Bloomberg’s ace data visualization team crushes it again; this is an awesome primer:

At the heart of the European debt crisis is the euro, the currency that ties together 17 countries in an intimate manner. So when one country teeters on the brink of financial collapse, the entire continent is at risk. How did such a flawed system come to be? Bloomberg Television and Jonathan Jarvis present “The European Debt Crisis Visualized.”


12:53
Source: Bloomberg, Feb. 12 2014

Category: Credit, Currency, Digital Media, Video

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

11 Responses to “European Debt Crisis: Visualized”

  1. icantdance says:

    awesome animation and narration

    I would like to request an anime vid that compares and contrasts the efforts of nations’ central banks in recent years.

  2. ch says:

    The euro is a mess b/c it wasn’t designed for the status quo, dollar-centric world. It was designed to thrive in the post-dollar world that is coming.

    That is why the euro established 15% of reserves in gold upon inception & marked those gold reserves to market quarterly, to the point where they are now well over 50% of reserves.

    This was a direct slap in the face to the dollar’s hegemony because the use of gold ensured that the US could never use the dollar as a weapon as they are doing against the EM’s now (creating dollar int’l shortages that forces those nations to 1st horde & then spend down dollars.)

    In extremis, the ECB could simply print euros & bid in the open market for gold & have the trade value of the euro RISE b/c the dilution of the money printing would be more than offset by the rise in the euro price of gold, marked-to-market quarterly.

    Once one understands this, one begins to understand why most EU technocrats & central bankers seem unconcerned about the Euro. There would certainly be financial market dislocations, but the Eurozone has an ace in the hole to play that the US does not…b/c the EU does not have the reserve currency to lose by making the above move as the US does (& would lose) were they to do the same.

    • Angryman1 says:

      all the US would have to do is allow Spain,Italy,Greece and Ireland peg its currency to the dollar and the Euro would collapse……..overnight. That would lead toward a mess in the north and severe depression.

    • ch-

      w/this: “…That is why the euro established 15% of reserves in gold upon inception & marked those gold reserves to market quarterly, to the point where they are now well over 50% of reserves.

      In extremis, the ECB could simply print euros & bid in the open market for gold & have the trade value of the euro RISE b/c the dilution of the money printing would be more than offset by the rise in the euro price of gold, marked-to-market quarterly. ..”

      seems a little self-referential, no?

      if that type of schema, actually, worked, what prevents other–smaller/weaker–CBs from executing it?

      past that, w/: “…This was a direct slap in the face to the dollar’s hegemony because the use of gold ensured that the US could never use the dollar as a weapon as they are doing against the EM’s now (creating dollar int’l shortages that forces those nations to 1st horde & then spend down dollars.)…”

      are you not being self-contradictory? ( X was established to prevent Y, that is, by the way, happening now..)
      ~~~

      really, there’s something known as the PetroDollar..
      https://www.google.com/search?q=petrodollar&ie=utf-8&oe=utf-8&aq=t&rls=org.mozilla:en-US:official&client=firefox-a

      with that, you may care to recheck some of the premises in the conclusions you’ve delineated..

      • ch says:

        Not contradictory at all. To provide a short answer, ask yourself why the Euro has risen against the dollar during the past several years & since inception if its structure is so structurally flawed.

        Of course the 1st part was self referential, but no more self referential than what is going on in the US, where the Treasury issues debt and then the Fed prints money to buy the debt. It’s just that the EU doesn’t have the reserve currency so if its reserves were dollars, it couldn’t print dollars to bolster its reserves. It can print Euros to bid gold in extremis & improve its financial position. It is intellectually offensive, but no more so than QE in the US.

        No, I’m not being self contradictory…in nature & systems there are things such as phase changes beyond certain tipping points. For example, bring a pot of water to 211 degrees F. Nothing. Bring it to 212 degrees F & voila! You no longer have water, you have a gas.

        Same thing here. Under the petrodollar status quo, the EU is having an issue. But what if the world is preparing for a phase change away from the petrodollar status quo? What would happen if China, Russia, EU, South Korea, Singapore, Thailand & Dubai all set up a new trading system whereby inter-country trade amongst them was not conducted in dollars & settled in Treasuries (the petrodollar) & instead conducted in yuan & settled in shanghai in gold?

        Sounds extreme but google around – you will find that they are putting this system into place.

        A phase change to the currency system is coming. It will catch most by surprise.

  3. alonzo says:

    Great video BUT can someone explain why individual EU countries can’t “go bankrupt” as US states seem to be able to without the Federal house falling? US states share the same currency. Is it just that other EU institutions hold so much “Greek” debt that they would fold? If that’s the case, then they’re just another case of “too big to fail,” right?
    Also, think the Greeks got stereotyped pretty hard in the video. I know it was done to simplify an explanation, but really – the EU totters because of the Greek joie de vivre?

  4. cobaltbluedolphins says:

    Answer to the last question posed in the video -

    Dump the Euro.

  5. ema82 says:

    Italy was never bailed out even though it went close to, this is a major mistake especially since it is by far the largest economy of the bunch.

    The stereotypical representation of the southerners lying on the beach while the hardworking germans work may be innocent fun for naive simple-minded people but is not really true or meaningful and in my opinion cheapens the whole thing.

  6. ch-

    I hear that, and, totally, agree that the current USGov/USFedRes Duopoly is a nightmare for the vast majority of the inhabitants of the Globe (not limited to “People”, either)..

    but, for the Time being, the Petrodollar is The Game in town.
    ~~

    here: “…What would happen if China, Russia, EU, South Korea, Singapore, Thailand & Dubai all set up a new trading system whereby inter-country trade amongst them was not conducted in dollars & settled in Treasuries (the petrodollar) & instead conducted in yuan & settled in shanghai in gold?…”

    to me, you’re asking a Question that should be at the forefront of many..

    I’d reckon that, sans Petrodollar, Foreign produced Goods, landed in the U.S. (Dollar-sphere), would become much more Expensive../ U.S. (Dollar-based) ‘Standard of Living’ would decline ~30-60% (as a SWAG)..
    http://acronyms.thefreedictionary.com/swag
    ~~

    with: “…in nature & systems there are things such as phase changes beyond certain tipping points. For example, bring a pot of water to 211 degrees F. Nothing. Bring it to 212 degrees F & voila! You no longer have water, you have a gas…”

    in U.S. Monetary History, we’ve seen this numerous times, even, in the 20th C. (1933, 1964, 1973) at the minimum..was the ~’73 event that bought that, aforementioned , “Petrodollar” to the fore..

    that it, “denominator re-set”, happens again shouldn’t surprise more than a few. Yet…
    ~~

    and, here: “…why the Euro has risen against the dollar during the past several years & since inception if its structure is so structurally flawed…”

    not sure it is any more complex than ‘Relative Demand’ (Real or Manufactured), that is has been strong vis-a-vis the U$D, in, and of, itself, is not, necessarily a testament to its ‘inherent soundness’..

    as you probably know, the Petrodollar gambit can only exploit those that are willing to accept it…the Euros long have, it would stand to reason that they’re ‘being carried a few rounds’, at the min. ..

    • WolfStreet says:

      Good to see you’re still around these parts of the web MEH. This year is the very year of dollar. There’s no sense in it being such weaker than the euro.

      As for the video thank you BR. I believe they’re being somewhat hard on the Greek matter though…

  7. ch says:

    Mark E. Hoffer-

    Apologies for the delay in my response – I appreciate your objective analytical thoughts.

    RE: “as you probably know, the Petrodollar gambit can only exploit those that are willing to accept it…the Euros long have, it would stand to reason that they’re ‘being carried a few rounds’, at the min. ..”

    From my observation of the past 40 years, “wiling to accept it” has less to do with it than “is there an acceptable & market-ready alternative available” & “do we have enough muscle to be able to ditch the Petrodollar?”

    When looked at that way, the answer up until recently was “No.” And as we saw from Syria & Iran, where foreign powers stood up to the US for the 1st time since the Iron Curtain fell, the answer is now “yes.”

    As an objective observer of events, that tells me that to your point, we are now much closer to one of the “big cogs” of economic history turning. It will surprise many, but it shouldn’t.