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moltke, the eu along with the imf have already intervened, announcements about tax raises and wage cutting are supposed to be made tomorrow, and loans are underway, most countries need to have their parliaments vote on that but theyve all said itll be done by the end of next week (even the opposition in germany has said theyll support that vote now).
and "Germany is saving now to insure the future".. yeah sure but whose future? the german worker's or the german businessman's?
im not saying germany as a whole isnt doing good business, im saying the public isnt seeing any of that good business and theres no reason to assume its going to see any of it in the future, hence i mentioned the french lady basically saying the german people should cash in on that good future now and german businesses should start making a bit less money (and theyre still gonna make money.. the rate at which they make more money will be a bit lower is all), and also thats why i asked why the fck various posters are ok with all this, unless theyre somehow big businessmen at the age of 20-25.
also, about greece being subprime estate right now, this is very probably true and its greece's fault but the markets and especially the ratings agencies have exacerbated it by a lot.
consider that the agencies categorizing countries, banks, financial products etc as prime or subprime or w/e are controlled by active participants in that business. what theyre essentially doing is selling a product and also telling u that product is rated as "prime"(for example standard's & poor's largest shareholder is an investment management firm (t.rowe price) and others include barklay's, morgan stanley etc, the same people that are selling financial products..)
so all in all yeah sure greece is screwed up and needs to pay for its mistakes, although that seems to mean, in the eyes of the international community (meaning eu, imf etc), that the people getting 800 euro wages should have it cut to 600 (by reading some of the replies im getting the feeling some people think that greeks got huge buying power or sth, thats not true for the average citizen.. still by voting for the corrupt politicians and sustaining the system we've made our own bed)
but dont be so fast in trusting the markets, it is those markets that valued real estate as prime business and then needed huge bailouts just so now they can turn on countries and keep on going merrily along the way. theres a risk involved in buying greek bonds, as theres a risk involved in everything but the people actually telling u the numbers sure have more motives than meets the eye
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Zurich15328 Posts
Taguchi, I don't think anyone here really said they are OK with receiving real wage cuts year after year while German companies ship in record margins. Most people are not OK with that.
However, the last thing your average German wants is to have 'saved' all that money to have it now given to people who have overspent recklessly in the past. I know this is oversimplifying things, but it's essentially why the German public is so opposed to the whole scheme.
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On March 01 2010 15:22 InToTheWannaB wrote:
Who knows, economics is crazy.
no its not. its as air-tight and logical as mathematics. that's why its called the Imperial Science.
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On March 01 2010 16:07 mahnini wrote:Show nested quote +On March 01 2010 16:04 Rothbardian wrote:On March 01 2010 16:02 TanGeng wrote:
wow, full blown bartering is like tax evasion. Are you sure the IRS isn't going to come after you? How are they going to know? There was a bristling counter-economy in the USSR and it survived one of the largest most oppressive States in the history of man-kind. Besides, I'm not scared of the IRS, and I will not voluntarily relinquish my natural rights to some arbitrary authority that is threatening me with violence and imprisonment. If they do come after me, I'm not going down alone, thats for sure, and I'm sure Patrick Henry, Richard Henry Lee, and John Locke, would be smiling don't pay taxes. use public services. FIGHT DA POWER
LOL FIGHT DA POWA!
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BRUSSELS � Greece outlined strict new austerity measures required by an international bailout and Germany said Sunday there was a good chance it would approve its part of the euro-zone and International Monetary Fund rescue before next weekend.
The finance ministers of the 16 EU nations that use the euro were holding an emergency meeting in Brussels to discuss the plan � the first-ever bailout of a euro-zone country � under which euro-zone countries and the IMF will extend loans to Greece over three years.
The exact amount of the three-year package will be agreed on during the meeting, but is expected to be about euro120 billion ($160 billion).
Source
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If you understand Taguchi's argument, the German government, he claims, is certain to make a profit at re-funneling her debt into Greece at a higher rate of interest. After all, if you can borrow at 3% and loan at 5%, you're not losing but earning money. Thus, it's a win-win scenario for Germany.
Which is assuming that Greece can somehow extract herself from her debt spiral. The only way of seeing returns on loans will be living till the day the Greek government has a budget surplus. Until that day, Greece will be continuously re-borrowing to pay for old borrowing. Even the austere measures and controls agreed upon are not very comforting: can anyone see the EU fulfilling its threats of sanctions against Greece? Shouldn't Greece already be fined for her deficit under Eurozone laws?
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On April 29 2010 08:33 JohnColtrane wrote:
last, about the bailout
germany borrows with a 3% interest rate and then gives that money to greece for a 5% interest rate, which greece thinks is ok since borrowing from the private sector right now goes with a 9% interest rate
lol raped
i have no idea, but maybe the taxes go to important stuff? like, is uni free in germany? maybe public health?
Well the money went to stuff like 1 extra salary to people within the public sector every year and an average pension age of 53. Can't belive there are people/contries that lazy.
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![[image loading]](http://i.huffpost.com/gen/163204/thumbs/s-ACROPOLIS-large.jpg)
ATHENS, Greece — Angry Greek unionists took to the streets Tuesday to protest harsh austerity measures imposed under an international bailout to save Greece from looming bankruptcy, while financial markets were far from assured that the euro110 billion ($144 billion) in promised loans could douse Europe's smoldering sovereign debt crisis.
About 4,000 striking teachers and students marched in Athens to protest the cuts, carrying black flags, while some scuffled with police. Earlier, about 100 Communist Party supporters broke through the gates of the Acropolis, the city's chief ancient monument, and hung banners in Greek and English reading "Peoples of Europe Rise Up," to the bemusement of tourists allowed in despite the disruption.
The cutbacks were announced on Sunday, as a precondition for the loans from the International Monetary Fund and the other 15 EU countries using the euro. The aid, spread over three years, is Greece's only hope of paying off euro8.5 billion ($11 billion) in debt that matures May 19 – or defaulting.
On Tuesday, the interest rate gap, or spread, between Portuguese and benchmark German 10-year bonds rose 22 basis points, or 0.22 percentage point, which means Lisbon would have to pay 5.2 percent in interest to borrow on the markets. In comparison, Greece would currently have to pay a prohibitive 9.5 percent – so much that the country was effectively shut off from the bond market.
Portuguese stocks were down 2.2 percent, while the Madrid bourse was shedding 2.66 percent. Athens stocks tumbled 6.5 percent.
http://www.huffingtonpost.com/2010/05/04/greek-protesters-storm-th_n_563341.html
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On May 04 2010 09:35 Robinsa wrote:Show nested quote +On April 29 2010 08:33 JohnColtrane wrote:
last, about the bailout
germany borrows with a 3% interest rate and then gives that money to greece for a 5% interest rate, which greece thinks is ok since borrowing from the private sector right now goes with a 9% interest rate
lol raped
i have no idea, but maybe the taxes go to important stuff? like, is uni free in germany? maybe public health? Well the money went to stuff like 1 extra salary to people within the public sector every year and an average pension age of 53. Can't belive there are people/contries that lazy.
not lazy. progressive?
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This is why a couple of months ago I decided not to invest in the stock market and focus instead on paying down debts. There are HUGE macroeconomic shitstorms just waiting to happen: first in Europe, next in China, and eventually in the US. It's really a shame, because there are some stocks out there that I really like and would love to buy.
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You know you can make money when stocks go down.
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In response to the fund announced yesterday.
I guess any such fund was pretty much inevitable, practically no Eurozone country has actually stuck to the 3% deficit/GDP target, even Germany itself has only stuck to it for 3 years since 2002, hardly a paragon of fiscal virtue.
Source: Eurostat (session times out but you can find the website).
One factor to be considered is that the EU's contribution(with the exception of €80 billion from the Commission budget) must be approved by the European parliament, this will be a very tough sell since MEPs are generally populist.
TBH I don't know how much of this fund will actually be honoured, but markets didn't really notice that too early. The initial positive reaction of yesterday is abating a great deal, equity markets are down, the euro is weakening, the only thing that is still down are bond spreads.
And those are only back to where they were 2 weeks ago.
The most this whole plan can do is keep panicky money from affecting markets but it doesn't solve the fundamentals.
While some people are saying that this will introduce moral hazard, moral hazard was always there, hence why even before the crisis of 2008/2009 most countries were flouting the stability and growth pact.
At least the EURO is still getting pounded against the Dollar and is weakening against Sterling which is really good for exports which is the only way indebted nations can actually recover.
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United States42694 Posts
On April 29 2010 09:02 tru_power22 wrote:Show nested quote +On March 01 2010 15 begin_of_the_skype_highlighting 01 2010 15 end_of_the_skype_highlighting:27 n.DieJokes wrote:
I honestly have nothing to add or confirm or deny. I almost wish we would go back to the gold standard so at least I would have some idea what's going on.
Yeah, at least that system made sense.
I can't tell if this is a joke post or if you're seriously suggesting the logical means of barter is by using a useless metal of changing value as an intermediary.
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On May 11 2010 20:52 KwarK wrote:Show nested quote +On April 29 2010 09:02 tru_power22 wrote:On March 01 2010 15 begin_of_the_skype_highlighting 01 2010 15 end_of_the_skype_highlighting:27 n.DieJokes wrote:
I honestly have nothing to add or confirm or deny. I almost wish we would go back to the gold standard so at least I would have some idea what's going on.
Yeah, at least that system made sense. I can't tell if this is a joke post or if you're seriously suggesting the logical means of barter is by using a useless metal of changing value as an intermediary.
Can't tell if you are serious either, after reading again Ima go with no.. but anyway gold isnt useless.. it has very important qualitys and is used in many ways (electronics, glass, jewlery etc). Theres a reason why it is so valuable (hint: not because its shiny).
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On May 11 2010 21:40 WAAA wrote:Show nested quote +On May 11 2010 20:52 KwarK wrote:On April 29 2010 09:02 tru_power22 wrote:On March 01 2010 15 begin_of_the_skype_highlighting 01 2010 15 end_of_the_skype_highlighting:27 n.DieJokes wrote:
I honestly have nothing to add or confirm or deny. I almost wish we would go back to the gold standard so at least I would have some idea what's going on.
Yeah, at least that system made sense. I can't tell if this is a joke post or if you're seriously suggesting the logical means of barter is by using a useless metal of changing value as an intermediary. Can't tell if you are serious either, after reading again Ima go with no.. but anyway gold isnt useless.. it has very important qualitys and is used in many ways (electronics, glass, jewlery etc). Theres a reason why it is so valuable (hint: not because its shiny).
Given gold's strong negative correlation with the Dollar (relative to other metals) and it's tendency to increase in times of market turmoil (it has increase markedly in the last two years and is near all time highs), one would have to conclude that it is not golds usefulness that is driving its value but rather its history as the root of most western specie.
Unless you can find a link between its fundamental usefulness and these market shifts.
At any rate this would serve as a further argument for not having it as a monetary base as you would be diverting resources away from their best uses and into vaults.
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Is the EURO going down?
Yes. yes it is.
The market movement is largely based on speculation imo and this Greece thing is just great way to get the markets volatile.
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Mystlord
United States10264 Posts
The Euro will probably be saved in the short run, but in the long run the EU has some serious work to do unless they want the union to collapse. Just looking at the smaller picture, Greece has a very good reason for not pulling out of Euro right here and right now, even though deflation is the ONLY way to stop their debt crisis. Between the economic benefits gained from being in the EU, as well as the massive infrastructural changes that would have to be made if Greece went off the Euro, plus the basically 100% likelihood of bank runs if they went off the Euro, there's absolutely no way that Greece will ever want to go off of it.
As for the Euro in the long run, the primary problem with the EU is basically giant culture barriers that appear between states and a central fiscal body in Brussels that can't really do anything. If you think of Europe as a giant United States, then those are the two primary differences between the two. Because there essentially is no labor mobility in the EU, as Greek labor can basically only work in Greece, so they can't really go out into other countries with higher wages to get jobs and return money back home. The other reason is obviously the lack of central power in the EU. Each country can basically do its own thing. If you look at the US prior to the introduction of the Federal Reserve back in 1913, it's just full of bank runs that occurred every few years. At this point it depends on which issue is more pressing for the EU - mobility or central authority. If mobility is the problem, then the Euro is as good as dead. If it's central authority, then they can fix it, but the likelihood that the major European countries will give up a sizable portion of their fiscal authority to Brussels is highly unlikely.
Then again, that happened in the US with Shays Rebellion so who knows.
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On May 11 2010 21:58 Not_A_Notion wrote:Show nested quote +On May 11 2010 21:40 WAAA wrote:On May 11 2010 20:52 KwarK wrote:On April 29 2010 09:02 tru_power22 wrote:On March 01 2010 15 begin_of_the_skype_highlighting 01 2010 15 end_of_the_skype_highlighting:27 n.DieJokes wrote:
I honestly have nothing to add or confirm or deny. I almost wish we would go back to the gold standard so at least I would have some idea what's going on.
Yeah, at least that system made sense. I can't tell if this is a joke post or if you're seriously suggesting the logical means of barter is by using a useless metal of changing value as an intermediary. Can't tell if you are serious either, after reading again Ima go with no.. but anyway gold isnt useless.. it has very important qualitys and is used in many ways (electronics, glass, jewlery etc). Theres a reason why it is so valuable (hint: not because its shiny). Given gold's strong negative correlation with the Dollar (relative to other metals) and it's tendency to increase in times of market turmoil (it has increase markedly in the last two years and is near all time highs), one would have to conclude that it is not golds usefulness that is driving its value but rather its history as the root of most western specie. Unless you can find a link between its fundamental usefulness and these market shifts. At any rate this would serve as a further argument for not having it as a monetary base as you would be diverting resources away from their best uses and into vaults.
The advantage of gold is
1. It Doesn't have much fundamental usefulness that varies in value significantly (just like paper money)
2. It can't be easily produced (unlike paper money)
#1 is what makes it a form of money rather than just a barter (ie gold is really only good for trading for something useful
#2 is what makes it a (relatively) stable form of currency [it does get produced but no single group can really control how much gets produced... that depends on where gold mines happen to be]
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EPT
