Topic: What can greece central bank do? - page 3. (Read 6575 times)

What metrics are you using for those 25%? Average unemployment in the Euro area is 11%. From Germany's 4% to Greece with more than 25%. Don't know exactly how they calculate that. But even considering people who gave up looking for work, 25% unemployment in most countries doesn't make sense.

Most countries in europe have 25% unemployment, it all because money printing and subsidizing crappy businesses, while keeping legit ones out with regulation.

Such an oligarchy.

You want to rethink social spending in a country with 25+% unemployment again. You need to rethink that line of thought. It can lead to a disaster.

They have lot of social welfare program for people so their tax money is not sufficient for all those spending. So they need to rethink about their social spending

Yep socialism caused damage can be offset by money printing, because the food stamp and welfare caused by it, can easily be taken away by rationing and money printing.

What they got for 10 years will be taken away in the next 10 years, with interest!

If GCB could print euro then their problem will disappear, just like FED printed 5x USD and most of the problem in US after financial crisis are solved (at least for 10 years)

Money printing works because most of the people do not understand how money works. When FED print 5x more money and buy lots of things, companies around the country will just see lots of incoming orders from large state organizations and they can immediately produce more, hire more, and make more money. Their sight is just limited on the available money to earn, they are seldom interested in the things happening beyond that scope

From an individual point of view, fiat money has relative stable value, this is their belief, so this belief gives central banks power to stimulate the economy, more money means more purchasing power, and a large amount of purchasing power will create boom. Since the production will always increase when more money arrives, there is almost no inflation as long as the money are not created at a speed of one fold a month

So to basically summarize greeks situations.

A few people made money pocketed personally Im pretty sure from the state, then have a few experts to cook the books for last 15 years.

Then ask for money and make it seem like its a banking euro situation for greece.

Good summary. Wondering how long it will take the public to understand that there are more basket cases in the EU, although less extreme and with more political clout.

It's not a banking problem alone and the GCB an not issue a bandaid for the Greek Crisis. The mentality in Greek Politics and also in the Lap People has to change so that we all learn the biggest lesson of all, to live within our means and not be bombarded by the rampant consumerism and American PIPEDREAM mentality because it just isn't sustainable. It may have been o.k for a few Million US peeps and a few European Elites but it has impoverished nations and we got the complete crap what we have today of destabilised countries, 1 rampant refugee crisis and billions of broke people who were promised the world if they overstretched and borrowed to buy a ton of imported goods and cars they simply couldn't afford. Also adopting the Euro and buying Ninja Derivatives from WALL ST before the blow up was a disaster waiting to happen. The GCB cannot fix that, only a wake up call and real solutionists can solve the problems in Greece and Worldwide for that matter. We need a solid team of problem solvers, not just politicians to help change the Status Quo in Greece.

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This is another strange thing: It seems Greek government have no control over what their own bank is doing, they can not stop their own bank from carrying out capital control, thus banks using capital control to threaten Greek parliament to give in to more austerity measure

So it seems these governments and parliaments in western countries are just a show, they don't have any real meaningful power, they can not decide on their own fate, it is banks who have the real control over the country

They had a plan B?

http://www.ekathimerini.com/199945/article/ekathimerini/news/varoufakis-claims-had-approval-to-plan-parallel-banking-system

There are a lot of misunderstandings here.   One can think of banking what one wants, but the Greek problem is NOT a banking crisis.  It is a state that went broke, that's all.

The Greek state has been spending much more than it got tax revenues for the last 15 years, and moreover, with the help of Goldman Sachs experts, has been hiding its deficit in complicated bookkeeping constructions.

These corpses became visible in 2009, when, for the first time since the end of dictatorship in Greece in the seventies, there has been a power change in the Greek government.
The new government, probably still in "electoral combat mode", made public the financial lying of the Greek state in 2009, when it turned out that they had a double digit deficit that was presented as something like 3%, and that the state debt was much higher than indicated.

This short moment of honesty had a totally different effect than anticipated, I suppose: financial markets lost confidence in the Greek state.  It is a bit of an irony that those coming to power and replacing the crooks had as effect that they now made the Greek state losing confidence.

With its huge debt and deficit, Greece was in a very bad shape when financial markets lost confidence (when their interest rates skyrocked).

This is when the "troika" took over.   They decided to lend Greece STATE money and IMF money to be able to honor its financial obligations with respect to their former financial partners.
This was done for 2 reasons of course:
one was to help out Greece who was in a bad shape not being able to borrow on the private market
but the other was of course that most former financial partners of Greece were French and German banks, who were themselves just recovering from the banking crisis of 2008, and to avoid that all that had been done to save them, would be wasted if they had to take the losses on their former Greek loans.

The idea was simply to give Greece some time to get back confidence on the financial markets (as was the case with Ireland and Portugal for instance).   That the "panicking" would be over, and that Greece would be able to borrow again, like everybody else, on the financial markets, paying back the troika for the emergency credits during a panicking time.  The requirements, of course, were that the Greek state would have a plan to be financially sound again.  Deficits should be eliminated, and a surplus should be generated to show that the Greek state had the resources to pay back loans.  This is what was called "austerity measures".

That's where things went wrong.   The Greek economy was a bubble living on credit.  There was no genuine economic power.  It was all fake, on state expenses.  Taking away the credit on which they had been living, and the whole thing collapsed.

The deficits got reduced, but in the mean time, Greece's REAL economy showed up, which was 25% lower than the bubble on credit.  The Greek governments never really managed to get a genuine correct balance.  In a depression environment, it is not easy to reform.
This made the ground for populist movements like Syriza, promising good life again based on, well, no idea.  That's what populism is for.

So we simply saw a state suffering the real consequences of neo-Keynesianism: blowing a bubble fake economy based upon deficit spending.  Many western states do that, but the Greek state simply did it more and faster.

This has nothing to do with fractional banking, "money out of thin air", or abusive credit.  This simply is the long term consequence of deficit spending, but at Greek rates, we got the movie in accelerated mode.

One cannot, at the same time, fulminate against "money out of thin air"  and "fractional banking" on one hand, and "austerity" on the other hand.

What does austerity actually mean ?  It means that a state spends no more than it earns as income.  In any sound money doctrine (such as bitcoin is based up), there's no way to escape "austerity" in the long run.  If you give in on austerity this year, you will have to be "twice as severe" next year.  Non-austerity is deficit spending.  With sound money, that cannot go on for ever.

An economy that has grown (supposedly) on non-austerity, that is, on deficit spending, is nothing else but a fake bubble.  There is no real production backing it.  One is living a good life on borrowed money, that's all.
As a state, you can do this by taking on a lot of civil servants and distributing a lot of allowances of all kinds.  That's essentially what the Greek state did.

In fact, given the deficit spending nature of the Greek state, the Euro is too much of a sound money to be good for them.  This is why they should leave the Euro zone.

A write-off debt, or an extended repayment schedule with very low interest rates have the same effect.
So they could give Greece this benefit, without calling it a write-off of debt.

All the money they get is for nothing, it's going to get evaporated instantly to pay the debt.. it's nonsense. Both parties know the debt will never be paid. What do they have on mind to solve this situation? I have no idea at this point, only conjectures, which includes "politely" pushing Greece out of the Euro.

Will it be a new face of anarchy?  Debt is not payable but can't be forgiven so the entire economy goes gray.  No money for any govt services (fire police roads etc) so all these services are privatized.

Varoufakis said the Germans wanted to kick Greece out to make an example for any other country that thought they could write off their debts.  The Greek economy is doomed now and maybe that will be the ultimate outcome of the new economic measures.  Politically though it seems dangerous for Europe to lose Greece on multiple levels.

How could they? The IMF and maybe everyone else by now admits the debt is unsustainable. That is the same as saying that whatever the greeks do they won't ever be able to pay back the full amount of the debt. What the greek government should have done these last few months was prepare to leave the euro and reintroduce the drachma by themselves.

The country became the epicenter of Europe’s debt crisis after Wall Street imploded in 2008. Now, it is struggling to pay its debt, and its people and creditors are growing restive.

No the Greece Central Bank have no right to create euro. If this would be possible it will be easy to solve the problems of Greece. At least apparently. The euros can be created only by European Central bank. The Greece Central Bank are controlled by one Governor that normally can be Greek. He do the job of the Governor of one central bank but under the rights given by the European Central Bank. Greek Central Bank couldn't print euro because the central banks of every country in the EU have no rights to do this action.