Athens ablaze tonight

[dingodan]

Tax avoidance is rife.

Here is a good example:

As the nation of Greece teeters on the edge of bankruptcy, its tax authorities are taking aim at Greece's notorious tax-evading rich elite. Using satellite photos, the tax authority examined the claim of the residents of Athens's wealthy suburbs and discovered that, rather than the 324 swimming pools claimed by the locals, there were 16,974 of them.

http://boingboing.net/2010/05/04/satellite-photos-cat.html

Tax evasion and tax avoidance are two different things. One is lawful, and one is not.

 

[sten_super]

In the spirit of Ponzi & Madoff.

If you just print money to pay off these debts you will cause massive inflation. This destroys a currency, and in doing so transfers wealth from the poor and the middle class to the wealthy.

It certainly would cause inflation, and I wouldn't disagree that inflation damages an economy (although I know that we'd differ on the degree), but the question is; would that leave us in a worse situation than 10+ years of austerity? The degree of inflation would also vary depending upon whether you allowed banks to resume the same level of lending; by ensuring that they didn't re-engage in the same level of lending that they previous held you'd be able to (somewhat) limit the money supply and reduce the inflation created.

As I mentioned previously, I'm not sure how you end the crisis without some serious out-of-the-box thinking. If you've got any ideas I'd be interested in hearing them.

 

[Chicken Runner61]

Indeed. They think this is all about banks etc, when it's about Greeks not working enough and voting for governments that kept hiding the problems. Who did they think was paying this whole time?

Whilst its true the Greeks didn't pay enough tax the problem does lie with the banking system that encouraged NATIONS including us to borrow money to supposedly improve life and living conditions. They did that by removing barriers to trade and also by taking away restrictions such as the Gold standard to allow Fiat currencies across the world. Its Government spending planned by the world bankers that created this mess.

The warnings against this were given years ago but they secretly planned and removed it and other restrictions and now you have the end result.

Even Buffet's father warned against this in 1948 - something he has forgotten or pretends to forget today

Human Freedom Rests on Gold
Redeemable Money
By HON. HOWARD BUFFETT
U. S. Congressman from Nebraska
Reprinted from The Commercial and
Financial Chronicle 5/6/48
Congressman Buffett stresses relation between
money and freedom and contends without a
redeemable currency, individual's freedom to
sustain himself or move his property is
dependent on goodwill of politicians. Says
paper money systems generally collapse and
result in economic chaos. Points out gold
standard would restrict government spending
and give people greater power over public
purse.

 

[beorhthelm]

Whilst its true the Greeks didn't pay enough tax the problem does lie with the banking system that encouraged NATIONS including us to borrow money to supposedly improve life and living conditions. They did that by removing barriers to trade and also by taking away restrictions such as the Gold standard to allow Fiat currencies across the world. Its Government spending planned by the world bankers that created this mess.

sorry, are you really trying to say that the banks caused this by encouraging, even forcing, the worlds governments to spend, rather than the governments themselves chosing to take that action. thats venturing off into conspiracy batland. it has to also be pointed out that the 30's depression happened with the gold standard in place, as did recessions before than after, something continuely ignored by the fans of gold.

 

[Spiros]

The fault lies squarely with the French and German banks and governments in my opinion. The French and German citizens must be getting very pissed off that they are going to have to prop up foreign countries financially.

I don't think German citizens should be that pissed off. This crisis has kept the Euro weak and German exports competitive. If they were still using the Deutsch-mark it would be so strong no-one could afford Audis, BMWs, Bosch white goods, etc outside of Germany.

However I don't know how anyone can blame the German and French governments for the fact that the Greek government has been spending far more on public services over the years than they are getting in income. That's not capitalism or bankers, its a straightforward chronic refusal to balance the books that have put the Greeks in this mess. If they blame the EU they are just in denial.

 

[Dick Knights Mumm]

There was a very good idiots guide to what is happening in the eurozone on This American Life the other week. When the criteria was set for entry to the Euro - the Greeks basically kidded themselves and everyone else (who suspected/knew what was going on) to be allied the German mark. It opened up a flow of cash to the general population - who were completely unprepared for it - and now the actual price has to be paid.

 

[Chicken Runner61]

sorry, are you really trying to say that the banks caused this by encouraging, even forcing, the worlds governments to spend, rather than the governments themselves chosing to take that action. thats venturing off into conspiracy batland. it has to also be pointed out that the 30's depression happened with the gold standard in place, as did recessions before than after, something continuely ignored by the fans of gold.

I havent got time to get into this now but

Yes partly I am - but how you can fail to see the failure of economic strategies that you seem to favour can only make me suspect your job depends on them or you are completely manipulated by the traders, bankers and speculators that you dance to.

For anyone not to have been in gold in the past 4 years is mad let alone the last 12. To ignore gold as a redeemable currency (let alone anything else) is exactly what the Fiat currency bankers want as it limits the power of government and their central banks , in this case its power to debase money. Without such a discipline to protect, those central banks would inevitably come under constant pressure to help finance their governments in much the same way that they had done before and during the wars with all of the inflationary consequences that come with it.

You might want to argue that the gold standard prolonged the depression but to use it to justify Fiat currency is plain dumb in the face of what we have now and what we may get in a few years. You might also want to reflect that within a week of Britain going off the gold standard the £ lost a quarter of its purchasing power. If you take a good look at the Feds involvement in the past 100 years and the speed and which crises now happen since that involvement. All fiat currency does is benefit the richest and most powerful people and organisations - and unless you are part of that elite you are insane to think there is any benefit to you.

Even people just after the stone age saw the value of gold and despite all the attempts by central banks to destroy its value they cant.

If you sold your home in 2008 and bought gold (£10k a kilo) you would now be able to buy that home back (£35k a kilo) and have still twice the value in cash/gold and if we keep printing money the way we are you will see £50k a kilo soon. And before anyone mentions Gordon Brown you might want to check a chart and see that gold really only went skyward from 2005 when bank lending and leverage went mad.

And you wonder why people are gold bugs?

 

[Chicken Runner61]

I don't think German citizens should be that pissed off. This crisis has kept the Euro weak and German exports competitive. If they were still using the Deutsch-mark it would be so strong no-one could afford Audis, BMWs, Bosch white goods, etc outside of Germany.

However I don't know how anyone can blame the German and French governments for the fact that the Greek government has been spending far more on public services over the years than they are getting in income. That's not capitalism or bankers, its a straightforward chronic refusal to balance the books that have put the Greeks in this mess. If they blame the EU they are just in denial.

Fine thats the Greek problem solved but how do you explain Spain, Italy, Ireland, Portugal and.......... the UK

 

[Spiros]

Fine thats the Greek problem solved but how do you explain Spain, Italy, Ireland, Portugal and.......... the UK

Each case is broadly the same. Each of those governments has spent beyond its means (in the case of the UK a large amount went on shoring up the banking system) and that money has to come from somewhere. Its basic household economics - if you spend more than you earn then you borrow/go into debt once your savings are gone. In my book there is really no mystery here, just a lot of politicians trying to blame someone else for the current state of affairs. Fortunately for us we voted out the government that was chucking our money around like confetti and now have one that's running a tighter ship. Because we started that process in 2010 we are in better shape than the likes of the Greeks in their denial and the Italians who only really acted once it was too late.

 

[sten_super]

[MENTION=6711]Chicken Runner61[/MENTION], the problem with proposing the gold standard is that the Great Depression happened under that system. That suggests that it's not the money system that is the decisive factor, but something else. In fact (and this may be what you were getting at) I think it's far more to do with the banking system than the gold standard. If you limited the ability of banks to 'create' money (in the sense that you stopped fractional reserve banking) then under either a gold standard or fiat money system you would be limiting the creation of money to only the central bank. That's certainly a system I'd favour (although I realise it will never happen).

 

[beorhthelm]

Yes partly I am - but how you can fail to see the failure of economic strategies

i see teh failures, just dont see some of the alternatives are going to work either. my responce was promted as i was very surprised at your view, as i thought you were a left winger, not a right wing austrian-economist.

You might want to argue that the gold standard prolonged the depression

yep, as do the history books. its not an arguement in favour of fiat currency, its just that gold is not the answer. I would only piont out there is nothing inherently wrong with fiat currency, if (a big one) it is well controlled. thats where policy needs to be directed. Its great to use the past decade to promote gold, but thats witha backdrop of easy credit and rampant growth in gold consuming countries, but what happens next year or next decade? it rose in similar proportions in the 70s/early 80's then crashed. its just another commodity like copper or grain. the fabled link to inflation is disconnected, on the past ten year rises its either overvalued or has another decade or two inflation priced in.

 

[Westdene Seagull]

I've just watched this - http://www.bbc.co.uk/news/magazine-17202274 - and it brings home somewhat the happenings in Greece. I doubt any of us would put up with it here !