September 16, 2011

European Economy vs. the US Economy

Recently, a meeting of European finance ministers and international financial institutions took place in Poland. They were trying to decide whether or not to provide additional tranche of bailout money to Greece. Europeans, unlike Americans, are very conservative about their economic decisions. However, first time in the history of those meetings, the US sec. of treasury Tim Geithner was present at that meeting. Guess what his message was to the EU: "BAILOUT EVERYBODY" and do it as soon as possible. He encouraged them to print more money and "jump start" the economy like they did in the US in 2008-09. Lo and behold, the US economy is very far from being anywhere close to stability, and the future of the economy is not bright for sure. Nevertheless, Geithner is proclaiming that printing more money and bailing everybody out is the best way to artificially "stimulate" the economy, which is the "natural" ecosystem and cannot be artificially stimulated without causing pain somewhere else. Thanks God, Germans are wiser and more conservative people who will not be swayed by Geithner so easily because they lived through hyperinflation before and know what that means. I've lived through it myself. I don't think that it's any better than depression. However, since most of the US economists and politicians have no clue about Austrian Economics, I think that US is destined to repeat German path of hyper inflation. Europe, on the other hand will go through this pain now and emerge as a much stronger Economy.

1 comment:

Larry Eubanks said...

I wonder what you mean be "stability." Couldn't we say the present situation in the US is consistent with stability?

What value judgment should we make so that "stability" is a significantly important attribute of economic affairs that it should be an object, or goal, of public policy?