Author: abramicus

GREECE IS CRYING OUT LOUD FOR A WILLING RESERVE CURRENCY - WHY NOT RENMINBI? [Copy link] 中文

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Post time 2015-6-29 05:57:18 |Display all floors
dusty1 Post time: 2015-6-29 05:44
Greece needs to change its fiscal management like Ireland did

Greece gave up its right to impose protective tariffs on German, French and Italian products, in the belief that the increased amount of loans available to its citizens would enable them to become more productive, and earn back the export earnings of these better developed countries.  Now, the other hidden cost of its membership in the Eurozone, the limits of liquidity of its banking system being used as leverage against its social welfare programs, is revealed.

The program is now clear.

1.  Let the poor Greeks borrow beyond their ability to repay.
2.  Impose austerity measures that reduce their population, starting with the elderly, the sick, and the unproductive.
3.  Foreclose on the Greeks to possess their choicest lands, their most productive factories, and their most valuable services.
4.  Net result:  fewer Greeks to compete with their creditors for the land and resources of Greece, and more land and resources for their creditors to use or enjoy.
5.  Not much different from Veni, Vidi, Vici.

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Post time 2015-6-29 06:16:19 |Display all floors
abramicus Post time: 2015-6-29 05:57
Greece gave up its right to impose protective tariffs on German, French and Italian products, in t ...

Greece proves you cannot live of credit

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Post time 2015-6-29 06:26:20 |Display all floors
This post was edited by abramicus at 2015-6-29 06:58
dusty1 Post time: 2015-6-29 06:16
Greece proves you cannot live of credit

Actually, you can, even luxuriously, as long as you print your own currency, and more so, by acting as the policeman of the block (EU), or of the world, you can force your terror-stricken protectorates to accept it as payment for their products and services as well.  Then, you can even live like a hog.  Never too late for Greece to do the same, except as a novice, it needs the jumpstart its printing press with the backing of a few reserve currencies.

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Post time 2015-6-29 06:55:43 |Display all floors
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Post time 2015-6-29 10:09:08 |Display all floors
THE NEW REPUBLIC

Well, Greece has declared a bank holiday and stock market holiday for Monday, which could be extended for a whole week, until next Monday, after the referendum.  While this shows that the Greek government is open to further talks over this period of time, hoping for concessions on avoiding cutting pensions and social welfare, while increasing taxes on the wealthy and on corporations, as its means of generating the cash to pay off its debts, the deciding factor will be the reaction of the Greek populace to the fear of losing their savings, either from bank insolvency, or from devaluation and loss of purchasing power, especially if they were to get back their savings in Drachma's instead of Euros.  If panic ensues, the Greek government would be forced to issue Drachmas ahead of the referendum, which makes the referendum question doubly moot, as the offers of the ECB would have expired by then, and the decision to go back to a national sovereign currency would have been a fait accompli.  More important for the people would then be a referendum on whether they would accept Drachmas in payment for their services, which is a human capital nobody could take away from them, and next for their agricultural products, rooted also in the land that nobody can take away from them as well.  If labor and land will accept payment in Drachmas, capital not only can follow, but will have to follow, and not only will follow, but in the absence of a foreign currency, such as the Euro, competing for such labor and land, will be extremely profitable trading such services and land-based products in a sheltered state-sponsored monopoly of all the financial services of Greece.


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Post time 2015-6-29 12:25:16 |Display all floors
This crisis has exposed the major flaws in the Euro economic model.  The Greeks exploited those flaws by using the currency to get cheap loans that they could never pay back.  Then when the loans come due, they (and many other European countries) suddenly see that there is no such thing as free and easy money.  Things like collecting taxes and servicing debt are still required even if you live as part of an economic powerhouse.

I think Europe and the IMF have made there position pretty clear.  You accept our money with many strings attached, including forced coercion into free trade agreements, access to capital markets, societal changes that destroy socialist welfare programs and many more unsavory things.  Take it or leave it.

Europe and America present the IMF like it is some sort of economic fairy that sprinkles magic restorative dust on impoverish nations.  It is not.  IMF money comes with MAJOR strings attached and often requires nations that take the money to give up economic sovereignty if you can't pay it back on time - sometimes even when you just take the money.  Why do you think China wants to open a bank of its own?  Power and forced access to markets and natural resources in exchange for developing a smaller country's economy!  Sometimes it works in a responsibly run country, sometimes it ends in being controlled by your creditors.

If you refuse to pay IMF, you will be sent to the economic hinterland without access to any capital.  The Europeans are saying we're tired of paying you bills -regardless of the fact that the Greeks are part of the group.  Don't like it, have fun with going it alone.  The Greeks are notoriously bad at collecting taxes and are having trouble squeezing those needed tax funds out of their population.

Greece has racked up an astonishing debt (something like 35,000 USD per Greek citizen) and don't want to pay it back.  If the Europeans bow down and forgive even more debt (they've already forgiven at least a third of it) what message does that send?  Elect a radical left wing government that refused to honor the terms of their debts and all will be forgiven?  The current governments in debt ridden Ireland and Spain don't like that message because they will be promptly thrown out of office.

There is no real upside for China to play the knight in shining armor.  China has just created its own infrastructure bank and what kind of message would that send to future debtors of China?  Don't pay us back, we're cool with that? And what economic advantage does Greece offer China.  Nice beaches, olive oil?  Plus, sticking it to the Europeans would only serve to infuriate Europe and they would probably pull any promised funding for the new Asian infrastructure bank in retaliation.  Any money China would loan would also come with strings attached and what leverage would they have for calling in that loan?  If China is going to be giving away free money, they are going to give it to their own local governments that have racked up too much debt.  Plenty of cities in need right here in the middle kingdom.

Is what the Europeans are doing to the Greeks nice, honest or in support of the democratic rights of a sovereign nation?  No, it is horrible blackmail and economic enslavement.  Also know as free market capitalism.  The only other option currently available to the Greeks is to go back to their own currency and implement a state controlled economy - and with no other state controlled economic partner like the old USSR around to provide support - that is a dark and painful path to go down.

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Post time 2015-6-29 12:41:07 |Display all floors
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