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It goes WAY beyond Greece. Italy is next up, and their debt is too large to refinance by a single entity...or perhaps all of the entities combined.
One plan being circulated has the US Fed buying ALL of the European Bonds held by US financial Institutions. I don't know the numbers, but to be sure it is multiple trillions of Dollars.
Had we rejected (as the people did, but not the Congress) Paulson's plan when we started this whole buying binge, we would have seen the bottom long before now, and be well on our way out of the ravine. Now we just blunder along, printing, spending, and praying that Great Depression II is only twice as bad as Great Depression I.
When have these European countries allied for us, or assisted us, when we could have used their help? If Socialism is failing them then they need to fall flat before they pick up. The US is in no stable condition to play 9-1-1 to anywhere but HERE.
Letting them fail may have big time negative implications for the US including our personal investments, our jobs, our real estate, and our retirement and estate planning.
Are we SURE we are OK with letting them fail?
This is a very valid point. But it doesn't seem like the US is really in a position to save anyone. We can't even save ourselves, let alone anyone else. EVen if we did manage a bailout and it "worked", then you have the problem of moral hazard, whereby the countries that get bailed out continue in their dysfuctional ways because in the back of their minds, they suspect they'll get bailed out again.
It seems the USA is participating in bailing out Greece and Italy - and the rest of the monetary union.
WASHINGTON — The Federal Reserve and other major central banks moved on Wednesday to help foreign banks more easily borrow and lend money, seeking to forestall a breakdown of global financial markets and giving Europe more time to wrestle with its debts. The latest round of interventions by central banks, including the expansion of an existing Fed program that lets foreign banks borrow dollars at a low interest rate, reflects growing concerns that Europe’s financial problems are hampering growth.
This is one of the problems with interdependence.
Because one of the entities failure may affect the other entities, they may have to step in to try to ensure that the troubled entity's fialure does not have drastic consequences for the whole group.
Even when the entitities that have to help have their own problems where efforts may be better focused.
I feel the US should have focused on home first give the information posted about the government choosing to help.
I may be wrong but it does seem like the US gives out way more aid than it is ever offered.
IMHO - The entire financial system is a mutually agreed upon fraud. There is no "money" any more. There is just debt. Our economy is based on the promise that if I do something for you, you will pay me sometime. The problem is the payment is made with borrowed money supported by a promise to pay the money back even if the borrower no longer has the means to do so. If the unsupported debt was eliminated there would not be enough "money" to run the system. I wonder how long this complicated invention can last.
Haveta agree w/ GregW here. Calling it "Sovereign Debt" is a joke anyway. The real issue is the "working joe" being used to create the "money" then being used to pay back the debt created. The few are profiting off the many. What is distorted is who is profiting?
Your local govt does the same thing. Just go get a copy of any of the CAFRs, not the budgets. See what fun they are having at your expense. It will explain why they think bailing out the banks and corps is more important than you. As the "debt slave" you will always be paying til people see behind the facade and change the system.
The whole notion that debt is valuable is a sick notion in my view.
The derivatives are a giant black hole, that hasn't been cleaned up at all. The in your face looting at MF Global, is likely just the beginning of a much bigger down turn to come. The next year is bound to get pretty crazy. Everyone thinking their retirement funds are safe might want to reconsider, especially seeing what is going on w/ the MF Global issue in plain sight. Although, I think this is just the tip of the iceberg.
I think most of you need to go take a cold shower. After that, maybe enroll in a couple of econ and history classes. If you're worried about all this "new globalization", what do you think Marco Polo was doing? What was the Dutch East India Company all about? Why did England and Spain create all those colonies in the New World?
And if you think world governments should have stood back and just let the spiral of 2007-08 continue to spin downward, ask youself how long you would have liked to live the life of a major hurricane survivor. There are no "white knights' at the bottom of the barrel, so think in terms of years and/or decades in your answer.
Then there's this nonsense about "moral hazard" and "the excesses of socialism" and apparently the notion that what the Fed and IMF do are being paid for out of US taxes. This is pure fluff that should have been wrung out of the system before even pretending to have reached Square-1.
Then there's the matter that the taxpayer's only real job is to pay taxes. You have no say in how they might be spent. We are (thankfully) a representative democracy, not a direct democracy. Elected representatives are there to represent constituent interests, not some bunch of grade-school level opinions.
In the bigger picture, no one is concerned about bailing out Greece. The concern is over assuring that global financial systems are strong and flexible enough to wind their way around blips and bumps such as Greece. All of your well-beings depend on the success of this venture.
Last edited by saganista; 12-22-2011 at 07:56 AM..
I think most of you need to go take a cold shower. After that, maybe enroll in a couple of econ and history classes. If you're worried about all this "new globalization", what do you think Marco Polo was doing? What was the Dutch East India Company all about? Why did England and Spain create all those colonies in the New World?
And if you think world governments should have stood back and just let the spiral of 2007-08 continue to spin downward, ask youself how long you would have liked to live the life of a major hurricane survivor. There are no "white knights' at the bottom of the barrel, so think in terms of years and/or decades in your answer.
Then there's this nonsense about "moral hazard" and "the excesses of socialism" and apparently the notion that what the Fed and IMF do are being paid for out of US taxes. This is pure fluff that should have been wrung out of the system before even pretending to have reached Square-1.
Then there's the matter that the taxpayer's only real job is to pay taxes. You have no say in how they might be spent. We are (thankfully) a representative democracy, not a direct democracy. Elected representatives are there to represent constituent interests, not some bunch of grade-school level opinions.
In the bigger picture, no one is concerned about bailing out Greece. The concern is over assuring that global financial systems are strong and flexible enough to wind their way around blips and bumps such as Greece. All of your well-beings depend on the success of this venture.
It's extremely RARE I get to read such an educated post on C-D. Well done, sage, I'm gonna call you a sage
I see too much breastbeating about "taxpayer money". Who cares? People pay taxes and that's it. We "pay" which means we don't have a say as to where it goes, it's not "your" money any longer, for you have already paid it away, for something in return - your life in a country.
I feel so redundant discussing this topic over and over. Europe will be bailed out by a massive trillion dollar bailout fund. It's coming. The only question is when. Becoz the most important people here are not the taxpayers, but the "bond holders"
We discussed this in the investing board, but the same populist sentiment spilled over and over and wrecked the thread, becoz the average Joe is so hung up on this persistent taxpayer dirge.
My poll is a clear indication that many people aren't aware of the fact that it's not "their" problem. It's OUR problem. As long as investors are in the dog house, the American and the world economy will be in the dog house. The world's government must react and will react. A series of elections and political wrangling is only delaying the inevitable.
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