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government zombie money

August 12, 2014

Yesterday at Bonner and Partners: “Are you a Zombie?” by Bill Bonner:

What are “zombies?” Neither dead nor alive, from an economic perspective, they are people who live at the expense of others. Are you a zombie?

Here’s how to tell: Ask yourself, in the absence of the government, would people voluntarily pay you to do what you do? If not, you’re probably a zombie.

Bill Bonner has zombied many times before, and today in MoneyWeek: “How to spot a zombie” by Bill Bonner:

A regular reader writes in. The bone he picks concerns our definition of ‘zombie’.
“Your definition of ZOMBIE is WRONG.
“A ZOMBIE lives on the back of someone else and is not productive (he consumes more than he produces).
“This is true in PRIVATE and PUBLIC BUSINESS.
Zombies in the private sector are the most dangerous.”

Meanwhile in Epoch Times: “Wakeup Call for Europe” by Philippe Legrain:

Much of Europe has zombie banks and crushing debt. Most of it has feeble productivity growth and weak investment. All of it is aging fast, and without immigration, workforces are set to shrink. In both Britain and the eurozone, bank credit to businesses continues to fall: While zombie banks are extending existing loans to zombie companies, they are denying new loans to promising businesses. In many countries, private debt remains huge while public debt continues to rise. Southern Europe threatens to sink into a deflationary debt trap.
….
Europe needs a monetary union that works for all its citizens. Zombie banks should be restructured; excessive debts, both private and public, written down; and investment increased.

And in fashion, Just-Style: “Government giveaways stifle garment industry growth” by David Birnbaum:

It seemed that government efforts to support the industry allowed companies that should have gone broke to survive, albeit in a commercial zombie state, at the expense of companies that having received no benefits were forced to adapt to existing conditions.

ECNS: “Credit easing cannot fix the structural slowdown” web editor, Qin Dexing:

Analysts are also worried that with liquidity easing again, “zombie” enterprises, once at the edge of extinction, could survive to function for another day.

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From → economics, money

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