Quote from morganist:
The default, whether QE or traditional, would be so damaging that the banking system would likely fail. Regardless people would lose savings pensions etc and would revolt. No amount of money the wealth have would prevent them from that.
Quote from morganist:
The default, whether QE or traditional, would be so damaging that the banking system would likely fail. Regardless people would lose savings pensions etc and would revolt. No amount of money the wealth have would prevent them from that.
Quote from jo0477:
QE may be the only method of SAVING the banking system if things continue to progress along the current path. As stated before, with no safety net (ie assurances that the ECB will support sovereign debt) yields will continue to climb as the debt loads continue to mount. There are no assurances that Greece won't default, even if they meet the bailout conditions and receive the necessary funds. As well, that piece of the puzzle is contingent on somehow cramming the haircut down and avoiding a credit event. When the credit derivatives are unleashed, the real meltdown starts... The scariest part is the increasing lack of faith in the euro from the EU states - That's a problem that could be mitigated if the debt markets were to stabilize.
I give up... You're just too confused and there's no getting through to you. Best of luck!Quote from morganist:
You have pointed out again you have completely missed my point.
The reason for the debasement is the debt that already exists. It is the debt that has to be paid off already not buying future debt as you suggest. This is the problem, what I am saying is that if the Euro prints money or if the member states leave and they print money to pay the debt the consequence is as severe as if they simply default. What I am saying in addition to that is the foreign investors who already own the debt that has to be paid back will lose out on the majority of their investment regardless of whether there is a default or printing money. The level of debt is so high that the cost of this scenario will be global.
In terms of your comments on QE in the UK and Japan. They are completely irrevelant. You are discussing QE which has been used to stimulate growth not to pay off existing debt. This is where the problem arises on an international level and the exchange rate comes into play. If the debts are owed abroad the money has to paid off in that currency so if the currency it is owed is devalued the amount of the foreign currency it can buy is diminished. This is not the case in the UK or Japan the QE is to stimulate the economy and stays in the economy thus the consequence of inflation is purely a national thing and only has an impact on the domestic economy. The situation in the EU whether it is joined or seperated is a global issue and will have a huge impact other countries return as a result of QE. QE is not an option for the Euro or the member states unless you want global collapse. What I am alluding to in the OP is that either another solution to the situation in the Eurozone has to be found or QE will lead to a catastrophic consequence to outside investors. That is what the title says is it not?
Quote from Martinghoul:
I give up... You're just too confused and there's no getting through to you. Best of luck!
I have already said everything I have to say on the subject. A few times, if I am not mistaken. Hence, my point above. As to other people, frankly, dear, I just don't give a damn.Quote from morganist:
No I am making a valid point. Other people have seen it and they can appreciate the point I am making. Why do you not understand the affect a currency debasement has on foreign exchange? Is that what you are disputing? Or is it that there is a difference between QE to stimlulate growth and QE to pay off foreign debt?
Quote from Martinghoul:
I have already said everything I have to say on the subject. A few times, if I am not mistaken. Hence, my point above. As to other people, frankly, dear, I just don't give a damn.
I don't want to argue with you. You're not listening to me (or not hearing what I am saying). If you were, you would realize that I have already responded to you regarding the first part of your query. As to the UK QE being "different to debt pay off QE, which would be seen in the Euro", that's just pure unadulterated nonsense. There's no way for anyone to tell a priori whether a central bank's QE program constitutes debt monetization (I guess you call it "debt pay off QE") or is used to "stimulate growth". If you believe QE is debt monetization and its primary effect is to debase the domestic ccy, this effect should be observed in all economies where the CB is engaging in QE. Finally, how the hell do you know that QE in the UK is NOT being used to pay off foreign debt? Do you have a direct line to George Osborne/Robert Stheeman, who are telling you things nobody else knows? What "reserve account" could you possible be referring to?Quote from morganist:
You don't seem to appreciate the exchange rate consequences of the debased currency. QE in the UK has nothing to do with the exchange rates because it is not being used to pay off foreign debt. Most of it is sitting in a reserve account. So I fail to see your point. Just simply answer are you contesting whether the debasement of currency will have and impact on exchange rates or are you contesting that the UK QE is different a debt pay off QE, which would be seen in the Euro?