Athens agreed to a package of tough economic reforms last week in exchange for a third bailout of up to 86 billion euros ($93 billion).
Will they save them from default?
Will they save them from default?
GREECE and the Euro
- Thread starter oldnemesis
- Start date
http://www.nytimes.com/2015/07/23/world/europe/alexis-tsipras-greek-debt-deadline.html?_r=0
"Extend and Pretend"???
http://www.city-journal.org/2015/eon0702ng.html?gclid=CL_x1ubj8MYCFcGRHwodU1MNow
http://www.marketwatch.com/story/how-we-can-already-see-the-debt-deal-killing-greece-2015-07-22
1. Greece IS tourism
2. Austerity and crises is killing tourism
3. Debt is impossible to service
4. More debt to pay back previous debt is absurd
5. The only answer is BANKRUPTCY. Debt repudiation. Quash the crises. Rebuild tourism. Grow more olives
6. The Germans have a lot of money, they shouldn't have lent Greece more than they can pay. Eventually they will have to endure the loss.
sorry
"Extend and Pretend"???
http://www.city-journal.org/2015/eon0702ng.html?gclid=CL_x1ubj8MYCFcGRHwodU1MNow
http://www.marketwatch.com/story/how-we-can-already-see-the-debt-deal-killing-greece-2015-07-22
1. Greece IS tourism
2. Austerity and crises is killing tourism
3. Debt is impossible to service
4. More debt to pay back previous debt is absurd
5. The only answer is BANKRUPTCY. Debt repudiation. Quash the crises. Rebuild tourism. Grow more olives
6. The Germans have a lot of money, they shouldn't have lent Greece more than they can pay. Eventually they will have to endure the loss.
sorry
Last edited:
http://www.marketwatch.com/story/af...ll-want-a-plan-b-to-leave-the-euro-2015-07-29
http://www.dw.com/en/blame-game-begins-as-refugees-swarm-the-chunnel/a-18616953
Religion is what keeps the poor from murdering the rich.
Napoleon Bonaparte
When the Chunnel was conceived it wasn't thought of as a route by which the poor could get to the rich.
http://www.dw.com/en/blame-game-begins-as-refugees-swarm-the-chunnel/a-18616953
Religion is what keeps the poor from murdering the rich.
Napoleon Bonaparte
When the Chunnel was conceived it wasn't thought of as a route by which the poor could get to the rich.
Is Ireland an example of how Austerity programs can be successful??
http://www.afr.com/opinion/columns/...ch-greece-an-austerity-lesson-20150506-ggva9p
Some don't think so:
http://www.irishexaminer.com/viewpo...ty-success-is-no-model-for-greece-340662.html
I guess it depends on which side of the scalpel you're on.
http://www.afr.com/opinion/columns/...ch-greece-an-austerity-lesson-20150506-ggva9p
Some don't think so:
http://www.irishexaminer.com/viewpo...ty-success-is-no-model-for-greece-340662.html
I guess it depends on which side of the scalpel you're on.
No, it will not save them from default...its just a band-aid treatment over a bullet wound.
Why would anyone have to "brace" for a level not seen since 2012. This has been going on for a long time without any real fix. Just plugging a hole in a very leaky clay dam. We all know what the basic outcome is going to be. So again, why should anyone have to 'brace" for what the fundamentals say will eventually happen. No one is going to fix it right until things get bad enough.
Bernanke speaks about 'European problem" and Germany's trade surplus.
http://www.brookings.edu/blogs/ben-bernanke/posts/2015/07/17-greece-and-europe?rssid=Ben+Bernanke
Krugman says Austerity is "madness"
http://www.cnbc.com/2015/07/20/whos-winning-on-greece-krugman-or-germany.html
The European Union was meant to create a flat playing field for all EU members by creating a single currency and reducing Tariffs etc.
https://en.wikipedia.org/wiki/European_Union
But some countries have more economic and industrial strength then others and the strong countries (Germany) are making the weak countries (Greece) into chattels . Germany has a large trade surplus and has greatly benefited from the union, but Greece continues to have a large trade deficit.
This is not to deny that Greece was spending borrowed money like a drunken sailor, but economic union without political union is not a workable plan.
http://www.bloomberg.com/news/articles/2010-05-13/euro-has-no-future-without-a-political-union-commentary-by-paul-de-grauwe
"The contrast with the U.S. is great. There are similar deficit-and-surplus regions there, yet these divergences are alleviated by automatic redistributions from the centralized federal budget to the deficit regions, without anyone noticing."
Through 'austerity' Germany hopes to make Greece like Germany. It's not going to happen. A lot of Greece's trade deficit is with Germany.
If Greece becomes more German than who will the Germans and Greeks sell their stuff to??? The US of course...in exchange for iPhones.
Some people have floated the idea of a pan-European bond which would help bail out Greece but make all members of the Union equally liable for repayment. This has not received good reviews. It is really the same thing as a debt haircut that the IMF has been in favor of.
The bottom line is simply that Germany is doing well under the union, Greece isn't. Without some sort of financial transfer the union cannot survive.
http://www.brookings.edu/blogs/ben-bernanke/posts/2015/07/17-greece-and-europe?rssid=Ben+Bernanke
Krugman says Austerity is "madness"
http://www.cnbc.com/2015/07/20/whos-winning-on-greece-krugman-or-germany.html
The European Union was meant to create a flat playing field for all EU members by creating a single currency and reducing Tariffs etc.
https://en.wikipedia.org/wiki/European_Union
But some countries have more economic and industrial strength then others and the strong countries (Germany) are making the weak countries (Greece) into chattels . Germany has a large trade surplus and has greatly benefited from the union, but Greece continues to have a large trade deficit.
This is not to deny that Greece was spending borrowed money like a drunken sailor, but economic union without political union is not a workable plan.
http://www.bloomberg.com/news/articles/2010-05-13/euro-has-no-future-without-a-political-union-commentary-by-paul-de-grauwe
"The contrast with the U.S. is great. There are similar deficit-and-surplus regions there, yet these divergences are alleviated by automatic redistributions from the centralized federal budget to the deficit regions, without anyone noticing."
Through 'austerity' Germany hopes to make Greece like Germany. It's not going to happen. A lot of Greece's trade deficit is with Germany.
If Greece becomes more German than who will the Germans and Greeks sell their stuff to??? The US of course...in exchange for iPhones.
Some people have floated the idea of a pan-European bond which would help bail out Greece but make all members of the Union equally liable for repayment. This has not received good reviews. It is really the same thing as a debt haircut that the IMF has been in favor of.
The bottom line is simply that Germany is doing well under the union, Greece isn't. Without some sort of financial transfer the union cannot survive.
Last edited:
I've read a lot about Greece and the Euro. Almost all experts say that there is no future for Greece with Euro as a currency. Germany is the biggest beneficiary of the Euro money union. And now they don't want make concessions for Greece.
Another view of how this came to be:
------------------------------------------
Greece’s Collapse Was a Reversion to the Mean… Who’s Next? (Phoenix)
Because of the rampant fraud and money printing in the financial system, the real “bottom” or level of “price discovery” is far lower than anyone expects due to the fact that the run up to 2008 was so rife with accounting gimmicks and fraud. The Greek debt crisis, like all crises in the financial system today, can be traced to derivatives via the large investment banks. Indeed, we now know that Greece actually used derivatives (via Goldman Sachs) to hide the true state of its debt problems in order to join the Euro. Spiegel:
Creative accounting took priority when it came to totting up government debt. Since 1999, the Maastricht rules threaten to slap hefty fines on euro member countries that exceed the budget deficit limit of three% of gross domestic product. Total government debt mustn’t exceed 60%. The Greeks have never managed to stick to the 60% debt limit, and they only adhered to the three% deficit ceiling with the help of blatant balance sheet cosmetics… “Around 2002 in particular, various investment banks offered complex financial products with which governments could push part of their liabilities into the future,” one insider recalled, adding that Mediterranean countries had snapped up such products.
Greece’s debt managers agreed a huge deal with the savvy bankers of US investment bank Goldman Sachs at the start of 2002. The deal involved so-called cross-currency swaps in which government debt issued in dollars and yen was swapped for euro debt for a certain period – to be exchanged back into the original currencies at a later date.
The above story for Greece is illustrative of the story for all “emerging markets” starting in 2003: tons of easy money, rampant use of derivatives for accounting gimmick, and the inevitable collapse. From a big picture scenario, in 2003, the global Central Banks abandoned a focus on inflation and began to pump trillions in loose money into the economy. Because large banks could loan well in excess of $10 for every $1 in capital on their balance sheets, global credit went exponential. The effect was sharply elevated asset prices that greatly benefitted tourism-centric economies such as Greece. As I stated in our issue Price Discovery:
If the foundation of the financial system is debt… and that debt is backstopped by assets that the Big Banks can value well above their true values (remember, the banks want their collateral to maintain or increase in value)… then the “pricing” of the financial system will be elevated significantly above reality. Put simply, a false “floor” was put under asset prices via fraud and funny money. Take a look at the impact this had on Greece’s economy. Below is Greek GDP dating back to the 1960s. Having maintained a long-term trendline of growth the country suddenly saw its GDP MORE THAN DOUBLE in less than 10 years after joining the EU?
In many regards, this “growth” was just a credit binge, much like housing prices, stock prices, etc. By joining the Euro, Greece was able to borrow money at much lower rates (2%-3% vs. 10%-20%). Rather than using these lower rates to pay off its substantial debts, Greece funneled as much money as possible towards Government employees (nearly one in three Greek workers). As a result, Government wages nearly doubled to the point that your typical Government employee was paid 150% more than his or her private sector counterpart. Add to this a pension system in which retirees are paid 92% of their former salaries and you have a debt bomb of epic proportions.
Read more …
------------------------------------------
Greece’s Collapse Was a Reversion to the Mean… Who’s Next? (Phoenix)
Because of the rampant fraud and money printing in the financial system, the real “bottom” or level of “price discovery” is far lower than anyone expects due to the fact that the run up to 2008 was so rife with accounting gimmicks and fraud. The Greek debt crisis, like all crises in the financial system today, can be traced to derivatives via the large investment banks. Indeed, we now know that Greece actually used derivatives (via Goldman Sachs) to hide the true state of its debt problems in order to join the Euro. Spiegel:
Creative accounting took priority when it came to totting up government debt. Since 1999, the Maastricht rules threaten to slap hefty fines on euro member countries that exceed the budget deficit limit of three% of gross domestic product. Total government debt mustn’t exceed 60%. The Greeks have never managed to stick to the 60% debt limit, and they only adhered to the three% deficit ceiling with the help of blatant balance sheet cosmetics… “Around 2002 in particular, various investment banks offered complex financial products with which governments could push part of their liabilities into the future,” one insider recalled, adding that Mediterranean countries had snapped up such products.
Greece’s debt managers agreed a huge deal with the savvy bankers of US investment bank Goldman Sachs at the start of 2002. The deal involved so-called cross-currency swaps in which government debt issued in dollars and yen was swapped for euro debt for a certain period – to be exchanged back into the original currencies at a later date.
The above story for Greece is illustrative of the story for all “emerging markets” starting in 2003: tons of easy money, rampant use of derivatives for accounting gimmick, and the inevitable collapse. From a big picture scenario, in 2003, the global Central Banks abandoned a focus on inflation and began to pump trillions in loose money into the economy. Because large banks could loan well in excess of $10 for every $1 in capital on their balance sheets, global credit went exponential. The effect was sharply elevated asset prices that greatly benefitted tourism-centric economies such as Greece. As I stated in our issue Price Discovery:
If the foundation of the financial system is debt… and that debt is backstopped by assets that the Big Banks can value well above their true values (remember, the banks want their collateral to maintain or increase in value)… then the “pricing” of the financial system will be elevated significantly above reality. Put simply, a false “floor” was put under asset prices via fraud and funny money. Take a look at the impact this had on Greece’s economy. Below is Greek GDP dating back to the 1960s. Having maintained a long-term trendline of growth the country suddenly saw its GDP MORE THAN DOUBLE in less than 10 years after joining the EU?
In many regards, this “growth” was just a credit binge, much like housing prices, stock prices, etc. By joining the Euro, Greece was able to borrow money at much lower rates (2%-3% vs. 10%-20%). Rather than using these lower rates to pay off its substantial debts, Greece funneled as much money as possible towards Government employees (nearly one in three Greek workers). As a result, Government wages nearly doubled to the point that your typical Government employee was paid 150% more than his or her private sector counterpart. Add to this a pension system in which retirees are paid 92% of their former salaries and you have a debt bomb of epic proportions.
Read more …