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On March 18 2014 02:45 aksfjh wrote:Show nested quote +On March 18 2014 02:06 SilentchiLL wrote:On March 18 2014 01:37 aksfjh wrote:On March 17 2014 23:59 Agathon wrote:On March 17 2014 18:02 SilentchiLL wrote:On March 17 2014 08:30 Nyxisto wrote:
Greece is still in really bad shape. I personally think they'll need a really big haircut or they'll never get out of the debt - austerity circle. It's pretty unbelievable that over the last 6 years nearly 30% of their economy just vanished. On what was most of that part of their economy build on? Fake numbers and debt. Very little of the overall picture was "fake numbers," and the debt was GIVEN to them by market forces. They borrowed and the banks let them, never hinting that their debt levels were unsustainable by refusing to bid on the debt at open auction. It was offered to them by market forces and they accepted, if a guy with a horrible business that doesn't make money goes to a loanshark, knowing that he won't be able to repay them but thinking that his rich father will protect him, do you blame the loanshark for giving him money alone or do you primarly blame the guy who lent money while knowing that he couldn't pay it back? No, it's the equivalent of going out to the major banks of the area, showing them your government approved paperwork, and offering you a loan at the same rate as your super rich, super successful neighbors. Not just the first time either, but every time you go back for another loan, it's no questions asked and for the same rate. If at some point the rates began to gently increase, then Greece could have heeded the warning and gone about sensible reform before a burst. But that's what bubbles are... And it's not like Greece was going to Russian mafia banks for this money, it was the reputable banks of Germany, France, Spain, et al that loaned them the money. These renowned banks reinforced the behavior, and then the Germans, French, and English back them up as if they were "bamboozled" while the Greek people suffer for taking the gifts that were given to them by those banks.
Nah, the client WAS the Government (and their banks), m8, the difference is quite big, greece's fall was actually predicted by more than one economist long before it happened, even Farrage called it and he's not even an economist (even though I don't actually like the guy). So you can't even say that it was a secret.
And German banks actually contributed suprisingly little to the loans of Greece
http://demonocracy.info/infographics/eu/debt_greek/debt_greek.html
I for one expected it to be a lot more.
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On March 18 2014 03:04 JonnyBNoHo wrote:Show nested quote +On March 17 2014 23:59 Agathon wrote:On March 17 2014 18:02 SilentchiLL wrote:On March 17 2014 08:30 Nyxisto wrote:
Greece is still in really bad shape. I personally think they'll need a really big haircut or they'll never get out of the debt - austerity circle. It's pretty unbelievable that over the last 6 years nearly 30% of their economy just vanished. On what was most of that part of their economy build on? Fake numbers and debt. That's too harsh. A lot of money was lent to the Greek economy on the basis that Greece, as part of the Eurozone, would grow relatively quickly and catch up to its richer peers. That means a growing ability for Greeks to repay the debt (so sustainable lending) and a higher rate of return for lenders. Unfortunately, not enough of the lending went to productive use and so Greece turned out to not have the ability to repay that everyone thought going in. Greeks weren't doing "fake" things, they just weren't doing things efficiently enough to repay the debts. The answer, of course, is to write off those debts but European lenders are too reluctant - too many debt write-offs and the banks will fail. So Greece and other peripheral countries are stuck in a sort of national debtor's prison. Why Europe doesn't bite the bullet and deal with the debt is beyond me. No one seems to be benefiting, even German growth isn't very good.
How would you deal with it?
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On March 18 2014 04:14 SilentchiLL wrote:Show nested quote +On March 18 2014 02:45 aksfjh wrote:On March 18 2014 02:06 SilentchiLL wrote:On March 18 2014 01:37 aksfjh wrote:On March 17 2014 23:59 Agathon wrote:On March 17 2014 18:02 SilentchiLL wrote:On March 17 2014 08:30 Nyxisto wrote:
Greece is still in really bad shape. I personally think they'll need a really big haircut or they'll never get out of the debt - austerity circle. It's pretty unbelievable that over the last 6 years nearly 30% of their economy just vanished. On what was most of that part of their economy build on? Fake numbers and debt. Very little of the overall picture was "fake numbers," and the debt was GIVEN to them by market forces. They borrowed and the banks let them, never hinting that their debt levels were unsustainable by refusing to bid on the debt at open auction. It was offered to them by market forces and they accepted, if a guy with a horrible business that doesn't make money goes to a loanshark, knowing that he won't be able to repay them but thinking that his rich father will protect him, do you blame the loanshark for giving him money alone or do you primarly blame the guy who lent money while knowing that he couldn't pay it back? No, it's the equivalent of going out to the major banks of the area, showing them your government approved paperwork, and offering you a loan at the same rate as your super rich, super successful neighbors. Not just the first time either, but every time you go back for another loan, it's no questions asked and for the same rate. If at some point the rates began to gently increase, then Greece could have heeded the warning and gone about sensible reform before a burst. But that's what bubbles are... And it's not like Greece was going to Russian mafia banks for this money, it was the reputable banks of Germany, France, Spain, et al that loaned them the money. These renowned banks reinforced the behavior, and then the Germans, French, and English back them up as if they were "bamboozled" while the Greek people suffer for taking the gifts that were given to them by those banks. Nah, the client WAS the Government (and their banks), m8, the difference is quite big, greece's fall was actually predicted by more than one economist long before it happened, even Farrage called it and he's not even an economist (even though I don't actually like the guy). So you can't even say that it was a secret. And German banks actually contributed suprisingly little to the loans of Greece http://demonocracy.info/infographics/eu/debt_greek/debt_greek.htmlI for one expected it to be a lot more.
The source that site uses is this: http://www.zerohedge.com/article/barclays-releases-updated-report-top-40-greek-debt-holders, it doesn't even work anymore.
The statistics are after the EU helped them anyway and for example the Dutch bank ING had already sold a lot of their Greek bonds by that time to limit their exposure to a potential Greek default.
edit: I found another something else as well although this was also after the bailout.
The circle below shows the gross external, or foreign, debt of some of the main players in the eurozone as well as other big world economies. The arrows show how much money is owed by each country to banks in other nations. The arrows point from the debtor to the creditor and are proportional to the money owed as of the end of June 2011. The colours attributed to countries are a rough guide to how much trouble each economy is in.
1. France: €41.4 bn
2. Germany: € 15.9 bn.
3. U.K: € 9.4 bn
So you're right when you're saying they weren't the main lender to Greece but they were still 2nd.
source
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On March 18 2014 04:14 SilentchiLL wrote:Show nested quote +On March 18 2014 02:45 aksfjh wrote:On March 18 2014 02:06 SilentchiLL wrote:On March 18 2014 01:37 aksfjh wrote:On March 17 2014 23:59 Agathon wrote:On March 17 2014 18:02 SilentchiLL wrote:On March 17 2014 08:30 Nyxisto wrote:
Greece is still in really bad shape. I personally think they'll need a really big haircut or they'll never get out of the debt - austerity circle. It's pretty unbelievable that over the last 6 years nearly 30% of their economy just vanished. On what was most of that part of their economy build on? Fake numbers and debt. Very little of the overall picture was "fake numbers," and the debt was GIVEN to them by market forces. They borrowed and the banks let them, never hinting that their debt levels were unsustainable by refusing to bid on the debt at open auction. It was offered to them by market forces and they accepted, if a guy with a horrible business that doesn't make money goes to a loanshark, knowing that he won't be able to repay them but thinking that his rich father will protect him, do you blame the loanshark for giving him money alone or do you primarly blame the guy who lent money while knowing that he couldn't pay it back? No, it's the equivalent of going out to the major banks of the area, showing them your government approved paperwork, and offering you a loan at the same rate as your super rich, super successful neighbors. Not just the first time either, but every time you go back for another loan, it's no questions asked and for the same rate. If at some point the rates began to gently increase, then Greece could have heeded the warning and gone about sensible reform before a burst. But that's what bubbles are... And it's not like Greece was going to Russian mafia banks for this money, it was the reputable banks of Germany, France, Spain, et al that loaned them the money. These renowned banks reinforced the behavior, and then the Germans, French, and English back them up as if they were "bamboozled" while the Greek people suffer for taking the gifts that were given to them by those banks. Nah, the client WAS the Government (and their banks), m8, the difference is quite big, greece's fall was actually predicted by more than one economist long before it happened, even Farrage called it and he's not even an economist (even though I don't actually like the guy). So you can't even say that it was a secret. And German banks actually contributed suprisingly little to the loans of Greece http://demonocracy.info/infographics/eu/debt_greek/debt_greek.htmlI for one expected it to be a lot more.
"Government approved paperwork" was a reference to Euro membership and all the bells and whistles certifications that go along with it. And I know a lot of debt lent to the Greek government wasn't from Germany, but that doesn't rule out inter-bank loans or risky loans into Greek enterprises. That's also why I included Spain and France into the picture, but it was really a massive failure of Europe as a whole. It also continues to be a massive failure of Europe as a whole.
And it doesn't really matter that some people saw it coming (I'm not sure why people get hung up on some people predicting massive events). Ultimately it was a systemic issue across Europe that most people and institutions missed.
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On March 18 2014 04:27 IgnE wrote:Show nested quote +On March 18 2014 03:04 JonnyBNoHo wrote:On March 17 2014 23:59 Agathon wrote:On March 17 2014 18:02 SilentchiLL wrote:On March 17 2014 08:30 Nyxisto wrote:
Greece is still in really bad shape. I personally think they'll need a really big haircut or they'll never get out of the debt - austerity circle. It's pretty unbelievable that over the last 6 years nearly 30% of their economy just vanished. On what was most of that part of their economy build on? Fake numbers and debt. That's too harsh. A lot of money was lent to the Greek economy on the basis that Greece, as part of the Eurozone, would grow relatively quickly and catch up to its richer peers. That means a growing ability for Greeks to repay the debt (so sustainable lending) and a higher rate of return for lenders. Unfortunately, not enough of the lending went to productive use and so Greece turned out to not have the ability to repay that everyone thought going in. Greeks weren't doing "fake" things, they just weren't doing things efficiently enough to repay the debts. The answer, of course, is to write off those debts but European lenders are too reluctant - too many debt write-offs and the banks will fail. So Greece and other peripheral countries are stuck in a sort of national debtor's prison. Why Europe doesn't bite the bullet and deal with the debt is beyond me. No one seems to be benefiting, even German growth isn't very good. How would you deal with it?
a) Bail country out (with loans from the Eurozone) early on so it doesn't collapse.
b) Force banks to accept write offs but not so much they collapse.
Repeat a couple of times until situation becomes stable.
c) Force reforms so Greece can eventually get a functioning economy. This won't happen if the situation isn't harsh.
d) Force banks to capitalize up and become more stable (this is happening).
e) Long term debt reduction when the economy is more stable. Could do it by forcing some write offs/writing off government debts since the banks are much less likely to fail or by giving new loans that have interest rates that are lower than inflation on the Euro so they teper out.
Things is rest of the EU is completely uninterested to help out the Greeks before shit is somewhat handled because no one want the same thing in 20 years and/or throwing more money into a black hole.
But I'm pretty sure there's no one who wants Greece to be buried in debt forever because it doesn't help the EU as a whole.
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On March 18 2014 04:14 SilentchiLL wrote:Show nested quote +On March 18 2014 02:45 aksfjh wrote:On March 18 2014 02:06 SilentchiLL wrote:On March 18 2014 01:37 aksfjh wrote:On March 17 2014 23:59 Agathon wrote:On March 17 2014 18:02 SilentchiLL wrote:On March 17 2014 08:30 Nyxisto wrote:
Greece is still in really bad shape. I personally think they'll need a really big haircut or they'll never get out of the debt - austerity circle. It's pretty unbelievable that over the last 6 years nearly 30% of their economy just vanished. On what was most of that part of their economy build on? Fake numbers and debt. Very little of the overall picture was "fake numbers," and the debt was GIVEN to them by market forces. They borrowed and the banks let them, never hinting that their debt levels were unsustainable by refusing to bid on the debt at open auction. It was offered to them by market forces and they accepted, if a guy with a horrible business that doesn't make money goes to a loanshark, knowing that he won't be able to repay them but thinking that his rich father will protect him, do you blame the loanshark for giving him money alone or do you primarly blame the guy who lent money while knowing that he couldn't pay it back? No, it's the equivalent of going out to the major banks of the area, showing them your government approved paperwork, and offering you a loan at the same rate as your super rich, super successful neighbors. Not just the first time either, but every time you go back for another loan, it's no questions asked and for the same rate. If at some point the rates began to gently increase, then Greece could have heeded the warning and gone about sensible reform before a burst. But that's what bubbles are... And it's not like Greece was going to Russian mafia banks for this money, it was the reputable banks of Germany, France, Spain, et al that loaned them the money. These renowned banks reinforced the behavior, and then the Germans, French, and English back them up as if they were "bamboozled" while the Greek people suffer for taking the gifts that were given to them by those banks. Nah, the client WAS the Government (and their banks), m8, the difference is quite big, greece's fall was actually predicted by more than one economist long before it happened, even Farrage called it and he's not even an economist (even though I don't actually like the guy). So you can't even say that it was a secret. And German banks actually contributed suprisingly little to the loans of Greece http://demonocracy.info/infographics/eu/debt_greek/debt_greek.htmlI for one expected it to be a lot more.
You cant just look at individual banks because many of the loans could have come in forms of buying Greek bonds by things like pension funds or whatever. You have to look at the flow of trade and flow of investment.
http://www.voxeu.org/article/germany-s-capital-exports-under-euro
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On March 18 2014 04:51 CuddlyCuteKitten wrote:Show nested quote +On March 18 2014 04:27 IgnE wrote:On March 18 2014 03:04 JonnyBNoHo wrote:On March 17 2014 23:59 Agathon wrote:On March 17 2014 18:02 SilentchiLL wrote:On March 17 2014 08:30 Nyxisto wrote:
Greece is still in really bad shape. I personally think they'll need a really big haircut or they'll never get out of the debt - austerity circle. It's pretty unbelievable that over the last 6 years nearly 30% of their economy just vanished. On what was most of that part of their economy build on? Fake numbers and debt. That's too harsh. A lot of money was lent to the Greek economy on the basis that Greece, as part of the Eurozone, would grow relatively quickly and catch up to its richer peers. That means a growing ability for Greeks to repay the debt (so sustainable lending) and a higher rate of return for lenders. Unfortunately, not enough of the lending went to productive use and so Greece turned out to not have the ability to repay that everyone thought going in. Greeks weren't doing "fake" things, they just weren't doing things efficiently enough to repay the debts. The answer, of course, is to write off those debts but European lenders are too reluctant - too many debt write-offs and the banks will fail. So Greece and other peripheral countries are stuck in a sort of national debtor's prison. Why Europe doesn't bite the bullet and deal with the debt is beyond me. No one seems to be benefiting, even German growth isn't very good. How would you deal with it? a) Bail country out (with loans from the Eurozone) early on so it doesn't collapse. b) Force banks to accept write offs but not so much they collapse. Repeat a couple of times until situation becomes stable. c) Force reforms so Greece can eventually get a functioning economy. This won't happen if the situation isn't harsh. d) Force banks to capitalize up and become more stable (this is happening). e) Long term debt reduction when the economy is more stable. Could do it by forcing some write offs/writing off government debts since the banks are much less likely to fail or by giving new loans that have interest rates that are lower than inflation on the Euro so they teper out. Things is rest of the EU is completely uninterested to help out the Greeks before shit is somewhat handled because no one want the same thing in 20 years and/or throwing more money into a black hole. But I'm pretty sure there's no one who wants Greece to be buried in debt forever because it doesn't help the EU as a whole.
B, C and D are all happening and E might still happen.
SYDNEY (MarketWatch) — European leaders announced a deal early Thursday in which private investors in Greek government debt will take a 50% writedown on the value of their holdings as part of a wide-ranging package of measures designed to stem the euro-zone debt crisis.
The haircut will be a voluntary agreement with private creditors and is expected to be finalized by the start of 2012. An involuntary writedown could have potentially constituted a “credit event” that would have required the payout on billions of euros in credit default swaps, instruments used to insure debt against non-payment.
source
Thus, the total amount of debt to be restructured was now guaranteed to be minimum 95.7% (equal to €196.7 out of €205.5 billion), while the remaining 4.3% of the private holders (equal to €8.8 billion) were offered a prolonged deadline at March 23 to voluntarily join the debt swap.[176] A deadline that subsequently got prolonged further to April 20,[177][178] with the positive outcome, that the total and final amount of acceptance rose to 96.9% (equal to €199.1 out of €205.5 billion), corresponding to a haircut or debt relief worth €106.5 bn.[179]
http://en.wikipedia.org/wiki/Greek_government-debt_crisis
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On March 18 2014 02:45 aksfjh wrote:
And it's not like Greece was going to Russian mafia banks for this money, it was the reputable banks of Germany, France, Spain, et al that loaned them the money. These renowned banks reinforced the behavior, and then the Germans, French, and English back them up as if they were "bamboozled" while the Greek people suffer for taking the gifts that were given to them by those banks.
What kind of naive world view is this? You seriously distinguish between good and bad money lenders? And where were you taught this? Of all places you are actually from the US?
Money was created precisely for the attribute of being neutral.
The difference between a bank and a loan shark is therefore by design not a moral one.
The difference is simply the means to enforce the dept payback. One does it through governments and their armies, the other does it with local brutes.
Also, all that the bank did with Greece was their job!
We the people of this world set up a monetary system in which the big bank's purpose is to lend money to countries. As much as you might detest 'banksters' for their greed and irresponsibility you have to realize that they all just fulfill their jobs. We set them up to do that and blaming them afterwards is hypocritical.
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There are three solutions out of the euro crisis. The first is to make a federation out of the current euro zone and permit fiscal transfert from germany to greece, the second is to give up with the euro.
The third is to continue like we are now and let people in unemployment.
People who think there are other solutions, are either lying or ignorant on the subject. The subject is not Greece, it is the whole eurozone that is in bad shape.
On March 18 2014 05:10 lord_nibbler wrote:Show nested quote +On March 18 2014 02:45 aksfjh wrote:
And it's not like Greece was going to Russian mafia banks for this money, it was the reputable banks of Germany, France, Spain, et al that loaned them the money. These renowned banks reinforced the behavior, and then the Germans, French, and English back them up as if they were "bamboozled" while the Greek people suffer for taking the gifts that were given to them by those banks. What kind of naive world view is this? You seriously distinguish between good and bad money lenders? And where were you taught this? Of all places you are actually from the US? Money was created precisely for the attribute of being neutral. The difference between a bank and a loan shark is therefore by design not a moral one. The difference is simply the means to enforce the dept payback. One does it through governments and their armies, the other does it with local brutes. Also, all that the bank did with Greece was their job! We the people of this world set up a monetary system in which the big bank's purpose is to lend money to countries. As much as you might detest 'banksters' for their greed and irresponsibility you have to realize that they all just fulfill their jobs. We set them up to do that and blaming them afterwards is hypocritical.
We set a banking system up and then we blame Greeks for using it. The euro was created with the idea in mind that it would permit all countries within the euro to get loan at the same interest rate as germany and france. And when Greece, before this money, decide to do everything it can to endebt itself, because it is invited to do so, retards from all over the world blame them for it.
A banking system is supposed to evaluate risks and manage them. If a country, or a familly, is not able to pay their credit, then both the bank and the credited are responsible. In our modern world, sadly, only the credited is judged responsible.
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On March 18 2014 05:16 WhiteDog wrote:There are three solutions out of the euro crisis. The first is to make a federation out of the current euro zone and permit fiscal transfert from germany to greece, the second is to give up with the euro. The third is to continue like we are now and let people in unemployment. People who think there are other solutions, are either lying or ignorant on the subject. The subject is not Greece, it is the whole eurozone that is in bad shape. Show nested quote +On March 18 2014 05:10 lord_nibbler wrote:On March 18 2014 02:45 aksfjh wrote:
And it's not like Greece was going to Russian mafia banks for this money, it was the reputable banks of Germany, France, Spain, et al that loaned them the money. These renowned banks reinforced the behavior, and then the Germans, French, and English back them up as if they were "bamboozled" while the Greek people suffer for taking the gifts that were given to them by those banks. What kind of naive world view is this? You seriously distinguish between good and bad money lenders? And where were you taught this? Of all places you are actually from the US? Money was created precisely for the attribute of being neutral. The difference between a bank and a loan shark is therefore by design not a moral one. The difference is simply the means to enforce the dept payback. One does it through governments and their armies, the other does it with local brutes. Also, all that the bank did with Greece was their job! We the people of this world set up a monetary system in which the big bank's purpose is to lend money to countries. As much as you might detest 'banksters' for their greed and irresponsibility you have to realize that they all just fulfill their jobs. We set them up to do that and blaming them afterwards is hypocritical. We set a banking system up and then we blame Greeks for using it. The euro was created with the idea in mind that it would permit all countries within the euro to get loan at the same interest rate as germany and france. And when Greece, before this money, decide to do everything it can to endebt itself, retards from all over the world blame them for it. A banking system is supposed to evaluate risks and manage them. If a country, or a familly, is not able to pay their credit, then both the bank and the credited are responsible. In our modern world, sadly, only the credited is judged responsible, while the creditor only accumulate wealth and ask others to pay when shit is raining.
Ideally, all of the Eurozone would participate in inflationary activity, with Germany leading the charge. This means massive government programs that target portions of the population that save the least (usually the poor). Depending on how you want to go about this, you either fund the programs with taxes on those that save the most (usually the rich) or have the ECB buy up most of the newly issued government debt to pay for the program. As long as you can keep most of the money from escaping the Eurozone (as in, don't import a lot from the US or China), this should spark inflation and help spur the periphery economies.
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On March 18 2014 05:29 aksfjh wrote:Show nested quote +On March 18 2014 05:16 WhiteDog wrote:There are three solutions out of the euro crisis. The first is to make a federation out of the current euro zone and permit fiscal transfert from germany to greece, the second is to give up with the euro. The third is to continue like we are now and let people in unemployment. People who think there are other solutions, are either lying or ignorant on the subject. The subject is not Greece, it is the whole eurozone that is in bad shape. On March 18 2014 05:10 lord_nibbler wrote:On March 18 2014 02:45 aksfjh wrote:
And it's not like Greece was going to Russian mafia banks for this money, it was the reputable banks of Germany, France, Spain, et al that loaned them the money. These renowned banks reinforced the behavior, and then the Germans, French, and English back them up as if they were "bamboozled" while the Greek people suffer for taking the gifts that were given to them by those banks. What kind of naive world view is this? You seriously distinguish between good and bad money lenders? And where were you taught this? Of all places you are actually from the US? Money was created precisely for the attribute of being neutral. The difference between a bank and a loan shark is therefore by design not a moral one. The difference is simply the means to enforce the dept payback. One does it through governments and their armies, the other does it with local brutes. Also, all that the bank did with Greece was their job! We the people of this world set up a monetary system in which the big bank's purpose is to lend money to countries. As much as you might detest 'banksters' for their greed and irresponsibility you have to realize that they all just fulfill their jobs. We set them up to do that and blaming them afterwards is hypocritical. We set a banking system up and then we blame Greeks for using it. The euro was created with the idea in mind that it would permit all countries within the euro to get loan at the same interest rate as germany and france. And when Greece, before this money, decide to do everything it can to endebt itself, retards from all over the world blame them for it. A banking system is supposed to evaluate risks and manage them. If a country, or a familly, is not able to pay their credit, then both the bank and the credited are responsible. In our modern world, sadly, only the credited is judged responsible, while the creditor only accumulate wealth and ask others to pay when shit is raining. Ideally, all of the Eurozone would participate in inflationary activity, with Germany leading the charge. This means massive government programs that target portions of the population that save the least (usually the poor). Depending on how you want to go about this, you either fund the programs with taxes on those that save the most (usually the rich) or have the ECB buy up most of the newly issued government debt to pay for the program. As long as you can keep most of the money from escaping the Eurozone (as in, don't import a lot from the US or China), this should spark inflation and help spur the periphery economies.
Inflation is only a short term solution (because an anticipated inflation has no effect on the economy in theory), plus it would only work if the inflation is either the same in the entire europe, or bigger in germany than in other countries, and it will not happen because germans shit themselves at night when they dream about the hyperinflation during weimar.
One of the biggest problem with the eurozone, and always forgotten about, is that the inflation rate in the eurozone is not the same in all countries : for exemple, when germany was the "sick man of europe" back in early 2000, and they decided to push a policy of competitive disinflation, they had a low inflation rate while countries such as spain or france had higher inflation which greatly helped them in terms of trade.
On the other side, today, we are asking spain, france, italy and greece to push for the same kind of competitive disinflation policies, but at the same time Germany, despite its high surplus, has a low inflation (and thus represent almost no demand), which put most southern countries in great difficulties.
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On March 18 2014 05:37 WhiteDog wrote:Show nested quote +On March 18 2014 05:29 aksfjh wrote:On March 18 2014 05:16 WhiteDog wrote:There are three solutions out of the euro crisis. The first is to make a federation out of the current euro zone and permit fiscal transfert from germany to greece, the second is to give up with the euro. The third is to continue like we are now and let people in unemployment. People who think there are other solutions, are either lying or ignorant on the subject. The subject is not Greece, it is the whole eurozone that is in bad shape. On March 18 2014 05:10 lord_nibbler wrote:On March 18 2014 02:45 aksfjh wrote:
And it's not like Greece was going to Russian mafia banks for this money, it was the reputable banks of Germany, France, Spain, et al that loaned them the money. These renowned banks reinforced the behavior, and then the Germans, French, and English back them up as if they were "bamboozled" while the Greek people suffer for taking the gifts that were given to them by those banks. What kind of naive world view is this? You seriously distinguish between good and bad money lenders? And where were you taught this? Of all places you are actually from the US? Money was created precisely for the attribute of being neutral. The difference between a bank and a loan shark is therefore by design not a moral one. The difference is simply the means to enforce the dept payback. One does it through governments and their armies, the other does it with local brutes. Also, all that the bank did with Greece was their job! We the people of this world set up a monetary system in which the big bank's purpose is to lend money to countries. As much as you might detest 'banksters' for their greed and irresponsibility you have to realize that they all just fulfill their jobs. We set them up to do that and blaming them afterwards is hypocritical. We set a banking system up and then we blame Greeks for using it. The euro was created with the idea in mind that it would permit all countries within the euro to get loan at the same interest rate as germany and france. And when Greece, before this money, decide to do everything it can to endebt itself, retards from all over the world blame them for it. A banking system is supposed to evaluate risks and manage them. If a country, or a familly, is not able to pay their credit, then both the bank and the credited are responsible. In our modern world, sadly, only the credited is judged responsible, while the creditor only accumulate wealth and ask others to pay when shit is raining. Ideally, all of the Eurozone would participate in inflationary activity, with Germany leading the charge. This means massive government programs that target portions of the population that save the least (usually the poor). Depending on how you want to go about this, you either fund the programs with taxes on those that save the most (usually the rich) or have the ECB buy up most of the newly issued government debt to pay for the program. As long as you can keep most of the money from escaping the Eurozone (as in, don't import a lot from the US or China), this should spark inflation and help spur the periphery economies. Inflation is only a short term solution (because an anticipated inflation has no effect on the economy in theory), plus it would only work if the inflation is either the same in the entire europe, or bigger in germany than in other countries, and it will not happen because germans shit themselves at night when they dream about the hyperinflation during weimar. One of the biggest problem with the eurozone, and always forgotten about, is that the inflation rate in the eurozone is not the same in all countries : for exemple, when germany was the "sick man of europe" back in early 2000, and they decided to push a policy of competitive disinflation, they had a low inflation rate while countries such as spane or france had higher inflation which greatly helped them in terms of trade. On the other side, today, we are asking spain, france, italy and greece to push for the same kind of competitive disinflation policies, but at the same time Germany, despite its high surplus, has a low inflation and almost no demand, which put most southern countries in great difficulties.
Aside from the short term effects of eroding debt obligations, inflation also has a mental side effect on demand. In the same way people react negatively to a decrease in nominal wages, they react positively to a nominal increase in wages. Even if their wages merely keep up with inflation, people see the higher number and are encouraged to spend more. This is something that will not be overcome very quickly, even if inflation stabilizes at that higher rate.
But yes, the primary role of the inflation I'm asking for is more for "positive shock" purposes. The debt obligations probably won't take as much of a hit with inflation as financial institutions take into account that inflation in debt refinancing at bond maturity, but the initial shock should knock out enough to at least get the economic tires out of the mud.
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On March 18 2014 06:07 aksfjh wrote:Show nested quote +On March 18 2014 05:37 WhiteDog wrote:On March 18 2014 05:29 aksfjh wrote:On March 18 2014 05:16 WhiteDog wrote:There are three solutions out of the euro crisis. The first is to make a federation out of the current euro zone and permit fiscal transfert from germany to greece, the second is to give up with the euro. The third is to continue like we are now and let people in unemployment. People who think there are other solutions, are either lying or ignorant on the subject. The subject is not Greece, it is the whole eurozone that is in bad shape. On March 18 2014 05:10 lord_nibbler wrote:On March 18 2014 02:45 aksfjh wrote:
And it's not like Greece was going to Russian mafia banks for this money, it was the reputable banks of Germany, France, Spain, et al that loaned them the money. These renowned banks reinforced the behavior, and then the Germans, French, and English back them up as if they were "bamboozled" while the Greek people suffer for taking the gifts that were given to them by those banks. What kind of naive world view is this? You seriously distinguish between good and bad money lenders? And where were you taught this? Of all places you are actually from the US? Money was created precisely for the attribute of being neutral. The difference between a bank and a loan shark is therefore by design not a moral one. The difference is simply the means to enforce the dept payback. One does it through governments and their armies, the other does it with local brutes. Also, all that the bank did with Greece was their job! We the people of this world set up a monetary system in which the big bank's purpose is to lend money to countries. As much as you might detest 'banksters' for their greed and irresponsibility you have to realize that they all just fulfill their jobs. We set them up to do that and blaming them afterwards is hypocritical. We set a banking system up and then we blame Greeks for using it. The euro was created with the idea in mind that it would permit all countries within the euro to get loan at the same interest rate as germany and france. And when Greece, before this money, decide to do everything it can to endebt itself, retards from all over the world blame them for it. A banking system is supposed to evaluate risks and manage them. If a country, or a familly, is not able to pay their credit, then both the bank and the credited are responsible. In our modern world, sadly, only the credited is judged responsible, while the creditor only accumulate wealth and ask others to pay when shit is raining. Ideally, all of the Eurozone would participate in inflationary activity, with Germany leading the charge. This means massive government programs that target portions of the population that save the least (usually the poor). Depending on how you want to go about this, you either fund the programs with taxes on those that save the most (usually the rich) or have the ECB buy up most of the newly issued government debt to pay for the program. As long as you can keep most of the money from escaping the Eurozone (as in, don't import a lot from the US or China), this should spark inflation and help spur the periphery economies. Inflation is only a short term solution (because an anticipated inflation has no effect on the economy in theory), plus it would only work if the inflation is either the same in the entire europe, or bigger in germany than in other countries, and it will not happen because germans shit themselves at night when they dream about the hyperinflation during weimar. One of the biggest problem with the eurozone, and always forgotten about, is that the inflation rate in the eurozone is not the same in all countries : for exemple, when germany was the "sick man of europe" back in early 2000, and they decided to push a policy of competitive disinflation, they had a low inflation rate while countries such as spane or france had higher inflation which greatly helped them in terms of trade. On the other side, today, we are asking spain, france, italy and greece to push for the same kind of competitive disinflation policies, but at the same time Germany, despite its high surplus, has a low inflation and almost no demand, which put most southern countries in great difficulties. Aside from the short term effects of eroding debt obligations, inflation also has a mental side effect on demand. In the same way people react negatively to a decrease in nominal wages, they react positively to a nominal increase in wages. Even if their wages merely keep up with inflation, people see the higher number and are encouraged to spend more. This is something that will not be overcome very quickly, even if inflation stabilizes at that higher rate. But yes, the primary role of the inflation I'm asking for is more for "positive shock" purposes. The debt obligations probably won't take as much of a hit with inflation as financial institutions take into account that inflation in debt refinancing at bond maturity, but the initial shock should knock out enough to at least get the economic tires out of the mud.
What you describe is the short term illusio of inflation - why i said it only work in the short term. But for it to be effective in the long run, you need inflation to be higher than anticipations, which can cause problems. And as I said, you don't adress the problem - core problem - that the inflation is not the same in every country.
Rethink what you said taking in consideration that inflation are different in countries. If the inflation is high in spain and low in germany, people in spain are pushed to spend more, but not in germany, which will result in a higher deficit for spain because they will most likely also increase their consumption of german goods, while germans, with a low inflation, will not increase their consumption of spanish goods (or not at the same scale). So the result will be exact opposite of what you want : you will increase the disparities between countries. In fact, the flat rate of inflation is even less important than the differences in inflation rate between nothern and southern europe.
But its true that an inflation rate between 7 to 10% would most likely erase the debt in a matter of years. That would still not adress the real problem behind the eurozone.
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On March 18 2014 06:16 WhiteDog wrote:Show nested quote +On March 18 2014 06:07 aksfjh wrote:On March 18 2014 05:37 WhiteDog wrote:On March 18 2014 05:29 aksfjh wrote:On March 18 2014 05:16 WhiteDog wrote:There are three solutions out of the euro crisis. The first is to make a federation out of the current euro zone and permit fiscal transfert from germany to greece, the second is to give up with the euro. The third is to continue like we are now and let people in unemployment. People who think there are other solutions, are either lying or ignorant on the subject. The subject is not Greece, it is the whole eurozone that is in bad shape. On March 18 2014 05:10 lord_nibbler wrote:On March 18 2014 02:45 aksfjh wrote:
And it's not like Greece was going to Russian mafia banks for this money, it was the reputable banks of Germany, France, Spain, et al that loaned them the money. These renowned banks reinforced the behavior, and then the Germans, French, and English back them up as if they were "bamboozled" while the Greek people suffer for taking the gifts that were given to them by those banks. What kind of naive world view is this? You seriously distinguish between good and bad money lenders? And where were you taught this? Of all places you are actually from the US? Money was created precisely for the attribute of being neutral. The difference between a bank and a loan shark is therefore by design not a moral one. The difference is simply the means to enforce the dept payback. One does it through governments and their armies, the other does it with local brutes. Also, all that the bank did with Greece was their job! We the people of this world set up a monetary system in which the big bank's purpose is to lend money to countries. As much as you might detest 'banksters' for their greed and irresponsibility you have to realize that they all just fulfill their jobs. We set them up to do that and blaming them afterwards is hypocritical. We set a banking system up and then we blame Greeks for using it. The euro was created with the idea in mind that it would permit all countries within the euro to get loan at the same interest rate as germany and france. And when Greece, before this money, decide to do everything it can to endebt itself, retards from all over the world blame them for it. A banking system is supposed to evaluate risks and manage them. If a country, or a familly, is not able to pay their credit, then both the bank and the credited are responsible. In our modern world, sadly, only the credited is judged responsible, while the creditor only accumulate wealth and ask others to pay when shit is raining. Ideally, all of the Eurozone would participate in inflationary activity, with Germany leading the charge. This means massive government programs that target portions of the population that save the least (usually the poor). Depending on how you want to go about this, you either fund the programs with taxes on those that save the most (usually the rich) or have the ECB buy up most of the newly issued government debt to pay for the program. As long as you can keep most of the money from escaping the Eurozone (as in, don't import a lot from the US or China), this should spark inflation and help spur the periphery economies. Inflation is only a short term solution (because an anticipated inflation has no effect on the economy in theory), plus it would only work if the inflation is either the same in the entire europe, or bigger in germany than in other countries, and it will not happen because germans shit themselves at night when they dream about the hyperinflation during weimar. One of the biggest problem with the eurozone, and always forgotten about, is that the inflation rate in the eurozone is not the same in all countries : for exemple, when germany was the "sick man of europe" back in early 2000, and they decided to push a policy of competitive disinflation, they had a low inflation rate while countries such as spane or france had higher inflation which greatly helped them in terms of trade. On the other side, today, we are asking spain, france, italy and greece to push for the same kind of competitive disinflation policies, but at the same time Germany, despite its high surplus, has a low inflation and almost no demand, which put most southern countries in great difficulties. Aside from the short term effects of eroding debt obligations, inflation also has a mental side effect on demand. In the same way people react negatively to a decrease in nominal wages, they react positively to a nominal increase in wages. Even if their wages merely keep up with inflation, people see the higher number and are encouraged to spend more. This is something that will not be overcome very quickly, even if inflation stabilizes at that higher rate. But yes, the primary role of the inflation I'm asking for is more for "positive shock" purposes. The debt obligations probably won't take as much of a hit with inflation as financial institutions take into account that inflation in debt refinancing at bond maturity, but the initial shock should knock out enough to at least get the economic tires out of the mud. What you describe is the short term illusio of inflation - why i said it only work in the short term. But for it to be effective in the long run, you need inflation to be erratic or higher than anticipations, which can cause problems. And as I said, you don't adress the problem - core problem - that the inflation is not the same in every country. Rethink what you said taking in consideration that inflation are different in countries. If the inflation is high in spain and low in germany, people in spain are pushed to spend more, but not in germany, which will result in a higher deficit for spain because they will most likely also increase their consumption of german goods, while germans, with a low inflation, will not increase their consumption of spanish goods (or not at the same scale). So the result will be exact opposite of what you want : you will increase the inequalities between countries. In fact, the flat rate of inflation is even less important than the differences in inflation rate between nothern and southern europe.
Exactly, which is why I said in my first post "with Germany leading the charge." I realize that's harder to do in reality than it is to type, which is why Japan is stuck where it is. However, if they can push austerity so fervently, when it has such awful consequences, maybe they can find the stomach to promote policy that actually discourages excess saving enough to help the economy. For some reason, it's easier to convince people to starve than it is to convince them to feast.
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Maybe on a little more positive note: Our imports have grown quite a lot over the last year as the wage situation improved quite a bit. (http://www.reuters.com/article/2014/03/11/germany-trade-idUSL6N0M80MM20140311)
So maybe with the new government here that seems to focus a little more on evening our trade balance out, the economy in the peripheral states will recover a little over the next years.
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On March 18 2014 06:34 Nyxisto wrote:
Maybe on a little more positive note: Our imports have grown quite a lot over the last year as the wage situation improved quite a bit. (http://www.reuters.com/article/2014/03/11/germany-trade-idUSL6N0M80MM20140311)
So maybe with the new government here that seems to focus a little more on evening our trade balance out, the economy in the peripheral states will recover a little over the next years.
Depends on where the imports are from. If that's from the U.S., Japan, or China, that's not going to help any of your neighbors. :/
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What both of you don't seem to understand is that, sure you can wait for the problem to fix itself, or push for inflationary policies, or by pushing germany's inner demand, but you will not fix the structural problem that the euro has.
What if tomorrow, everything is fixed and a new exogene shock arrive and touch some european countries and not all of them equally ? The same problem will rise again, because the core problem is not the debt, not the crisis, not the lack of competitivity of the most competitive economy of the planet (europe) but the core problem is the lack of fiscal transfert within the european union (as the theory of optimum currency area stated 50 years ago).
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On March 18 2014 05:29 aksfjh wrote:Show nested quote +On March 18 2014 05:16 WhiteDog wrote:There are three solutions out of the euro crisis. The first is to make a federation out of the current euro zone and permit fiscal transfert from germany to greece, the second is to give up with the euro. The third is to continue like we are now and let people in unemployment. People who think there are other solutions, are either lying or ignorant on the subject. The subject is not Greece, it is the whole eurozone that is in bad shape. On March 18 2014 05:10 lord_nibbler wrote:On March 18 2014 02:45 aksfjh wrote:
And it's not like Greece was going to Russian mafia banks for this money, it was the reputable banks of Germany, France, Spain, et al that loaned them the money. These renowned banks reinforced the behavior, and then the Germans, French, and English back them up as if they were "bamboozled" while the Greek people suffer for taking the gifts that were given to them by those banks. What kind of naive world view is this? You seriously distinguish between good and bad money lenders? And where were you taught this? Of all places you are actually from the US? Money was created precisely for the attribute of being neutral. The difference between a bank and a loan shark is therefore by design not a moral one. The difference is simply the means to enforce the dept payback. One does it through governments and their armies, the other does it with local brutes. Also, all that the bank did with Greece was their job! We the people of this world set up a monetary system in which the big bank's purpose is to lend money to countries. As much as you might detest 'banksters' for their greed and irresponsibility you have to realize that they all just fulfill their jobs. We set them up to do that and blaming them afterwards is hypocritical. We set a banking system up and then we blame Greeks for using it. The euro was created with the idea in mind that it would permit all countries within the euro to get loan at the same interest rate as germany and france. And when Greece, before this money, decide to do everything it can to endebt itself, retards from all over the world blame them for it. A banking system is supposed to evaluate risks and manage them. If a country, or a familly, is not able to pay their credit, then both the bank and the credited are responsible. In our modern world, sadly, only the credited is judged responsible, while the creditor only accumulate wealth and ask others to pay when shit is raining. Ideally, all of the Eurozone would participate in inflationary activity, with Germany leading the charge. This means massive government programs that target portions of the population that save the least (usually the poor). Depending on how you want to go about this, you either fund the programs with taxes on those that save the most (usually the rich) or have the ECB buy up most of the newly issued government debt to pay for the program. As long as you can keep most of the money from escaping the Eurozone (as in, don't import a lot from the US or China), this should spark inflation and help spur the periphery economies.
You'll not only be hitting the rich though, a lot of people have money saved up trough pension funds and they get hit as well. In The Netherlands for example we have €1 trillion in our pension funds and there are quite a few who already don't have the buffers required by the DNB (Dutch central bank).
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Yeah but Montana and California share the same currency. If those two can make it work I guess Germany and Greece can. In my opinion the problem lies more within the lack of coordination on fiscal policy than with the currency. I feel like we're trapped in some prisoners dilemma situation, because every country within the EU is acting solely in own national interest. I think we need a lot more European integration to get rid of that.
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On March 18 2014 06:40 WhiteDog wrote:
What both of you don't seem to understand is that, sure you can wait for the problem to fix itself, or push for inflationary policies, or by pushing germany's inner demand, but you will not fix the structural problem that the euro has.
What if tomorrow, everything is fixed and a new exogene shock arrive and touch some european countries and not all of them equally ? The same problem will rise again, because the core problem is not the debt, not the crisis, not the lack of competitivity of the most competitive economy of the planet (europe) but the core problem is the lack of fiscal transfert within the european union (as the theory of optimum currency area stated 50 years ago).
One thing at a time. The same shock could happen without this being fixed, and then guess where Europe is. Fixing the long term problems is a noble goal, but don't put the cart in front of the horse.
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EPT
