Topic: If Greece defaults - page 4. (Read 45250 times)

Yes, it would seem to them like Euro is giving away free money and letting go of Greece, which will be taken as an advantage by these countries. They would default and leave stating the same, debating why Greece got added benefits and question Eurozone's authenticity. Its one of the most complicated economic situations, hope things work our for all parties involved.

The precedent that Greece abandoning the Euro sets would be devastating. It means that Germany or France could do so if they ever pleased, and the possibility of that happening would place the Euro in a lot of trouble.

Stop that hyping about Grexit, it's not ganna happen, to bad for all those doom porn lovers....

I think that if Greece continues to fail the euro will fall also. People will think That bitcoin is fail proof when in actuality it is not perfect for thier situation.

Trying to measure inflation only makes sense if you limit yourself to a class of prices, like consumer product prices, building prices, building material prices, raw material prices, heavy machinery prices and so on. If you add up everything, a price index is the same as the money value.

Correct. If the inflation cannot be controlled every salary or pension will lost his bought power very soon and continuously. So no one will be able to assure their needed things to do a normal life. Needed more money to live normally, more money mean more inflation and this will be a closed circle without end.

Wrong. There is a very important institution named Central Bank that have as principal duty the control of inflation. There are to many monetary policies that can be used to control this. If the inflation would be not controllable the economy will be in chaos and everyone will have big difficulties in its everyday life.

The effect of low interest on saving and consumption: When you have pension savings, and say a house where, due to inflation, the mortgage is only 40% of the house, you can borrow more to spend, thinking that the interest rate is low, the value of your house raises, and your pension is safe. But - since the pension fund invests the money in the debt market, you really borrow from your own savings.

To make it clearer, we can take out the money from the experiment. The money, as you know, have only exchange value and therefore has no relevance to the real economy of goods and services.

Think that the only thing you consume, is food, some kind of food that can be saved and used later, however long it is held in storage. While you work, you save a part of what you produce in a pension fund, which have the form of a gigantic silo to hold the food. Then you borrow from the pension fund for immediate consumption, which is the same as you take out the food of the silo and eat it. Now when you retire, what are you going to eat? This is what the greeks now have to learn the hard way, and we will, later.

With sound money, and therefore an unfucked interest rate, the pension fund would keep the money, and you would not be so quick to borrow, thinking it will have to be paid back, with interest.

The inflation (as in a general price increase) can not be determined. If you take into account all prices, the increase or decrease of the prices is solely dependent on the quantity of money and the holding preferences for money amongst the public.

In the shock that we are facing, some prices will go up, some down. Therefore you will see that the keynesian commenters will not agree on which we have, inflation or deflation, or maybe some will say that we have both at the same time.

In a scenario of lower prosperity, because the capital structure is misadapted due to ZIRP, people will still demand everyday things and basic foodstuffs, which will then appreciate in price. While not so necessary things, like nice houses, will go down. And investments will go down, because people have to use their savings for consumption. Therefore peoples wages will go down relative to the basic foodstuffs. Due to excessive regulations, the capital structure will be slow to adapt, adding to the pain.

They will not be able to pay it, unless the debt is crossed over. Some commenters do not see that in both cases, debt crossed over or debt not crossed over, the debt will not be paid. If you think the problem for the creditors will be solved either way, you are in danger of incurring cognitive dissonance in yourself.

And if you think that the creditors can take the hit, think of who the real creditors, when everything is cleared out, is: It is the public, and they have to pay through higher taxes, or lower profit from interest on savings (pensions), or through inflation.

And with inflation I mean stagflation. This time it will be stagflation, because the capital structure is now not well adapted to demand.

Greece will continue to be in crisis mode even with the last help in money. IMF told that without a reconstruction of the debt the Greece will not be able to pay his debt. So all the other credits given by everyone will facilitate the situation but never will resolve that. The problem is that Tsipras with his politic and demagogie in all that 5-6 months in power are deteriorated badly the economic situation and the needed credits or helps must be more consistent and must serious. No one can predict how will finish this situation. There are to many imprevedible conditions that can happen. Let's hope that the consequences don't fall to the most poor people.

how come they give to them funds for 3 years then? even if the agreement is over they would still have those funds, which are 80B btw, they can not covert(which is 350B http://www.nationaldebtclocks.org/debtclock/greece) their debt but in the worst case they could restart from zero without problem

Perhaps, but it is not human nature to allow their elders to suffer to such extremes.

If the pensioners cannot get their pension any more, they will starve, and that problem is then solved, no ?
Once there are no elderly and other non producers depending on impossible state expenses any more, because stopping the state expenses for them made them starve to death, the expenses of the state would be seriously reduced no ?  Which means that the taxes are not necessary any more, and productive people can start over building up a fruitful economy. 
What makes you think it will be the young that will die of famine ?  The young are doing the right thing: go to a better place !

Exactly, i cannot agree more with you.

But there is a stupid human genetic instinct of affinity to the tribe. Certain humans have a loyalty to their surroundings: city, county, country, so it's obvious that patriots will always exist.


But there is nothing wrong with patriotism as long as it doesnt turn into racist/xenophobe/minority hater nationalism.

Of course politicians always use hegelian dialectic to fool the 50 IQ voting sheeps and control them, rob them and make their lives miserable.

Patriotism seems foolish to me. You get a leader who you didn't pick, do not admire, do not respect, who is faced with an impossible mathematics problem. He makes demands upon you with threats if you do not deliver. And why? Because you speak with an accent that brands you to a specific geolocation on the planet? Because your education teaches you to be proud of the history our ancestors branded to the same geolocation as us went through?

Well it works and I am not immune from it, but logic tells me it is foolish.

For instance I love the story that the two finger display of defiance by Brits, commonly interpreted as, "fuck off", originated as a sign of British prisoners of war towards their French captors in order to remind them that they still have both of their bow fingers and that they are still a threat. This really strikes an emotional chord with me, but is it foolish? Food for thought.

Folks all the tax money went to politician purses what do you expect?

Milk 60-70-80-90-99% tax off from poor people, just so that a few politicians grab it?

Nah i rather just lower the tax rates to the healthy 3-5% like in hong kong.

You cannot fucking build an economy at 99% rates, and you are wondering why they leave to bulgaria or macedonia... unbeliavalble.

All the tax money milked from us and now you say its our fault fuck it! (i`m not greek but i sympathize with hard working businessman in greece)

Yeap the tax evasion by the big guns is on the Agenda so we hope that the Government can at last implement tax reform and go after those that helped Sink Greece to it's knees..If they really love their country they should be injecting cash into rebuilding it but with another 60,000 companies asking to relocate to Bulgaria to do business, looks like Greeks are not so patriotic as they try to show when going on the streets to protest..Unfortunately Greece needs some stropping patriotism at this time and I am not talking about Golden Dawn style of nationalism either.. I am talking about people who will put money and sweat on the table to rebuild the country and get it going again.. The cow has no more milk to be milked.

Yep it's always Government X,Y,Z is the problem but never "Government" itself as the institution that it is.

Do you think that killing half the population will solve the problem? I doubt that. The birth rate has nosedived after the crisis started in Greece. And the death rate is going up steeply. And this means that in the future, there will be too many pensioners, and too few tax payers. Close to a million Greeks of working age has fled the country. The government should encourage them to move back to Greece, if they want to improve the tax collections.