If You Aim For The Stars —— Fun From France!

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This made me chuckle a bit.  So the saying goes if you shoot for the stars and miss you may land on the moon, or some such.  “Aim high!”  was a slogan used by the USAF at one time.  Well, France seems to have inverted the thoughts. 

France on track to meet 0.8 percent growth target: minister

PARIS (Reuters) – French Finance Minister Pierre Moscovici on Sunday said the government believed it could reach its 2013 economic growth target of 0.8 percent. ……

Moscovici also said that although the euro has stabilised, it may have become too strong. “The euro is stable, it is strong, perhaps too strong in some respects,” he said. …..

Hmm, I’d hold off on the stabilized Euro thinking.  While the Eurozone can do some things to hold the value relative to other countries, it’s limited in it’s ability to react as quickly as nations like the US, Japan, and China, who are all printing money like crazy mad. 

Moscovici said the government would disclose “within two to three weeks” a redrafted version of its proposal to tax the wealthy, which he said it would be imposed on households rather than individuals.

We should note that the rich people’s exodus from France has already commenced even before the new tax is instituted.

The council said the tax was unfair as it would hit married couples where only one partner earned above a million euros but would not affect couples where each earned just under a million.

Ahh, we’ll at least they will be confiscating earnings in a fair fashion.

I’m not sure what to make of the 0.8% target.  Is it possible to finely tune your targets to a percent of a percentage point?  To clarify, or to put in other words, the French are saying, “We’re confident our economy will grow by 8/1000.”  —– What? 

And, for the record, unless they’re playing with their records, they won’t.  Their auto industry is in a free fall, the wealthy people are running from the country, and they’re going to increase taxes on the ones that stay.  What is gives them reasons to believe their economy will grow at all?  (Not that 0.8% is what many would consider growth.)  So, while I laugh at their aim for 8/1000 growth, as if that’s something to shoot for, I think its still optimistic. 

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10 Responses to If You Aim For The Stars —— Fun From France!

  1. HankH says:

    Moscovici said the government would disclose “within two to three weeks” a redrafted version of its proposal to tax the wealthy, which he said it would be imposed on households rather than individuals.

    So what they’re saying is they’re going to lower the tax threshold by imposing the tax on the aggregate income of several individuals in the household rather than a single individual. The redrafted version will hit more lower income people than before. Political jargon – it’s an sly art – well practiced in our own country too.

  2. kelly liddle says:

    Suyts Sorry to get onto you but if that number is “real” then it would be a very good outcome. Of course it is not real and does not take into account inflation and population growth so these should be mentioned to get a reasonable idea of what we might be looking at, the number 0.8 in isolation is meaningless.

    • suyts says:

      No problem Kelly, yes, pop growth, inflation, etc…. need to be taken in account. Sometimes, I write assuming the reader knows this, and just leave it as a given. But, even if there was zero pop growth and inflation, 0.8% isn’t anything to crow about, especially since France hasn’t had an annualized quarterly growth of over 1% in over 6 years, and a 0.8% growth would still have them under their 2009 nominal GDP. Yeh, I probably should have provided more details. It was just a quick post because it made me laugh. Woo-hoo!!! 0.8% growth!!!

  3. DirkH says:

    The reason for the Euro strength is that the QE4EVER funds since October went entirely into the reserves of European banks doing business in the US.

    They used these funds to pay back a few 100 bn EUR to the ECB. This diminished M2 of the Eurozone; sterilizing ECB money, reducing the money supply.

    This move is now over. It was a move designed to prop up the EURUSD for years end, making the balance sheets of the Euro banks look better, I think.

    The Eurozone needs a cheaper Euro to be able to export (not only Germany but also Spain; they export agricultural produce to Latin America and suffer gravely from the high Euro).

    So my guess is the Eurocrats will use or create a little crisis as pretense to make Draghi start his OMT and ramp up M2 again. OMT is for now only a promise of QE, not used by now.

    Time to lose your Euros is NOW. And Gold is cheap when you have Euros NOW.

  4. philjourdan says:

    Actually the story is a good demonstration of a couple of things.

    #1 – The French are not the worst exaggerators
    #2 – Obama learns from the French.

    In 6 months, the US will be HOPING for an annual growth of .8%.

  5. cdquarles says:

    Do not forget that taxes get paid in nominal currency. Politicians spend nominal currency. They will always like inflation. No group benefits more from inflation than governments, up to the crash, that is. So they’ll do anything they can to hide the inflation. Economic actors feel it and respond to it. QE won’t work any better now than it did in the 1930s. You can’t push on a wet string. The economy will not turn around until real market interest rates reflect the internal preferences of the economic actors. Those IRR numbers are very high. We need a Reagan/Volker, not a Obama/Bernanke.

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