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Old 10-27-2014, 09:27 AM
 
Location: Atlanta
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For those who argue that "economics" rule over all, even over the democracy of whole nations, you should check out this article about Iceland, who chose to extend their middle finger to the money-grubbers of the world and do things their own way, as decided by its people.

Why Iceland Should Be In The News, But Is Not

If only Greece had done the same - they'd be in much better shape than they are now. Instead, they're being crushed under the boot of the money-grabbers, being forced to pay back debt they can ill afford.

Debt is nothing but paper - actually a series of digital bits in a computer. It can be wiped away with a touch of a button. So why do we have to impoverish whole nations to pay back debt they can ill-afford, putting millions of people in abject poverty? Vanish the debt, a few money-grubbers suffer a few paper losses, but the lives of millions would be vastly improved.

I can only hope the US will follow in the footsteps of Iceland someday when our collective debt becomes too great of a burden for our people.
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Old 10-27-2014, 02:07 PM
 
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But it was economic policies that got Iceland into that possession in first place. Iceland real problem was they bought bdebt that was high risk in first place and depended on its high returns.
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Old 10-29-2014, 09:00 AM
 
Location: Vallejo
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Yup.

Also different in that Iceland was basically a bubble. Most of the "bad debt" in Ice Land was a result of foreigners rushing to Iceland's banking system chasing returns. It's a little easier to point the finger and tell the money grubbers to stick it when less than 10% of the money the banks default on is your countries money.

Anyway, it was widely reported. The blogger might be ignorant of current events, but that's a separate issue. Greece looked at doing precisely what Iceland did, in gist, and seizing a percentage of deposits, percentage of deposits over a certain amount. It went through various iterations and was massively unpopular since most of the money in the Greek system, especially at that point, was money that belonged to Greek citizens rather than foreign Danes and Englishmen. Also, Icelands economy was otherwise healthy whereas the PIIGGS all have varying real economic problems.

Greece would best be served by dissolving its government, for example, and bringing in the Chinese to run things as they've done with half of their money-losing port. The Chinese half now is bustling with activity, filling the tax coffers, providing jobs and economic activity. The Greek half is still poorly run like anything the Greek government operates and costs more to operate than it brings in.

Last edited by Malloric; 10-29-2014 at 09:38 AM..
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Old 10-29-2014, 12:41 PM
 
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The huge difference between Iceland and Greece is monetary sovereignty.

In Greece they may have to administer mandatory hair cuts to its citizens just to stay afloat. Because they cannot create their money or debt based in what is essentially for them, a foreign currency. In Iceland hair cuts are never mandatory.

Sovereign debt is somewhat of an illusion, but based on trust. So that trust cannot be abused to any great extent.

In the US the TDC has been proposed as a way to reduce our National Debt load. For those that believe in such things.

Trillion dollar coin - Wikipedia, the free encyclopedia
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Old 10-30-2014, 05:45 PM
 
Location: Ohio
17,998 posts, read 13,238,246 times
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Quote:
Originally Posted by NorthStarDelight View Post
For those who argue that "economics" rule over all, even over the democracy of whole nations, you should check out this article about Iceland, who chose to extend their middle finger to the money-grubbers of the world and do things their own way, as decided by its people.
Yes, all 320,000 people.

In what way is Iceland like Greece?

In what way is Iceland like the US?

The author suckered you with a fallacy:

False Analogy
The problem is that the items in the analogy are too dissimilar. When reasoning by analogy, the fallacy occurs when the analogy is irrelevant or very weak or when there is a more relevant disanalogy.

And for the record, the Laws of Economics are real....that's why the banks collapsed.

Quote:
Originally Posted by NorthStarDelight View Post
If only Greece had done the same - they'd be in much better shape than they are now. Instead, they're being crushed under the boot of the money-grabbers, being forced to pay back debt they can ill afford.
If only you and the author would be concerned with Truth instead of propaganda and disinformation.

Didn't Greece agree to the terms of the Euro?

Iceland didn't use the Euro.

Suppressed Evidence
Intentionally failing to use information suspected of being relevant and significant is committing the fallacy of suppressed evidence. This fallacy usually occurs when the information counts against one’s own conclusion.

Why would you both lie and suppress that information?

Probably because neither of you understand economics or fiance or banking.

That would also be more proof of the False Analogy.

Quote:
Originally Posted by NorthStarDelight View Post
Debt is nothing but paper - actually a series of digital bits in a computer. It can be wiped away with a touch of a button.
Misrepresentation
If the misrepresentation occurs on purpose, then it is an example of lying. If the misrepresentation occurs during a debate in which there is misrepresentation of the opponent’s claim, then it would be the cause of a straw man fallacy.

Quote:
Originally Posted by NorthStarDelight View Post
I can only hope the US will follow in the footsteps of Iceland someday when our collective debt becomes too great of a burden for our people.
Ah, well, the crux of the matter....sheer ignorance.

Because Iceland, Greece and the US are so dissimilar, they cannot be compared; only contrasted.

Iceland is monetarily sovereign; so is the US; but Greece is not.

The Icelandic government does not issue securities; the US government does; Greece is prohibited by law.

Iceland is a closed system; the US and Greece are open systems.


Let's look at the facts, and especially at the information you and the author chose to hide from people, or simply ignored.

Iceland is the only user of the currency it issues: the Kroner. That makes Iceland in terms of monetary policy a "closed system." Because it is a closed system, the value of the Kroner is directly rated to the GDP of Iceland.

If the money supply is greater than the GDP, then you have Monetary Inflation; if less, then Monetary Deflation. You instantly know when Monetary Inflation exists, because the price of everything "inflates" at the exact same rate.

Example: Monetary Inflation has annual 20% rate, then the price of tampons increases 20% every year, as does the price of pencils, and gasoline, and all food and all clothing and all housing and all cosmetics and all electronics and all cars and all healthcare and everything, as in every thing as in every single thing, including your auto insurance, electric bill, natural gas bill, cell/telephone bills, including your wages and salaries.

So when an ass-clown starts ranting: "Federal Reserve...inflation....stagnant wages....Blue Meanies!" they just talked out of both sides of their neck. Stagnant wages are impossible when Monetary Inflation exists.

Iceland is 320,000 people and effectively a big rock surrounding a volcano. Unless Iceland can figure out how to control other volcanoes around the world using their volcano, they'll never amount to much.

What you and the author both ignore, is the fact that Iceland cannot grow all that much, so how do Icelandies get to live the good life and live large like Americans? The only way to do that is to sell their souls, which is what they did. Blame rests solely with the People of Iceland, and not their government -- whom they chose, and not the banks.

Oct. '12 BBB- Stable
Jul. '13 BBB- Negative
Jan. '14 BBB- Stable
Jul. '14 BBB- Positive

When the Icelandic government needs money for any reason, it's only choices are to raise taxes, print more money and cause Monetary Inflation, or borrow money.

Seeing how the People of Iceland got a credit card, ran up debt, and then defaulted, lenders are not likely to loan money to Iceland when needed.

No State is legally, morally or ethically obligated to loan money to any other State, nor to purchase securities.

Why would any foreign government, foreign bank or foreign investor loan money to Iceland? The chances of not getting that money back, are quite high. And those who are willing to take the risk, are very cautious and panic at the first of instability or negativity, which ultimately has an negative impact on Iceland.

Also, just curious as to why you failed to mention that Iceland's per capita GDP fell from $65,000 to $45,000

That's a decline of 33%, which is not chump change.

For those who fawn over things they don't understand...

Mircea
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Old 10-30-2014, 06:27 PM
 
Location: Ohio
17,998 posts, read 13,238,246 times
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Quote:
Originally Posted by NorthStarDelight View Post
If only Greece had done the same - they'd be in much better shape than they are now. Instead, they're being crushed under the boot of the money-grabbers, being forced to pay back debt they can ill afford.
Greece is different than Iceland or the US.

Greece does not have sovereign currency. The relationship between Greece and the Euro is identical to the relationship between any US State or Commonwealth and the US Dollar.

Just as US States cannot print US Dollars, Greece cannot print Euros. Likewise, just as US States cannot sell treasury securities, neither can Greece.

The Greek government gains revenues in exactly the same way any US State does, through various taxes on personal income, corporate income, Capital gains, import and export tariffs, fees or duties and sales taxes, plus other fees and taxes.

When the Greek government spends more money than it collects, what is can it do?

The Greek government can raise taxes; or the Greek government can borrow money from foreign governments, foreign banks and foreign investors; but Greece cannot print Euros or issue Euro-based securities.

Let's review Greek History briefly:

1] In 1948, the American People led by Murderer Harry Truman illegally overthrew the Greek government and set up a puppet-dictatorship that would buy goods from the US so that Americans could have jobs and buy TVs and watch the Ozzie & Harriet Show. Since the Greeks were taxed to death to keep Americans employed, the Greeks played with the US army toys they were forced to buy.

2] In 1967, the American People were angry because Greece wasn't buying enough stuff to keep Americans employed, and they told their leader LBJ to illegally overthrow the Greek government. Thousands and thousands of Greeks were slaughtered in the fighting, including 8,000 in the first month alone. LBJ's new hand-picked dictators --- The Colonels -- then bought $Billions worth of unneeded military hardware so Americans could have color TVs and watch Elvis gyrate on the Ed Sullivan Show.

3] The Colonels taxed the hell out of the Greek People to pay for the F-104 Starfighters and F-4 Phantoms and A-7 Corsairs and refurbished WW II destroyers that employed Americans, letting roads and schools and universities and hospitals fall into disrepair and depressing the Greek People.

4] In 1974, freedom fighters (pronounced "terrorists" in American English) over-throw the US puppet-dictatorship. Not all insurgent factions are represented in the new government, resulting in continued hostilities into the 1990s. US State Department issued travel advisories for northern Greece, where anti-American sentiment was strong, and several insurgent factions had killed US military members, US State Department members, and other American civilians, throughout the late 1970s, 1980s and early 1990s.

Now that everyone knows what happened....

Surely you can come to appreciate the plight of the Greeks.

Think about it....it's 1948 and you have 20 years. The Americans overthrow your government, installing a dictator who denies you basic human and civil rights, while simultaneously taxing you to death.

26 years later.....it's 1974 and you have 46 years and you are finally free of American Tyranny....you want what's yours; you want what was stolen from you.

Right?

It's only natural to feel that way.

The problem is the Greeks went overboard on their overly generous Social Welfare Benefits and light on taxation.

As Greece becomes unable to pay for its Social Welfare Benefits it keeps raising taxes, resulting in reduced revenues and ends up borrowing money from foreign governments, and foreign banks and foreign investors, since Greece cannot print Euros and cannot sell Euro-based securities.

Greece has a spending problem.

Greece must implement Austerity and get its spending and revenues under control.

Austerity does not mean simply slashing the budget 10% or 20%. It means reviewing policies, programs and agencies, and eliminating those that are wasteful or inefficient. Those foreign States that implemented Austerity in the correct way were successful, and those who just slashed spending failed miserably.

The Greek People can surely do like the Icelandies and thumb their noses, but the problem will not go away.

Very simply, it comes down to this:

1] Greece is "obligated" (snort/chuckle) to certain Social Welfare Spending, plus other normal government spending

2] Spending exceeds revenues

3] No level of taxation will ever result in Greece collecting more money in revenues than it spends

4] Greece is in a perpetual state of borrowing to cover its expenditures.

5] Greece has been cut-off

Greece has a spending problem coupled with a revenue problem. Greece has little power to increase revenues. The only option for Greece is to implement Austerity Measures.

The Greeks can thumb their noses at the bankers, but that will not resolve the underlying causal issues, which is that Greece has a spending problem coupled with a revenue problem.

If Greeks do as Iceland did, the only thing that happens is Greece collects tax revenues, then pays out only what it collects, and you have forced Austerity, because no one is going to loan Greece money to pay for what Greece has no money to pay.

Greece can certainly de-couple from the Euro and return to the Drachma, but then that makes Greece a closed system with rampant hyper-Monetary Inflation.

In that case, Greece still has a spending problem, still has a revenue problem, has more problems due to hyper-Monetary Inflation, and will not be able to borrow money, so Austerity is rammed down their throats no matter what happens.

You can give up your fantasies anytime you want....


Mircea
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Old 10-30-2014, 07:01 PM
 
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I toured Iceland at the height of the bubble just before it burst. Stuff was EXTREMELY expensive, I think I paid like $700 for a wool sweater.

Absolutely stunning country, like no where else on earth.

That being said, their economy really hit the crapper since I was there.
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Old 10-30-2014, 09:28 PM
 
Location: Ohio
17,998 posts, read 13,238,246 times
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Quote:
Originally Posted by NorthStarDelight View Post
I can only hope the US will follow in the footsteps of Iceland someday when our collective debt becomes too great of a burden for our people.
That is not going to happen.

It's really a shame -- and frightening -- that people who don't understand anything get to vote and mess things up for everyone else.

I'll try to dumb this down for the benefit of the non-starters, and so the many liars and deceivers can be destroyed.

The US government spends money annually.

In an ideal situation, the government would only spend the exact amount that it collects in revenues, leaving a balance of $0. That hasn't happened for a very, very long time. In reality and practice, the governments spends far more than it collects in revenues. What options does the US government have?

1] the government can do nothing, leading to hyper-Monetary Inflation worsening things for everyone.

2] the government can borrow money from foreign governments, foreign banks or foreign investors, except it doesn't. Why not? Quite the contradiction in terms, no? A super-power.....on its hands and knees begging for loans from foreign entities? Yeah, right. And all the while at the mercy of lenders? Sure.

3] the government borrow money using different mechanics: it packages its debt as treasury securities in the form of short- and long-term notes, bills and bonds, and auctions them off to the lowest bidder. And what is bid? Interest rates. And that would be for short-term bills mostly. Treasury auctions off $500 Million at 30 days, and one State bids 0.25% interest while the other bids 0.20% so that the lowest is the winner.

Call it what you want, but at the end of the day, it's a loan....the government is borrowing money from foreign and domestic entities, and agreeing to pay the money back with interest.

What happens when government sells debt and no one comes to buy it?

Apparently, that day has already come.

There is evidence that suggests the US government is buying back its debt using proxies.

Presently at $17.9 TRILLION, the federal debt is greater than 25% of World GDP.

Who is unable to see a problem there?

I stated several years ago that US debt would exceed 33% of World GDP by 2030, and that at current rates, it would exceed 50% of World GDP by 2042.

Several articles and op-ed pieces of late have suggested 33% of World GDP by as early as 2025.

Again, who is unable to see a problem here?

Really? The Brits and others are going to voluntarily reduce their Standard of Living to 3rd World Level so that their governments can buy US debt?

Really?

Only a total nutter completely disconnected from reality would even attempt to think that would happen.

So, if you do not get your debt under control, who will buy your debt in the Future?

No one.

So, now what? Hyper-Monetary Inflation.

Let's talk about the mechanics of that, since people have such a freaking difficult time with it.

Iceland, Romania and Zimbabwe are all examples of closed systems. They're all monetarily sovereign and the only users of the currencies of are the people of those States. There's a relationship between the money supply and GDP.

The US is an open system. The US Dollar is sovereign, but Americans are not the only users or consumers of US Dollars. The US Dollar is a de facto international currency, and a de facto international currency of trade.

Because that is true, we do not look at money supply vs GDP, rather we look at money supply vs GDP plus all US Dollar denominated transactions globally.


As I said a few years ago, the US can pump about $9 TRILLION to $13 TRILLION into the money supply before you start seeing signs of Monetary Inflation, and you'd probably reach that at the end of this decade.

Quote:
Originally Posted by " " View Post
You have no way of telling that. Even then, hyper-monetary inflation =/= hyperinflation. Hyper monetary inflation is fixable.
I'm sure it's hard for people who don't understand Economics to grasp the concepts, but we can know and we use integral calculus.

Many of the inputs are predicated on Future Value.

For example, oil production is not static, right? Oil production is constantly increasing. Every new barrel of oil on the Market consumes US Dollars...

...assuming it is sold in US Dollars.

You all need to understand how and why your world works the way it does.

Your whole world revolves around the Petro-Dollar. In other words, a good chunk of your Standard of Living and Life-Style is wrapped around commodities like oil, natural gas, metal ores, minerals and such being sold in US Dollars.

And if they are not sold in US Dollars?

Say Hello! to a 2nd or 3rd World Life-Style and Standard of Living.

Don't worry....after a few months of riding the bus to an internet cafe so you can use the internet for an hour or two, it will become second nature to you, as though you always did it that way from the moment of birth.

So, those are some things we look at, and nothing fundamental has changed, the estimate stands at $9 TRILLION to $13 TRILLION by the end of this decade.

For a long time now, many people have known that the only solution for Japan's financial woes is to expand their currency. I don't mean print more Yen, rather I mean increase the number of users and consumers of Yen.

Japan had no way to do that, until recently with the rise of China and its 1.5 Billion population and its GDP that now exceeds US GDP.

For about the last 2 years or so, Japan and China have been working on a unified Asian currency similar to the Euro. I also happen to know that Russia, India and Iran are discussing some platform currency for Central Asia that could lead to a unified currency in the future.

That spells Doom for America.

Every foreign State that abandons the US Dollar in any way, shape or form, rather it is a wholesale switch like Iraq and Iran (and others did) or whether it is the use of basket currencies, pushes the US closer and quicker to Monetary Inflation.

The best way to understand Monetary Inflation is to always remember it is the currency's "fault."

A grapefruit is worth 1 Unit, and if the money supply is in balance, then 1 Unit and $1 are the same.

Assume annual Monetary Inflation rate of 35%.

A grapefruit is still worth 1 Unit, but it takes $1.35 to buy the grapefruit.

Note that the value of the grapefruit remains unchanged -- it's still 1 Unit -- it is the currency that is defective and has lost value because it is over-supplied.

This is readily seen with exchange rates.

When money supply is balanced, then a grapefruit is worth 1 Unit which is the same as $1 and 1 Euro.

With 35% annual rate, then a grapefruit is still worth 1 Unit, but $1.35 and 1 Euro.

You're paying more, but the Germans and French aren't. There is nothing wrong with the grapefruit or the Euro, the problem is the US Dollar.

Don't forget the rate is in addition to the normal Supply & Demand rate. Currently, 1 Euro = $1.26 but at 35% Inflation 1 Euro = $1.61

If you understand that, then you can understand why the price of everything, as in every "thing" as in every freaking thing increases.

That includes your wages/salaries. It's not that your labor is worth more, rather the currency is worth less, and so to compensate or off-set, your wages increase.

There's always a lag time, usually 9-12 months, unless it is so bad that it has to be every 4-6 months. The bottom line is that you get soaked, because by the time the inflationary period ends (assuming it ever does), you never get that last pay raise to offset.

This raises the issue of the indebtedness and claims by many that those in debt gain advantage with Monetary Inflation.

I would dispute that. In the end, there's no real advantage, or it is such that it has negligible impact.

I use the word "everything" with the presumption that people are smart enough to understand that those things dictated or governed by contract to do not change in price.

Salaried and on contract is not probably not going to be a winner for you. If you run a business with fixed prices on parts or supplies, you could win or lose, depending on whether there's a clause that allows you to make adjustments to prices.

Home-owners....mortgages are contracts so the principal is fixed, but you don't gain until your wage/salary increases, and by the time you're there, how badly have you been soaked already?

It's problematic, because the price of homes will increase, but this is not the 1970s, it's the 21st Century and we have Generation Stupid-X and Generation Stupid-Y who will run up their HELOC for purposes of instant self-gratification, then cry like sissies when Monetary Deflation starts and they are now under-water on their mortgages.

Be wary of escalation clauses in mortgage documents. That's why we use a Real Estate Attorney, and if we cannot afford one, then we cannot afford to buy a house.

I hear rumors they're out there, but I've never actually seen one. I'd like to see one for the legal context as well as to see what formula they are using.


There are many events that will be occurring over the next 2-20 years that will cause economic strife in the US. Austerity measures need to be put in place, now, so that they can be increased incrementally, instead of suddenly.

The question isn't "If" foreign entities stop buying US debt, it's "When" and that's just a matter of time. A unified Asian currency will be extremely competitive to both the Euro and Dollar. Both the 2nd and 3rd (and 4th) Worlds are coming to the realization that there is no benefit to the Euro or Dollar, and that both are harmful to them, thus the search for alternatives, which are becoming available.

If you were forced to pay competitive interest rates, you'd go belly-up in no time.

So much for silly premises....


Mircea
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Old 10-30-2014, 09:43 PM
 
Location: Ohio
17,998 posts, read 13,238,246 times
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Quote:
Originally Posted by NorthStarDelight View Post
For those who argue that "economics" rule over all, even over the democracy of whole nations, you should check out this article about Iceland, who chose to extend their middle finger to the money-grubbers of the world and do things their own way, as decided by its people.

I can only hope the US will follow in the footsteps of Iceland someday when our collective debt becomes too great of a burden for our people.
Okay, well, that elderly couple next-door....go ahead and extend your middle finger to them.

After all, they are money-grubbers, right?

The school your children attend.....needed Capital improvements.

That elderly couple next-door, bought bonds issued by your school district via your State.

Those bonds financed the Capital improvements.

The State took the money for the bonds at 3.25% and purchased US treasury securities to finance your government's spending spree at 5.25%, so the elderly couple next-door gets paid back, and your State makes 2% gross profit and you pay less in taxes.

But that's evil.....evil stinky bankers.

Flip off of the pension plans for teachers, fire-fighters, city/county/municipal employees and State government employees.

Those are the evil stinky bankers who bought US government debt.

Flip the bird at corporate and non-corporate pension plans that bought US government debt, because they're evil stink bankers.

The cities, counties and States that have "rainy-day funds" and have them invested in US treasury securities, go ahead give them the California Hello, too.

Oh, and the insurance companies and their holding companies that bought US debt to ensure they have enough funds to provide insurance reimbursement for your healthcare, or car or home, or boat, or business, or the flood, or the hurricane, or the tornado.

So, go ahead and walk away from your debt and mess up all those people....and "those people" might include or those you care about.

I just wanted to make sure everyone sees how silly the entire premise of this thread really is.

Finalizing...

Mircea
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Old 10-31-2014, 07:32 AM
 
Location: West Coast of Europe
19,865 posts, read 18,312,135 times
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The whole European Union plus Euro have to go, that would be better for everyone in the long run. Unlike what we are told by the elite all the time, there is no need for a huge European block. Each country could go its own way at its own pace, implement its own policies according to its own specific priorities and needs, for instance create special economic zones, which is currently all but impossible in the EU.

Regarding Iceland, it is so small, specific, and unimportant that it doesn't serve as an example for anything.
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