Greece may exit the Euro ?

[hhiusa]

But they are contributing. 👍

Why do you think there has been this shift?

Basically, this situation is akin to a parent telling the older brother that he has to help his younger somewhat mentally challenged brother. Finally, the parent has to say "help your brother out, you know he doesn't know any better".

The US is the parent. Germany is the popular older brother. Greece is the ugly ginger stepchild.

 

[Atilla]

Basically, this situation is akin to a parent telling the older brother that he has to help his younger somewhat mentally challenged brother. Finally, the parent has to say "help your brother out, you know he doesn't know any better".

The US is the parent. Germany is the popular older brother. Greece is the ugly ginger stepchild.

No I don't think that's how one would describe it.

http://www.marketwatch.com/story/why-the-us-will-have-to-bail-out-greece-2015-02-18

Notice this article was out on 18th Feb :idea:

If a crunch comes, America will have no choice but to bail Greece out.



Face facts. It is in the national interest! Ehemmm that's uncle Sam's (your) interest. 😎

 

[hhiusa]

No I don't think that's how one would describe it.

http://www.marketwatch.com/story/why-the-us-will-have-to-bail-out-greece-2015-02-18

Notice this article was out on 18th Feb :idea:

If a crunch comes, America will have no choice but to bail Greece out.



Face facts. It is in the national interest! Ehemmm that's uncle Sam's (your) interest. 😎

They are not doing it because of that. It most certainly is not in my concern or in my interest to bail out feckless socialist that can't govern themselves. Come on England, why don't you do something besides point the finger at the US. That article's title says it all for me. "Why The US Will Have To Bail Out Greece". It speaks to how the US usually has to be the one to solve people's problems. European countries are like Steve Urkel, "did I do that?". They break their own economies, then ask for a hand-out whilst demanding sovereignty. I thought the idea of the EU was strengthen each other's economies but it seems it is definitely a work in progress. With amount of money the US spends on you guys, they just take over and pull the purse strings. All you really need is your illusion of sovereignty. I have said it once and I'll say it again 503,000,000 people and 28 countries and it is still just barely bigger than the US economy. What would really be in the US's best interest is to break the EU apart and sell it off for parts.

 

[new_trader]

Solution remains the same wrt our debt;
- raise taxation
- keep interest rates low
- cut social benefits
- invest in infrastructure and manufacturing; production capability

And here's me thinking that you would have learnt something from the experience of the last 6 years. Guess I was wrong.

 

[hhiusa]

Why would anyone want to pay higher taxes? It seems especially strange for anyone in the financial industry, unless they were actually working and having pay taxes. What do you mean by such a vague statement, "invest in infrastructure"?

 

[fayalac]

2 different questions.

The first is priced in to an extent as we expect that to happen.

The second question isnt priced in. Even with Syriza in power no one seriously expects grexit. It certainly would'nt happen overnight and steps would be taken to find a compromise and keep Greece in.

If syriza aren't elected id expect euro to be higher tonight.

Euro is weak for many reasons not only the turmoil caused by greece..., remember forex is dealt in couples, a relatively weak euro against a solid USD or GBP?, how could it be higher?

 

[new_trader]

Why would anyone want to pay higher taxes? It seems especially strange for anyone in the financial industry, unless they were actually working and having pay taxes. What do you mean by such a vague statement, "invest in infrastructure"?

Yes, but anyone with even half an understanding of economics would know that interest rates are the price of money.

High interest rates = High demand for borrowing

When interest rates are artificially kept low through Central Bank intervention it allows Governments to get into more debt than they could otherwise afford. The US debt chart clearly shows the correlation. The FED has been monetizing Government debt. Had the Fed not intervened there is no way the US Government could afford to borrow as much as it has. There would have been much more discipline...That's why Governments hate the gold standard.

When someone prescribes low interest rates as a solution to a debt problem then they have no idea what the problem is.

Governenment debt is the result of over-borrowing not under repaying!

 

[Atilla]

Yes, but anyone with even half an understanding of economics would know that interest rates are the price of money.

High interest rates = High demand for borrowing

When interest rates are artificially kept low through Central Bank intervention it allows Governments to get into more debt than they could otherwise afford. The US debt chart clearly shows the correlation. The FED has been monetizing Government debt. Had the Fed not intervened there is no way the US Government could afford to borrow as much as it has. There would have been much more discipline...That's why Governments hate the gold standard.

When someone prescribes low interest rates as a solution to a debt problem then they have no idea what the problem is.

Governenment debt is the result of over-borrowing not under repaying!

High interest rates = Less demand for borrowing ! Forget half, do you have any understanding of economics?

1. Do you not think interest rates are kept low to stimulate investment?

2. Do hyou not think governments are keeping interest rates low to reduce cost of servicing collosal debt?

3. Do you not think governments are trying to facilitate inflation to reduce the real value of debt and stimulate production?


Round and round in circles. Time for you to start throwing your toys out the pram 😆

 

[hhiusa]

High interest rates = Less demand for borrowing ! Forget half, do you have any understanding of economics?

1. Do you not think interest rates are kept low to stimulate investment?

2. Do hyou not think governments are keeping interest rates low to reduce cost of servicing collosal debt?

3. Do you not think governments are trying to facilitate inflation to reduce the real value of debt and stimulate production?


Round and round in circles. Time for you to start throwing your toys out the pram 😆

It is as @new_trader says law of supply and demand. Things are more expensive when there is a greater demand for them. If the demand is high and you artificially lower the price; you oversaturate the market. I think what @new_trader is saying, is that interest rates are too cheap and it has allowed overborrowing because they have an artificial increase in purchasing power.

Why would we want to make it easier to "service costs of collosal debt"? What is that you think inflation is @Atilla? Inflation is the increase in price and decrease in purchasing power. if you artificially lower price, then you increase purchasing power which is the opposite of inflation. Decreasing interest rates does not facilitate inflation. Secondly, Phillips curve shows that unemployment and inflation go hand-in-hand just as employment and deflation go hand-in-hand. You say we want to stimulate production. How are we to do that with more unemployment as a result of more inflation. More unemployment = less productivity, not more.

 

[new_trader]

High interest rates = Less demand for borrowing ! Forget half, do you have any understanding of economics?

As usual, you put the cart before the horse. Interest rates rise as a result of more people wanting to borrow. As the pool of real savings dwindles (because monies have been loaned), interest rates rise to reflect this. Do you have any understanding of scarcity?..🙄

Now, as you say, when interest rates are low through artificial Central Bank intervention not through a pool of real savings, borrowing is HIGH...duh! Who takes the most advantage of borrowing at low interest rates...you guessed it GOVERNMENTS! So how on earth would low interest rates make government reduce debt? 🙄

Are you really so incapable of following things through logically? 🙄

1. Do you not think interest rates are kept low to stimulate investment?

How does it stimulate investment? If a business needs 0.5% interest rates to stay in business then how will they survive 1 or 2 or 5% interest rates? The only thing it stimulates is sub-profitable business enterprise that will then RELY on low interest rates.

High interest rates encourage savings, which leads to lower interest rates, which then encourages borrowings through a natural supply and demand mechanism.


2. Do hyou not think governments are keeping interest rates low to reduce cost of servicing collosal debt?

Governments don't control interest rates 🙄 The Central Bank does. Are you implying that Central Banks are not truly independant? If that is the case then who is responsible for allowing Governments to get into so much debt?


3. Do you not think governments are trying to facilitate inflation to reduce the real value of debt and stimulate production?

Once again, you and your "Bullsh!t baffles brains" economics! Governments are printing money to dishonestly default on debt.


Round and round in circles. Time for you to start throwing your toys out the pram 😆

Well stop saying stupid things!

See above

 

[Atilla]

It is as @new_trader says law of supply and demand. Things are more expensive when there is a greater demand for them. If the demand is high and you artificially lower the price; you oversaturate the market. I think what @new_trader is saying, is that interest rates are too cheap and it has allowed overborrowing because they have an artificial increase in purchasing power.

Higher the interest rate => longer it takes for payback ROI.

If price rises, supply increases but demand falls. This is BASIC economics. Go back and read what you guys have written.

Yes one would need to consider inflation and opportunity cost of money and lots of other asset classes. But for you two - we need to keep it simple and very BASIC.

Why would we want to make it easier to "service costs of collosal debt"? What is that you think inflation is @Atilla? Inflation is the increase in price and decrease in purchasing power. if you artificially lower price, then you increase purchasing power which is the opposite of inflation. Decreasing interest rates does not facilitate inflation. Secondly, Phillips curve shows that unemployment and inflation go hand-in-hand just as employment and deflation go hand-in-hand. You say we want to stimulate production. How are we to do that with more unemployment as a result of more inflation. More unemployment = less productivity, not more.

HHi for someone who claims to be know it all you do ask some pretty rudimentary qeustions.

Servicing government debt comes out of tax payers money. I appreciate G should not get into debt and balance budget etc., but once in debt why raise r and pay high service charges for that debt? Surprised one has to explain this to you.

I also appreciate your arguments about big G crowding out private sector for loans by competing and raising cost of money etc but the point remains.

Phillips curve has broken down. So has Milton's elasticity model about Monetary policy controlling the economy blah blah blah. Read up on expectations theory.

Also, the elasticity of the supply of money to interest rates varies depending where one is on the economic cycle imo.


I'm sorry but I really do not wish to discuss with you two peas in a pod, everything with argued in the past. Read up the Keynes threads etc. There are quite a few. I also don't want to upset NT or have him burst a vessel as he stopped talking to me for ages. 🙁

Let's keep it sweet. 👍


Best regards and Maryland chocolate cookies 🙂

 

[new_trader]

Read up the Keynes threads etc. There are quite a few. I also don't want to upset NT or have him burst a vessel as he stopped talking to me for ages. 🙁

Let's keep it sweet. 👍


Best regards and Maryland chocolate cookies 🙂

Yes, and I thought that anyone who argued in favour of low interest rates would have figured out, after 6 years, that it is NOT a solution. Have you been living on Mars? Do you honestly believe the UK has reduced it's debt over the last 6 years? What freaking planet are you on?? That's why I stopped 'talking' you. You are inconsistent...baffling, bewildering and you speak out of both sides of your mouth...I can't be arsed keeping up with it all.

 

[hhiusa]

HHi for someone who claims to be know it all you do ask some pretty rudimentary qeustions.

Servicing government debt comes out of tax payers money. I appreciate G should not get into debt and balance budget etc., but once in debt why raise r and pay high service charges for that debt? Surprised one has to explain this to you.

I am not asking these rudimentary questions because I need to understand them I'm asking them because it seems you haven't thought about them.

I also appreciate your arguments about big G crowding out private sector for loans by competing and raising cost of money etc but the point remains.

Phillips curve has broken down. So has Milton's elasticity model about Monetary policy controlling the economy blah blah blah. Read up on expectations theory.

Also, the elasticity of the supply of money to interest rates varies depending where one is on the economic cycle imo

You said "imo", which is right as it means "in my opinion" because it is nothing more than that, an opinion. Most concepts in Economics are nominative. Why are you typing "blah blah blah"? Would it really be that difficult to type your idea in full? I suppose these questions are more rhetorical than anything. Show me how the Phillips curve doesn't work. I can accept I am wrong when given proof.

I'm sorry but I really do not wish to discuss with you two peas in a pod, everything with argued in the past. Read up the Keynes threads etc. There are quite a few. I also don't want to upset NT or have him burst a vessel as he stopped talking to me for ages. 🙁

So when the going gets tough you throw up your hands as usual, post a cop-out reply and say you don't want to discuss it any further. Now who is throwing their toys around? The conversation was finally going somewhere it seemed.

Let's keep it sweet. 👍


Best regards and Maryland chocolate cookies 🙂

If you want to keep it sweet and stop calling people names and throwing a tantrum. Post your ideas without telling them they are stupid @Atilla.

 

[Atilla]

Yes, and I thought that anyone who argued in favour of low interest rates would have figured out, after 6 years, that it is NOT a solution. Have you been living on Mars? Do you honestly believe the UK has reduced it's debt over the last 6 years? What freaking planet are you on??

Mate you going off on one of your rants again, predictably so. Take a BP reading before you give your self a stroke.

Our current predicament has good many economists scratching their heads and I don't claim to know it all like you big wigs.

Right now Monetarists are wondering why negative interest rates haven't kicked started the economies or why people aren't borrowing and spending as before.

They are even trying to stimulate inflation in fear of deflation but it's not working. You surely must listen to the news. Perhaps you can explain how why or what is not right with the global economy.

We haven't had wage inflation either. Oil prices also dropped and still no go go in the economy.


If you guys think you have possible solutions, do tell. Let's sort out the World troubles and get a noble prize or something. 🙂

 

[Atilla]

I am not asking these rudimentary questions because I need to understand them I'm asking them because it seems you haven't thought about them.

Thought about them so much more I read more I find out I don't know that much at all.

You said "imo", which is right as it means "in my opinion" because it is nothing more than that, an opinion. Most concepts in Economics are nominative. Why are you typing "blah blah blah"? Would it really be that difficult to type your idea in full? I suppose these questions are more rhetorical than anything. Show me how the Phillips curve doesn't work. I can accept I am wrong when given proof.

http://www.economicsonline.co.uk/Global_economics/Phillips_curve.html


So when the going gets tough you throw up your hands as usual, post a cop-out reply and say you don't want to discuss it any further. Now who is throwing their toys around? The conversation was finally going somewhere it seemed.

It's probably because I don't care that much any more about the subject matter or what others think...

You don't need to write volumes as I know where you and NT pretty much are coming from. At least I know as much as I care to know.

My apologies for any offence. Having tongue and cheek fun is better imo.



If you want to keep it sweet and stop calling people names and throwing a tantrum. Post your ideas without telling them they are stupid @Atilla.

Didn't think I called anyone names. I was having tea and cookies thought I'd offer some.

Were you a teacher in your previous life?

👍

 

[new_trader]

Mate you going off on one of your rants again, predictably so. Take a BP reading before you give your self a stroke.

Is that all you can do when your idiotic ideas are challenged? Tell people to "chill man" 🙄

Our current predicament has good many economists scratching their heads and I don't claim to know it all like you big wigs.

Many "good" KEYNESIAN economists! 😆

Right now Monetarists are wondering why negative interest rates haven't kicked started the economies or why people aren't borrowing and spending as before.

The Austrian economists aren't baffled.

They are even trying to stimulate inflation in fear of deflation but it's not working. You surely must listen to the news. Perhaps you can explain how why or what is not right with the global economy.

I said their policies won't work in the Keynes Vs Hayek thread...YOU professed it was the solution, and still is the solution. Like I said, you haven't learnt a thing!

We haven't had wage inflation either. Oil prices also dropped and still no go go in the economy.


If you guys think you have possible solutions, do tell. Let's sort out the World troubles and get a noble prize or something. 🙂

I have told and told and told...the problem is YOU AREN'T 'LISTENING'!

See above.

 

[Pat494]

I see it as an opportunity. With interest rates so low it is a good time to borrow a sizeable amount and invest it in farm land, housing or stocks.
My neighbour has bought 1,400 acres combined with a big house, lake, home farm etc. Is it all on borrowed money ? Could be.

 

[Atilla]

I said their policies won't work in the Keynes Vs Hayek thread...YOU professed it was the solution, and still is the solution. Like I said, you haven't learnt a thing!

See above.

Well if you look at the US and UK who didn't apply austerity that EU did, there economies are relatively better and less in pain than Europes right?

Not only that EU has finally relented and now applying same policies.

So when you say it hasn't worked, in the absence of liqudity, the collapse and downturn in the global economy would have been considerably worse and longer.

But we'll never know.


When you say hasn't worked that's not technically correct. The expected down turn is simply part of the economic cycles and we are about to enter the 5-7 year short cycle.

 

[hhiusa]

We haven't had wage inflation either. Oil prices also dropped and still no go go in the economy.


If you guys think you have possible solutions, do tell. Let's sort out the World troubles and get a noble prize or something. 🙂

 

[hhiusa]

Well if you look at the US and UK who didn't apply austerity that EU did, there economies are relatively better and less in pain than Europes right?

Not only that EU has finally relented and now applying same policies.

UK is a part of Europe and the European Union. It seems as though you are talking about them as if they were separate. Do you mean less pain the "rest of Europe"?