European stock market continues to fall

European stock market continues to fall

POSTED: Wednesday, August 17, 2011 - 7:55am

UPDATED: Tuesday, September 20, 2011 - 5:54am

Investors seemed unimpressed with a plan for greater economic discipline and unity among European nations. European shares opened lower as hope waned for bold action to stop an escalating debt crisis. Britain's FTSE 100 lost seven-tenths of a percent, and Germany's DAX was also down slightly. France's CAC-40 slipped one tenth of a percent.

The euro slid against the dollar tuesday after German Chancellor Angela Merkel and French President Nicolas Sarkozy announced the results of their emergency talks. The leaders called for a "New Economic Government" for Europe that would meet with EU President Herman Van Rompuy at least twice a year.

They also called for constitutional amendments requiring balanced budgets in all Eurozone countries. Both said it wasn't the right time to replace 17 government bonds with a single one that would allow weaker economies to borrow in cooperation with strong economies like France and Germany.

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All these governments seem to be borrowing endlessly with no brakes on in the game. Very little of this money being borrowed is being put into productive investments. Instead, it's being spent on entitlements, bailouts and various other gimmicks to keep the lipstick on the pig (economy) and get the politicians re-elected. I'm not surprised people are losing confidence. They see interest rates being set down near zero, debt monetization going into overdrive, crony capitalism and the like. It's all a shell game while the productive private economy is being hollowed out. Honest, productive people have been turned into the third estate and than most of them have to apply for payday loans. The first estate being wall street/bankers, the second estate being the political class/unions, and the third state being everyone else. I see this getting far, far worse before it gets much better.

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