Is the end nigh for the Euro? [vol. 3]
Discussion
Steffan said:
Real question now that the reality of the collapse and dropout of Greece is upon the EU must surely be, what are the realities of the consequences to the EU and Greece? Furthermore what are the consequences to the other failing states?
A lack of confidence and it's dramatic impacts on economies, and so entire societies (stupid I know) is only a bad day away for almost every nation in the world following the Westernised Keynesian economic model.Greece isn't special here. They're just the most exposed in a deflating world and so the problems show up first.
The worrying thing is, as more fail, the faster the exposure grows as confidence spirals out of control. QE and ZIRP/NIRP around the world are making things travel in straight or slightly upward lines, but for how long?! Confidence only lasts so long until the bulls
t meters ring out even in the most bullish person.What you see happen to Greece, and happened to Austria and Cyprus, is a petri dish for how things will likely go elsewhere, so keep your eyes open and ears closed.
Dave
Gargamel said:
Can anyone on PH robust expound a scenario where Greece doesn't go bust and does re pay its debts ?
All is possible with a bit of lateral thinking. Another current EU problem is the wave of immigrants coming north across the Med - do we save them from drowning, and then who takes them in if we do?So the EU pay the Greeks 200k€ for each immigrant that they take in and keep in Greece. The immigrants have a contract, if they leave Greece and head elsewhere in the EU in the first, say, 10 years they will be repatriated back to their native misery.
So the Greeks net 1 billion € for each 5000 immigrants. Given that this immigration is annually in the 100s of thousands if not over a million, the Greek debt will be paid off in a year and half and they will have a new, dynamic population to put to work rebuilding their economy.
The EU commission look like wonderful, philanthropic humanists and bask in the glory, the rest of the EU are happy as they have reduced their net immigration of these poor unfortunates.
The Greek population might be a tad upset by this plan and the changing face of their society, but they would be given no choice in the matter.
What's my prize?
Mr Whippy said:
YankeePorker said:
The Greek population might be a tad upset by this plan and the changing face of their society, but they would be given no choice in the matter.
This is the crux of any outcome scenario."given no choice" are dangerous words.
Quite how far Greece will fall economically and what they consequences will be for the Greek population is a very moot point. However it would appear that, whilst no EU state is prepared to actually accept the loses that will call onto the EU, equally, I doubt that any EU state will not agree to providing aid and support to Greece when the collapse is finally admitted.
Germany will be particularly concerned with such a poriblkem that loser to home. Quite where this would actually lead to in terms of continuing support I know not. But I have no doubt there will be such support offered to Greece.
It does seem to me that until the hubris that will be caused with the collapse of the first EU member state, has actually settled the full consequences will not be apparent. I do think here will be further consequences to the other identified failing states and I do think the spotlight will turn onto the incompetance within the EU that has largely created this position. Until those events follow on estimating the long term effects will be very difficult. Could be the start of further major changes as the EU jointly and severally come to terms with the reality of the first failure of a member state within the EU.
Steffan said:
Mr Whippy said:
YankeePorker said:
The Greek population might be a tad upset by this plan and the changing face of their society, but they would be given no choice in the matter.
This is the crux of any outcome scenario."given no choice" are dangerous words.
Steffan said:
It does seem to me that until the hubris that will be caused with the collapse of the first EU member state, has actually settled the full consequences will not be apparent. I do think here will be further consequences to the other identified failing states and I do think the spotlight will turn onto the incompetance within the EU that has largely created this position. Until those events follow on estimating the long term effects will be very difficult. Could be the start of further major changes as the EU jointly and severally come to terms with the reality of the first failure of a member state within the EU.
Don't you worry though that they won't see their failings?This is the fundamental reason that political hubris brings us to failure time and again.
If they really were so good, we'd never have wars, or economic crashes. They fail again and again. Greece is just the beginning, and they'll repeat their mistakes again and again with Italy, Spain, France and the rest of the member countries... and if we're not careful the UK too!
I fear the day that we're all "given no choice" by our failures for elected representatives.
"It's for your own good".... aaannnnnddddddd... poof... we're back to socialist USSR.
Dave
fblm said:
YankeePorker said:
Uuuuhh, thanks for that. The oil business has taken me to Africa quite enough already so I'll quietly decline and withdraw my suggestion! 
It's not a bad idea but I'd want Germans counting them off the ships not Greeks! Mr Whippy said:
Steffan said:
It does seem to me that until the hubris that will be caused with the collapse of the first EU member state, has actually settled the full consequences will not be apparent. I do think here will be further consequences to the other identified failing states and I do think the spotlight will turn onto the incompetance within the EU that has largely created this position. Until those events follow on estimating the long term effects will be very difficult. Could be the start of further major changes as the EU jointly and severally come to terms with the reality of the first failure of a member state within the EU.
Don't you worry though that they won't see their failings?This is the fundamental reason that political hubris brings us to failure time and again.
If they really were so good, we'd never have wars, or economic crashes. They fail again and again. Greece is just the beginning, and they'll repeat their mistakes again and again with Italy, Spain, France and the rest of the member countries... and if we're not careful the UK too!
I fear the day that we're all "given no choice" by our failures for elected representatives.
"It's for your own good".... aaannnnnddddddd... poof... we're back to socialist USSR.
Dave
Good actors well versed in offering the policies needed to achieve election. Then all politicians nowadays look after thelselves.
However from time to time the phrase "Events,Dear Boy, Events" to quote an old politcal Master, Harold Macmillan, used to decry a suggestion that election success was guaranteed, comes up again and I do think this dreadful business might be just such an event.
The EU have made a series of enormous mistakes in trying to keep a number of the economies currently within the EU, who were visibly inslovent, still ithin the EU, by offering massive bailouts to hoplesssly insolvent sovereign states on the dishonest pretext that there was no risk of failure.
Clearly this has proved to be grotesquely misguided stupidity. When the first state fails hoplessky and the losses that must be met by the solvent EU stares become apparent there is going to be an almightly row within the EU. Either the likes of Draghi knew the totally improper risks they were taking with EU taxpayers money, which constiutues outright fraud. Or they were totally incompetent in managing this self made mess and totaly failed to understand the ludicrous risks they were taking through their incompetence.
"They could and should have seen this coming", to paraphrase the damning report from the Judge appointed to the Aberfan disaster many many years ago. I think these events are now outside the control of the EU and will remain outside the control of the EU. For that reason I think changes will be coming to the EU whatever they try to spin this into.
The EU are totally foist by their own petard I think entirely as a result of their own arrogance, their own incompetance and their abject failure to understand the reality of the actual economic positions of the failing states in this matter IMO.
The Domino effect which has worried the EU throughout this affairmay still arise as all eyes turn to look at the other insolvent states including France of course.
For those reasons I am expecting major changes within the EU directly as a result of this muddle. Try as the self serving EU politicians may I think controlling the consequences of such abject stupidity financially (at best!), is beyond the EU. Otherwise they would not be in this entirely self made mess they are in.
ZH reporting ECB is imposing 50% haircut on the deposit assets of Greek banks it just spent EUR 74bn bailing out.
Here: http://www.zerohedge.com/news/2015-04-21/ecb-prepa...
Here: http://www.zerohedge.com/news/2015-04-21/ecb-prepa...
Digga said:
ZH reporting ECB is imposing 50% haircut on the deposit assets of Greek banks it just spent EUR 74bn bailing out.
Here: http://www.zerohedge.com/news/2015-04-21/ecb-prepa...
Good post Digga!Here: http://www.zerohedge.com/news/2015-04-21/ecb-prepa...
Well here we are then! Reality times have arrived in the EU, the ECB and are knocking on the door of Greece. Clearly Greece cannot continue in this way now that reality has arrived. So what happens now?
Having an absolute distrust of the EU bureaucrats and EU politicians I suggest we must look for another "Solution" being proposed by the EU that limits any personal damage to both groups of those self serving apparatchiks in the best possible way for the EU itself.
The Domino effect on the other failing states within the EU is the biggest danger IMO. I remain even more unconvinced that Draghi can actually manage this mess of the EU's making. What the EU must avoid is any suggestion that these states may follow Greece into abject economic failure and collapse.
Can the EU actually manage this nonsense? Personally, since the EU has been so consistently wrong on this matter for year after year, it seems to me to scream of dreadful incompetence at every level within the EU and ECB. Greece has played them for fools! The writing has been on the wall for anyone to read ever since the entry by Greece into the EU was fiddled jointly and severally by Greece and the EU.
I can see major consequences being forced upon the EU and the other failing states. Once this bandwagon starts rolling there will be consequences way beyond the control of the EU. Anyone care to estimate their view of the likely long term effects?
Steffan said:
Good post Digga!
Well here we are then! Reality times have arrived in the EU, the ECB and are knocking on the door of Greece. Clearly Greece cannot continue in this way now that reality has arrived. So what happens now?
Having an absolute distrust of the EU bureaucrats and EU politicians I suggest we must look for another "Solution" being proposed by the EU that limits any personal damage to both groups of those self serving apparatchiks in the best possible way for the EU itself.
The Domino effect on the other failing states within the EU is the biggest danger IMO. I remain even more unconvinced that Draghi can actually manage this mess of the EU's making. What the EU must avoid is any suggestion that these states may follow Greece into abject economic failure and collapse.
Can the EU actually manage this nonsense? Personally, since the EU has been so consistently wrong on this matter for year after year, it seems to me to scream of dreadful incompetence at every level within the EU and ECB. Greece has played them for fools! The writing has been on the wall for anyone to read ever since the entry by Greece into the EU was fiddled jointly and severally by Greece and the EU.
I can see major consequences being forced upon the EU and the other failing states. Once this bandwagon starts rolling there will be consequences way beyond the control of the EU. Anyone care to estimate their view of the likely long term effects?
I imagine it will be a balancing act between "Look at the consequences if you don't follow our rules" and "It's not that bad, please don't start a bank run across the EZ"Well here we are then! Reality times have arrived in the EU, the ECB and are knocking on the door of Greece. Clearly Greece cannot continue in this way now that reality has arrived. So what happens now?
Having an absolute distrust of the EU bureaucrats and EU politicians I suggest we must look for another "Solution" being proposed by the EU that limits any personal damage to both groups of those self serving apparatchiks in the best possible way for the EU itself.
The Domino effect on the other failing states within the EU is the biggest danger IMO. I remain even more unconvinced that Draghi can actually manage this mess of the EU's making. What the EU must avoid is any suggestion that these states may follow Greece into abject economic failure and collapse.
Can the EU actually manage this nonsense? Personally, since the EU has been so consistently wrong on this matter for year after year, it seems to me to scream of dreadful incompetence at every level within the EU and ECB. Greece has played them for fools! The writing has been on the wall for anyone to read ever since the entry by Greece into the EU was fiddled jointly and severally by Greece and the EU.
I can see major consequences being forced upon the EU and the other failing states. Once this bandwagon starts rolling there will be consequences way beyond the control of the EU. Anyone care to estimate their view of the likely long term effects?
Digga said:
ZH reporting ECB is imposing 50% haircut on the deposit assets of Greek banks it just spent EUR 74bn bailing out.
Here: http://www.zerohedge.com/news/2015-04-21/ecb-prepa...
I'm really not clever enough to understand all this, but everybody knows Greece is skint and is looking at a default - managed or notHere: http://www.zerohedge.com/news/2015-04-21/ecb-prepa...
So what the ECB is really doing is 'lending' (giving) money to a central bank it knows can't pay it back, but tweaking the terms so they can claim they're being tough. It's just smoke and mirrors isn't it - to keep things running a little bit longer.
If Greece collapses none of this collateral will actually make it back to the ECB (not that it would make much difference anyway) - so whether it's held in an insolvent commercial bank or an insolvent central bank doesn't really make any difference does it?
Greece is on a downward spiral, and there don't seem to be any plans to make radical changes so why would it be going anywhere except further down.
fblm said:
maffski said:
It's just smoke and mirrors isn't it - to keep things running a little bit longer.
Yup. Mad Hatter's tea Party.
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