in india oh she's available in the movie joyce the hotels the home of villas the gateway hoto the grand imperial tried to talk to us the bush coromandel you can a letter to the socialist good to see don't need to go and. read this and the colonel was hotel to retreat. from moscow this is r.t. top stories of this out over thirty countries including the u.s. officially recognize the libyan rebel council is the legitimate government authority which originally a calls for gadhafi to give up power recognition will allow washington to sponsor certain libyan rebels with money from gadhafi frozen assets. and people take to the streets to protest against a looming cuts in italy the latest e.u. country to be hit by the financial crisis that is the economy decrees a kill sturdy project in a bid to stave off the threat of a bailout. u.k.

phone hacking scandal gathers pace forcing the chief executive of the group home by the murder can parts acquit me more questions arise as to why is taken so long to confront the crisis despite police knowing about many of the on occasions for years . or more on the eurozone that train next. guest whether the e.u. has enough financial fine up to save it from ruin that's in crosstalk. hungry for the full story we've got. the biggest issues get a human voice face to face with the news makers. in the story. hello and welcome to crossfire i'm peter lavelle

a currency in crisis european finance ministers central bankers and politicians remain at odds on how to rescue the euro as pressure mounts for another greek bailout and investors worry about italy is the hero of dysfunctional currency and who will ultimately foot the bill. came. across not the eurozone crisis i'm joined by dennis gartman in virginia he is editor of the carbon letter in singapore we go to jim rogers he's an author and financial commentator and in washington we go to sherry's ide raman she is professor of international business finance and international affairs at the george washington university where i focus is crossed i'm going to as you can jump in anytime you want there are different points of view here like here beneath the dentist if i go to you first i am i asked the question before we go to there you the facts that are at hand with the euro i pose the question is it a dysfunctional currency what do you think about that. i've i've always thought it

was a dysfunctional currency i thought quite honestly that the only reason the only rationale for the euro to begin with was was to do something on the part of the northern european countries to tie the great german giants down with as many bureaucratic ropes as they possibly could they have done it to this point i think it is an eminently unsuccessful attempt i cannot imagine that that german is working as hard as they do as many hours as they do saving as much money as they do find anything in equal nature with the greeks who simply don't work as hard as they do don't save as much as they do and avoid taxes like they do so quite honestly i think at the core at the edges of this cloth the thread is being ripped and the cloth is finally coming apart jim singapore. is going to go to you anyway go to peter. peter did a concept of a unified european currency is fabulous and the world needs something to replace or

to compete with the u.s. dollar unfortunately execution has not been very good they brought in people like greece and and portugal and ireland who weren't paying there who aren't paying their bills and who weren't paying their bills and that's led to the problem i'm like dennis i cannot conceive of why honest hard working australians and dutch and pins should have to pay for a bunch of greeks are sitting on the beach drinking too so and greek banks i find this is outrageous. if i knew you in washington ok we have two euro skeptics or you could have found that out a little bit. i'll try to very much the bottom line is this this this this is a good project to begin with if the membership had been correct greece portugal ireland spain were never supposed to join and if it was a reasonable six countries bedded down we would have had a pretty successful project but in the you know we've got some in the eurozone at this point this is not healthy and i agree with them that this situation is now but

it's done it's legalized and no one can step out and no other people can you know sort of change the rules at this point so the germans have to pay the piper they really in this document and these are the repercussions if you know. what in the end if you do it yourself they. are for the germans the germans don't germans don't have to pay the piper let greece go bankrupt it would be good for greece it would be good for the europe would be good for the world if greece went bankrupt and ran out of the hands of pay their bills or stop lying then you would have everybody would know it's a strong sound currency based on a strong sound economy why not let him go bankrupt there's nothing in our euro in america we've had stage called wait until you can see it is still great growth we've had carries no great growth it didn't in the united states and it didn't in the u.s. dollar ok shares and you know. i'll tell you why because of the four hundred billion dollars of debt that greece has fifty percent is held by german and french

banks and those countries still want to take it so i think in the financial markets it's that simple. why should why should taxpayers bail out banks since when the taxpayers have to bail out mistakes made by banks the taxpayers didn't make those mistakes when i make a mistake i can i come to you and let you bail me out next time i start losing money all right dennis go ahead jump in what you should be doing u.s. government. i absolutely agree with jim on this in this instance why can't they allow them to go to go bankrupt we in virginia understand our rights as virginians compared to anybody else i think that you have the right if you are a country to opt out of that circumstance i think the germans have absolute the right to say we have given up we have watched this for a decade it has proven to be unworthy we are simply stopping the payment to the greeks we're going to stop payment to portugal they have to get their own act in

order let them go greece will be far better off allow them to go back to the drachma make their economy stronger again let tourists move that go back to greece again we were talking about this beforehand it's too expensive to go and nobody is they are greek is a tourist spot and notorious for their let them become a tourist but by going back to a devalued drug might tell you ok serious i mean it was i think you brought up a very interesting point i think we have to go with it still here is that if this president is saying with greece then you have this is a knock on effect of this contagion and it is about banks here i mean we can all we can all criticize the banks but i mean the banking system in germany and france wants to survive this is well i mean it's damned if you do damned if you don't that's the problem absolutely you are going to lose years you know for a season or you're first going to go bankrupt shares i'll go ahead. ok well the problem is that if you let them go bankrupt and then through default and this conclusion spreads is probably going to slip will respond and hop right into italy

where we still grapple with it today then you've got a real problem this is not a domino effect in the eurozone this is a break for the rest of the world that's been thrown and is going to affect our markets look the europeans can make up their minds hang on the europeans can make up their minds over a two day conference we took a eleven trillion dollars in the global capital markets so that i don't think we will get hit here if it's too big to fail at this ship and use ensures arizona over certain years you ladies have been going hundreds of years when the time joe you point it is jarrett very basic been going bankrupt a hundred shares our banks of been going bankrupt for hundreds of years we have made horrible mistakes over the past thirty or forty years in the united states we have made unbelievable mistakes in our financial situation so we've got to pay the piper a visually as dennis says when do you stop are you going to run this down for another five years of the actually the market's going to say you know they're you going to

have a major crisis that you had to deal with at least if you have a crisis now you can organize it and let some people called bankrupt and by the way get as i wouldn't pull out of your of my will greece i just go bankrupt and reorganize i think the euro is good for greece they reorganize the stop the craziness ok sure resign if i can ask you. if you want to ranchers are going to. well i just wanted to say you know clearly i think i agree. with jim that clearly greece is future is within the eurozone but i'd like to ask jim and dennis both one other thing as americans if the u.s. government had not stepped in and then our one trillion dollar bailout where would you be right now you were so grateful that these guys stepped in because we were hemorrhaging and markets are frozen and everybody no. no no no no i was never a prayer of any of this bailout what are you talking about i would have let them all go bankrupt in two thousand and eight in two thousand and nine and it is outrageous what we're doing people who've tried this such as the japanese have now

have lost two decades the japanese refused to let anybody for a zero they have zombie banks and zombie companies and twenty years later their stock market is down seventy five percent this approach doesn't work americans already had one last decade we're going to have two or three at the rate they're going. to want to jump in there one of the things i'd like to ask everyone here is that all these governments are going through austerity i mean including the as we speak right now and but can austerity create growth then these can you can you give agree with her because i can't think of too many examples where i steer it is because if you want to pay back these loans you're not generating enough wealth i mean again it's a damned if you do damned if you don't approach we inside the eurozone austerity austerity doesn't create growth governments don't create growth low taxes getting government out of the way letting markets work that creates growth my favorite

example of this is what happened in new zealand in the early one nine hundred eighty s. when they turned their back on everything that the i.m.f. had said they cut taxes across the board they did what they could to strengthen the new zealand dollar and the next thing you knew you were running budget surpluses you had to. trade surpluses they went there for the proper way of allowing the market to freely function if we would do that we would get many of these problems simply subside. i don't go away so terry i'm afraid it's not the problem is not the problem it's a government is the problem getting in the way putting too many blocks in the way of people doing the things that in their own best interests serve everybody else ok what you think about that jimmy's on security list and why did you go ahead in the early and the early and the early one nine hundred ninety s. scandinavia had the same problem huge problems and in scandinavia a lot of people went bankrupt they reorganize they had a horrible two or three years but since then scandinavia has been one of the great growth region so the country sweden is probably better off than most nations you

know as we speak in two thousand and one south korea had a problem at the end of the ninety's people went bankrupt they had horrible pain but since and they've had a booming economy the list goes on and on people who've taken the pain accepted reality done something about it and then started over this idea of doing what the japanese did doesn't work doing what the americans have done doesn't work ok shares i don't think everyone's talking about a selective default i mean is that just double speak for when it comes to a country like greece but maybe just don't want to call it default is this selective i mean is because it's not built into the euro zone i can't have it happen so i just trying to kind of fake it and say it's a default but it's not a default. you know we're very close to the line the bottom line is if a restructure will happen and it's going to happen you can call it a default if a restructuring actually does happen the credit agencies have a different view on this they believe a private participants are involved they will consider default but to step back for

one second. austerity needs to happen in a lot of these countries obviously too much austerity will stifle growth has got to be some balance here some some mechanism to grow down the road or there's no hope and you know unfortunately both examples jim and dennis are giving are in the past in the eighty's in the ninety's when two thousand and eleven the financial markets had mutated we are in a very different environment right now we have a crisis of fear and fear has no economic logic to it and once it spreads it spreads like wildfire and everybody looks like greece portugal ireland spain italy now and the consequences are quite devastating we destroyed the american middle class wealth all right here's another generation here and we break it out you adventure break out you're pretty good you're discussion of your. ok.

i.

just said. listen live. our lives in an entry system transform a criminal into a law abiding citizen. present life behind bars monarchy. to. live. welcome back. to remind you we're talking about the eurozone crisis.

ok jim and i think audio is the is it too expensive to let thirty year old die or is it too expensive to keep it going. well first of all i should tell you i own the euro for a variety of reasons but we'll come back to come back to that that in a minute i want to go to share point. for hundreds of years hundreds of years we've had bear markets and when you have a long period of exist somebody has to clean out that exist you cannot just keep going and going and going and going and pouring money down a rat hole the world doesn't work that way nothing wrong with a bear market bear markets have been going on for hundreds of years they clean out the excesses in the system and you start over it's usually like a forest fire when you have a forest fire and it's terrible he cleans out the underbrush it cleans out the deadwood and then the forest can grow even better the same way with recessions depression well depressions and and even the bear markets ok but it sure is obvious very interesting i mean the analogies are sort of the forest fire is nice but we're

talking about people and governments and elected officials and this is where it gets really really sticky doesn't it ok are you ready for heat i don't want to pay for and i'm very happy with my situation right now ok sure. the bottom line is you know a crisis is different than a bear market in a crisis and it's like a victim that has just been hit by a bus and is hemorrhaging to a major artery on the road what you want to do is stem the hemorrhaging and then decide you know then take the hospital and then decide what you want to do but you've got to stem the hemorrhaging because in that hemorrhaging you lose your middle class if you lose your middle class you have decades and decades of pain ok did you see if you could see you want to jump in there go ahead. yeah i did want to jump in shares i brought up the idea that jim and i supported what happened in the united states and that's just not true and jim and i may argue about one thing i think that what the united states government did in october of two thousand and eight when when the financial system really was about to seize up the central bank

acted as central banks are supposed to do through history supply reserves in excess in order to accommodate that circumstance and get you past that two or three week or two month period of time what we've done since then however by by continuously yelling the central bank to expand its balance sheet and supporting that expansion of those monetary observes i take issue with that i think we needed to have stopped quite some time ago we did the right thing in in october two thousand and eight applying liquidity in the system but continuously doing it and supporting industries that probably shouldn't be supported by supporting businesses that probably should have been supported gets in the way of progress gets in the way of allowing those businesses that really need that new capital that will be created to move forward so i take exception we need to to all do the right thing at a that a period of time of panic but panic has ended panic is done now you need to tell the greeks greeks stereo i think just pay the taxes t.v.

ratings are actually just beginning and it's coming back and with the fury right now shares if i can ask you a question well no if we look at what's going on with with italy and then we can look at spain and then it gets worse and worse and worse and in its perceptions it's a very important chairs and if i can ask you this monetary union it's monetary there's no fiscal side to it is that what's needs to be done to fix this because i think what maybe all of us would agree that you just can't keep pouring money into a system that doesn't structurally change it's not fixing the problem you're just dealing with the moment at the end of the moment and it's called fear. that's right and i think that what you've got you hit it on the head right here it's about perception the problem has been that the european leadership has been so bad that they have mangled the process for the last eighteen months clear decisive action would have calmed the markets a long time ago and we wouldn't be talking about second bailouts in ireland or in portugal and talking about a financial crisis hitting italy at this point so the problem is there's no clear decisive action lot of domestic politics going on and when you have

a union like this you can't behave like this it's that simple oh you invite disaster to your shores now you're right this is not a fiscal union but there are fiscal constraints when you join this union and i think that they're now coming aware that the fiscal part of this is war critical in the march report this morning ok jim you want to look like you're really sure is not working let jim go first i want to ask peter as sure as i want to ask peter ensure over who's going to pay for all of this who's going to pay you know america's the largest debtor nation in the history of the world right now you know who's going to pay for europe to be bailed out all of the west who's going to pay for all of this are you sure are you peter the germans with the germans you can see the germans and they're getting. all the time so that brings up a very interesting point and looking at dennys theory i mean one point the germans are going to say enough is enough and i think everyone would feel that's justified to the danger that we have here perhaps. what i'm sure because you know now he's

going to. shares out what you say decisive action what sort of decisive action should have been undertaken decisive action on the part of government always frightens me what sort of decisive action would you have said would have been proper. it's a clear message a clear message to the market that a fund has been created the bailout will happen the restructuring will happen everybody's aware that we cannot pay the money back instead of saying you know what one year from now they're going to go back in the private markets that was not going to happen even today the european central bank is not talking about restructuring they do want private investors involved in this plan and the bottom line is everyone knows it has to go that way so the delay the confusion the different talking heads are not helping the situation and creating more confusion in the market when the market gets confused it starts to and we think about that jim is a shares i don't think it was can jam. every one of the italy greece

portugal spain or belgium arlen all of their debts are going up over the next few years none of those countries have declining deads the current deficit this is just getting worse it's not getting better and five years from now we're going to all look at each other and say my god now the world is coming to an end because the debts are too staggering for anybody to deal with issues one of the biggest problems that one of the biggest criticisms of the of the eurozone is that it doesn't really promote a lot of fiscal responsibility because you can these moral hazard out there or you could just you know just wait for the for the lifeboat to be you know do to rescue you because you don't have to be responsible i mean is this something that needs to be changed where people are made it held accountable because like you said when the middle class is gone who's going to be paying taxes. look you're absolutely right and you know they they believe that peer pressure and public pressure could keep

these countries in line but it didn't work and i had bill and it was is presumptious that we thought it would work and this market failure the markets believe it could work and you know what possessed the markets to believe that the greek risk would be the same as german risk so it was market failure clearly now there are calls for for example the european central bank is calling for a european finance minister and the purpose of this finance minister is really not to represent all of the eurozone countries but the basically watch over the bailed out countries so it would be like a mini i.m.f. within the euro zone for conditions attached to countries that are bailed out and that's coming there's no question ok jim how much that's what role should i mean to do one of the things that germans are saying is that for more bailouts we're looking at greece particularly the most the private sector has to get involved in this the i.m.f. is a green with that but there's not a lot of other there's not a lot of consensus across the eurozone on the how much should the private sector be involved in dealing out these governments i happen to agree with the private or

private sector made mistakes the private sectors made the loans to the greeks made the lowest all these people take your losses i mean you made the mistakes the taxpayers in finland and austria didn't make the mistakes why should they have to pay for all of this i mean this is our rate this is terrible economic and it's horrible morality not the politicians care about morality that's for sure but if you think about that how much of the private world in this i made a bad. well i made a bad trade yesterday in crude oil shares i would you help bail me out please oh no i think i'll go to the germans and ask them to bail you know i don't have a legal agreement is the same it's the same money you and i had a legal agreement but if you hadn't married that i didn't hear us on that we're not sure is are you bring up an interesting way to reduce your chances are this is a this is a very difficult real address of the euro zone is ok go ahead jim go ahead hold on that's exactly what i meant hold on guys there is a link there was a legal agreement with the european union is called

a mastery treaty we were supposed to keep your debts with your deficits under three percent you were supposed to run a sound contract a sound economy these guys violated a law they violated the treaty and now you expect me to bail them out oh please are you going to look they i know you're going to bail me out of here i'll write it yours are good at the bottom line is you're absolutely right they are violated there's no question they violated the cheated on the books they did all sorts of things that were not kosher but here's the catch a legal contract was signed between the seventeen countries and now it's a catholic marriage they can get out of there ok it's interesting i mean where you met right now jim let me ask you a question here i mean again you know we focus on these national economies ok but really it's go back to really work it's the banks that want these bailouts they want they want governments to bail out these countries so they can pay banks money that owe them so it's really not about people is it it's about making sure banks get their money back private individuals in many cases. peter maybe i haven't made

myself clear i would make the banks take their losses i would make them suffer they are the ones who made the mistakes i made to you jim advantage to the great. wall street was bailed out because everyone we were all told that we need a banking system so that we're doing the same thing will play now we the banking system that's the rationale i'm not saying i agree with it. you said the operative words we were told yes you know who told us that the banks and banks were panicking they called over and said save me save me save me come on let them i want to repeat banks have been going bankrupt for hundreds of years it's not the end of the world it may be a depression but you know if we let more people go bankrupt in one thousand in two thousand and eight we probably did have it behind us by now other countries have it's been three years we would have had a horrible three years perhaps but you know when i in two thousand and eight out there in oklahoma and texas they were doing fine it was only on wall street that

you had these staggering problems ok shares i'm going to give you the last word what's the future of the euro five years from now five years from now i think that i have a two tier euro zone there has been the have nots ok then what do you think should be you would you would you like to see the round in five years. i think it will disappear in five years i think shares out his right i think will be a northern fiscally responsible euro and i think in the southern states that have proven themselves to be fiscally irresponsible they will all go their own way and will be back in the eschewed oh well back to the drachma we'll be back to the era of let's see what the future holds for the euro many thanks to my guest sitting in virginia washington and in singapore and thanks to our viewers for watching us here r.t. see you next time and remember cross talk news. came . straight.