Whilst the U.S. is continuing Recovery, and China is implementing policies which will hopefully ensure a soft landing, in Europe they are doing a game of wait and watch.
Like people keep money under a mattress and it doesn't do anyone much good, European banks seem to wish to hoard the cash. If money is not lent out, it does not create wealth. It just sits there in the vaults, paying out interest, and thereby diminishing in value.
Money is not like chicken, it does not hatch eggs sitting under the mattress or in the bank vaults. It only grows and helps people by being out there, in peoples' hands and pockets, financing their businesses and giving them the means to earn a living, thereby taking the burden off the governments to dish out social welfare benefits.
So, I suggest the banks must have the confidence to lend out the money and not hoard it.
I also suggest Governments and banks must resolve not to put us all through an unnecessary dip.
When capital is there, and people wish to continue working, it would be sad if due to the wait and watch tactics people end up in a recession in the midst of plenty.
So many closures and impending job losses have been announced today. Deficit cuts create a downward spiral, which it is necessary now to halt before more damage happens to the economies.
I welcome your comments, so please do drop me a line.