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The European Crisis - Part 1: Hidden concern in the U.S. before the rise of the euro for the reserve currency?

The European crisis as a "debt crisis" or simply as "Euro-crisis" to understand how this is suggested to date of policy experts and media, is insufficient and leads in the search for solutions in the wrong direction. It's not only comes to saving, but also about the current European growth model, as is evident now more and more, the European Union (as a whole) who threatened to no longer be covered and therefore urgently. However, in this direction so far has not been made. With the debt crisis, however, highlighted the issue of "Quo Vadis" for the EU in the first place and radical saving concepts are not the answer to everything is to dar. in "The European Crisis - Part 2" will be discussed.

If, as a starting point at first only the debt problem in the eye holds and not so much look at Europe, but mainly to the U.S., you can certainly state that the debt problems of the EU is far from are as serious as the across the Atlantic. They are also also strengthened by various factors. The debt situation in Europe devoted to the press and media really art. I would therefore like the following one in which the reinforcing factors, in my view and the position of the U.S. with the help of a - by no means exhaustive - carry-on listing points again by appropriately interpreted in mind:

1. on the markets is obviously a tightening of the debt problems of EU speculation. There were always financial markets, which forced the European Heads of State and Government and the ECB rescue operation and that primarily in that it states the costs of financing debt driven into the air. Still does not have the financial means and security guarantees tremendous efforts to calm the markets. Regardless, it is in the debt crisis but not insignificant amount again to rescue a bank.
2. The leading U.S. rating agencies S & P, Moody's and Fitch have with ongoing, but not uncontroversial devaluations of the standing and the persistent questioning of the ability of the Crisis States or Europe to solve the problems, can significantly since early 2010 further aggravate the situation. Greece became the first euro-zone member felt. But it got more and more "potential" Crisis states targeted by the credit quality monitors, the rating on the world market have a virtual monopoly. (1)
   The EU has so far not succeeded in spite of all the support measures and guarantees, to escape. Rather, the European Heads of State and Government, especially the European Commission, in whose jurisdiction the solution search is actually, still driven financial markets. This is however also on their disagreement and in some, undermining the credibility of EU decisions and statements by Heads of State and Government. These include the hesitation of the Federal Chancellor Angela Merkel at the start of the crisis in Greece and the controversy over appropriate solution components (Keywords: IMF and EWF, increasing the rescue fund, Euro bonds). This, however, includes the proposal of David Cameron to freeze the EU budget first and then actually cut (2) , supported by Germany, France and Finland. For he was the wrong time and fired the suspicion existed within the EU for doubt about the importance of the European project.
3. addition, brandishing the crisis almost €. In the press and the media for months already dominate articles and reports, ascertaining numerical to the appalling depths of the Euro-crisis and in the conclusion often predict the disintegration of the euro zone or the demise of the euro. It is - In the total viewing - in fact a media barrage against the euro, which seems not least to put on nationalist sentiments, it stirs up in any case. From the strict rejection of a transfer-Union and the desire of many for a return to German German mark is also a result of this reporting, which has lost sight of the relations and so ultimately no longer objective.
   

because the debt problems of the European Union fade almost facing the U.S.: was

• The U.S. budget deficit at the end of the fiscal year 2010 (September 30) 1.294 trillion U.S. dollars (1.416 trillion for 2009), corresponding to a rate of 8.9 percent (10 percent) of GDP. (3) This is because second-largest deficit in U.S. history.
• In the last three years alone, the debt of the U.S. federal government for three trillion U.S. dollars on a total of 13 billion U.S. dollar increase - show any deficits in the trillions of social funds. (4) expected in financial year 2011 to increase the debt of the United States as calculated by the Commerzbank to about 70 percent. (5) The U.S. Court of Auditors (Congressional Budget Ofice (CBO)) suggests that with rising costs of health insurance Medicare could rise and Medicaid as well as lower tax revenues, the debt ratio by the year 2030 to 140 percent of GDP. (6)
• There are also further the precarious financial situation of many U.S. states and municipalities, some of which are nearing insolvency. According to calculations by the National Conference of State Legislature, the U.S. states fought in the fiscal year 2010 with budget deficits totaling 121 billion U.S. dollars. (7) disputed About 30 percent of their expenditure to 2010 on aid from Washington. For 2011 alone for the states of Maine, New Jersey, North Carolina, Arizona and Nevada, with budget deficits each with more than 25 percent expected. (8)
  Local governments are no better. The housing crisis has its main source of income, the business tax can fall away. Until now, states and municipalities on the 2.8 trillion dollar market for municipal bonds could finance more often because the U.S. government attacked them with the "Build America Bonds" program (BAB) on the ground. Under this program does go, the government 35 percent of interest paid by bonds that states and municipalities. (9) But after the U.S. congressional elections which changed the voting majorities in favor of Republicans in Congress now found himself no longer a majority, this to extend the program beyond 2010. (10) It expired at the end of December - which is not without consequences for highly indebted countries and communities and the U.S. municipal bond market will remain.
• same time, the Fed flooded the markets with cheap money and constantly makes the printing presses running at full speed. No other country does so in such numbers. In the crisis was the U.S. central bank for 1.7 billion U.S. dollar loans obtained, of which 300 billion U.S. treasury bonds. In early November 2010 they decided until mid-2011 to acquire a further 600 million U.S. dollar government bonds. In addition to the Fed owned, but end-papers be replaced, so that the new bond purchases add up to 850 to 900 million U.S. dollars. (11) Because that's all nothing so far to the sluggish economic recovery and has amended the high unemployment, many complain that the Fed, thus significantly contribute to new bubbles in financial markets since then, the money flowed.

addition intensified but, for example, the situation in the U.S. housing market:

• The nationalized at the height of mortgage finance companies Fannie Mae and Freddie Mac, the end of 2009 for about Sptember 70 percent of liquidity in the U.S. housing market and stood together guarantee mortgage of more than 5,000 billion U.S. dollars, cost the state billions continue. (12) promised With the nationalization of the institutions in September 2008, Henry Paulson, state aid of up to 200 billion U.S. dollars. Because that is not enough, increased his successor Timothy Geithner, the amount only up to 400 billion U.S. dollars, and put the institutions then at the end of December 2009, a blank check: the upper limit for state aid has been repealed. (13)
  Two years after the nationalization, the end of September 2010, the government had put already of 148 billion U.S. dollars in the two institutions. The relevant U.S. regulator FHFA expects Fannie need and Freddie in the next three years to survive together in addition to 215 billion U.S. dollars in state aid is. (14) is a realistic alternative to the support it has not, because the market is threatening to collapse if they were stopped. A recovery of the market is not in sight, on the contrary, the situation heats up again.
• The price decline in the real estate market is not stopped, the persistently high unemployment exacerbated the situation and increases the number of foreclosures. put estimates of Amherst Securities in the U.S. as early as 7 million homes in foreclosure procedure. (15) 2.1 million U.S. homeowners in 2010 had put into the debt trap and over half of them expect the end of 2010 with the forced evacuation of their homes - often wrongly, as we can now. (16)
  The Justice Department and 50 states have Betrugser averaging initiated for unauthorized eviction. Banks and foreclosure specialist firms are the focus. Instead of helping debtors, as does the U.S. Government's assistance program "Affordable Home Modification Program (HAMP) for in installments in troubled mortgage borrowers were apparently without adequate examination of the cases mass evictions started. (17) Most banks have in the real estate boom in lending activities, no safety precautions taken in the event that the debtor can not pay. Politicians accuse the banks to have been based on the proceedings initiated in hundreds of thousands of cases on faulty documents. (18)
  Some banks have responded quickly and forced full-extension precaution stopped to examine the cases. This could exacerbate the situation in the housing market but at the end when it subsequently to a wave of forced evictions is, because that would put increasing pressure on property prices. Even before banks with the moratoria calculated experts began with a renewed slippage in property prices by 7 to 13 percent. (19)
• also been cleared and now masses of empty houses cause big problems. After the eviction appeared to leave many banks, in possession of the homes after the loans have burst, neglected the property for reasons of cost easy. This has a negative effect on the prices of houses in affected residential areas every abandoned house pushes the value up to six adjacent Worldwide average of at least $ 10,000. In addition, the polluter pays empty property communities high costs for cleaning, lawn care, lack basic holding tax incurred and often also for the necessary demolition. Many communities now complain against the banks. It's about hundreds of millions of U.S. dollars. (20)
  

That is, as I said, not an exhaustive list of unresolved problems and new entrants. To be considered are also some additional problems in the market for commercial properties. unresolved

Washington High debt, many states and cities, and more growing problems in the housing market, low growth, high unemployment, an ever further apart gaping income and wealth gap (see: "The American Crisis"), with the one percent super-rich at the top and more poor and more than 40 million Americans who depend for survival on the receipt of food stamps, plus the advanced industrialization, outdated facilities or dilapidated U.S. infrastructure - from roads to bridges to the rail network - whose restoration costs, the United Engineering Association American Society of Civil Engineers (ASCE) once on total of 1.6 trillion estimated (2007) (21) - the situation in the United States is very serious and a real improvement in sight.

Against this background it is very surprising that the U.S. debt crisis in the financial markets and the focus is U.S. rating agencies, but the EU. The raises, along with the barrage of press and the media against the euro, some questions. One - admittedly very speculative - question is whether it far in the Euro-crisis, at least one piece is also about to divert attention from the much larger problems of the United States - primarily because they have not been able to solve? A further question would then be derived if the euro crisis, bearing in mind where "the financial markets" and "the rating agencies" to be located geographically, are ultimately not even a bit more concern about the status of the U.S. dollar as reserve currency is owed? The U.S. has at least put to the efforts of States in the ancient world, combined to form a union menzuschließen and a single currency, the euro, seen always with a degree of "skepticism". But this is conspiracy theory, please just forget about it again.

addition recommended articles:
- Dramatic Appeal: Geithner warns Congress against insolvency of the U.S. (by 6:01:11)
- rampage in Arizona: U.S. lawmakers shot down during event (by 8:01:11)
- High debt: Star economist warns of dollar crash (by 9:01:11)
- gigantic mountains of debt: U.S. states are facing the bankruptcy (v. 30.01.11).