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Jim Rogers Marc Faber - The European Welfare State

In this Jim Rogers Marc Faber video, they discuss that when East Germany joined with West Germany, there were a lot of problems. When countries join together, there are always winners and losers. A lot of centers of prosperity will move east. You might not notice any difference between eastern and western Europe in 10 years.

The price level in the old Soviet Bloc is still significantly lower than in Western Europe. You will see a certain amount of arbitrage. In Eastern Europe, the purchasing power and standards of living will move up. We don’t want them to emulate the high taxes of the countries in the west. The low taxes are an incentive for foreign investment into those countries.

Politicians are not what they used to be. The government of Poland is full of scandals. But when taxes are lower, you are not dependent on the government to allocate the money. Jim Rogers Marc Faber agree that even if Eastern countries governments are bad, at least they are far cheaper than the western governments.

The choice for Europe is simple. Either the easterners will move to the west, or production will move to eastern Europe. This means that the unions will lose their power. But the demographic problem in Europe is terrible. The low birth rate is because it is very expensive to have babies. The divorce laws are also very unfavorable. And if economic conditions improve, many more babies could be born. There are high taxes for the welfare state that Europe has built up, and it is unsustainable.

Europe cannot survive without new young people being born. The social welfare state has replaced the family. Now people go to the government in order to solve their problems. But most people don’t want to give up those benefits. We need someone to explain to the people that there will be short term pain, but in the long term there will be tremendous benefits.

Stay tuned for the next installment of this Jim Rogers Marc Faber video series tomorrow.

The Jim Rogers Blog is updated daily with stock market and economic commentary. If you would like to receive the articles and videos directly in your email inbox, The Jim Rogers Blog offers that service at absolutely no charge.

Jim Rogers is a renowned economist and investor known for his accurate stock market and economic forcasts. He is the author of several books, including: A Gift to My Children, A Bull in China, and Hot Commodities.

Marc Faber Jim Rogers Together

Here is a rare video of Marc Faber and Jim Rogers together. You may not understand the introduction to the video, but the bulk of it is in English.

From the perspective across the Atlantic, is this new plan going to work? 25 countries, which are very different are all coming together. The hope is that this will bring centuries of peace.

Bringing in 9 new languages and people with no infrastructure seems like a stretch to say that this will help the EU. In the US, people don’t understand history or anything that happens outside of their country. This is the first time that so many countries have come together to form an empire on a voluntary basis. People are worried that jobs will go to Eastern Europe. But that is better than allowing them to go to Asia, where they would go otherwise. There is certainly a Marc Faber Jim Rogers disagreement here.

This will definitely work. However, there are large price differences between the various countries. There are also different tax codes for each country. This will be a challenge, however, different tax codes should allow for a bit of competition between countries.

GE bought a light bulb factory in Hungary. That factory was making light bulbs for 100 years, but GE couldn’t get any profits out of that old communist factory. So productivity will be a challenge. 14 years is a long time to invest somewhere in order to turn a profit, so there is a question about whether this will be worth it for companies like GE or Unilever to invest.

When China opened up, they had no infrastructure. Hong Kong was doing much better, but there hasn’t been much progress there in the past ten years. Real estate has gone up quite dramatically in cities like Prague. It is a shame that a country like Switzerland has decided not to join the EU. On the other hand, they could be making the right decision. Part 2 of this Marc Faber Jim Rogers video will be posted tomorrow, so stay tuned.

The Jim Rogers Blog is updated daily with stock market and economic commentary. If you would like to receive the articles and videos directly in your email inbox, The Jim Rogers Blog offers that service at absolutely no charge.

Jim Rogers is a renowned economist and investor known for his accurate stock market and economic forcasts. He is the author of several books, including: A Gift to My Children, A Bull in China, and Hot Commodities.

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