Greece - the drachma - devalue

[beorhthelm]

The Germans are putting measures on Greece that are greater than were placed on Germany after the war. You want to leave the Greeks to rot "for the best" with a bankrupt drachma and you think I want to see them collapse?

Take a look at the graphs for bond spreads against Greek Car registrations and you can see where all the loans went and then look at where all those cars were made.

i dont want to see the greek rot either way, what im saying is i think they be a bit resolute and get on with it, particularly in the tourist area where i picked this up. Tourism is 20% of their economy, probably a great deal more off the mainland.

much is made of the German benefits of Greeks spending, but i recall its low single digit market for german manufacturers. they like it, but its not exactly US, China, BRIC or UK markets. the wider benefits Germany gain from the single currency are from all the med states, including Italy, to some degree France too, and its not by their design as they opposed it at first. Its the French who drove the wider inclusive scope of the currency, thinking it would shift power away from the unified Germany.

 

[Chicken Runner61]

i dont want to see the greek rot either way, what im saying is i think they be a bit resolute and get on with it, particularly in the tourist area where i picked this up. Tourism is 20% of their economy, probably a great deal more off the mainland.

much is made of the German benefits of Greeks spending, but i recall its low single digit market for german manufacturers. they like it, but its not exactly US, China, BRIC or UK markets. the wider benefits Germany gain from the single currency are from all the med states, including Italy, to some degree France too, and its not by their design as they opposed it at first. Its the French who drove the wider inclusive scope of the currency, thinking it would shift power away from the unified Germany.

The Greeks don't want out (70% want to stay in) but they don't want suffer that amount of austerity and hope that the IMF will come in and save them in order to stop contagion.

Read this by Lorenzo Bini Smaghi who was a member of the ECB
The only way to contain a Greek exit - FT.com

"On the other hand, there is no doubt that if Greece leaves the eurozone the contagion will be devastating. Those who suggest that markets are now well prepared for such an event and that most of the costs would be borne by the Greek economy seriously underestimate the channels of transmission of systemic crises following a sovereign debt crisis and a bank run. As we saw after the fall of Lehman Brothers, quick decisions would have to be taken to set up credible firewalls and stop market panic."

If Greece renegotiates then so will Portugal & Ireland. Its a perfect storm.

I thought this was going to come to a head 5-6 months ago but I didn't allow for the elections which have complicated matters further

Each banking crisis makes another one more credible

As some one wrote "Every aircraft that crashes makes another airplane crashes less likely, Every Banking Crash makes another Banking crash more likely" !!

 

[beorhthelm]

If Greece renegotiates then so will Portugal & Ireland. Its a perfect storm.

which is why their leaving is more likely: they dont want the austerity so they have the other option of bankruptcy. renegotiation towards a state of perpetual bail outs, isn't an option that will sustained even if the rest of europe want to.

 

[Chicken Runner61]

which is why their leaving is more likely: they dont want the austerity so they have the other option of bankruptcy. renegotiation towards a state of perpetual bail outs, isn't an option that will sustained even if the rest of europe want to.

Well start preparing for bank crashes then.

 

[The Maharajah of Sydney]

I feel that I am playing with fire by asking this question but whose plan and what outcomes?

...Just off downstairs to get a beer, a cheese and pickle roll and maybe some pringles.

Click-on the table below , it might help in understanding the present situation .
It's an unbiased assesment of all the likely scenarios that could come in to play
and assesses how each policy would potentialy be affected .

(It was put out in an economic note during the week by an Australian bank (ANZ) , hence the info pertaining to Australian assets & markets at the bottom highlighted in blue) .

 

[Brovion]

ah yes of course, they planned a single currency only to wait 10 years then make it fail, taking several years to do that too. run off back to the conspiracy forums, grown ups having sensible debate here.

No, I think he's right. Anybody with even the tiniest amount of economic sense could see that the forcing a single currency on a load of disparate nations was bound to be a catastrophic failure - you may as well insist that all European men wear the same size trousers. (Think of the advantages, manufacturers wouldn't have to bother making lots of different sizes, and wherever you go in Europe they'll always have your size. Plus if you're too fat to get into a 32inch waist, or whatever random figure was picked, then the discipline of losing weight will be good for you.). Now the planned collapse is here and the solution is full fiscal and political union which is what they wanted all along. Clever, clever EU

Of course it's possible that a single European currency was introduced by bone-headed politicians who thought it was a simple gesture of unity on a par with introducing a single European flag and a single European anthem, but I don't buy that. Not even the most rabid pro-EU moron could be THAT stupid. Could they?

 

[wehatepalace]

Could the pound strengthen against the euro if this happens ?

 

[brunswick]

ah yes of course, they planned a single currency only to wait 10 years then make it fail, taking several years to do that too. run off back to the conspiracy forums, grown ups having sensible debate here.

yep, just like they sold the uk's gold at £260 an ounce - when a year later it went sky high. just like the great depression in the 30's was not planned....sigh. ten years is not long to these people. read some books once in a while.

 

[brunswick]

Could the pound strengthen against the euro if this happens ?

already has in the the last week, easy way to make money if your on it

 

[Steve.S]

Can someone please answer this question?
Are we all agreed that we are in this mess because of the banks. Did they not lend to much money to people who had no chance of paying it back? Which then meant governments had to bail the banks out.
Now I do not believe there is anybody that does not blame the banks for getting us into this mess.
So is the answer really to keep giving a country like Greece more loans from Banks. Maybe I am being a bit stupid.

 

[Mutts Nuts]

Well start preparing for bank crashes then.

You realy do not have a clue

 

[Chicken Runner61]

No, I think he's right. Anybody with even the tiniest amount of economic sense could see that the forcing a single currency on a load of disparate nations was bound to be a catastrophic failure - you may as well insist that all European men wear the same size trousers. (Think of the advantages, manufacturers wouldn't have to bother making lots of different sizes, and wherever you go in Europe they'll always have your size. Plus if you're too fat to get into a 32inch waist, or whatever random figure was picked, then the discipline of losing weight will be good for you.). Now the planned collapse is here and the solution is full fiscal and political union which is what they wanted all along. Clever, clever EU

Of course it's possible that a single European currency was introduced by bone-headed politicians who thought it was a simple gesture of unity on a par with introducing a single European flag and a single European anthem, but I don't buy that. Not even the most rabid pro-EU moron could be THAT stupid. Could they?

The flaw in your argument is that whilst the disadvantage of a single currency on disparate nations is as clear as day now it wasn't before because I don't remember anyone ever raising this scenario and foretelling these events.

Greater economic ties with France & Germany were fostered to try to prevent War starting again, the EU was a progression from that, the union to create a greater trading block and a single currency to tie that block together. The Euro is/was not a unique idea and there were/are plans for an asian and american version (the amero), those plans are in tatters now but they are there and still talked about.

You probably couldn't have an exit plan for leaving either the EC or the euro because an exit plan would imply that the whole plan might not work. But you are right the Eu was supposed to make Greece get in those trousers and it probably would have been good for them had they gone down the Gym!

I suspect it was individual greed that has led to this, there is no doubt that policies suited Germany and on a wider scale the Eu has been manipulated by global giants and world bankers for their own means. The Fed, the IMF and the ECB and other world banks have had a hand in creating the EU and all those pesky little individual currencies and exchange rates get in the way of their wider plans so a few fiat currencies made control of people greater and printing economic banking success has been their plan for 75 years or more now. Fiat currencies and debt are perfect ways to enslave people and the bigger the lie the easier it is to get people to hide it from everyone as people then say "that wouldn't really happen and they wouldn't do that"

 

[Chicken Runner61]

You realy do not have a clue

You really are an ignorant idiot.

 

[Chicken Runner61]

Can someone please answer this question?
Are we all agreed that we are in this mess because of the banks. Did they not lend to much money to people who had no chance of paying it back? Which then meant governments had to bail the banks out.
Now I do not believe there is anybody that does not blame the banks for getting us into this mess.
So is the answer really to keep giving a country like Greece more loans from Banks. Maybe I am being a bit stupid.

Its a bit more complicated than that but you could have a point , its a bit like (in Greece's case) they turned them in to junkies and now just want to turn the supply off rather than bring them down slowly.

But Greece is not the only problem and the euro crisis is just another problem across the world. None of this is particularly new bits of this problem have been played through before but the EU seems to have created a really bad complicated mess at a particularly bad time.

 

[Brovion]

The flaw in your argument is that whilst the disadvantage of a single currency on disparate nations is as clear as day now it wasn't before because I don't remember anyone ever raising this scenario and foretelling these events.

Greater economic ties with France & Germany were fostered to try to prevent War starting again, the EU was a progression from that, the union to create a greater trading block and a single currency to tie that block together. The Euro is/was not a unique idea and there were/are plans for an asian and american version (the amero), those plans are in tatters now but they are there and still talked about.

You probably couldn't have an exit plan for leaving either the EC or the euro because an exit plan would imply that the whole plan might not work. But you are right the Eu was supposed to make Greece get in those trousers and it probably would have been good for them had they gone down the Gym!

I suspect it was individual greed that has led to this, there is no doubt that policies suited Germany and on a wider scale the Eu has been manipulated by global giants and world bankers for their own means. The Fed, the IMF and the ECB and other world banks have had a hand in creating the EU and all those pesky little individual currencies and exchange rates get in the way of their wider plans so a few fiat currencies made control of people greater and printing economic banking success has been their plan for 75 years or more now. Fiat currencies and debt are perfect ways to enslave people and the bigger the lie the easier it is to get people to hide it from everyone as people then say "that wouldn't really happen and they wouldn't do that"

Well I did. Maybe even on NSC (although it was before the current incarnation of this board). And I've only got economics 'A' level, so I'm sure others could also see the fault line inherrent in the fact that it was a political device not an economic necessity.

I should point out that I'm not opposed to a single European currency, in fact I think it's a great idea, but it should have come about as a result of closer political and fiscal union and not as the engine to try drive it. The Germans and Benelux countries could have had a single currency back in the 1970s, France could probably have joined in the late 1990s, and other nations could have joined in as and when they met certain criteria (Gordon Brown always maintained that view when he was Chancellor).

 

[brunswick]

interesting article about greece and how it is going to affect the uk really soon.

Greece Exit, Euro-Zone Collapse, Spain and Portugal Will Follow Within 6 Months :: The Market Oracle :: Financial Markets Analysis & Forecasting Free Website


the issue with a debt based monetary system is that it has failure within it - more loans, more interest, and the money in circulation cannot pay back the debts.

giving greece more money is not the answer, nor is centralising banks and governements for hundreds of millions of ppl.

the imf now own much of greece's assets and infrastructure and greece owe them billions, this is not by accident. read a book called "tale of an economic hitman" - it is all planned and orchestrated.

 

[beorhthelm]

Well I did. Maybe even on NSC (although it was before the current incarnation of this board). And I've only got economics 'A' level, so I'm sure others could also see the fault line inherrent in the fact that it was a political device not an economic necessity.

indeed, it was widely critisied, but those voices were simply ignored as europhobes and anti-EU. even the Germans were predicting this, which is why some rules were set such as restrictions on GDP debt. once the euro was implemented, politicans waved problems away and everyone pretended all was fine. one thing that goes under reported is that the Bundesbank has sued their own government over the current bail outs, because they break the rules. again.

Chicken61 has one very valid point though, they deliberatly didnt have an exit plan because that would suppose that one would be needed, such was the blind optimism that this plan could never fail.

apparently there was a report this week that assessed the viability of different currency unions. such as US and Canada, South Americans, Commonwealth nations, three random countries begining with "M". all were better suited than the Eurozone.

 

[Chicken Runner61]

Well I did. Maybe even on NSC (although it was before the current incarnation of this board). And I've only got economics 'A' level, so I'm sure others could also see the fault line inherrent in the fact that it was a political device not an economic necessity.

I should point out that I'm not opposed to a single European currency, in fact I think it's a great idea, but it should have come about as a result of closer political and fiscal union and not as the engine to try drive it. The Germans and Benelux countries could have had a single currency back in the 1970s, France could probably have joined in the late 1990s, and other nations could have joined in as and when they met certain criteria (Gordon Brown always maintained that view when he was Chancellor).

I think the problem really came apparent when they started changing the requirement for entry and ignoring the flaws just to create a greater union, before that countries were pretty much aligned.

I think there are many good points about the Eu but global corporations are manipulating it through things like immigration and equal pay for control of markets and financial gain. I also am anti fiat currency as it also allows people to be completely controlled and enslaved by debt.

 

[Chicken Runner61]

indeed, it was widely critisied, but those voices were simply ignored as europhobes and anti-EU. even the Germans were predicting this, which is why some rules were set such as restrictions on GDP debt. once the euro was implemented, politicans waved problems away and everyone pretended all was fine. one thing that goes under reported is that the Bundesbank has sued their own government over the current bail outs, because they break the rules. again.

Chicken61 has one very valid point though, they deliberatly didnt have an exit plan because that would suppose that one would be needed, such was the blind optimism that this plan could never fail.

apparently there was a report this week that assessed the viability of different currency unions. such as US and Canada, South Americans, Commonwealth nations, three random countries begining with "M". all were better suited than the Eurozone.

The prospect of an asian euro has fallen dramatically in recent months...........

I don't recall the criticism being specifically defined to the situation we have now and if it was I think the politicians who referenced it would be shouting now. And in any case had 2008 not created banking meltdown europe might have been better equipped and financially confident to deal with this.

 

[Steve.S]

The flaw in your argument is that whilst the disadvantage of a single currency on disparate nations is as clear as day now it wasn't before because I don't remember anyone ever raising this scenario and foretelling these events.




Greater economic ties with France & Germany were fostered to try to prevent War starting again, the EU was a progression from that, the union to create a greater trading block and a single currency to tie that block together. The Euro is/was not a unique idea and there were/are plans for an asian and american version (the amero), those plans are in tatters now but they are there and still talked about.

You probably couldn't have an exit plan for leaving either the EC or the euro because an exit plan would imply that the whole plan might not work. But you are right the Eu was supposed to make Greece get in those trousers and it probably would have been good for them had they gone down the Gym!

I suspect it was individual greed that has led to this, there is no doubt that policies suited Germany and on a wider scale the Eu has been manipulated by global giants and world bankers for their own means. The Fed, the IMF and the ECB and other world banks have had a hand in creating the EU and all those pesky little individual currencies and exchange rates get in the way of their wider plans so a few fiat currencies made control of people greater and printing economic banking success has been their plan for 75 years or more now. Fiat currencies and debt are perfect ways to enslave people and the bigger the lie the easier it is to get people to hide it from everyone as people then say "that wouldn't really happen and they wouldn't do that"

The United Kingdom entered the ERM in October 1990, but was forced to exit the programme within two years after the pound sterling came under major pressure from currency
The European Exchange Rate Mechanism was a system introduced by the European Community in March 1979, as part of the European Monetary System (EMS), to reduce exchange rate variability and achieve monetary stability in Europe. Looking back to this, would point to the difficulties that could happen with the Euro



France wanted greater ties with Germany because they knew it would become a super power and they did not want Germany going alone and thats still the case today.