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Monday, January 04, 2016

No, they shouldn't have

Outsourcing your money to a self-interested outside party seldom ends well:
Finland should never have signed up to the single currency union, according to its foreign minister.

With the northernmost euro member now set to become the bloc’s weakest economy, the question of currency regime continues to resurface as Finland looks for explanations for its lost competitiveness. Timo Soini, who is also the leader of one of three members of the ruling coalition, the anti-immigration The Finns party, says the country could have resorted to devaluations had it not been for its euro membership.

The comments come as a former foreign minister gathers signatures in an effort to force the government to hold a referendum on euro membership. While polls still show most Finns don’t want to go through the process of exiting the currency bloc, there are signs that a plurality of voters think they would be better off outside the euro....

Without the option of currency devaluation, the government has calculated that Finland needs to lower its labor costs as much as 15 percent to catch up with its main trade partners, Sweden and Germany. Finland’s economy has shrunk for the past three years and Nordea, the biggest Nordic bank, predicts further contraction in 2015. Finland will be the weakest EU economy by 2017, when it will grow at less than half the pace of Greece, according to the European Commission.
Translation: when you can't devalue your currency and share the burden equally throughout the entire nation, you have to pay all your workers less even though their expenses will remain high. So, instead of a devalued currency, you've lowered the quality of life of pretty much everyone who works for a living.

The sad thing is that this was all entirely obvious, and was in fact predicted, by many economists critical of the Euro. But social mood always trumps the naysayers who are battling the zeitgeist.

The Euro will fail eventually. This is not in doubt. The only question is how bad it has to get in the member nations before they reclaim their financial sovereignty.

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40 Comments:

Blogger White Knight Leo #0368 January 04, 2016 1:59 PM  

I have to ask: isn't what's wrong with a common currency the same thing that's wrong with a fiat currency generally, and the only thing that makes it worse because its outside of the political control of the people who use it?


"So, instead of a devalued currency, you've lowered the quality of life of pretty much everyone who works for a living."

This is separate from the common currency issue, but doesn't devaluing a currency lower the quality of life for savers and creditors?

Anonymous Female Logic January 04, 2016 2:01 PM  

While polls still show most Finns don’t want to go through the process of exiting the currency bloc, there are signs that a plurality of voters think they would be better off outside the euro.

Anonymous KoranBurningFaggot January 04, 2016 2:14 PM  

Finland looks for explanations for its lost competitiveness.

Import Low IQ people from the 3rd world then wonder why the average IQ is going down.

you've lowered the quality of life of pretty much everyone who works for a living

How does that work out for their pensioners?

Anonymous ben January 04, 2016 2:21 PM  

Finland is drawing dead regardless of their currency. You can't pay your young adults to sit around and take vacations and expect a healthy economy to result.

Blogger Cinco January 04, 2016 2:46 PM  

Hmmmm. I wonder if those million new Germans are suppressing German wages thereby keeping the Krouts more competitive. Next they will be arguing for an equal distribution of future jihadists in order to boost their respective GDP's.

He world has lost its mind.

OpenID denektenorsk January 04, 2016 2:48 PM  

Finland has a weaker economy than Malta??? That's saying something or are they classified differently within the EU bloc? When I visited Malta it was on the Euro and prices were dirt cheap due to the local economy being almost entirely tourism based.

Blogger Jourdan January 04, 2016 2:53 PM  

I agree that the Euro is a doomed project, but it is doomed in the same way as the "U.S. as propositional nation" is doomed; in other words, nothing will be changing any time soon.

The Euro is a central pillar of the E.U.-globalist capital project. As we just saw in Greece, its importance bears NO RELATION to its economic value. (Or, if you are too much of an economic thinker to accept that, then simply think of the imputed value to the political benefits to be greater than any possible economic factor to the negative).

The Euro CANNOT be given up by the EU, not at any price, just as massive immigration cannot be given up by the U.S. In both cases, it is seen by the elites as key to its project.

It will die, eventually. But not because the True Finns don't like it, just as massive immigration into the U.S. isn't going to stop just because some Rs are thinking of voting Trump.

Blogger VD January 04, 2016 2:57 PM  

Next they will be arguing for an equal distribution of future jihadists in order to boost their respective GDP's.

Next? They've been doing that since this summer.

Anonymous Tunglet January 04, 2016 3:10 PM  

"But social mood always trumps the naysayers who are battling the zeitgeist."

Isn't Zeigeist just a simplification of wyrd or prvoidence, so not to get in trouble with the free will dogma churchianity and the consumer society needed?

Blogger White Knight Leo #0368 January 04, 2016 3:15 PM  

@6

The Euro is a central pillar of the E.U.-globalist capital project. As we just saw in Greece, its importance bears NO RELATION to its economic value.

This was the harder thing for me to grasp, that there really were people who preferred to be King of the Dung Pile rather than one of the Moderately Wealthy People of the Stupendously Prosperous Nation.

It's like... I read something about Castro's takeover of Cuba, and how the destruction of Cuba's economy was effectively total. The guy pointed out that someone merely interested in looting other people's riches wouldn't have wanted the economy destroyed; he would have understood the 1st Law of Parasitism: the host must survive.

Whereas Castro turned an actual 1st World nation into a 3rd World hellhole so bad that Haitian refugees avoid it. This, he said, is not something that can happen by accident. It has to be done intentionally. He believes that Castro did it because if the only sources of wealth come from Castro himself, there will be no challengers to his power (given how long Castro has ruled Cuba, this was a justified belief). So he'd rather be King of the Hellhole than risk allowing anyone to challenge his authority.

Bill Whittle once put up a hypothetical scenario involving someone being elated a gift of $100,000 from his company, only to be crushed when he found out that others had gotten more. He said that if the deal was that everyone had to accept the gift that they received as is, or no one would get anything, that there would be people who would refuse. They would rather turn down $100,000 than allow someone else to get $150,000.

I understand that such people exist. But they make no sense to me at all.

Anonymous #8601 Jean Valjean January 04, 2016 3:16 PM  

To be a sovereign nation, it is critical to have one's own currency. By giving up their own respective currencies in favor of the Euro, the European nations basically gave their sovereignty.

So I agree with Vox. The Euro will not last. Nationalism is returning to Europe, and with it will return the sovereign currencies.

Look out for the Deutsche Mark, the Lira and the Frank.

Anonymous KoranBurningFaggot January 04, 2016 3:17 PM  

Why did my post get deleted? I only commented on immigration and asked how pensioners are affected in the nation.

Blogger Markku January 04, 2016 3:17 PM  

No, zeitgeist is majority opinion, especially to a degree where it causes an avalanche effect and takes with it those who are incapable of independent thought. Which is arguably the majority of people. That's why it can change on such things as immigration or opinion of EU faster than one might naively imagine, thinking all people as rational actors who are individually persuaded by arguments.

Blogger Markku January 04, 2016 3:19 PM  

Why did my post get deleted?

It was autospammed. I released it. To decrease the probability of that happening, I recommend using some other login method than Name/URL. You CAN of course keep using it, but then this will keep happening occasionally.

Blogger Jourdan January 04, 2016 3:20 PM  

@11 If you're going to use that very French handle, you're going to have to use the correct "franc" instead of "frank".......

Anonymous #8601 Jean Valjean January 04, 2016 3:23 PM  

At least Finland is a world hockey power, which is extremely impressive for a country of 5 million people. Looks like they're gonna win the World Juniors, possibly against the USA if they can get by the Russkies right now.

Blogger S1AL January 04, 2016 3:24 PM  

@10 - What, you thought "it is better to rule in Hell than to serve in Heaven" was just a catchy phrase? I know you aren't religious, but that's the heart of moral rebellion.

Anonymous #8601 Jean Valjean January 04, 2016 3:26 PM  

Très bien, Monsieur Jourdan.

Le Franc, bien sure.

Blogger Jourdan January 04, 2016 3:28 PM  

@16 You got that right. I've never seen a better hockey player than Teemu Selanne, and his fellow Finns always impress on the ice.

Blogger bob k. mando January 04, 2016 3:36 PM  

VD
The sad thing is that this was all entirely obvious, and was in fact predicted,


1995 the skeptics said, "this will all end in tears." europhiles scoffed.

1996 the skeptics said, "this will all end in tears." europhiles scoffed.

1997 the skeptics said, "this will all end in tears." europhiles scoffed.

1998 the skeptics said, "this will all end in tears." europhiles scoffed.

1999 the skeptics said, "this will all end in tears." europhiles scoffed.

2000 the skeptics said, "this will all end in tears." europhiles scoffed.

2001 the skeptics said, "this will all end in tears." europhiles scoffed.

2002 the skeptics said, "this will all end in tears." europhiles scoffed.

2003 the skeptics said, "this will all end in tears." europhiles scoffed.

2004 the skeptics said, "this will all end in tears." europhiles scoffed.

2005 the skeptics said, "this will all end in tears." europhiles scoffed.

2006 the skeptics said, "this will all end in tears." europhiles scoffed.

2007 the skeptics said, "this will all end in tears." europhiles scoffed.

2008 the skeptics said, "this will all end in tears." europhiles started getting a little nervous.

2009 the skeptics said, "this will all end in tears." europhiles got a lot nervous.

2010 the skeptics said, "this will all end in tears." europhiles started getting a lot nervous and Iceland's pro-Euro ruling coalition got thrown out.

2011 the skeptics said, "this will all end in tears." europhiles started getting a lot nervous and kept eyeing Greece.

2011 the skeptics said, "this will all end in tears." europhiles started getting a lot nervous and kept eyeing Greece but heckled the Bears for ... never yet having been 'right'.

there is a lot of ruin in a stupid thing that was built on top of the wealth of your forefathers. but someday, the wealth that your forefathers created will run out.

and then, where will you be?

Blogger Sam vfm #111 January 04, 2016 3:37 PM  

@10 " They would rather turn down $100,000 than allow someone else to get $150,000."

Years ago, I watched my boss do just that. He was offered a change to an existing deal with a contractor that would have made money for both sides. I advised him to take it, but he said no, that he didn't want the contractor to make that much.

Blogger dc.sunsets January 04, 2016 3:45 PM  

Social mood trumps. Absolutely.

The problem we have faced is that social mood in the West entered a once-in-3-centuries mania in 1995.

I submit that the last manias (England's South Sea Bubble and France's Mississippi Scheme) were delimited by an anchored monetary system, while the fully fiat US system that emerged after policy changes in 1964 & 1971 left no consistent yardstick for people to measure "how high is up?"

As interest rates fell for 30 years and when debt = wealth, creating "wealth" by issuing IOU's became universal. Only under a social mood mania AND a fiat monetary regime could we have seen the Flying Unicorns Economy emerge, and its social Narrative, "We find ANY intolerance of what we tell you is good INTOLERABLE," rose to dominance.

Who could have predicted the pendulum would swing so wildly askew? And the swing-back (and overshoot) are the stuff of Carthaginian-level warfare.

Blogger dc.sunsets January 04, 2016 3:51 PM  

Given that the Euro was fiat at the outset, I wonder if the entire project was intended to simply let some people create wealth out of thin air (i.e., issue Euro-denominated bonds) and others were to pay the coupon.

Could it be just that simple?

Anonymous WillBest January 04, 2016 4:04 PM  

Outsourcing your money to a self-interested outside party seldom ends well

No it doesn't, which is why I can't comprehend how so many people in my economic circle have financial planners.

Blogger Danby January 04, 2016 4:04 PM  

@dc.sunsets
Every fiat monetary system is, at base, that simple. A few people create money and make a great profit, a very few people manipulate the system to get truly unbelievable profits and everyone else pays the coupon, either directly or though currency devaluation.

Blogger pyrrhus January 04, 2016 4:29 PM  

"Social mood" is right, although another way of putting it is that most people easily fall for propaganda and like to outsource their thinking to their Fearless Leaders....

Blogger pyrrhus January 04, 2016 4:31 PM  

@21 And at that point, you will be in an internal war with the alien invaders....

Anonymous Roundtine January 04, 2016 4:37 PM  

Finland can allow cryptocurrency and private money tomorrow. Considering the euro's final destination of zero, borrowing in euros to buy or build real assets is not the worst way to go. That they can't or won't take steps to help themselves is nobody's fault except the Finns.

Blogger dc.sunsets January 04, 2016 4:37 PM  

I think the "social mood" to which Vox Day refers is what Bob Prechter, Jr., describes.

Socionomics is a subject of considerable depth (and controversy.) Social mood as a concept within socionomics is equally deep (and controversial.) Fun, thought-provoking stuff.

Lots of stuff on it at www.socionomics.net, but suffice it to say, it is synonymous with herding behavior...something we all do, given the impossibility of living entirely as an island. Social mood drives fashion, pop culture and the ideas that end up as The Narrative...and the fervor with which adherents adhere.

Blogger dc.sunsets January 04, 2016 4:40 PM  

You can't fool an honest man...but you can con a blindly optimistic one endlessly.

The EU was just one among many illustrations of a Western World populated by people so fat, dumb and optimistic that they'd jump at the chance to board the WayBack Machine to buy the last ticket for a steerage berth on the Titanic.

Anonymous Dave January 04, 2016 6:09 PM  

@16, @19 Kimmo Timonen was another Finn hockey great in the World Juniors, World Cup, Olympics, and the NHL.

I wanted the Flyers to draft winger Mikko Rantanen in last years draft @ #7 but they went for the Russian defenseman Provorov instead.

Blogger Phat Repat January 04, 2016 6:12 PM  

Isn't the Euro separate from the nation state? I would be more concerned about the USD; or haven't you noticed the de-pegging operations around the world? Hmmm...

Anonymous #8601 Jean Valjean January 04, 2016 7:12 PM  

The American, Auston Matthews, is expected to be picked number one at this year's NHL draft. However, a couple of Finns having been playing so well at the World Juniors that they just might jump ahead of Matthews (though Matthews has also impressed). The two Finns are Jesse Puljujarvi and Patrik Laine.

Apologies for going off topic but at least we are still talking about Finland!

Blogger Ahazuerus January 04, 2016 7:19 PM  

"The only question is how bad it has to get in the member nations before they reclaim their financial sovereignty."

Not even that is a question. This road has been well trodden many times before us. First they wreck the financial system, which ruinously harms the general economy, resulting in massive unemployment, and then we go to war.

What happens after that double-down roll of the dice is anyone's guess.

But the last two world wars benefited the elite one-worlder's at the expense of everyone else.

I'm not saying Vox is wrong, just like William Rees-Mogg and James Dale Davison weren't wrong.

But market timing is a mug's game. The degree our rulers will go to, in order to kick the can a little further, has been consistently underestimated for over a century...

Blogger Kristophr January 04, 2016 8:23 PM  

White Knight Leo: You are correct. Deliberate inflation hurts everyone, and hurts those prudent enough to save the hardest.

The only correct way for Finland to get out of the mess is to lower regulation and taxes to encourage more businesses to move there and set up shop. Not offering welfare to immigrants is also a good notion. Then consider breaking away from the Euro just to avoid going down with the ship.

Blogger Markku January 04, 2016 8:27 PM  

The only correct way for Finland to get out of the mess is to lower regulation and taxes to encourage more businesses to move there and set up shop.

Our corporate flat tax rate is 20%. What's yours?

Blogger Markku January 04, 2016 8:31 PM  

Rhetorical question. It's not flat, and the top is 39%. USA punishes success. We don't.

Anonymous KoranBurningFaggot January 04, 2016 9:11 PM  

But market timing is a mug's game.

Guessing when the Soros of the world with stab a nation in the back for maximum profit is a mugs game, unless you get the memo

2011 the skeptics said, "this will all end in tears." europhiles started getting a lot nervous and kept eyeing Greece.

Merkel is planning to blow $15billion supporting 3rd world moslems next budget, but wants to bleed Greece for non Greek politicians redistributing Greek wealth.

Anonymous Eduardo the Magnificent January 04, 2016 11:59 PM  

Kimmo Timonen, no relation to Teppo Numminen

Blogger Kristophr January 05, 2016 8:15 PM  

Markuu: That is a good start. I am aware that the US tax rate is insane. The US is a good example to absolutely not follow.

I will have to get a citizenship elsewhere first before I can renounce and get out from under it. The US IRS expects citizens living abroad to report income and pay tax on it, something only Eritria does as well.

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