Greece Watch...

[Totally_Baffled]

Hi Steve

By firing up the printing presses - wouldnt the ECB just be doing what the Fed does in the US?

According to Wikipedia - QE 1 and 2 were worth $2.7 trillion alone! - lol

I dont know how much is required to bail out Spain+Italy+Ireland+portugal but despite this - inflation is (apparentely) relatively benign!

It could be that you can print as much as you like as long as that enough money is being destroyed via default or recapitisation (of banks) so you dont get too much money chasing too few goods, which is what causes inflation.

Dunno to be honest, it seems our financial system is ridiculous! lol

[Aurora]

So the Germans blinked first. Chickens....

http://www.youtube.com/watch?v=LGUYsuYudVA

It now remains to be seen how the German people react.

Badly I suspect and after fifteen years of propping up former East Germany, who could blame them?

[UndercoverElephant]

I really don't get all of this.

There is no way that the ECB has got enough money to buy up enough of the bonds of the stricken club med countries in order to keep them afloat unless it buys them with IOUs that it has issued to itself.

The ECB can print as much money as it likes. The problem was always that this was being blocked by the Germans.

In which case the debts of citizens that have been passed onto sovereign states who themselves have been passing them on to the wider EU super state in the form of loans/bailouts etc will ultimastely be have to be settled by the ECB. The thing is, the people at the bottom will never be able to repay the debts, nor will the sovereign states, nor will the ECB.

So what then?

Seriously?

Does the ECB, at some point, simply fire up the presses and inflate it all way?

That's what I'd bet on.

Or what?

From here, I'm having trouble thinking of another what. At least until the election in the US anyway. After that US politics comes back into play. At the moment there is a lame duck president and a lull in the financial pressure on the US because of all the money fleeing the eurozone.

An inflationary bust seems to me to be more and more the likely outcome to all of this. The EU project engineers, in a desperate bid to keep their construction afloat, are quite prepared to drag the people of Europe into the furnace.

To be fair to Merkel, she doesn't appear to have wanted to take this path, but has been pressured into it by other world leaders.

Or maybe she looked at the alternative and decided this was the least bad option for Germany.

[Catweazle]

I can't see any way out except to rapidly inflate away national debts until they are insignificant, then issue new notes with many Zeros on them. What puzzles me is that the inflation hasn't started yet, I assume it's because people are scared to spend what money they have.

This solution is bad news for the cash rich, but they appear to be getting plenty of warning to convert their cash into harder assets. It's also bad news for savers, who should be spending those savings on something more tangible in the next couple of months.

I've tried and tried, but all I see for the UK and Europe is bad news ahead. Can somebody with a better understanding of economics give me a light at the end of the tunnel ?

[UndercoverElephant]

I can't see any way out except to rapidly inflate away national debts until they are insignificant, then issue new notes with many Zeros on them. What puzzles me is that the inflation hasn't started yet, I assume it's because people are scared to spend what money they have.

Yes. There is massive downwards pressure on both wages and prices, because everybody is in survival mode.

This solution is bad news for the cash rich, but they appear to be getting plenty of warning to convert their cash into harder assets. It's also bad news for savers, who should be spending those savings on something more tangible in the next couple of months.

Yes. Individual cash rich / saver types have had plenty of warning and if they have any sense they have already got out of most of their cash. But it is different for the big financial players because if they all stampede for the exits then the system comes crashing down. They have a huge vested interest in not helping to bring it down. Eventually they too will have nowhere to run, and then they'll start feeding off each other.

I've tried and tried, but all I see for the UK and Europe is bad news ahead. Can somebody with a better understanding of economics give me a light at the end of the tunnel ?

Why are you asking economists? They are the ones who were supposed to see all this coming, and didn't, or decided not to mention it.

[energy-village]

I've tried and tried, but all I see for the UK and Europe is bad news ahead. Can somebody with a better understanding of economics give me a light at the end of the tunnel ?

I have half an economics degree and I can't see sunny uplands ahead for the UK, either. Not for want of looking, I just hope I've missed something.

The best I can think of is the G20 introducing strict financial regulation (e.g. banning of derivatives) and massive biblical debt jubilee, the worst is too horrible to burden this forum with.

[Aurora]

I've tried and tried, but all I see for the UK and Europe is bad news ahead. Can somebody with a better understanding of economics give me a light at the end of the tunnel ?

Due to recent cutbacks and until further notice, the light at the end of the tunnel has been turned off.

[Little John]

I've tried and tried, but all I see for the UK and Europe is bad news ahead. Can somebody with a better understanding of economics give me a light at the end of the tunnel ?

Due to recent cutbacks and until further notice, the light at the end of the tunnel has been turned off.

[Aurora]

The Guardian - 19/06/12

Germans are now thinking the unthinkable on European integration

After the Greek elections, it's dawning on ordinary Germans that the best – or worst – of integration is still to come, and soon.

Article continues ...

[Catweazle]

Why are you asking economists? They are the ones who were supposed to see all this coming, and didn't, or decided not to mention it.

I must assume that all the QE and bailout measures are merely devices to buy enough time for the economists to feather their own nests.

[UndercoverElephant]

Why are you asking economists? They are the ones who were supposed to see all this coming, and didn't, or decided not to mention it.

I must assume that all the QE and bailout measures are merely devices to buy enough time for the economists to feather their own nests.

The economists are driven by ideology, either their own or those of their political paymasters. QE is a device to "buy time" in the sense that it stops the system from collapsing in heap. As for transfering massive banking losses onto national balance sheets, from what I can tell that was just some policy that Gordon Brown made up as an ad-hoc response to an unprecedented situation, and then the Americans followed suit.

[UndercoverElephant]

http://www.cbc.ca/news/world/story/2012 ... unist.html

Greek fascist having a debate with several other people including a communist. Two minutes of tryiong to shout each other down, mainly about the Greek oil industry and how foreign companies got all the benefits from the oil. Then it gets nasty, ending in a physical punch-up.

[energy-village]

Why are you asking economists? They are the ones who were supposed to see all this coming, and didn't, or decided not to mention it.

I must assume that all the QE and bailout measures are merely devices to buy enough time for the economists to feather their own nests.

As for transfering massive banking losses onto national balance sheets, from what I can tell that was just some policy that Gordon Brown made up as an ad-hoc response to an unprecedented situation, and then the Americans followed suit.

Indeed. Possibly the key players weren't at first sure it could be sold to the public, when they found it could it's been repeated many times around the world.

[Aurora]

The Independent - 20/06/12

Greek parties agree new coalition

Greece has agreed a new coalition government, socialist party head and former finance minister Evangelos Venizelos announced.

Mr Venizelos said details of who will be appointed ministers were still being discussed but would be finalised today.

He said the country would be represented at the forthcoming meeting of Eurozone finance ministers by outgoing finance minister Giorgos Zanias.

Original Article

A marriage made in heaven? I'll give it until the end of the week.

[JavaScriptDonkey]

In short, I'd be extremely obliged if you might explain how it is "every man for himself", "red in tooth and claw", "free-market", "f*ck you Jack I'm alright" capitalism on the way up but, on the way down, we are apparently "all in this together, ".

So you think that the Greek pensioner will carry on receiving a pension if all the individual Greeks decide to not pay any debts incurred by their own Government? This is about economics not morals, about bread in the hand not political point scoring.

To survive with the trappings of a 1st world nation Greece needs a stable income. They will only maintain that if they make considerable efforts to pay off their debts.

What the Greek electorate did was to vote as individuals very much in the 'I'm alright Jack' mode.
What the Greek electorate did not do was vote 'as a people'. To paraphrase Maggie, there is no Greek society.

Lastly I've never said we are all in this together. Rest very assured that I will let you and yours starve in the gutter if I'm forced to choose.