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There is nothing beautiful about the collapse in Greece.
It is going to create a lot of hardship for younger generations who did not behave irresponsibly.
When Greece ends up out of the Eurozone and goes back to a currency like the Drachma, ordinary Greeks will learn that things they need from outside their country like oil, automobiles, steel, electronics, and pharmaceuticals will be virtually unaffordable. Many innocent people will pay.
If that is where things are heading they can beat the fall by running to it.
That is the beauty of the ability to look-ahead.
Mind if I run an edit on that last paragraph . . . would suggest the following >>>
Ordinary Greeks may learn -- as Americans may learn -- that things they need like oil, automobiles, steel, electronics, and pharmaceuticals are best sourced locally.
Well If you go to the gas station and put in your credit card and it doesn't work what are you going to do? If the truck that brings your food to the supermarket does the same thing how will you eat? If you don't eat will you live for very long?
Quote:
Originally Posted by Philip T
Becomes Game Over for the Globalony Economy and the end of the nonsense.
A Beautiful Thing.
Collapse the mess, and use a local currency.
Go Greece Go!
What is coming is a top down government in the EU.
A wise government would have appreciated the opportunity that it was getting and would have behaved with some fiscal prudence. Because of mismanagement that opportunity has been squandered. Many young Greeks will now pay the price for irresponsibility by older generations.
well, that is exactly the pattern that the US is following as well. Running up unsustainable deficit loads just to "test out" if it works... we are the next Greece for sure considering that our revenues are 500 billion and our current budget is $1.5 trillion...even a 2nd grader would realize that we are doomed on this path.
Why are we worried about which money grubbers get their gold coins, If Greece were not in the euro they could print currency and take care of themselves. The whole country is the size of a small state. Apparently the whole world rises and falls over these parasites getting their money
Hi Boompa,
Exactly. If Greece is sucked of euros, explain to me why two people in Greece are to have no medium of exchange? Lots of labor and capital will be standing around because they don't have a piece of paper spelled euro.
The problem is this. Banks have borrowed money to buy sovereign debt instrument. If Greece defaults then they will default as well. If they default then the people that borrowed money to loan it to them default as well. This is causing a bank run.
I don't think Greece's debt is large enough to bankrupt the world.
The big problem, I believe, is the fact that for many years Greece was able to borrow money at low interest rates because investors thought Greece was not likely to default because of their Eurozone membership. If Greece defaults and/or leaves the Eurozone, that confidence goes down the drain. So other countries who can also borrow money at low interest rates (for the same reasons Greece could) such such as Italy and Spain, will no longer be able to do so, since investors know being in the Eurozone gurantees nothing. Because they can't borrow money (which is vital for countries to raise funds), they will eventually also default. And when they default, since their debts are significantly larger than Greece, that's when the bank runs will start.
The big problem is not Greece itself, but the domino effect (and confidence crisis) it could trigger.
Tourism is one of Greeces main source of cash. Look at where Korea got from nothing. Besides the problem is not how they do it but why it affects everyone else.
In 2008, tourism amounted to 18.2% of GDP.
Historically, Greece has attracted middle class tourists rather than 'mass market' tourism which has tended to go to Spain or, more recently, Turkey. Consequently, it would be quite hard for Greece to grow their share of tourism especially with lower cost competition from Turkey and with the very well developed Spanish tourist industry being closer to the main European population centers.
Shipping is the main Greek economic sector. But that is a global industry which rises and falls with the world economy and no currency devaluation is going to make it more attractive.
Global capitalism, global markets, global meltdowns...we all need to understand how it all works.
Capitalism didn't cause the problem its people dependent on too fewe provide for them. Its now said that bonholders i original agreement tooka 21% haircut and now maybe a 41% haircut. The problem is it was voted on and took all these months to get that agreement. bnakig is global now with global impliactions from making the world work ;so the effects wil be felt all over just like when banks here stopped dealig with other in 2008 because they did know the others real position.
asking the responsible to keep bailing out the irresponsible.
look at what is going to happen with dexia:
'Dexia SA (DEXB) may be left with the lender’s worst assets under plans that would allow the French and Belgian governments to avoid injecting more capital into the bank, two people with knowledge of the talks said.
Under the option most favored by the French, the two governments would guarantee Dexia’s borrowings before splitting up the lender, said the people, who declined to be identified because the talks are private. Belgium may then assume Dexia’s assets in that country, while France’s state-owned La Banque Postale and Caisse des Depots et Consignations would buy Dexia’s French municipal-lending unit, leaving Dexia as the “bad bank,” the people said.
That would avoid an immediate recapitalization of Dexia, which would then sell its legacy assets over time, the people said. If the lender transferred its bad assets to a new company, the bank would need additional capital because a sale would crystallize what are at the moment paper losses for Dexia, one of the people said.
A final decision is yet to be made and the negotiations are still fluid, the people said. The governments pledged yesterday they would take “all necessary measures” to protect clients and will guarantee all Dexia’s loans.
France will announce more details about Dexia’s rescue tomorrow, French Finance Minister Francois Baroin told RTL radio today. Deposits with Dexia are backed by state guarantees which won’t increase French state debt, he said.
Belgian Finance Minister Didier Reynders said guarantees that will be provided will be “inferior” to the ones granted in 2008, when Belgium’s share exceeded 90 billion euros. He also said that Belgium has “no intention” of chalking up losses, adding that it will collect a fee in return for the guarantees. Dexia paid 489 million euros last year for use of guarantees, according to company filings.
You catch that? Here is an admission that the bank is full of “assets” which are “bad.” But no one wants to take any losses, so they will simply split the company up and use it as a “bad bank” to hold the rotten assets until they can be sold, but somehow, by some mysterious means no one will have to take losses! Oh, and it’s a “rescue!” Or wait, is it a “ringfence?” Because you know they must build a “fence” around the banks prior to letting Greece default so as to not shock the markets, LOL.
government "guarantee" means that the citizens are expected to eat the losses, and nothing more than that.
evidently that is preferable to punishing the guilty, and discontinuing the fraud.
I don't think Greece's debt is large enough to bankrupt the world.
Reggie Middleton Boom Bust Blog this person has some good info on just how interconnected the banking system is. It is like a set of domino’s tip one and they all fall down.
Quote:
Originally Posted by Hesky
The big problem, I believe, is the fact that for many years Greece was able to borrow money at low interest rates because investors thought Greece was not likely to default because of their Eurozone membership. If Greece defaults and/or leaves the Eurozone, that confidence goes down the drain. So other countries who can also borrow money at low interest rates (for the same reasons Greece could) such such as Italy and Spain, will no longer be able to do so, since investors know being in the Eurozone gurantees nothing. Because they can't borrow money (which is vital for countries to raise funds), they will eventually also default. And when they default, since their debts are significantly larger than Greece, that's when the bank runs will start.
The big problem is not Greece itself, but the domino effect (and confidence crisis) it could trigger.
My thoughts exactly but it is already underway.
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