.

Which brings us to today, to an expository article in the International Herald Tribune about how the world has been brought to the precipice of perhaps its greatest financial collapse. In reading it, I was looking for something concrete… much in the way I suppose a radiologist might look for a tumor in an MRI… that would reveal the root cause of our problem.

And here it is:

White House philosophy stoked mortgage bonfire – International Herald Tribune

“We absolutely wanted to increase homeownership,” Tony Fratto, his [Bush’s] deputy press secretary, recalled him saying. “But we never wanted lenders to make bad decisions.”

Now, I have to admit here that I already knew The Bush Administration truly believed that all people of all races, ethnicities, creeds, intelligence quotients, and life experiences were equally capable of managing the details that go along with home ownership in our society. But I had not yet written about it here and it was time that I pointed it out.

In one short paragraph, this article exposes two assumptions, commonly held by many of our leaders, that our children and probably our children’s children will be paying for throughout their lifetimes.  The legacy it now appears we will leave is simply unconscionable, especially to those of us with traditionalist mindsets attached to stewardship obligations.

It is time for government, for leaders and especially for the snooty, elitist bastards on the left, to stop every social engineering effort they have in mind that is based on false premises regarding human nature. From now on, before those we choose to represent us do anything… and I mean ANYTHING… they must ask themselves the following: Does the world really work this way? Is there any instance in history, any set of acts not committed by Saints or our Savior, that supports what we believe will happen if we do this?

If the answer to these questions is not an overwhelming and utterly unqualified “yes,” then they must not do it. Period.

From what I’ve seen, I don’t believe that we have any leaders capable of the discernment necessary to keep us from the abyss.

Importance of Time in Finance


“The time is gold” Old saying but it’s true. Compared the time the gold because gold is such a time is also important in human life. All people become poor or rich , male or female as long as its there . Depending on just where you use time. Used to work in the development or use of money or you can choose both.

The decision is yours. In business, especially if the product is biodegradable or easily corrupted, required immediately to sell the product to earn and if not, can fall a business.

Have also business such as the ground, you first spend a few years and wait until prices before you sell and profit. In this example we can say that time and time becomes large influence on our finances. Over time, shrinking and dropping the benefit purchasing our money while constantly increasing the price of goods, service charge and government tax.

If anything, the past year and compared with the big difference now is the money that money right now, especially on its usefulness and purpose. Example fares to ride the jeep , in the year 1995 the lowest fare is $ 1.00, if you have 5 pesos to spend as fare , far away that you can reach , after more than 15 years , the same as 5 pesos when you use as fare to ride a jeep , you cannot get to your destination area.

Otherwise changed as our money but changing its usefulness and purpose over time. Inflation call the experts at this event , which is rising prices of goods and services while diminishing and decreases the usefulness and purpose of the money to us . To fully comprehend the table I do know what the impact of tax and inflation on our money put away over time.

A year after becoming $ 105,000 Money in the bank but must deduct tax imposed by government so just be 104,000. Within a year, along with the growth of money in the bank , the price of commodities were increasing reason for the inflation rate also rose , say reached 7 % .

After all, $ 104,000 as the real money can be used in buying. But it appears that the equivalent amount is $ 97,000 its just due to inflation, that’s why the money deposited in the bank , instead to increase the capacity , useless and benefits that are much buy off or more movement had waned after a year . For in that way, must fight inflation , parties can add , if you are able to have better passive income , avoid spend more on income or wages , and find investment or placement of money that will interest , which higher inflation .

So it’s means that the lower the interest rates relative to inflation, maintaining and counting the useless and the ability to buy the currency.