Greece's Debt Crisis - How Does This Happen?

Quote from Misthos:

We should have had a deflationary collapse (mini depression) in 1987.

It's too late. A deflationary depression now would be extremely severe and we will always have people second guessing not taking the inflationary solution approach. No politician wants that. Better to keep the game going as long as you can than to decide on a collpase today.

People are clueless. They hate the deficits the US Gov't is running. What they don't understand is that deficit spending is what's keeping the wheels from falling off the economy today.

My opinion is that we are going to keep this charade going as long as possible, hope others meltdown before we do, and then come out with a new monetary system - a clean sweep. This may result in war.

This is not tinfoil... monetary and fiscal policy did not end the last depression. A war did.
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I am inclined to agree, sorry to say.
 
Quote from vulture:

That pretty much summarizes the US situation as well. There is a short lived effect of issuing massive monetary stimulus, yet we find ourselves in a situation where asset prices deflate back to previous levels, yet individuals, corporations, governments are left with a massive bill for the exercise in futility.

At this point, you notice all planning is to get us thru this month, this quarter, maybe this year. On the state level, federal level, etc, etc. There is no long term planning anymore, it's just a "stop the bleeding" approach until the next crisis.
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Thats what the idiots at the Fed dont get. We have markets to send signals not for them to distort because of fanciful notions like we can get housing back to 2007. No one can plan or see the future
 
"There is no means of avoiding a final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion or later as a final and total catastrophe of the currency system involved."

- Ludwig von Mises
 
Greece is an extremely corrupt country , economically and politically. Forty % of the GDP is the public service sector, that means a lot of people that can't be fired and collect pensions. Shipping is less than 5% if memory serves. Just today they banned early retirement.
http://www.startribune.com/business/83888477.html.

They simply can't develop the income to meet the legacy expenses and debt, just like the U S soon.
 
Quote from Banjo:

They simply can't develop the income to meet the legacy expenses and debt, just like the U S soon.
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At least the US has passed on the retirement liability from the company to the individual, with the proliferation of the DC pension.
 
Quote from JRL:

What exactly has happened with Greece that has led their debt situation to what it is?

Is it not a diverse economy? Do they just love to spend money a bit too much?
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All those who got debt during the good times got into trouble.

All those, be it individuals, corporations, gov't etc.
Debt should only be used in true emergengency situations.
 
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