Greece - the drachma - devalue

[Chicken Runner61]

no. are you certain of your doomed future? many countries have devalued in the past and it not led to bedlam. these days we get fed pictures of riots on 24hr news, missing the localised nature of such incidents. human nature is to make the best of the situation, life goes on, if your life revolves around the tourist £ for 5 months you'll get back to work.

But its not straight devaluation is it, you are basing your whole outlook on economics and not practical events. You can't move to a devauled Dracma overnight it will take weeks. It's likely the currency is already set up and stored somewhere, just think of the turmoil that would occur if that comes out too early.

Go on then how would you ...

Exchange the Euros the greeks had for the new currency?
How would you convert all the Greek Euro's around the globe and from what date?
How would you stop Greeks from moving all their Greek Euros's to other countries banks ready to convert to millions of Greek Drachma the day after devaluation?
At what point does goods bought by Greece in Old Euros flip to the devalued rate?
And what are you going to value those junk bonds in Euros or devalued Drachma?

 

[Steve.S]

The running of the country will not be affected by leaving europe any more than it was by joining , the Germans would like every body to beleive leaving will be a didaster it wont.When other countries see how well Greece improve there economy after leaving they will follow, which is what the Germans are afraid of ,hence all the propoganda Germanys 3rd attempt at world domination is starting to fail

Well said, I agree with you. If Greece go back to Drachma they can set own interest rates/devalue or whatever. All the other countries have to do is set the interest on their loans at a reasonable rate and they can pay them back. Germany is the only country benifiting from the Euro

 

[Chicken Runner61]

what you're missing is all the greek debt is already written off or written down - the banks already got dicked. most has been rolled over into low 30 year bonds and much brought up by the ECB, with conditions attached. while in the Euro its a millstone around their neck, if they get out, default once and for all then they can start rebuilding. its matter of short term pain for long term improvment or a long term moribund nation.

Not all of the debt was written off and they still can't make the repayments. You are forgetting that the greeks were to be given further loans subject to them agreeing FURTHER austerity measures.

What will they rebuild with? Tourism?
Who will go to Greece if there is austerity?
The Germans?
Greece does not have vast commodities or an industrial giant system to produce its way out of this, it has some agriculture and an international shipping industry.

 

[beorhthelm]

Go on then how would you ...

i dont profess to be an expert, but those that do say it would take a couple of weeks. its mostly technical stuff for banks and businesses to sort out. the immidate action of putting cash into the system is a couple of days once the stuff is printed. a long weekend bookended by bank holidays they are saying.

they managed to bring in the Euro ok, dint they?

btw, somthing to note there is no "greek" euros. if there were, there wouldnt be an issue.

 

[Steve.S]

But its not straight devaluation is it, you are basing your whole outlook on economics and not practical events. You can't move to a devauled Dracma overnight it will take weeks. It's likely the currency is already set up and stored somewhere, just think of the turmoil that would occur if that comes out too early.

Go on then how would you .

Exchange the Euros the greeks had for the new currency?
How would you convert all the Greek Euro's around the globe and from what date?
How would you stop Greeks from moving all their Greek Euros's to other countries banks ready to convert to millions of Greek Drachma the day after devaluation?
At what point does goods bought by Greece in Old Euros flip to the devalued rate?
And what are you going to value those junk bonds in Euros or devalued Drachma?

When the Greeks can change back to the Dracma, it would be done slowly, they would start to print the money and drip it in. Just like any change to gradually fade out the Euro.At the moment they can not do what we do and print extra money. When they have the Dracma back, they would be able to ease it in. To keep Bailing them out is not working, the interest rates are hurting them

 

[Chicken Runner61]

Well said, I agree with you. If Greece go back to Drachma they can set own interest rates/devalue or whatever. All the other countries have to do is set the interest on their loans at a reasonable rate and they can pay them back. Germany is the only country benifiting from the Euro

What have they got to trade then? Where will they get buy their oil to make electricity from? How much will it cost and what will they pay the bill in? Will you go on holiday to somewhere hot that has to cut power 3 times a day?

 

[Chicken Runner61]

i dont profess to be an expert, but those that do say it would take a couple of weeks. its mostly technical stuff for banks and businesses to sort out. the immidate action of putting cash into the system is a couple of days once the stuff is printed. a long weekend bookended by bank holidays they are saying.

they managed to bring in the Euro ok, dint they?

btw, somthing to note there is no "greek" euros. if there were, there wouldnt be an issue.

Nice try but.......

If you check your Euros you will see they are all marked as to where the came from. If it doesn't/didn't matter how would you apportion how much to print for each nation

Your two weeks might work if you are bringing in an exchange currency but I don't believe anyone has ever exchanged a currency that is tied to 23 other nations?

Just a little additional problem, what happens to any gold held by the ECB do they give any of that back or is that put back on a tab for Greece when they recover?

 

[Steve.S]

What have they got to trade then? Where will they get buy their oil to make electricity from? How much will it cost and what will they pay the bill in? Will you go on holiday to somewhere hot that has to cut power 3 times a day?

They are trading now, changing from Euro to Dracma will not change that. We are not in the Euro and we manage. At the moment they are throwing money at Greece and it does not matter how much money they give them, its still not solving the problem. Its time to make a change. In this Country we have a low credit rating, and the reason for that is that we can set our own interest rates, and if needed print more money. Greece does not have that opition and has its interest rates set by others.

 

[Butch Willykins]

if you are interested in this thread then you will certainly be interested in a great book I'm currently reading called 'Planet Ponzi' by Mitch Feierstein.

If you are of a nervous disposition, or mortgaged up to the eyeballs I suggest you read something else!

 

[Chicken Runner61]

They are trading now, changing from Euro to Dracma will not change that. We are not in the Euro and we manage. At the moment they are throwing money at Greece and it does not matter how much money they give them, its still not solving the problem. Its time to make a change. In this Country we have a low credit rating, and the reason for that is that we can set our own interest rates, and if needed print more money. Greece does not have that opition and has its interest rates set by others.

I think you are a little confused. Bond market interest rates are set by the markets not by the countries that sell them. Printing money is not the same as selling bonds as printing can lead to hyperflation.
If Greece leaves the Euro let alone Europe its credit rating will be trash and its not exactly good now

 

[beorhthelm]

Nice try but.......

If you check your Euros you will see they are all marked as to where the came from. If it doesn't/didn't matter how would you apportion how much to print for each nation

markings are there to pander to a little national pride. its a single currency remember, a euro with a French face printed is the same as one with a Danish face. if they were different then the Greeks could devalue "their" euros. good question how do they know how many to print, though there isnt a euro note (or £) printed for every one that exists in the economy.

 

[Steve.S]

I think you are a little confused. Bond market interest rates are set by the markets not by the countries that sell them. Printing money is not the same as selling bonds as printing can lead to hyperflation.
If Greece leaves the Euro let alone Europe its credit rating will be trash and its not exactly good now

The European Central Bank (ECB) is the central bank for the eurozone (euro area, the countries which have adopted the euro). One of the ECB’s important tasks is to set and implement European monetary policy. This includes the use of the interest rate tool. The main objective of the ECB is price stability, or an inflation level of maximum 2%, therefore they set the rates. In joining the euro each Member States has agreed to allow the ECB to act as an independent authority responsible for maintaining price stability through the implementation of monetary policy. This is the problem, the policy is being set by others. Lets give them control back

 

[beorhthelm]

I think you are a little confused. Bond market interest rates are set by the markets not by the countries that sell them.

Bond market rates are not the same as central Bank interest rates. the fact we can print means bond holders only risk inflation, not default. while we wouldnt like inflation eating away the value, its better than getting nothing back.

 

[Chicken Runner61]

markings are there to pander to a little national pride. its a single currency remember, a euro with a French face printed is the same as one with a Danish face. if they were different then the Greeks could devalue "their" euros. good question how do they know how many to print, though there isnt a euro note (or £) printed for every one that exists in the economy.

What are you talking about ...? i thought you knew about economics and the Euro?

Its a letter on a note to mark where it comes from - thats hardly going to instil National pride is it?

And the French Euro is completely different different from the Danish one seeing as the Danes don't even use the Euro!!

 

[Steve.S]

How about the greeks go back to the |Dracma,And the Euros they have in their banks. Pay their debts off. Thats a joke.
We may disagree, however at the end of the day the Greeks will go back to the Dracma and the rest of Europe will have to deal with it. It would be better if they help the Greeks to make that tansition and give them a chance.

 

[Steve.S]

How about the greeks go back to the |Dracma,And the Euros they have in their banks. Pay their debts off. Thats a joke.
We may disagree, however at the end of the day the Greeks will go back to the Dracma and the rest of Europe will have to deal with it. It would be better if they help the Greeks to make that tansition and give them a chance.

 

[beorhthelm]

...the Danes don't even use the Euro!!

doh, school boy error. point remains, a euro is exactly the same value no matter what country its nominally represents. thats the whole purpose of the single currency.

 

[beorhthelm]

........

 

[Steve.S]

How about the greeks go back to the |Dracma,And the Euros they have in their banks. Pay their debts off. Thats a joke.
We may disagree, however at the end of the day the Greeks will go back to the Dracma and the rest of Europe will have to deal with it. It would be better if they help the Greeks to make that tansition and give them a chance.

 

[beorhthelm]

......