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19 comments on Countdown to €100 Oil: €70 Oil

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alistairC on March 21, 2008 - 6:18am Permalink | Subthread | Parent | Comments top

In my opinion the EU has exactly the same economic structure as the US and will suffer the same fate as deflation takes hold.

I don't agree, because the EU is, in the aggregate (and not counting the UK), more or less solvent. The US is not. Equilibrium can only be found through a huge debt-equity swap, where the sovereign funds end up .. owning you.

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memmel on March 21, 2008 - 11:49am Permalink | Subthread | Parent | Comments top

If you think being solvent or insolvent makes a difference then you simply did not understand what I wrote.

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DoDo on March 21, 2008 - 1:37pm Permalink | Subthread | Parent | Comments top

I'm not sure I understand it, either. At face value, the Eurozone as well as the EU as a region without trade deficit, and still strong internal manufacturing output, seems rather different from the credit-dependent US economy.

Or, do you mean it on the longer term, do you mean its fossil fuel dependency? On that I'd agree, the EU is not better on that presently. However, the EU (or at least some of its members) are ahead in the development and installation of renewables, as well as sustained energy efficiency measures (say in building codes). In my opinion this puts it potentially in a better position when supplies are shrinking, though a lot depends on the timescales.

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memmel on March 22, 2008 - 2:57pm Permalink | Subthread | Parent | Comments top

Yes I mean on the longer term. Short term solvency in fiat currencies based on infinite growth is not all that important. One reason I think the US has no problem running its currency in the ground. TPTB know its dead and are milking it for all its worth. I don't agree with the approach but if your goal is a third world economy then the US is going to win big over Europe. Europe won't be able to compete with the new poor in America willing to work for nothing. Europe is going to have to deal with the rest of the world opting for a small wealthy class and a large poverty stricken working class.

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