Reuters: Situation in Europe is serious

Quote from jem:

Where a floated currency goes - it not as obvious at it may seem on "paper".

--->It'd be obvious in the black mkt where the "true"
value would show. And obvious at the food market.

If it were so obvious wouldn't the U.S. dollar be a hell of a lot lower.

--->Sure and plenty who shorted it. It's the reserve and
transaction currency,though, of the world
which gives it an underlying bid
(sometimes strong/sometimes not). And the dollars for
low cost Chinese imports thing(for the time being)
keeps it up.

Wouldn't the "intrinsic worth" be altered if the Greeks brought in central bankers to play games... the way our fed does?

---> Games? Bottom line, not much to sell, so not much IV.

What if they hired volker and they did not have to print money to pay off any old debt.

---> He'd probably say quit spending.

Would investing in greece be similar to a bank issuing a credit card to a person who just cleared bankruptcy.

---> No, they borrowed more money, haven't discharged old
debts.

What if they started to raise interest rates. Doesn't a raising of interest rates almost always cause currency strengthening.
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--->A high interest rate doesn't necessarily mean a currency
is sound, fundamentally. In this instance, it'd be like a
metal roof on a thatched hut. It keeps the money in, for
sure, but it goes to debt service.
 
Quote from Martinghoul:

It is pretty obvious to me and probably to a whole bunch of other people. There's also quite a few precedents.

What could possibly lead you to this conclusion?

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.

What on Earth does Volcker have to do with money and not having to pay 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.

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?
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Were those answers really worth writing?

1. When everyone is on your side of the trade... you are wrong.
2. having traded for a living I am always leery of the obvious result.
3. I had no desire to turn this into a Fed bashing debate.... but...

I refer you to Greenspans record of controlling a bubble by lowering rates and allowing liar loans. i thought central banks were supposed modulate cycles not exacerbate them. I will defer to guys like Thomas Jefferson?
Thomas Jefferson wrote:

"The [privately-owned] Central Bank is an institution of the most deadly hostility existing against the principles and form of our Constitution...if the American people allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporationsthat will grow up around them will deprive the people of all their property until their children will wake up homeless on the continent their fathers conquered."


4. If Volker was involved with a new Greek Central Bank would you really still make an bet on inflation.... I brought him up as an example of how perhaps a central bank should be run. Now do you see the connection .
5. In the world of Sovereigns we have Bono getting debt forgiven a loans from the IMF. Debt forgiveness is a lot like bankruptcy --- don't you think?
6. Its odd you say that because the moral of Volkers story is that a little short term pain while he crushed inflation expectations... set the U.S. up for a 15 year expansion. Bernanke just spent how many trillion to avoid pain.
He changed agency debt in to treasury. he spent how many trillions on bad assets.


The story about Soros has turned into marketing cliche my 10 year son knows it.

Why don't you tell us who was the money behind Soros. That would be a useful reply.
 
Quote from Martinghoul:

I am willing to give the Greeks and the Eurozone as a whole the benefit of doubt... I think they deserve a fair chance to try to make all the measures work.
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So are you a buyer of Greek debt?
 
Quote from bearice:

Leading Debt to GDP Figures

Country Name, Gross External Debt, GDP, percentage of external debt vs. GDP

1. Ireland – 2.386tr, 188.4b, 1267%

2. Switzerland – 1.338tr, 316.7b, 422.7%

3. UK – 9.087tr, 2.226tr, 408.3%

4. Netherlands – 2.452tr, 672b, 365%

5. Belgium – 1.246tr, 389b, 320.2%

6. Denmark – 607.38b, 203.6b, 298.3%

7. Austria – 832.4b, 329.5b, 252.6%

8. France – 5.021tr, 2.128tr, 236%

9. Portugal - 507b, 236.5b, 214.4%

10. Hong Kong – 631.13b, 306.6b, 205.8%

11. Norway – 548.1b, 275.4b, 199%

12. Sweden – 669.1b, 344.3b, 194.3%

13. Finland – 364.85b, 193.5b, 188.5%

14. Germany – 5.208tr, 2.918tr, 178.5%

15. Spain – 2.409tr, 1.403tr, 171.7%

16. Greece – 552.8b, 343b, 161.1%

17. Italy – 2.31tr, 1.823tr, 126.7%

18. Australia – 891.26b, 800.2b, 111.3%

19. Hungary – 207.92b, 196.6b, 105.7%

20. USA – 13.454tr, 14.26tr, 94.3%
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How can everyone be in debt. A lot of this is they are all holding each others debt. What is left is owned by China, Taiwan and Japan and the likes.
 
These numbers cannot be correct as both Japan and China have national debts. The Japanese have one of the highest debt to gdp ratios that I know of, excluding these numbers. Not sure where you got them. Link?

**edit**

This is external debt to GDP. Japan has a very high savings rate. Still I would appreciate a link.
 
Quote from bkveen3:

These numbers cannot be correct as both Japan and China have national debts. The Japanese have one of the highest debt to gdp ratios that I know of, excluding these numbers. Not sure where you got them. Link?

**edit**

This is external debt to GDP. Japan has a very high savings rate. Still I would appreciate a link.
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I agree China and Japan should be on the Debt list. Here is the link-:

http://www.cnbc.com/id/30308959/The_World_s_Biggest_Debtor_Nations

http://www.picassodreams.com/picass...p-to-external-debt-default-is-inevitable.html
 
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