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Author Discussion

Mermaid

16,950 posts

54 months

[news] 
Monday 14th May 2012 quote quote all
TheDiplomat said:
Am about to book a holiday to Greece!

Will be incredibly cheap and at least I'll be helping re-build the shattered local economies.

When will the printing presses start up for the Drachma?
I like the optimism, how come they don't share that?

HundredthIdiot

4,414 posts

167 months

[news] 
Monday 14th May 2012 quote quote all
coyft said:
How long before plan B is announced? Deficit reduction, whilst allowing economies to grow.

Plan B. Strong commitment to a long term deficit reduction plan, cut less in the short term and push back austerity to later years.

See that can? Give it a good kick.
I do not understand how you can cut deficit, debt and stimluate growth at the same time. You can say it or write it, but it just doesn't add up given the yawning gaps involved.

Take Ireland for instance. There's already quite a lot of moaning about austerity from the political left, who now perhaps represent both the unemployed builders and the public sector, both of whom want to avoid cuts to welfare/public sector pay. Despite all this moaning, and four years of crisis to date, the deficit correction is only part done. There are still another two or three years of savage budgets to come according to the original plan, and that original plan envisioned growth which hasn't appeared yet. Each of these future budgets will depress the domestic economy and push the fantasy projections of balanced budgets further into the future.

And then you have to move past govt deficit to govt debt, and beyond govt debt to private sector debt and those tens/hundreds of thousands in mortgage arrears.

And that's just Ireland, which has been Mr Goody Two Shoes amongst the PIIGS, and is fortunate enough to have "only" 14% unemployment.

In the context of all this, what effect is a little "stimulus plan" going to have on the likes of Spain? It'll just be state support to the construction sector to build stuff that is already built. Straight down the toilet.

The only way this is going to end is by widespread destruction of the paper wealth that has accumulated in the last decade. It was never worth anything in the first place.

coyft

3,379 posts

94 months

[news] 
Monday 14th May 2012 quote quote all
HundredthIdiot said:
coyft said:
How long before plan B is announced? Deficit reduction, whilst allowing economies to grow.

Plan B. Strong commitment to a long term deficit reduction plan, cut less in the short term and push back austerity to later years.

See that can? Give it a good kick.
I do not understand how you can cut deficit, debt and stimluate growth at the same time. You can say it or write it, but it just doesn't add up given the yawning gaps involved.
When did common sense have anything to do with it? This is about how politicians can gain or retain their power.

cal216610

7,814 posts

53 months

[news] 
Monday 14th May 2012 quote quote all
It's starting to hit local news that Greece maybe out of the EURO with local businesses having drachma contingencies.

lost in espace

3,527 posts

90 months

[news] 
Monday 14th May 2012 quote quote all
I saw the BBC travel correspondent Simon Calder on breakfast telly talking about how the change over to Drachma will happen. The euros will be stamped with a drachma symbol to differentiate them, and he recommended taking small note euros if you are going on holiday there as they will be in demand should the worst happen.
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Keyser Soze

13,655 posts

74 months

[news] 
Monday 14th May 2012 quote quote all
lost in espace said:
I saw the BBC travel correspondent Simon Calder on breakfast telly talking about how the change over to Drachma will happen. The euros will be stamped with a drachma symbol to differentiate them, and he recommended taking small note euros if you are going on holiday there as they will be in demand should the worst happen.
A very similar article in the Evening Standard tonight, think I will take Sterling and change as much as I need per day

lost in espace

3,527 posts

90 months

[news] 
Monday 14th May 2012 quote quote all
Keyser Soze said:
A very similar article in the Evening Standard tonight, think I will take Sterling and change as much as I need per day
Not a bad idea as its getting stronger by the day.

Keyser Soze

13,655 posts

74 months

[news] 
Monday 14th May 2012 quote quote all
lost in espace said:
Keyser Soze said:
A very similar article in the Evening Standard tonight, think I will take Sterling and change as much as I need per day
Not a bad idea as its getting stronger by the day.
yes I will probably lose out slightly with commission fees but think it will be worth it

Mermaid

16,950 posts

54 months

[news] 
Monday 14th May 2012 quote quote all
cal216610 said:
It's starting to hit local news that Greece maybe out of the EURO with local businesses having drachma contingencies.
Will it be panic in world markets when it finally happens, or relief and a rally?

cal216610

7,814 posts

53 months

[news] 
Monday 14th May 2012 quote quote all
Mermaid said:
cal216610 said:
It's starting to hit local news that Greece maybe out of the EURO with local businesses having drachma contingencies.
Will it be panic in world markets when it finally happens, or relief and a rally?
Think it maybe more like, told you so and back to eating a ploughmans lunch and a pint of ale.

hornetrider

47,453 posts

88 months

[news] 
Monday 14th May 2012 quote quote all

Steffan

8,907 posts

111 months

[news] 
Monday 14th May 2012 quote quote all
Mermaid said:
cal216610 said:
It's starting to hit local news that Greece maybe out of the EURO with local businesses having drachma contingencies.
Will it be panic in world markets when it finally happens, or relief and a rally?
Now that is a question that needs consideration.

Robert Peston has posted a comment in the Beeb at : http://www.bbc.co.uk/news/business-18058270

Which asks " Could the Euro survive the Greek Exit"

In his post Mr Peston reminds us that just the collapse of Greece will expose the Banks to unfundable losses which will require the ECB to fund these loses using QE to bridge the gap. Mr Peston believes this will undermine the solvency of the ECB.

But this completely ignores the Spanish and Portuguese insolvency and the domino effect that collapsing Sovereign debt will have on their ability to raise funds. They will be total pariahs overnight.

In reality there will only be one lender who will be forced to even attempt to sort this out. The ECB.

And the concerns that Mr Peston is pronouncing over the Greek collapse, in a country with 11 Million people will be magnified dramatically when two countries with a combined population of 60 Million people, fall down the same hole. In short order. Which they will.

Sovereign debt in Europe will fall from the safest form of Bank investment, to an absolute Pariah level and the consequences will be horrendous. Overnight. Investors will realise that at any time, the Sovereign countries to which, they have been lending, can repudiate their debt, totally and still continue to exist and continue as they were before.

This will be much worse than a business going bust. There will literally be no return for anybody, not even a liquidators fee. All that happens is that the investors lose 100% of their investment and only the investors lose out.

The countries can continue to remain in possession of the goods and chattels, bought with the loans, and the infrastructure created within the country, with the loans and create a new currency and soldier on. Using the communications, transport and every other benefit they received from the loans without any interference.

Equally all the Trillions of Euro's printed by the ECB and thrown away on this will be gone totally. Nothing the EU can do about it. either.

This does require deep and serious consideration.





Apache

38,779 posts

167 months

[news] 
Monday 14th May 2012 quote quote all
Always a glass half empty man that Peston

1point7bar

1,091 posts

31 months

[news] 
Monday 14th May 2012 quote quote all
HundredthIdiot said:
I do not understand how you can cut deficit, debt and stimluate growth at the same time. You can say it or write it, but it just doesn't add up given the yawning gaps involved.
Wave goodbye to statism.
This gives the private sector room to breathe and the merchant adventurers who serve the consumer the most efficiently get to keep their pieces of eight.

Tighter monetary policy (QE3) and real independence for the Office of Budget Responsibility and real independence for the Independent Commission on Banking with transparency of government accounts(bien a fait CMD) to give stable currency, is an enticing prospect. Being able to predict with a degree of certainty the costings of enterprise and escaping the fear of deflation(aka hoarding cash) is a global head start.

The cost of debt can be as low as zero in the crazy world of future money.

Piersman2

3,891 posts

82 months

[news] 
Monday 14th May 2012 quote quote all
For the first time I actually heard the main news headlines a few minutes ago openly stating that Greece was about to leave the Euro.

Most surprising to actually finally hear it being mentioned in this tone on TV.

HarryW

11,931 posts

152 months

[news] 
Monday 14th May 2012 quote quote all
Apache said:
Always a glass half empty man that Peston
Can't watch or listen to him, complete cocjtard imho, he just grates on me. If his written work is as poor as his spoken word then he would fall foul of the PH gramma' police in sort order..............

Keyser Soze

13,655 posts

74 months

[news] 
Monday 14th May 2012 quote quote all
I'm a bit of a simpleton when it comes to these things, have followed the thread for a while so forgive if this has been asked or is stupid

If (or more likely when) the Greeks leave other countries will most likely follow especially if it isn't as painful as people think

Would this not be a good(ish) thing for the UK as people look to put their money in a safe currency e.g. GBP

1point7bar

1,091 posts

31 months

[news] 
Monday 14th May 2012 quote quote all
Keyser Soze said:
Would this not be a good(ish) thing for the UK as people look to put their money in a safe currency e.g. GBP
The State? (UK), debtors, creditors and consumers would all experience a different direct consequence.

davepoth

22,922 posts

82 months

[news] 
Monday 14th May 2012 quote quote all
Keyser Soze said:
I'm a bit of a simpleton when it comes to these things, have followed the thread for a while so forgive if this has been asked or is stupid

If (or more likely when) the Greeks leave other countries will most likely follow especially if it isn't as painful as people think

Would this not be a good(ish) thing for the UK as people look to put their money in a safe currency e.g. GBP
Your first point is right, your second wrong; but it is almost perversely counter-intuitive. wink

When people buy lots of Pounds, the value of Pounds goes up. Great for going on holiday, not great for industry trying to sell to people who don't have pounds to pay use with. That hurts the economy, so the government would rather the pound stay weak at the moment so that our exports are more competitive. On the plus side, people will probably pile out of the Pound if Greece leaves.

With every crap country that is ejected, the Euro becomes more and more like a Deutschmark, and there's nothing the markets love more than a safe and sturdy Deutschmark. It works out quite nicely for us really, and that's the benefit of a floating exchange rate. Now point across the channel and laugh a bit. biggrin

Keyser Soze

13,655 posts

74 months

[news] 
Monday 14th May 2012 quote quote all
davepoth said:
Keyser Soze said:
I'm a bit of a simpleton when it comes to these things, have followed the thread for a while so forgive if this has been asked or is stupid

If (or more likely when) the Greeks leave other countries will most likely follow especially if it isn't as painful as people think

Would this not be a good(ish) thing for the UK as people look to put their money in a safe currency e.g. GBP
Your first point is right, your second wrong; but it is almost perversely counter-intuitive. wink

When people buy lots of Pounds, the value of Pounds goes up. Great for going on holiday, not great for industry trying to sell to people who don't have pounds to pay use with. That hurts the economy, so the government would rather the pound stay weak at the moment so that our exports are more competitive. On the plus side, people will probably pile out of the Pound if Greece leaves.

With every crap country that is ejected, the Euro becomes more and more like a Deutschmark, and there's nothing the markets love more than a safe and sturdy Deutschmark. It works out quite nicely for us really, and that's the benefit of a floating exchange rate. Now point across the channel and laugh a bit. biggrin
Thank you that makes sense to me now

I shall point and laugh biggrin

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