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Old 10-10-2011, 08:20 PM   #226
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Default Re: Credit crisis in Greece, others to follow...?

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I think nobody will care to argue against the fact that barren, hilly and dry Ireland (not dry, but very much all of the rest)
You call Ireland barren? I guess that's why it is called the Emerald Isle then. Who knew?
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Old 10-11-2011, 03:45 AM   #227
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Default Re: Credit crisis in Greece, others to follow...?

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Originally Posted by Lopez View Post
There's a big difference in "creating money" by reinvesting... Creating money is a poor term in that context. Creating money by printing it, now there the term create is more apt.
whether paper from a printing press or numbers on a bank statement it doesn't matter, the fed creates money plain and simple... it's one and the same thing, and there is no mistaking that...

who controls the quantity of money...? governments or banks...?
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Old 10-11-2011, 07:22 PM   #228
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Default Re: Credit crisis in Greece, others to follow...?

Greece will fall, fortunately for the other EU members who won't have to provide for this country.
The times of incessant fiesta and 5-hours working day are over.
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Old 10-11-2011, 07:47 PM   #229
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Default Re: Credit crisis in Greece, others to follow...?

An interesting read this thread! I am unfortunately too inept in economics to be able to discuss it, but I think that

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Originally Posted by Dougie View Post
That´s exactly what the whole problem comes down to. The basic principle of financial economics is that when you borrow money, you take a risk. The risk is compensated by the interest of the loan. Right now, as Greece is on the verge of bankruptcy, what the EU is doing is not primarily to keep Greece afloat, it´s to keep the private sector banks that have a lot of money borrowed to Greece, afloat. This creates a huge moral hazard. You can take a risk, make a profit if all goes well, and if it goes bad, the tax payers will bail you out.
The problem was created a originally a long time ago, though. There is no way Greece should have ever been accepted to EMU. Then again, very few countries actually fulfilled the criteria in the first place, Greece was certainly not the only one.
... this is basically the long-and-short of it all.
My country is on the verge of donating billions to Greece (and perhaps a few other EU-failed countries as well), and I can well understand the grumbleing of millions of hard-working tax payers to see all of their money going through the drain in the near future.
My knowledge about economics is too limited to even think about it being the right or wrong move, but I wholeheartedly agree with the fact that the EU has allowed plenty of countries to join much too early. Back in 1990's, there was this rampant illusion of 'economies-always-growing', and imho the EU has been much too optimistic about that. As if crises wouldn't ever happen again.

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Greece will fall, fortunately for the other EU members who won't have to provide for this country.
The times of incessant fiesta and 5-hours working day are over.
I fear that the other EU-members will already have ditched billions of euros before that will happen. BTW, your 'incessant fiesta and 5-hours working day'-comments are out of place I think - a vast majority of the Greek people work hard for their money, and those people are in fact the greatest victims of this utter fiasco - seeing their savings, pensions etc. evaporate by the joint doings of corrupt bankers and failing politicians in the past.
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Old 10-11-2011, 07:56 PM   #230
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Default Re: Credit crisis in Greece, others to follow...?

I've heard quite the contrary about Greek's hard-working from different sources.
I'm not saying they don't work at all, but the rest of europeans are forced to give much more effort in their jobs in order to keep the whole union in financial equilibrium.
Societies from the West/North are compelled to stay after hours while Greeks, Spaniards or Italians can sip their vines in the backyard.
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Old 10-11-2011, 08:29 PM   #231
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Default Re: Credit crisis in Greece, others to follow...?

I'm a bit too lazy to read the entire marathon thread but if there is anything I'm pissed off about in Europe it's the corruption in some countries.

^ sure the greek people work hard but don't say this wasn't coming. They did some funny articles in a swedish paper about that before. For example only a handful people had payed for the right to build a private pool. Then they showed an air photo of the city and it was thousands of them.

People have done their best to avoid taxes at all costs. Then when the shit hits the fan everyone blames politicians and corrupt bankers? I don't think so. The corruption is everywhere.

You can't be corrupt yourself and blame it on someone else being corrupt. The entire society becomes corrupt. The fail lies in a culture of corruption and as soon as you let that get hold eventually the country will collapse.

People just want to spend and spend and not pay anything back. That's whats wrong today. Why do people think banks collapse? because they are incompetent? no because they have lended money to people and companies that once had solid numbers but then turned into clowns. People and companies that have ruined their economy and might lose everything. Once they had a good life but they just kept spending and spending and spending until they ruined themselves. Nothing anyone can do to protect themselves against such madness except making it even harder to borrow money. That's gonna make others suffer
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Old 10-11-2011, 08:31 PM   #232
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Default Re: Credit crisis in Greece, others to follow...?

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Originally Posted by fast_clay View Post
whether paper from a printing press or numbers on a bank statement it doesn't matter, the fed creates money plain and simple... it's one and the same thing, and there is no mistaking that...

who controls the quantity of money...? governments or banks...?
Well there is a difference, a fundamental one... Printing money does not increase GDP and thus it does not have any value, which is why it leads to inflation. The money that banks reinvest has value and it increases GDP.

The central banks control the money supply and they have linkages to the government (IIRC the US president chooses the board of Fed and Fed pays all its profits to the government). Whether government supervision works or not, that I don't know and don't care to speculate since I haven't really done any research on that.

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I fear that the other EU-members will already have ditched billions of euros before that will happen. BTW, your 'incessant fiesta and 5-hours working day'-comments are out of place I think - a vast majority of the Greek people work hard for their money, and those people are in fact the greatest victims of this utter fiasco - seeing their savings, pensions etc. evaporate by the joint doings of corrupt bankers and failing politicians in the past.
Of course Greeks work, like anyone who actually wants to have a decent standard of living, but from what I've heard the problem is that Greeks don't pay taxes properly. Kinda hard to run a government with a poor budget. Of course the politicians are to blame as well for distorting Greece's economic numbers to look better for the EU. Reminds me a bit about Enron and we all know how that went down...
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Old 10-11-2011, 09:04 PM   #233
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Originally Posted by EddieNero View Post
Societies from the West/North are compelled to stay after hours while Greeks, Spaniards or Italians can sip their vines in the backyard.
While being a very Northern European myself, I happen to think that this is a common prejudice against the Southerner's lifestyles. I've heard about too many examples of very hard working people over there to not fall into this trap.

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People have done their best to avoid taxes at all costs. Then when the shit hits the fan everyone blames politicians and corrupt bankers? I don't think so. The corruption is everywhere.

You can't be corrupt yourself and blame it on someone else being corrupt. The entire society becomes corrupt. The fail lies in a culture of corruption and as soon as you let that get hold eventually the country will collapse.

People just want to spend and spend and not pay anything back. That's whats wrong today. Why do people think banks collapse? because they are incompetent? no because they have lended money to people and companies that once had solid numbers but then turned into clowns. People and companies that have ruined their economy and might lose everything. Once they had a good life but they just kept spending and spending and spending until they ruined themselves. Nothing anyone can do to protect themselves against such madness except making it even harder to borrow money. That's gonna make others suffer
This is very, very true, but point is - it's not merely the 'Southern' countries and their populations that should get accused of this kind of behaviour, it exists in my own very Northern European country as well.

To give you an example: in my country, we have this truly rule that if you want to buy a ridiculously expensive house, and you get the mortgage based on your income, you are allowed to detract it from your annual tax payment. Year-after-year. This tax rule has now lead up to many folks having way too high mortgages, financed by the OTHER tax payers, who have been as decent/wise/unlucky to not do so themselves (or not being able to) - a clear case of the poor paying for the rich!
Right now, the real estate-business in my country is plummeting, and one can argue who's to blame - the banks giving out way too high loans/mortgages, the politicians for keeping up that idiotic rule, the house buyers for paying ridiculous prices for a house and thus making the prices to up to astronomical levels? You tell me... I'd say all of them are to blame, but it will pull a huge 'mortgage' on the future of the Dutch economy - all the signs are heavily in the red right now.

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Of course Greeks work, like anyone who actually wants to have a decent standard of living, but from what I've heard the problem is that Greeks don't pay taxes properly. Kinda hard to run a government with a poor budget. Of course the politicians are to blame as well for distorting Greece's economic numbers to look better for the EU. Reminds me a bit about Enron and we all know how that went down...
Yep, all too true. I just wanted to point out that the Greek population surely isn't the only European folk that try to duck paying taxes as much as they can.
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Old 10-11-2011, 09:07 PM   #234
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Default Re: Credit crisis in Greece, others to follow...?

Yeah sure, everyone wants to pay less taxes. But at least the government could try to make a better effort in the collection process . It's criminally easy not to pay taxes in Greece from what I understand...
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lol, who will beat him? Wawrinka? Berdych? Gulbis? Rosol? Federer?

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Old 10-11-2011, 09:22 PM   #235
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Yeah sure, everyone wants to pay less taxes. But at least the government could try to make a better effort in the collection process . It's criminally easy not to pay taxes in Greece from what I understand...
Pretty sure it is, but it is like that in a lot of countries.
There's a lot of corruption playing a role as well as silly tax rules, which are easily to 'get around' to in all countries. I well remember visiting Greece not that long ago, and I was surprised to see so many houses not being properly built off - until I asked about it and got told that the real estate-developers as well as the buyers didn't have to pay any taxes until the houses were fully finished. So, just not having finished them benefitted both the re-developers as well as the buyers... people are really creative when it comes to avoiding tax payment - everywhere.
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Old 10-11-2011, 09:43 PM   #236
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Default Re: Credit crisis in Greece, others to follow...?

Again, yes it's true but one could never avoid taxes to the same extent in Finland. For example, from what I understand, income tax is determined by the amount that people tell they've earned (you can bet that works...). Some Greek could enlighten us with more facts though...
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lol, who will beat him? Wawrinka? Berdych? Gulbis? Rosol? Federer?

Only Del Potro can take him out before the semis, and he won't. Nadal is winning the AO, bet your house on it.
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Old 10-12-2011, 01:42 AM   #237
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Default Re: Credit crisis in Greece, others to follow...?

lol @ Europe. Accepting 3rd world countries into EU just because they are close by territorially is the precise reason for the whole crisis. If only they were smart and allowed every country to fend for themselves, maybe they wouldn't be bringing down the rest of the world with them. The whole EU has been a fiasco from the start and nothing more than an attempt to oppose USA economically. Too bad the over-fed fat cats cannot see this and will bring down everyone else around them out of sheer arrogance.
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Old 10-12-2011, 08:24 AM   #238
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Default Re: Credit crisis in Greece, others to follow...?

The EU a fiasco? rubbish, EU's been a huge success in many levels. Common currency is a huge fiasco though.

You should unite with NZ and Papua.
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Old 10-12-2011, 10:10 AM   #239
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Default Re: Credit crisis in Greece, others to follow...?

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lol @ Europe. Accepting 3rd world countries into EU just because they are close by territorially is the precise reason for the whole crisis. If only they were smart and allowed every country to fend for themselves, maybe they wouldn't be bringing down the rest of the world with them. The whole EU has been a fiasco from the start and nothing more than an attempt to oppose USA economically. Too bad the over-fed fat cats cannot see this and will bring down everyone else around them out of sheer arrogance.
EU has been very successful. The trade within the union got simplified and everyone has gained. The losers are the 3rd world countries (mainly in Africa, Asia) that suddenly got a disadvantage trying to compete with a super strong market instead of much weaker individual markets.

EMU is a fail though. When they started it the rules were simple. Every country must fulfill goals like having max 2% inflation etc. Then some sucky countries started to not follow the rules and voilá: Eventual disaster

Only way for a common currency to work is if the economies involved are similar or can make themselves similar. They thought they could make the economies similar by having strict goals and then give penalties to members not following it but how do you penalize a country without money anyway? give them a fine to pay wouldn't work

So if you ask me some countries should never have been let into the monetary union in the first place. Not my problem on the other hand. Swedes were clever enough to vote no
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Old 10-13-2011, 04:57 AM   #240
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Default Re: Credit crisis in Greece, others to follow...?

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No offence, Im sure I´m missing the point of your post, but you do realise that money cannot simply be created? Especially not in the euro zone, where one country creating money instead of borrowing would alter the exchange rate for all euro-countries.. The history is full of sad examples of countries that tried this ( Hungary, Germany etc.), and the inflation rates skyrocketed. Even the possibility of this kind of action would increase the inflation expectations dramatically. But like I said, I probably missed the point of your post..-
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You're not missing anything...

And you're very right about the devaluation.

Sorry if i'm being rude but you just don't get simple economic logic... What you're sugggesting is very different from the money multiplier effect. A loan that has no interest is not a loan, but a donation. You do realize what a ridiculous suggestion is that states should cover their budget deficits by donating money to themselves?

There is no point in using a currency to measure value if that currency is not scarce.

Denying banks the opportunity to reinvest the funds that they hold would sevely reduce the gdp and thus, the personal wealth of everyone.
Government deficit spending increases the money supply. We borrow money into existence. Money can, simply be created and is, simply being created, by central banks and by commercial banks through fractional reserve lending. This is not arguable. You guys are flat earthers.

Debt-free money creation as opposed to the present debt-based money creation has been used succesfully by a number of nations throughout history and is being used succesfully by states today, saving them billions on unnecessary interest payments. Whether the money supply is increased by a democratic institution or an independent bank is of no consequence for inflation.

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That´s the point right there. Let´s say a family wanted to buy a flat and instead of getting a loan from their bank they would just "create" that money like a rabbit form the hat and just buy the flat? Nice idea, but utterly ridicilous. Mjau, how do you think the flat prices would develop if this was possible..? Countries are not that different, there are basic economic laws that cannot be ignored. You cannot create money to pay off your debts.
That's not at all what I'm suggesting. Please pay attention.

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