Eurpopes nations embrace the M4 money supply. Canadian dollar named the most expensive currency in the world. Excellent for Canadians.

Europe's governments will no longer pay interest on borrowing. It is the policy that all government of Europe to borrow at a zero percent interest rate from the European Federal Reserve. This as a policy will begin with the European Federal Reserve offering to finance all "new" loans of these governments at a 2 percent interest rate, several nations at same trough. After interest returned after issues like Greece's bailout sized up.
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[[ http://money.ca.msn.com/savings-debt/gallery/gallery.aspx?cp-documentid=23431350
Quote,"Across Europe, governments have gotten so used to piling up debt that the likelihood of them ever getting back to balanced budgets seems pretty slim.
But recent fears about Greece in particular have got investors thinking other countries with big deficits and sluggish economies might be riskier borrowers as well.
At issue is the stability of the government bonds issued by some EU members, the very sort of worry that got countries like Mexico and Argentina in trouble in decades past.
According to the European Central Bank, half of the 16 euro area countries are assessed as high risk in terms of the sustainability of their public finances. These include Ireland, Greece, Spain, Cyprus, Malta, the Netherlands, Slovenia and Slovakia."]]



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Issues with the European Banking reserves regulations proposed at Davos. Simply don't work. Misunderstanding of the core issues of reality. No such thing a saving currency in the macro sense, as the only reserves are obligations.

Alternative. Adjustment opportunity. The European Federal Reserve can also access funds through slowly buying debt already outstanding from the various european governments, reducing government costs.

Governments still owe and pay interest for past borrowing. Federal Reserve can access some of these funds governments pay in interest on this debt, by using m4 money supply to buy back some of this debt, but continue to have that nation pay the interest costs for that old debt, and now have access to these funds. Key to the European Union sticking together. Benefits good economies also as better to have the Federal Reserve own your debt, then others.

Also allows the Reserve to lower particular government interest costs, by buying their debt --the Reserve then will be refunded by that particular nation later. Novel way to allow debt buying of good economies, and use the extra to fund any European union countries government bailouts. Bond Rating services can better rate particular European governments, if the European Reserve has this active approach.

Bankrupcy consideration for Greece. Bonds trade based on the interest yield, and the current rate of yield available. Therefore costs more than a dollar to buy a dollar of debt for high interest rate debt. European Zone dealing with a limited Greece government bankrupcty, would see the resetting of certain Greece government bonds interest rates to a few percent. All debt will be honoured, just an interest rate adjustment. Honour is key.]

[Without this advance monetary economics technology, governments like Greece borrow at high rates, which will only further indebt the European Union. ]

Past university monetary theory can be improved. Needs metaphors, like the paradox that spending new or saved reserves by the federal bank, nearly the same effect (on limited spending). Aka governments' dream to one day be debt free and have a reserve. Yet if there, spending this reserve has the same effect in increasing the money supply, as if they created the credits of thin air. Can't save what does not exist. The emperor has no cloth. Noble prize for the monetary policy to have this data fit the engine of hope.

This theory cannot be separated from new developments in understanding how a balance of payment system works. International trade theory and access to local capital.
Parts in same engine. Canada always has a trade surplus, yet our currency lags. Canada's banks should be making more, considering that the modern economics term termed the Domestic bank of clearance effect. Basically all trade is dependent of the goodwill each nation's domestic banks to allow international trade. Need local bank cooperation to get access to that nation's currency. Canada

Also have Keynes multiplier effect, modernized into equations and waves. Example capital out there, and lack of access, and how this tap and lack of liquidity, affects economy. Part of the M4 money supply engine. [A nation with its own currency has a much easier time of it.]