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On December 18 2014 07:50 Dangermousecatdog wrote:
Of course it would be worse if the Greek government defaulted. 27% unemployment? 25% GDP collapse? Now imagine what the figures would be if the Greek government simply didn't have the finance to pay the workings of the government.
That's why i spoke about solving the deficit problem in favor of the citizens and not the oligarchs and the banks.
But IMF (in accordance with EU) obviously has a far different approach (break your legs type), not just for Greece ofc.
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On December 18 2014 07:50 Dangermousecatdog wrote:Show nested quote +On December 18 2014 07:08 JonnyBNoHo wrote:On December 17 2014 22:07 Dangermousecatdog wrote:On December 17 2014 09:12 JonnyBNoHo wrote:On December 17 2014 07:20 Dangermousecatdog wrote:On December 17 2014 06:12 JonnyBNoHo wrote:On December 16 2014 23:44 Skilledblob wrote:
the greek government lied when it applied for the Eurozone, the greek government failed to build a proper tax infrastructure
you reap what you sow.
everyone was hit by the global recession a couple years back, but the magnitude by which it affected Greece was by a large part their own making. Greece wasn't the first or last country to break deficit rules or fudge the accounting to make things look nicer, nor was it the last. As for 'you reap what you sow', well yes, I wouldn't disagree with that. Greeks borrowed heavily and didn't spend it wisely... of course good things don't come from that. However, it takes two parties to be involved here, and so those who lent Greeks money for those frivolous things should be reaping what they sowed as well. A nd that doesn't seem to be the case, or at least it is lopsided. Actually I beleive the banks which lent the money to the Greek Government had to write off billions of dollars. True, but the pain has been very lopsided. Greece went from a rising economy into a depression while Germany went from 'the sick man of Europe' to an economic superstar. There's more to that story than just the debt crisis, but the reversal in fortunes is amazing. Eh? Greece wasn't a rising economy, it just hid how badly it was doing by taking debts and hid it's decifits with dodgy accounting until it couldn't be hidden any longer. Germany had their roots on being an economic superstar simply because they themselves underwent years of reform with a political and popular will, far greater than just about any other democratic country. Who lent the Greeks money? It wasn't the German government. It were banks. And those banks that lent the Greek government money lost money. Who gained money? The Greek government in the short term. Who gained out of all this? The wealthy tax avoiders in Greece. The nepostic, well paid, public sector with comfortable jobs with comfortable pensions. The politicians. Those were the ones who gained. Who suffered? The banks who lent the money in the first place, and everybody else in Greece. Oh and everybody else whose taxpayers money had to who bailed out the Greeks. That'll be the German taxpayers then. So as you can see, your strange story that the Germans somehow engineered the Greek disaster for their own benefit is nothing of the sort. But that's not my story. Germany relies on foreign demand to keep its economy going. For a while that foreign demand was provided by Europe's peripheral countries like Greece and Spain. It was a mutually beneficial arrangement, with Germans having a market for their goods, higher rates of return on their investments and peripheral countries better able to finance their purchases. As it goes, a portion of that foreign demand turned out to be unsustainable. So a correction was needed but keep in mind that a correction should hurt both parties. Countries like Greece should be buying less but countries like Germany should be producing less, since their customers are now buying less. But that is not how the aftermath has really played out. Germany continues to produce, and indeed its exports have only risen. Meanwhile Greek unemployment shot up, meaning they're producing less. Part of that is due to being locked in a currency union with Greece, but it is also due to Greek debt restructuring not going far enough. Those who lent, have gotten off too easy in the name of financial stability. So, according to you Greece exists to buy German goods, and Germany exists to give their money to Greece to buy their own goods, and after the euro crisis Germany continues to make goods and Greeks has no money to buy them any longer with unemployment as the result. Your words not mine. What a load of bullcrap. I wonder who fed you such a story. It's simple really. Germany is doing well becuase the rest of the world buys German exports. Whatever loss in exports the Germans has lost in Europe, they have more than gained in outside markets. Greek unemployment shot up simply because the Greek government can no longer afford to pay their ridiculously inflated and inefficient public sector.
It's not bullshit, though your paraphrasing is off the mark. I'm not describing what the countries 'exist' to do, I'm describing what they did do, and are or are not doing anymore. Germans lent Greeks money to buy German goods. That helped German exports and Greek consumers. It was mutually beneficial. But when the bill turned out to be unsustainable, Greeks suffered more.
Clearly that means that Greeks needed to make some changes. What they were doing was unsustainable and so it had to end at some point. But the same is true for Germans - running massive trade surpluses is just as unsustainable. But what changes has Germany made? They're back to record trade surpluses!
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On December 18 2014 07:47 Doublemint wrote:There's a popular meme around that actually. + Show Spoiler +
A lot of the money in Iceland's banks was foreign money. A bit easier to offer debt relief when the creditor is in another country.
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On December 18 2014 08:36 JonnyBNoHo wrote:A lot of the money in Iceland's banks was foreign money. A bit easier to offer debt relief when the creditor is in another country.
I said it's popular, not 100% accurate :p
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Cayman Islands24199 Posts
On December 18 2014 08:34 JonnyBNoHo wrote:Show nested quote +On December 18 2014 07:50 Dangermousecatdog wrote:On December 18 2014 07:08 JonnyBNoHo wrote:On December 17 2014 22:07 Dangermousecatdog wrote:On December 17 2014 09:12 JonnyBNoHo wrote:On December 17 2014 07:20 Dangermousecatdog wrote:On December 17 2014 06:12 JonnyBNoHo wrote:On December 16 2014 23:44 Skilledblob wrote:
the greek government lied when it applied for the Eurozone, the greek government failed to build a proper tax infrastructure
you reap what you sow.
everyone was hit by the global recession a couple years back, but the magnitude by which it affected Greece was by a large part their own making. Greece wasn't the first or last country to break deficit rules or fudge the accounting to make things look nicer, nor was it the last. As for 'you reap what you sow', well yes, I wouldn't disagree with that. Greeks borrowed heavily and didn't spend it wisely... of course good things don't come from that. However, it takes two parties to be involved here, and so those who lent Greeks money for those frivolous things should be reaping what they sowed as well. A nd that doesn't seem to be the case, or at least it is lopsided. Actually I beleive the banks which lent the money to the Greek Government had to write off billions of dollars. True, but the pain has been very lopsided. Greece went from a rising economy into a depression while Germany went from 'the sick man of Europe' to an economic superstar. There's more to that story than just the debt crisis, but the reversal in fortunes is amazing. Eh? Greece wasn't a rising economy, it just hid how badly it was doing by taking debts and hid it's decifits with dodgy accounting until it couldn't be hidden any longer. Germany had their roots on being an economic superstar simply because they themselves underwent years of reform with a political and popular will, far greater than just about any other democratic country. Who lent the Greeks money? It wasn't the German government. It were banks. And those banks that lent the Greek government money lost money. Who gained money? The Greek government in the short term. Who gained out of all this? The wealthy tax avoiders in Greece. The nepostic, well paid, public sector with comfortable jobs with comfortable pensions. The politicians. Those were the ones who gained. Who suffered? The banks who lent the money in the first place, and everybody else in Greece. Oh and everybody else whose taxpayers money had to who bailed out the Greeks. That'll be the German taxpayers then. So as you can see, your strange story that the Germans somehow engineered the Greek disaster for their own benefit is nothing of the sort. But that's not my story. Germany relies on foreign demand to keep its economy going. For a while that foreign demand was provided by Europe's peripheral countries like Greece and Spain. It was a mutually beneficial arrangement, with Germans having a market for their goods, higher rates of return on their investments and peripheral countries better able to finance their purchases. As it goes, a portion of that foreign demand turned out to be unsustainable. So a correction was needed but keep in mind that a correction should hurt both parties. Countries like Greece should be buying less but countries like Germany should be producing less, since their customers are now buying less. But that is not how the aftermath has really played out. Germany continues to produce, and indeed its exports have only risen. Meanwhile Greek unemployment shot up, meaning they're producing less. Part of that is due to being locked in a currency union with Greece, but it is also due to Greek debt restructuring not going far enough. Those who lent, have gotten off too easy in the name of financial stability. So, according to you Greece exists to buy German goods, and Germany exists to give their money to Greece to buy their own goods, and after the euro crisis Germany continues to make goods and Greeks has no money to buy them any longer with unemployment as the result. Your words not mine. What a load of bullcrap. I wonder who fed you such a story. It's simple really. Germany is doing well becuase the rest of the world buys German exports. Whatever loss in exports the Germans has lost in Europe, they have more than gained in outside markets. Greek unemployment shot up simply because the Greek government can no longer afford to pay their ridiculously inflated and inefficient public sector. It's not bullshit, though your paraphrasing is off the mark. I'm not describing what the countries 'exist' to do, I'm describing what they did do, and are or are not doing anymore. Germans lent Greeks money to buy German goods. That helped German exports and Greek consumers. It was mutually beneficial. But when the bill turned out to be unsustainable, Greeks suffered more. Clearly that means that Greeks needed to make some changes. What they were doing was unsustainable and so it had to end at some point. But the same is true for Germans - running massive trade surpluses is just as unsustainable. But what changes has Germany made? They're back to record trade surpluses!
they changed by stomping on greece etc.
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Reducing the trade surplus isn't actually as easy as it sounds. One reason for the huge trade surplus is that many of our exports are pretty price inelastic. Wage dumping has largely reduced imports through a lack of demand rather than increased exports. The export products aren't actually cheap, and salaries in the industrial branches are very high and the workers are heavily unionised.
Also the general salary level isn't even that low, although it could be higher. The lack of investment and imports also has simply to do with the demographical structure and the culture. The population is insanely old and there's a general aversion to credit fuelled investment. I don't even know if that is economically fixable.
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On December 18 2014 09:24 Nyxisto wrote:
Reducing the trade surplus isn't actually as easy as it sounds. One reason for the huge trade surplus is actually that many of our exports are pretty price inelastic. Wage dumping has largely reduced imports through a lack of demand. The export products aren't actually cheap, and salaries in the industrial branches are actually very high and the workers are heavily unionised.
Another reason is a lack of German consumption. Try cutting your VAT - it would be a de-facto raise for most Germans too, so I'm guessing it would be politically feasible.
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On December 18 2014 09:30 JonnyBNoHo wrote:Show nested quote +On December 18 2014 09:24 Nyxisto wrote:
Reducing the trade surplus isn't actually as easy as it sounds. One reason for the huge trade surplus is actually that many of our exports are pretty price inelastic. Wage dumping has largely reduced imports through a lack of demand. The export products aren't actually cheap, and salaries in the industrial branches are actually very high and the workers are heavily unionised. Another reason is a lack of German consumption. Try cutting your VAT - it would be a de-facto raise for most Germans too, so I'm guessing it would be politically feasible.
the VAT was actually increased a couple years ago. And you can be damn sure our government will fight tooth and nail to keep taxes the way they are, at least for everybody but big buisness
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The Swiss National Bank just lowered its interest rate to -0.25%...
"Interesting" times...
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"spend peasants, or the inflation is going to get you!"
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On December 18 2014 17:48 Doublemint wrote:
"spend peasants, or the inflation is going to get you!"
Honestly, bankers really should learn why people have savings. People save up money so they have something to fall back on on a rainy day. Very few people keep their money on a savings account because it is lucrative. Negative interest rates will not suddenly make people spend more. On the contrary, they will think "things are going bad, better save up even more."
Most people haven't got a clue about inflation.
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Something is just seriously wrong if a Bank is charging you so it can play with your money...
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On December 18 2014 20:01 maartendq wrote:Show nested quote +On December 18 2014 17:48 Doublemint wrote:
"spend peasants, or the inflation is going to get you!" Honestly, bankers really should learn why people have savings. People save up money so they have something to fall back on on a rainy day. Very few people keep their money on a savings account because it is lucrative. Negative interest rates will not suddenly make people spend more. On the contrary, they will think "things are going bad, better save up even more." Most people haven't got a clue about inflation.
It will make businesses and banks spend more. Also this move is also to some extent made to protect CHF from the aftereffects of what is happening to the Russian Ruble (or more generally the effects of the oil price collapse and the resulting volatility and risk in global markets). CHF and USD are generally seen as safe currencies, so when the ruble is becoming risky people try to exchange the Ruble for CHF and USD, but the Swiss central bank has made statements to the effect that they wish to keep EURCHF at its current 1.2 level which they have kept it at for like 3 years now. This negative rate incentivizes people and institutions who wishes to get rid of Rubles to seek alternative exchange currencies.
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those are 2015 ifs and buts ...
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This isn't the first time either, right? Just jumping in on the discussion here because Switserland as a country interest me greatly because they seem to do so well (too well?) without being noticed by anybody.
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On December 19 2014 00:03 SC2Toastie wrote: This isn't the first time either, right? Just jumping in on the discussion here because Switserland as a country interest me greatly because they seem to do so well (too well?) without being noticed by anybody.
nobody wants to notice Switzerland because they all know that their tax evasion money is there 
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On December 19 2014 00:33 Skilledblob wrote:Show nested quote +On December 19 2014 00:03 SC2Toastie wrote: This isn't the first time either, right? Just jumping in on the discussion here because Switserland as a country interest me greatly because they seem to do so well (too well?) without being noticed by anybody. nobody wants to notice Switzerland because they all know that their tax evasion money is there
I am neutral to that loaded statement.
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On December 18 2014 20:01 maartendq wrote:Show nested quote +On December 18 2014 17:48 Doublemint wrote:
"spend peasants, or the inflation is going to get you!" Honestly, bankers really should learn why people have savings. People save up money so they have something to fall back on on a rainy day. Very few people keep their money on a savings account because it is lucrative. Negative interest rates will not suddenly make people spend more. On the contrary, they will think "things are going bad, better save up even more." Most people haven't got a clue about inflation.
Its not about 'people', its about corporations and foreign investors. The Swiss are dealing with a massive inflow of speculators who are worried about Euro/Ruble/Yuan and prefer to invest in Swiss instead of American debt. The pressure on the Swiss is hurting their domestic industries so they are rationally responding: "You want to use us as a safe haven? Fine, but we will charge you like a bank would"
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EPT![[image loading]](http://www.ritholtz.com/blog/wp-content/uploads/2012/08/iceland.jpg)
