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Post by Doug on Jul 5, 2015 14:24:21 GMT -5
Europe fraying at the edges.
The euro thing failing? How do you write off a default of 240 billion euros?
Maybe the solution for them is "The Mouse That Roared". Declare war on the European Union, surrender and let them rebuild the country. I guess they could declare war on the US but it's been so long since we won a war that we wouldn't know what to do if we won.
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Post by RickW on Jul 5, 2015 14:32:32 GMT -5
Greece does not seem willing to change. It's citizens wish to believe they can live as they wish, when they have no money. They were better off on their own, so the drachma could fall to its own level, making it cheap for everyone else to visit and spend money.
They are either going to write it off now, or more later. One wonders how long they'll keep trying.
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Post by Doug on Jul 5, 2015 14:45:42 GMT -5
Unraveling the euro. Spain, Portugal, Italy and maybe others leaving before they get as bad a the Greeks.
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Post by theevan on Jul 5, 2015 14:56:59 GMT -5
Meanwhile, Switzerland is sitting pretty with their Franc. And to a lesser extent, so is the UK with their Sterling.
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Post by Cosmic Wonder on Jul 5, 2015 19:09:51 GMT -5
Greece just gave the middle finger to the IMF. It was entirely predictable. The austerity already enforced on Greece left it with a 25% u over all unemployment rate, and a 60% youth unemployment rate. How much worse is it likely to get for them?
Mike
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Post by theevan on Jul 5, 2015 19:12:32 GMT -5
In other words, they just cut off their nose to spite their face
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Post by Cosmic Wonder on Jul 5, 2015 19:15:49 GMT -5
Evan, I don't think they are going to sink much lower from the level they are at, and they will certainly be better off than accepting the more sever austerity the IMF wanted to enforce.
Mike
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Post by RickW on Jul 5, 2015 19:23:05 GMT -5
They really do need to leave the union, and go back to being Europe's vacation spot. They'll be a lot better off.
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Post by Deleted on Jul 5, 2015 19:50:14 GMT -5
Nobody's fault but theirs, and a parable for poor fiscal discipline and and an entitlement mentality. If you can't compel your own citizens to pay their own taxes, why should anyone else step in to help?
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Post by theevan on Jul 5, 2015 19:55:44 GMT -5
I don't know Mike. From my reading of the subject the IMF has been patient until their patience has been stretched too thin. meanwhile Greece has acted like a petulant child.
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Post by Cosmic Wonder on Jul 5, 2015 19:58:13 GMT -5
I guess we are reading different sources. Mine say almost the opposite.
Mike
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Post by epaul on Jul 5, 2015 20:44:58 GMT -5
They really do need to leave the union, and go back to being Europe's vacation spot. They'll be a lot better off. Even that option is cloudy. A friend of mine is a devoted Hellenist who has been to Greece perhaps a dozen times. He told me his last trip, (this spring), was his last. The place is just too damn depressing. The places he treasures are neglected, broken, and are more evocative of a dirty bathroom than a grandeur that once was, and the beggars have transitioned from troubling to threatening. A garbage dump with fouled beaches and a too high percentage of angry, impoverished natives will not draw boatloads of tourists, and Greece, if not there already, is getting close.
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Post by epaul on Jul 5, 2015 21:13:33 GMT -5
Greece will be part of our election debate.
Conservatives describe Greece's meltdown as a classic example of a failed economy trying to spend its way out of the toilet with borrowed money it can't repay. Liberals can't afford to let this conservative view take hold across the electorate as it too closely resembles conservative critiques of their own economic positions and too many voters will begin to associate the failed Greek policies with economic policies favored by Liberals. So, the Left has to vigorously refute the conservative view (Greeks were fiscally irresponsible) and place the blame elsewhere; on Bankers, U.S. Corporations (always a good play), the IMF and (often) capitalism in general. The solution to Greece's economic woes, in the Liberal view, is not to spend and borrow less but to spend and borrow more. The economic crisis in Greece should be a Republican gift, on the face of it. If the Democrats can negate it and gain a draw on the debate, it will be a master stroke.
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Post by RickW on Jul 5, 2015 21:47:12 GMT -5
Be interesting to see. Greece never did have anything except tourism. The Democrats should be arguing that Greece in no way resembles the US, as they had nothing to begin with. They got pulled into trying to pretend they were the equal of the economies in the north - that's the only pie in the sky I see here. The Greeks believed the north would support them, and somehow transform them into something they were not. And the north I guess believed the same thing.
As the saying goes, never put lipstick on a pig. All you do is aggravate the pig, and it all looks the same in the end, anyways.
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Post by fauxmaha on Jul 5, 2015 23:32:16 GMT -5
We should start contingency planning now in case we are suddenly cut off from the steady supply of Greek manufactured goods.
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Post by epaul on Jul 5, 2015 23:58:47 GMT -5
Be interesting to see. Greece never did have anything except tourism. The Democrats should be arguing that Greece in no way resembles the US, as they had nothing to begin with. They got pulled into trying to pretend they were the equal of the economies in the north - that's the only pie in the sky I see here. The Greeks believed the north would support them, and somehow transform them into something they were not. And the north I guess believed the same thing. As the saying goes, never put lipstick on a pig. All you do is aggravate the pig, and it all looks the same in the end, anyways. That was going to be my very next post (I started, but then had to pack the car and gave it up). Yes, the conservatives are trying to equate Greece to the U.S., but they don't equate. Greece is a barren rock with no equity. The U.S. is the most complete productive country on the planet. We make more stuff, grow more stuff, invent more stuff, and have more stuff than anyone. If Greece is to be a lesson, it should be a complete lesson, not a partisan volleyball to be batted back and forth. Borrowing money to stimulate an economy is neither good nor bad, it all depends on where you put the borrowed money and what the pay off in that investment is. I don't know what Greece did with the billions and billions it borrowed, but I don't think they invested in the machinery of a working economy. It sounds like too much of it went into pensions, salaries, and the pockets of consumers. If so, they made the Chinese and their Euro trading partners happy as spent their borrowed money on stuff made by other people, but they didn't create a functioning Greek economy that was able to generate the income needed to pay back the loans. A farmer might borrow money. If he uses the borrowed money to buy a new boat, a home entertainment center, and take a nice vacation, he probably won't be farming long as those consumer items have no economic payback. If, however, the borrowed money is used to purchase seed, drain a field, purchase a more efficient piece of equipment, that borrowed money will make money, enough to pay back the loan and pay cash for the boat, car, and vacation. So too with a nation (like ours). It is fine to borrow money if the money is invested in something that will produce some tangible good, like making more money. If it just goes into the pockets of consumers, too much of it will have nothing to show for itself at the end of the day. It's fine to make the Chinese happy and tickle the pockets of purveyors of trinkets and fancies, but not with borrowed money as those things don't create the money needed to pay back the loan. There will be fierce arguments over what investments have an economically useful return and which ones don't. An argument can be made in favor of any investment that will make it appear to be a sound one. The successful nation will be the one that makes enough right choices with its investments and garners a tangible return from them. Sinkholes that produce little or no results are not the right investments. ?
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Post by epaul on Jul 6, 2015 0:05:17 GMT -5
We should start contingency planning now in case we are suddenly cut off from the steady supply of Greek manufactured goods. I'm covered. My pita bread is made in Vietnam.
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Post by jdd2 on Jul 6, 2015 0:18:07 GMT -5
I don't see why an economy that size is such a big deal or worry. 240B euros is a small fraction of the mkt cap that has disappeared from the chinese market over the last few weeks. BP, single company, just reached an 18B dollar gulf settlement, and its stock popped 5%.
At least Greece can be kicked out of the euro and return to their drachma.
A bigger problem is that Illinois can't similarly be kicked out of the US.
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Post by epaul on Jul 6, 2015 0:20:26 GMT -5
Illinois just has to figure out a way to get rid of Chicago.
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Post by fauxmaha on Jul 6, 2015 0:22:31 GMT -5
Borrowing money to stimulate an economy is neither good nor bad, it all depends on where you put the borrowed money and what the pay off in that investment is. ... It is fine to borrow money if the money is invested in something that will produce some tangible good, like making more money. If it just goes into the pockets of consumers, too much of it will have nothing to show for itself at the end of the day. Some Keynesian you are. In Keynesian theory, it matters not one whit where the money goes or what its used for. All that matters is aggregate demand. That's it. Critics of Keynesian stimulus always say "but the government makes bad (inefficient) spending decisions" and Keynesians reply "that doesn't matter. Spending is spending". To this very moment, there are plenty of Krugmans out there telling us that the entirety of Greece's troubles stem from "austerity" measures reducing aggregate demand. Personally, I'm more of a monetarist than anything (not that I think manipulating the money supply is a reasonable thing for governments to do. But I do think it is something they can do that actually has meaning, unlike fiscal policy, which inevitably amounts to cutting a few inches off of one end of the blanket, sewing it on the other end, and declaring it has become longer), and as such, I think that's where and why Greece is hitting the skids. A shared currency without a shared politics is insanity. It can't hold. Greece needs its own (soon to be worthless) currency so they can happily eat their own dog food in peace. Tying a do-nothing, barely-a-notch-above-third-world economy like Greece to the likes of Germany and the UK was always insane.
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