How I Solved The Euro Crisis and US Debt Crisis.
This economic plan will provide the time frame needed in halting the collapse of Banks in Europe and in the USA, from having so much debt.
Essentially what we must do is Mortgage the Future. It is a very similar plan to How I Solved The Housing Mortgage Crisis in the USA.
http://www.sodahead.com/united-states/how-i-solved-the-housin...
What needs to happen is the USA needs to Buy Europe's Debt, and Europe needs to Buy the US Debt. Loans are created by both countries from the World Bank. When the US buys Europe's Debt, it essentially pays off Europe's Debt, and makes Europe free of debt. The same happens when Europe buys the US debt. The US now becomes debt free. The point is now the US has Europe Debt it is responsible for, and Europe has the US Debt that it is responsible for.
These Loans can be manufactured to be due in payment say in a 10 year cycle. When the 10 year cycle happens on that day, Europe goes to the World Bank and borrows enough money to buy back it's original debt the US bought from them. On that same day, the USA goes to the World Bank and borrows the money to buy back it's original debt it sold to Europe.
This means both Countries finance each others debt, allowing each country to maintain a good long lasting solvent Credit Rating.
During the 10 year cycle in which payment is due on the last day of the 10th year, when both Countries buy back their Debts, the US and Europe are free to borrow within their respective countries to create growth in their Economies. They borrow money, and they also maintain austerity measures in government spending.
This means the Private Sector can borrow for job creation and growth while governments are held toe to the line in Austerity. Please note this will work only when countries realize they must do both, in doing Economic Growth, and in doing Austerity.
In time it is expected that European Debt and US Debt will be reduced because of the Growth and Austerity measures. So when the 10 year cycle is due for payment, the payment will be less than what they both sold them for.
This plan is not creating more debt. It is not debt. What it is, is buying debt. You are creating stable credit, which you know will be paid off in 10 years. My idea is buying debt, not creating it. You assure the markets that debt is stabilized, and once you know that, you can begin a Growth Economic Model for the Private Sector, while at the same time implementing Austerity on the Government. When someone buys off your debt, you are now debt free. When you buy someone else's debt that is not due until 10 years, you are essentially debt free for 10 years. This means you have the time to establish Growth, while implementing Austerity at the same time. This will essentially bring down the debt factor. In 10 years, Europe is required to buy it's debt back , in order to adjust its debt accounts. The accounts should be lower. When seen lower, Europe and the US can then resell their debt again to each other, to provide another 10 year period of being debt free. And the same process, until the debts on both continents is low enough where selling and buying back debt is no longer required.
This ultimately weans the World from Total Economic Collapse. The following will explain the European Crisis. We should note that the US must take the leadership in promoting this effort, which in my opinion will be a dual Marshall Plan in the 21st Century.
Note: The following Article was Published by The 4th Media, that provides a good understanding of the Financial Crisis. I did not write the article, and give all links and credits to their author. The reason I post the article is due to Security Issues, in which sometimes just posting links does not work. You click the link and it comes back as a Page Not Found. So in order to assure the available information I include the Article and link, and make it clear the article was not written by me.
For The First Time The New World Order In Panic: The International Establishment Face A Crisis Posted: 28 Jun 2012 11:42 PM PDT For the first time in my career, I see the international establishment, sometimes called the New World Order, facing a crisis so large that its very survival is at stake. For the first time, these people are scared. The crisis in Europe is clearly beyond anything that this generation of establishment leaders has ever seen. The last time that anything like this faced the European establishment, it led to World War II.
Rest of Article Can Be Found Here: CONCLUSION Angela Merkel can scream, yell, and hold her breath until she turns blue, but ultimately she has no power over the European Central Bank. Ultimately, no politician has any power over it. No politician really wants power over it. Why not? Because that politician would then be responsible for coming up with the money that the European Central Bank was about to come up with, but which was stymied by the politician.
June 23, 2012 lewrockwell.com/north/north1159.html Gary North [send him mail] is the author of Mises on Money. Visit www.garynorth.com. He is also the author of a free 20-volume series, An Economic Commentary on the Bible. |
Then according to my article follow the Economic Growth model for the Private Sector and implement Austerity Measures on both Governments. Upon the end of the 10 year cycle it is predicted that both nations will have lowered their indebtedness.
The point is neither country can get out of debt without each other. They need each other to buy and sell across their debts, to establish steady reliable credit. Presently Moody's has lowered the credit rating of both countries, because there is no stable means of financing. They do not consider to help each other. They are trying to solve it within their perspective Countries. That will not work, because they can not establish an outside c...
Then according to my article follow the Economic Growth model for the Private Sector and implement Austerity Measures on both Governments. Upon the end of the 10 year cycle it is predicted that both nations will have lowered their indebtedness.
The point is neither country can get out of debt without each other. They need each other to buy and sell across their debts, to establish steady reliable credit. Presently Moody's has lowered the credit rating of both countries, because there is no stable means of financing. They do not consider to help each other. They are trying to solve it within their perspective Countries. That will not work, because they can not establish an outside credit source. So both nations need each other to establish their both needed outside credit source.
It is like Floating Credit, in a way, but not exactly because floating credit usually involves only one party. This involves two parties; Europe and the US, working jointly to establish credit stability in order to lower their debts.
It will not work with a country who has less debt and the other country much more. Such as having Germany bailing out Spain, or Greece. And it does not work with the idea China which has a lower debt to buy out US debt, because one country has more to gain, than the other. If they are equally in trouble they need to cooperate to lift them from the peril.
In fact, it would mean leaving China entirely out. This is good because it forces China inward, toward their own markets. And it may be politically smart, because with China focusing inward, it causes trouble between China Bosses, and essentially slows down China expansionism. Do we really want Communism to succeed? It only succeeds when it has access to outside markets, because Chinese do not have to compete with each other. When they compete with each other, they then look at each other as enemies. When this happens Communism is rejected, and the people see how fake they have been to themselves.
Perhaps the Economic Crisis is a blessing, because it makes the outside Western Countries in the US and Europe work together in unity to lift themselves out of debt. This means higher trade and jobs with Europe and the US. Import and Export prices and goods can be easily exchanged in comparison to Asian goods in the West. Where as thinking Western goods coming to China will gain them profits is a delusion. Western Goods exported to China are always a loss, because Chinese can not match exchange rate performance, nor afford the higher product costs, that support US jobs.
But Obama or Romney or whoever needs to act, instead of campaigning.
For once I would like to see US Candidates do things that benefit Job creation, and use that work energy as their campaign. Match deeds with words, first, and let the campaign follow along. Money will pour in like opening the tap.