There’s a fruit store on our street
It’s run by a Greek.
And he keeps good things to eat
But you should hear him speak!
When you ask him anything, he never answers “no”.
He just “yes”es you to death, and as he takes your dough
He tells you
“Yes, we have no bananas
We have-a no bananas today.”
Those are some of the words to the 1923 hit song “Yes, We Have No Bananas” by Frank Silver and Irving Cohn. The song is mostly associated with World War II, but according to Wikipedia it had found its way into the history books before that:
The song was the theme of the outdoor relief protests in Belfast in 1932. These were a unique example of Protestants and Catholics in Northern Ireland protesting together, and the song was used because it was one of the few non-sectarian songs that both communities knew. The song lent its title to a book about the depression in Belfast.
For nine decades “the depression” meant the one that started in 1929. But the coronavirus looks likely to bring in its wake an economic depression that may well take the definite article for itself. Naomi O’Leary of the Irish Times reports,
Euro finance ministers reach compromise to fund pandemic recovery
Deal dashes hopes of Italy, Ireland and seven others for the roll out of so-called corona bonds
The 19 members of the euro zone agreed a compromise on Thursday to aid states in need of funding to address the profound economic fallout from the coronavirus pandemic.
But it dashed the hopes of Italy, Ireland, Spain and six other member states that had called for eurobonds to bring down borrowing costs and send a signal of unity as the continent confronts a health crisis that is threatens to become an economic disaster.
Under the deal, states can borrow from the European Stability Mechanism bailout fund to finance spending needed to overcome the crisis.
I do not seek to play down their achievement in reaching a compromise at all. Every finance minister on Earth must be passing sleepless nights wondering how best to deal with our current predicament. But the dilemma faced by the Eurozone countries is particularly acute. Italy and Spain will never forgive the EU if they receive no help in their hour of need. But the northern countries were repeatedly assured that EU membership and the adoption of the Euro would never mean they had to write a blank cheque to what they see as the spendthrifts to the south (and a few other directions besides). The Dutch, the Germans, the Finns and the Austrians must hope that when they say, “yes, we have no Eurobonds” the upbeat momentum of the first three words will carry them over the next two.
Not every country is spendthrift. Some actually run a surplus and save for a time like this.
The Norwegian finance minister is not worried. He will, however, be very pleased that he isn’t in the EU.
One of the few bright spots in the entire hysterical mess is the destruction of the EU.
Regrettably, I believe the prospective demise of the EU is much exaggerated…
Well, it is certainly long overdue. 🙂
This post rather ignores the fact that this “compromise” is about half a TRILLION Euros.
It will bankrupt the European Union – and make the Euro a joke currency.
Not that the Yen, the Dollar and the Pound are going to be any better.
The bitter truth must be faced – the People’s Republic of China has crushed us, or rather WE HAVE CRUSHED OURSELVES by the terrible response to the virus.
And the business stations?
Bloomberg and CNBC have acted as cheerleaders for this insanity – just as they have (FOR YEARS) acted as cheerleaders for even the demented mixture of Marxism and Greenism that the education system pushes (“Saint” Greta and all that).
“Big Business”, especially the banks (but not just them), is just a bunch of welfare claimants dressed in thousand Pound suits.
Thus the West ends – in both tragedy and farce.
“This post rather ignores the fact that this “compromise” is about half a TRILLION Euros.”
And the population is about half a billion, so that’s a loan of about a thousand euros per person, yes?
For comparison, I understand that the total outstanding residential mortgage debt for the UK alone is about 1.5 trillion euros. (About 11 million mortgages, average 135,000 euros per mortgage.) Note, there is no government borrowing in that number. That’s just the personal debt owed by ordinary British households. Does that mean we’re bankrupt?
The eurozone is not an optimal currency area which is all you need to know.
Those responsible for it know this and have always known this. But their arrogance and hubris is such that they simply dismiss economics as just being some sort of yankee voodoo.
What is needed to make it an optimal currency area is simply not politically possible so go figure. Whatever the China virus does to the dollar, pound or Yen, the Euro has fundamental and underlying “health issues”.
The Eurozone has a GDP of about 12.8 trillion Euro. So this is about 4% of GDP. The US had an annual deficit higher than that even before this crisis.
I’m not much of a fan of deficit spending, god knows. But there’s a lot of ruin in a nation. This isn’t going to push anyone over the edge, unless they were on it before.
Nullius has asked a civil question and he deserves a civil answer.
“Is the United Kingdom bankrupt?”
The Bank of England is creating money (from nothing) to, directly and indirectly, fund government spending.
That means that the answer to your question is YES Sir.
Alsadius.
Again YES – I think most Western nations were “over it before”. I think the economies of most Western nations were degenerate Credit Bubbles even before the panic response to the virus.
The panic response of which this half a trillion is only PART.
But perhaps I was mistaken – perhaps the West was not bankrupt before the response to the virus.
However, it can not be seriously denied that most Western nations are bust now.
The final “push over the edge” was not from the virus created in the Communist Party Dictatorship animal experiment centre near Wuhan – it was our own panic response to the virus.
In the end WE HAVE DONE THIS TO OURSELVES.
“Nullius has asked a civil question and he deserves a civil answer.”
Thank you!
“The Bank of England is creating money (from nothing) to, directly and indirectly, fund government spending.”
‘Money’ is any promise to pay something of real value at a later date. (e.g. taking out a loan or mortgage. Writing an IOU, signing a contract, promise to accept in lieu of taxes, etc.) Since making promises requires no raw materials or prerequisite property, it can all be “created from nothing”. It’s value is based on the amount promised to be paid, multiplied by the market’s assessment of the probability of you paying it. So you are always limited in your ability to create money by the market’s belief in your future ability to pay.
So, to say the Bank of England is creating money from nothing, thus rendering us bankrupt, do you mean that it is making promises to pay later it canot deliver on, and the market is stupidly overestimating the probability? Or are you just referring to the observation that promises are not physical/material? And that you can promise to deliver something later that doesn’t yet exist?
Are you saying that the half a billion population of the EU is collectively unable to repay a loan of 1000 euros per person via future taxes?