I answered this in the edit of my previous post. Specifically, that the IMF, arguably, deserves more faith in these matters than any other body on this planet, given their track record.
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Reuters: Situation in Europe is serious
- Thread starter bearice
- Start date
M
morganist
Quote from Martinghoul:
I answered this in the edit of my previous post. Specifically, that the IMF, arguably, deserves more faith in these matters than any other body on this planet.
Can I have that paper you stated.
The IMF did not deal with Equador or Argentina very well in my opinion.
Many economists fear that Greece will be another IMF battle ground. Greece should listen to how Argentina solved its debt woes with the IMF or it may suffer for many years.
http://www.voxeu.org/index.php?q=node/5018
http://www.voxeu.org/index.php?q=node/5018
I keep reading questions... such as how can they repay it.
As an american I have been conditioned to respond they will just spend more by printing more...
But here the Greeks can't exericse their right to inflate their way out.
Ironically I find myself arguing inflation is a sovereign right.
As an anti- internationalist I find myself thinking that the Greek politicians had no right to surrender their peoples right to govern themselves. (even if it was bypopular vote.)
I postulate to myself that the greeks should disavow their Euro Debt arbitrarily establish the drachma at a 1 to 1 ration with the euro. And see what happens.
Note: inflation in a system with progressive tax rates is theft.
I am therefore arguing that the Greek government should re establish its rights to screw the population itself rather than surrender it to foreigners.
As an american I have been conditioned to respond they will just spend more by printing more...
But here the Greeks can't exericse their right to inflate their way out.
Ironically I find myself arguing inflation is a sovereign right.
As an anti- internationalist I find myself thinking that the Greek politicians had no right to surrender their peoples right to govern themselves. (even if it was bypopular vote.)
I postulate to myself that the greeks should disavow their Euro Debt arbitrarily establish the drachma at a 1 to 1 ration with the euro. And see what happens.
Note: inflation in a system with progressive tax rates is theft.
I am therefore arguing that the Greek government should re establish its rights to screw the population itself rather than surrender it to foreigners.
Argentina was an unmitigated disaster, indeed. Not entirely sure about Ecuador. It was interesting reading the IMF paper on the lessons of Argentina. On the other hand, they seem to have done all right with Turkey.Quote from morganist:
Can I have that paper you stated.
The IMF did not deal with Equador or Argentina very well in my opinion.
Here's the IMF Staff Report:
http://www.imf.org/external/pubs/ft/scr/2010/cr10110.pdf
This is the most paradoxical statement I have seen in a while.Quote from jem:
As an anti- internationalist I find myself thinking that the Greek politicians had no right to surrender their peoples right to govern themselves. (even if it was bypopular vote.)
I can tell you what happens. Assuming drachma is free-floated, it immediately goes to 0.0001 of a Euro and probably stays there for a while. This ain't rocket science.I postulate to myself that the greeks should disavow their Euro Debt arbitrarily establish the drachma at a 1 to 1 ration with the euro. And see what happens.
Given that the Greek govt originally issued the EUR-denominated debt, hasn't it been screwing the Greek people all along, rather than the foreigners?I am therefore arguing that the Greek government should re establish its rights to screw the population itself rather than surrender it to foreigners.
Il Principe
Guest
Quote from jem:
"I postulate to myself that the greeks should disavow their Euro Debt arbitrarily establish the drachma at a 1 to 1 ration with the euro. And see what happens. "
If they value at 1:1, then let it float, it immediately goes to 10:1, as A.) not much demand for Greek-made goods/services & B.) Greeks will pay up to get out of a new currency that everyone knows has issues.
If they peg it, they'll have to print or pay up in the credit mkt to keep it level(or within a band if floating peg).
Much easier to be Euro-fied, but should they take your route, it'd be more painful, but perhaps more clear as to what they need to do to right their ship.
Il Principe
Guest
Where a floated currency goes - it not as obvious at it may seem on "paper".
If it were so obvious wouldn't the U.S. dollar be a hell of a lot lower.
Wouldn't the "intrinsic worth" be altered if the Greeks brought in central bankers to play games... the way our fed does?
What if they hired volker and they did not have to print money to pay off any old debt.
Would investing in greece be similar to a bank issuing a credit card to a person who just cleared bankruptcy.
What if they started to raise interest rates. Doesn't a raising of interest rates almost always cause currency strengthening.
If it were so obvious wouldn't the U.S. dollar be a hell of a lot lower.
Wouldn't the "intrinsic worth" be altered if the Greeks brought in central bankers to play games... the way our fed does?
What if they hired volker and they did not have to print money to pay off any old debt.
Would investing in greece be similar to a bank issuing a credit card to a person who just cleared bankruptcy.
What if they started to raise interest rates. Doesn't a raising of interest rates almost always cause currency strengthening.
It is pretty obvious to me and probably to a whole bunch of other people. There's also quite a few precedents.Quote from jem:
Where a floated currency goes - it not as obvious at it may seem on "paper".
What could possibly lead you to this conclusion?If it were so obvious wouldn't the U.S. dollar be a hell of a lot lower.
Firstly, the Greeks already have a central bank and, surprise, it employs central bankers. There's also the ECB. Secondly, you're gonna have to be a little bit more specific about the "games" central bankers play.Wouldn't the "intrinsic worth" be altered if the Greeks brought in central bankers to play games... the way our fed does?
What on Earth does Volcker have to do with money and not having to pay old debt?What if they hired volker and they did not have to print money to pay off any old debt.
In the world of sovereigns, people who go through a bankruptcy generally don't get any credit cards for a decade or more.Would investing in greece be similar to a bank issuing a credit card to a person who just cleared bankruptcy.
Strengthening only happens if there are enough investors that want to hold assets denominated in the higher yielding ccy. Moreover, it's not like raising rates is costless, as high interest rates don't exactly do wonders for the domestic economy. Just ask Volcker. Also, why don't you read the infamous story of Soros, pound sterling and the ERM?What if they started to raise interest rates. Doesn't a raising of interest rates almost always cause currency strengthening.