петък, 17 януари 2020 г.
The disguised economic crisis strikes the European Union
The most important for the economic situation in the European Union (EU) is:
1. A misconception about the current economic situation is popular.
2. The decline in Gross Domestic Product (GDP) is not an absolute law for an economic crisis. Manipulated GDP is an equivalent criterion for an economic crisis.
3. The economic crisis is a stage in the economy in (1) GDP manipulation and / or (2) GDP decline. It has two possible phases.
The disguised economic crisis is the first phase.
Lowered base interest rates provide manipulated GDP. The increase in total GDP hides the decline in market GDP.
In line with market economy principles, the conclusion is: The manipulated GDP growth is a sign of a hidden economic crisis.
The International Monetary Fund, the World Bank, ministers and others are now neglecting the substance of manipulated GDP. There is a public misconception about the absolute utility of manipulated GDP. The market economy is degrading. The government is a victim of the central bank. The prime minister will fail.
The perceived economic crisis is the second phase. It is in decline of GDP.
How did the EU economic crisis start?
The causes of the crisis are many. The good news is - the root cause of the current economic crisis has been discovered.
The European Central Bank (ECB) is introducing the euro. The use of the currency has good and bad consequences. The worst are the damage caused by debt crises.
Two approaches to euro introduction are feasible:
First: The introduction of the euro without public opposition to the worst consequences.
Second: The introduction of the euro with public opposition to the worst consequences.
It is now without public opposition to the worst effects of the euro. The emergence of a global mistake by central banks in the EU is a major cause of European damage. Eurozone governments are forced to borrow to pay for ECB damage.
Example: If the euro had public opposition to the worst effects - the eurozone governments would have no current debt.
The ECB introduced a lowered base interest rate for the euro to stimulate European GDP. This euro interest rate provided a manipulated European GDP. Total European GDP has masked the decline in market-based European GDP.
A European disguised economic crisis has arisen.
The European Commission ignores the wrong introduction of the euro. Now European damage is multiplying. Brexit, the situations in France and other European countries are facts of malignant problems. With government loans, the cessation of useful government spending, and other things, it is possible to temporarily delay the development of a relevant economic crisis. The same leads to further inflated damages.
The EU options are:
First: Incorrect euro introduction causes damaging damage. The European economic crisis is growing. ECB failure causes further damage.
Second: Salvation from an economic crisis is achievable.
A properly prosperous EU requires the proper introduction of the euro.
Ivan Mitev - economist