Is the end nigh for the Euro? [vol. 3]

[Art0ir]

loafer123 said:

Germany is incentivised to keep the Euro project going as long as possible.

When they eventually face up to having a fair valued currency, it won't be pretty.

And on the flipside, if you look at how Italy was not only competing with but outperforming Germany prior to the Euro, the Lira is looking very attractive right now.

[Ridgemont]

Fastdruid said:

Ridgemont said:

I tell you what that bunch of slacktards needs. More reform I tell you..

And yet they don't want to leave the Euro...

Financial Stockholm syndrome.

[Fastdruid]

Ridgemont said:

Fastdruid said:

Ridgemont said:

I tell you what that bunch of slacktards needs. More reform I tell you..

And yet they don't want to leave the Euro...

Financial Stockholm syndrome.

My wifes family on her mothers side is Greek. They still have family out there, own property out there etc and it very much is.

"I've got €5000 in the bank, it'll be devalued to worthlessness if we go back to Drachma"

[YankeePorker]

loafer123 said:

Germany is incentivised to keep the Euro project going as long as possible.

When they eventually face up to having a fair valued currency, it won't be pretty.

Yes, going back to nice strong Deutschmark will be painful for their industry.

However, "as long as possible" is tricky - if they believe that the € will come to a sticky end then dragging it out while Super Mario and the ECB pile up a whole load of communal debt defending it will leave them with a nasty Geraus or Allexit bill. No doubt southern €zone will look to northern €zone when the bill is put on the table! They won't want to go Dutch on it!

[rdjohn]

Fastdruid said:

My wifes family on her mothers side is Greek. They still have family out there, own property out there etc and it very much is.

"I've got €5000 in the bank, it'll be devalued to worthlessness if we go back to Drachma"

Four years ago, I was helping a Greek guy with directions on the RER station for the Eiffel Tower. He told me then that he had been sent to France by his sons and daughters (doctors and dentist) to open accounts so they could transfer their deposits, just in case.

So I am a bit surprised that anyone with €5000 on deposit has not already thought about moving it.

I have also wondered if he has returned recently to shift it to a Luxembourg account or some other country where the population are "at the heart of Europe".

[Fastdruid]

rdjohn said:

Fastdruid said:

My wifes family on her mothers side is Greek. They still have family out there, own property out there etc and it very much is.

"I've got €5000 in the bank, it'll be devalued to worthlessness if we go back to Drachma"

Four years ago, I was helping a Greek guy with directions on the RER station for the Eiffel Tower. He told me then that he had been sent to France by his sons and daughters (doctors and dentist) to open accounts so they could transfer their deposits, just in case.

So I am a bit surprised that anyone with €5000 on deposit has not already thought about moving it.

I have also wondered if he has returned recently to shift it to a Luxembourg account or some other country where the population are "at the heart of Europe".

I suspect those that are smart enough have. In the same way I wouldn't be keeping any funds in MPS (or for that matter any number of Italian banks!) if I was in Italy.

[Ridgemont]

LongQ said:

The Greek analysis puts me in mind of the observations last week that Osborne's property tax revisions cost the taxman £500M last year.

I thought this potential effect was very well known around the world and we in the UK had experience of it well within living memory (although perhaps Osborne would be too young to remember.)

Was it not 95% Higher Rate taxes back in the 60s that drove high earners into tax exile?

Is it not similar considerations that have multinationals moving their Tax HQs around the world according to who is offering the best deals for corporation tax?

So how does an extreme version of such tax policy, as advised to Greece, work differently?

I presume they cook all of thins up with some models to support the proposals? Is that too trusting of the professionalism of these people?

The proposal only stacks up if you consider that the objectives are not any of the following:
Growth
Employment
Debt repayment

The primary objectives here are;
Confidence in the Euro
Confidence in banking exposure
Fiscal rectitude

I.e Greece is being, to use Varoufakis' phrase, water boarded pour les encourages l' autres, and because at this stage even after 8 years of this nonsense, the troika is a one legged stool which doesn't involve the IMF or the Commision and the ECB/Germany aren't really interested in Greece, only in the implications of what happens in Greece with regards to the Eurozone.

Re Greeks not wanting to lose savings: €5000 will probably go a lot further with a depreciated drachma locally. That's how depreciation works.

Edit - qualify that last point: devaluation certainly works when concerned with an economy likely to be importing huge amounts of euros courtesy of tourism.

Edited by Ridgemont on Monday 12th December 21:17

Edited by Ridgemont on Monday 12th December 23:12

[Digga]

Fastdruid said:

Ridgemont said:

Fastdruid said:

Ridgemont said:

I tell you what that bunch of slacktards needs. More reform I tell you..

And yet they don't want to leave the Euro...

Financial Stockholm syndrome.

My wifes family on her mothers side is Greek. They still have family out there, own property out there etc and it very much is.

"I've got €5000 in the bank, it'll be devalued to worthlessness if we go back to Drachma"

^This.

There is acute irony that the respective economic stances of both the Greeks and the Germans are rooted in the national, historic experience of the same phenomenon; rampant inflation.

[Escapegoat]

Fastdruid said:

My wifes family on her mothers side is Greek. They still have family out there, own property out there etc and it very much is.

"I've got €5000 in the bank, it'll be devalued to worthlessness if we go back to Drachma"

Why would they leave Euros in the bank? Surely having them as Euro banknotes would be the least risky and cover all eventualities?

[Welshbeef]

Digga said:

This.

There is acute irony that the respective economic stances of both the Greeks and the Germans are rooted in the national, historic experience of the same phenomenon; rampant inflation.

But what does house price matter?
If in this instance the whole country takes and instant devaluation you are at the same rung on the property ladder.

If they want to change countries I guess that is an issue but frankly hardly anyone really does that.

[Gargamel]

Welshbeef said:

But what does house price matter?
If in this instance the whole country takes and instant devaluation you are at the same rung on the property ladder.

If they want to change countries I guess that is an issue but frankly hardly anyone really does that.

Nothing to do with house prices, in hyperinflation, it is the inability of wages to keep pace with the cost of goods.

[Welshbeef]

Gargamel said:

Nothing to do with house prices, in hyperinflation, it is the inability of wages to keep pace with the cost of goods.

When you can grow your own fruit and veg and be self sufficient it's irrelevant

[B'stard Child]

Welshbeef said:

Gargamel said:

Nothing to do with house prices, in hyperinflation, it is the inability of wages to keep pace with the cost of goods.

When you can grow your own fruit and veg and be self sufficient it's irrelevant

Of course........

[Welshbeef]

B'stard Child said:

Welshbeef said:

Gargamel said:

Nothing to do with house prices, in hyperinflation, it is the inability of wages to keep pace with the cost of goods.

When you can grow your own fruit and veg and be self sufficient it's irrelevant

Of course........

Well we in the U.K. Did that after WW2. Every back garden and front gardens turned into vegetable patches. Sure it looked odd v what we see today (but in Bulgaria they do this no lawns or open space it's all turned into growing veg ).

I see zero reason why you wouldn't do the same self sufficient as much as possible happy days

[B'stard Child]

Welshbeef said:

B'stard Child said:

Welshbeef said:

Gargamel said:

Nothing to do with house prices, in hyperinflation, it is the inability of wages to keep pace with the cost of goods.

When you can grow your own fruit and veg and be self sufficient it's irrelevant

Of course........

Well we in the U.K. Did that after WW2. Every back garden and front gardens turned into vegetable patches. Sure it looked odd v what we see today (but in Bulgaria they do this no lawns or open space it's all turned into growing veg ).

I see zero reason why you wouldn't do the same self sufficient as much as possible happy days

Were you talking about Greece, Germany or the UK because now I'm confused

If it's the UK well we could dig up all the brick weave and send it to Donald so he could get started on that wall

If Greece or Germany......

Can you grow your own Oil, Gas, Coal, Petrol, Diesel or LPG - all that stuff that is needed to get people/goods to places?

As long as you have veg - price increases in everything else doesn't matter

This failure of "care in the community" is quite frightening

[smifffymoto]

But you assume that people will still be in employment,earning wages and still able too buy stuff.

[davepoth]

B'stard Child said:

As long as you have veg - price increases in everything else doesn't matter

You're being a little unkind. Perhaps.

While it's not just limited to fruit and veg, the countries of the Mediterranean have always had a thriving..."informal" economy. Look at a lot of the poor villages in southern Italy, or Spain, or Greece, and you see people who don't have much in the way of money at all but still managing to survive.

They have a bit of land, maybe some goats and a donkey, and they grow a crop of something - tomatoes, olives, oranges, perhaps - some of which they keep, and some of which they barter for other stuff. Very little of it goes to market, but it doesn't need to as nobody has any money to spend anyway.

[maffski]

Gargamel said:

Nothing to do with house prices, in hyperinflation, it is the inability of wages to keep pace with the cost of goods.

It's the loss of public trust in the implied value of money - see Venezuela, who have done fine work in taking the Bolivar fuerte from inception to destruction in under a decade.

But would dropping out of the Euro lead to hyperinflation? It's a very different beast to normal inflation.

[YankeePorker]

Looks like the Greeks have pissed off the Troika again - how dare they try to give their poorer pensioners an Xmas bonus!?

http://www.bbc.com/news/business-38318360

I dislike that wker Dijsselbloem - ever since his snooty put down of Varoufakis. Along with Junkers and Schultz, he'll be another I'd be glad to see the back of.

[Digga]

Welshbeef said:

Gargamel said:

Nothing to do with house prices, in hyperinflation, it is the inability of wages to keep pace with the cost of goods.

When you can grow your own fruit and veg and be self sufficient it's irrelevant

Grow their own using imported tractors and agricultural equipment, transported to market in imported vehicles. Tourists moved using taxis, busses, bikes and boats that are imported.

The cost of machinery is often the most significant capital investment for many in the Greek economy, paying more for them because their currency has tanked is not affordable or sustainable.