IPJ sends this from ZeroHedge:
It was back in December 2012 when we summarized the biggest failing with the Eurozone: a continent in which due to the lack of a flexible currency (also known as a gift to Germany and what otherwise would be a very, very expensive Deutsche Mark) the member nations were unable to devalue their way out of depression. Namely, that absent the ability to engage in external devaluation, Europe’s troubled nations (i.e., most of them) had only one option: internal devalution, also known as plunging wages.
… which tries to argue that austerity is a good thing and wages must drop by 30-50%. Sorry but most people do not buy this need for austerity. Let me be more precise – in the economic terms we have imposed on us, from Keynesianism to monetarism, it’s all about models and when the model fails due to 1. coercion, manipulation and corruption by Them and 2. the fundamental flaw in economic models, then yes – austerity is necessary, wages must fall.
What I challenge is the model which would ever require such a thing in the first place and yes, that includes offering credit with high limits to those who cannot afford it – the sub primes. Everyone knows the old adage about earning 10 shillings and paying out 9, compared to earning 10 shillings and paying out 11. That’s the only real economics.
And all this talk of portfolio growth and the like. Seems to me that there are an awful lot of economists and advisers who are living this jargon version of the simple laws of economics with all their tranches and SDRs and OCDs etc. The very existence of the IMF, WB and the BIS is a perpetuated lie. Why on earth should any country be paying its taxpayer’s money to an external body, in order to have it lent back at crippling rates in perpetuity?
You might call that economics, I call it economic insanity. Even criminality.