Saturday 10 September 2011

Proportion of EUR by country based on GDP 2009

This pie chart shows the EURO-Countries GDP as of 2009. I gather that if you know what the GDP of a country is, you can deduct how much of the EURO currency they account for.

So according to my calculations based on IMF data found on Wikipedia Germany was 27%, France 21,5%, Italy 17%, Spain 12%.

If Italy and Spain really follow through on fiscal austerity, they'll probably fall into recession.

What I'm not sure of: If they improve their debt situation but cause consumption to drop, unemployment to rise, how do they get around paying more for their debt? Aren't they in a sort of Catch-22 or vicious circle.

The ECB will have to increase the amount of sovereign debt they buy off them to keep them from the vicious circle. That in turn leads to Germany, the healthiest, to get infected with the debt cancer, in my opinion.

I don't think Greece is of any real relevance except to show what happens when a country fails to comply with rules and guidelines: they get bailed out. But who will bail out the ECB? Their printing press. That's why Gold isn't dropping.

What in heavens name can bring back confidence? Jobs right? But jobs, factories are in China, India, Vietnam and other countries right? Why would they come back?



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