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When the domino effect became the boomerang effect
by Thanos Kalamidas
2011-09-16 07:16:27
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Thanks to the Euro-crisis the last few months we all learned the term “domino effect” but now a new term raises the “boomerang effect” and let’s see how painful it will be the way and how long it will take to memorise this new term.

The domino effect is not a new term actually its foundations there are in the idea of the global economy where they were expecting that finance and the need for a market to work competitively correct would inveigle other sides of the states life including politics and even influencing states to a more western style democratic governing. Actually global economy as a theory meant a huge/global market with common rules and targeted production and targeted consuming where the competition is limited to prices that decree the quality. And the European Union in its foundations had tried to do – in many cases successfully – have already done so assigning, subsidize and protecting production.

The common currency for the European Union was the natural next step and since the Union could not adopt the dollar – for many reasons including historical – they adopted as the middle solution a new currency the Euro. This is were the first problems started because the markets around the world reacted differently to the new currency often using it as a way to avoid the American dollar domination and the domino effects that would bring. They preferred the side effects of an often anarchist Europe than the enslavement to the American capitalism which also meant obedience to rules that expanded far more than the market.

That meant that the Euro didn’t want to stabilize in equal exchange prices with the dollar making ripples and creating a new domino effect; only this time in their arrogance the aspirators of the global economy hadn’t calculate the problem and of course had not a solution or at least a plan B. Then new but very old elements came to the front like the rise of the Chinese economy that among all had control over the actual exchange compared to the west that its control, most of the time was virtual and existing only in accounting digital sheets. Actually this last one - virtual economy existing only in accounting digital sheets – has been one of the major problems for the west and again, no solutions no plan B and the crisis deepens all the time turning the domino effect into a boomerang effect where the aims of the experiment return back to hit the player.

The new problem now is that the boomerang in its cycle has missed some things but the same time has collected new elements that can or already are threatening for the starting point and again there is no plan B for the simple reason that nobody thought about it. Depressing? Sure but look at the situation this moment, the USA has more interest in a possible Greek collapse, greater than even her European partners. If the Greek economy collapses then the Irish, the Portuguese economy are in lethal danger with Italy and Spain following close and France with Germany endangering any kind of growth for the next few years. Finland has already warned that the country’s growth for the year 2012 around zero and that’s for the country that supposedly has one of the most stable economies within the euro-zone. All that is the domino effect. But when half of the countries inside the euro-zone will be forced to limit their imports and their consuming power will fall to zero then the European problem becomes global problem, a good chance for the economic opportunists – Soros is not just a name – and for countries that always played in the sides of the rules but with powerful and absolutely controlled economies like China. Then we have the boomerang effect. And this is going to be really painful.

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