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Europe is running out of money: a centuries-old evil?

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The European prosperity is coming to an end with the sale of their property, political extremism and other signs of imminent collapse, says HSBC chief economist Stephen King. In his book "When the Money Runs Out", whose chapter was published exclusively by the Russian site finmarket.ru, the economist points out that capitalism has failed to demonstrate its effectiveness and that economic history returns to stages already experienced in several European countries. To demonstrate the author cites several examples from the past. Medieval Lessons Not Learned Centuries ago, people also believed that he could spend without thinking about their future. For a long time, the most expensive item in the budget was the military spending. Despite the looming economic crisis, war expenses not were cut, which in the fourteenth century led to a tremendous peasant revolt, which can also be seen today. Today governments, beset by debt, are determined to introduce incentive programs. The protests in Athens and Madrid seem surprisingly peasant revolts of the period. Sale of West If government bonds and currencies lose value, investors need to buy real assets. Following this logic, if the West wants to continue living beyond their posibilidfades, will allow foreigners to take the best, says King. The return of political extremism The lack of growth, loss of confidence or unequal burden of austerity are a dangerous cocktail, says King, who called to remember the bloody revolutions in France in the eighteenth century, anti-Semitism in Germany in the nineteenth century and the rise of fascism and communism in the 1920s and 1930s. Each of these events was a response to an economic crisis. End of globalization Blaming others for problems is a predictable response from politicians. In the history of the world, this approach has been used very often. The euro zone crisis also it demonstrated. Germany accused of mismanaging its own economy to Greece, which in turn blames the Germans of implement tough austerity measures. For its part, UK accuses throughout the eurozone as a whole inability to restore economic growth. In result, countries are beginning to live according to the principle of "every man for himself", and a policy of protectionism that is manifested in the financial sector. What recipe will choose Europe? According to King, analyzing the history of the economic crisis, we can deduce that elites resorted to five different forms of recovery from the crisis: blame everyone, admit that they live beyond their means, apply severe austerity measures, guard against speculators, carry out revolutions to overthrow the ruling elite. The future will show what will be the choice of Europe this time. The collapse of the euro area During the creation of the so-called market unique in 1992, the single currency seemed a natural step. The financial crisis has shown that, despite the common currency, in difficult times countries always are guided by their own interests, which puts into question the future of the euro zone, notes the Economist. Governments without trust In democratic countries politicians are afraid to take an unpopular decision and not be reelected. Therefore, simply postpone decisions in the hope that their successors solve all problems. But this policy has its limitations, because at some point the lenders may abandon them. The distrust towards money grows Over time, permanent loan policy may lead to loss of confidence in the money, not only among the general public, but also of foreign creditors. Fears are sufficient to generate a rapid increase in prices, forcing people to get rid of your cash. As a result the money will lose its value. [caption id="" align="alignnone" width="630"]Corbis / RT Corbis / RT[/caption] From Actualidad.rt.com
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