[Tex Pro]

^What I don't get is why the ECB seems intent on debasing the Euro.

Weakening the Euro for the purposes of creating inflation seems like a terribly short-sighted policy. Something else has to be going on.

[ElJefe]

This is fantastic news! Finally a hard-core socialist party has a solid majority in a relatively modern country. It's a natural experiment waiting to happen. Win/Win

Hopefully GRE will leave the Euro, but as other posters have indicated, that's against the wishes of the political establishment, so they'll offer a lot for their pet project not to go that way. If they do bail out GRE again, AfD will come roaring back to life in Germany and anti-EU sentiment will gain real traction. Win.

If they don't bail out GRE, either Syriza becomes a lame-duck or they leave the EU, and we all go to GRE summer '15 to find Greek wives. Win.

[Foolsgo1d]

As I was corrected above, youth unemployment is above 50%. Greeks might not like working but they certainly do like rioting and drawing attention to themselves.

Would Syriza dare to go back on its claims?

[VolandoVengoVolandoVoy]

Of the people who claim the fundamental problem is that Greeks are lazy and don't want to work, are you currently living or have you lived for an extended period of time (1yr plus) in Greece?
It's an honest question, I am curious.
I have never been to Greece, so none of my knowledge is first hand.
The closest comparison I can make is having lived in the southern Spanish city of Seville for a total of 4 years, with nearly two of those years spent during the economic crisis in 2009-2011.
The Spanish in general, and Andalucians in particular, are frequently maligned as being lazy and unwilling to work.
Their youth unemployment rate reached as high as 60% during the time I was there, and the overall unemployment rate exceeded 30%.
From what I saw first hand, it wasn't because they were lazy. The people I met desperately wanted jobs...if there was an open job somewhere many many would apply. Tons of students and even people 5 years from their degree were jumping at the chance to take bullshit internships that paid 500 euros a month. People were moving in with their parents. Parents were getting laid off, and then everyone was moving back to the village to live with Grandpa and survive off of his pension.
I had friends and contacts among many different socioeconomic levels.
The common sentiment among the really wealthy elite aristocratic Sevillians was - fuck 'em, they're lazy and they didn't plan ahead or save.
Among everyone else, it was a bit different. I was friends with a guy who would have been considered elite by common people, but wasn't really. He was an eye surgeon, regarded as one of the best in the country, had the largest private practice in southern Spain, and worked like a dog. Brilliant man, and he probably made about 6,000 euros a month from his business. Which in southern Spain is top end and semi baller. He talked to me about business issues, and one of the problems is how hard it is to fire someone, and this in turn makes him reluctant to hire. Some lady working for him engaged in gross misconduct, and he still had to pay her wage for 1.5 years. Also, massive taxes. It pissed him off that his American doctor friends in Chicago were making 5 times what he did and taking 3 months of vacation a year.
The real problem Spain was/is facing was a combination of an entrenched system of laws that were hostile to business, along with a rapacious political class interested only in corruption, and an elite that could give a fuck and had no interest in putting their capital to work in any productive way. Are many Spanish bureaucrats and public workers lazy as fuck and incompetent? YES! But they are not the majority of people. Most people were very willing and eager to work, but their country and system failed them. I suspect the situation is similar in Greece.

[Simeon_Strangelight]

(01-26-2015 07:18 AM)VolandoVengoVolandoVoy Wrote:  

The real problem Spain was/is facing was a combination of an entrenched system of laws that were hostile to business, along with a rapacious political class interested only in corruption, and an elite that could give a fuck and had no interest in putting their capital to work in any productive way. Are many Spanish bureaucrats and public workers lazy as fuck and incompetent? YES! But they are not the majority of people. Most people were very willing and eager to work, but their country and system failed them. I suspect the situation is similar in Greece.

Yeah - that's a good take of what is happening in Greece. I visited Greece and also have Greek friends who now work in Switzerland and London. The best of them leave Greece despite their universities being some of the best in the world rivaling Oxford - for anyone really believing that "education can solve it all".

Education won't solve shit if their elite does not invest in companies, production facilities and even fleeces them more by erecting bloody tolls on streets. Sure - there may be plenty of inefficient and lazy government workers, but the average Greek worked longer hours than the average German - they just had shit to show for all their work.

Also the EU is poison for any less competitive country since you then have to openly compete with much more productive ones while being unable to lower competitive costs via devaluation of the currency. If Greece would be out of the Euro zone now, then millions more of Europeans would be having holidays now in Greece, because it would be so incredibly cheap due to Drachme-devaluation.

[Maciano]

Poor Greece, their leaders messed up and now being part of the euro forces them to relive a de facto great depression. So, they chose the road to serfdom. And we all know how that ends.

[freeuser]

(01-25-2015 06:00 PM)poutsara Wrote:  

I am no economist and maybe my analysis is crap but...what if Greece leaves the euro zone?

Greece can't control its monetary policy while in the EU.

The main industry in Greece is tourism, followed by shipping and some others.

Cheaper money in Greece would benefit tourism and their other homegrown industries.

Leaving the EU would be bad precedent to the big players in Europe and their central banks because but it may be good for Greece and its people - but I might be wrong. We will see.

Either way, Zito Hellas.

Leaving the euro would be a fucking disaster for Greece, since the whole savings of the greek people, would become worthless if converted to a neo-dracmas. They would loose all their lives savings over night. Yeah sure, for the central european tourists it would become cheaper to go to Mykonos. But that wouldn´t bring back the (false) prosperity of the 2000s and make up for the downside of the greek collapse.

Some people think it can´t get worse for Greece than it is now. They are wrong.

(01-26-2015 05:10 AM)Tex Pro Wrote:  

^What I don't get is why the ECB seems intent on debasing the Euro.

Weakening the Euro for the purposes of creating inflation seems like a terribly short-sighted policy. Something else has to be going on.

The Eurozone is facing the danger of deflation, which is bad for economic growth and thus for job creation. Now the mandate of the European Central Bank, is to maintain price stability within the Eurozone. The ideal scenario is an inflation of around 2%. That´s what that are trying to achieve with QE. Will it work? I don´t know, I certainly hope so, but it´s difficult to predict. It has worked in GB and the US.

[freeuser]

(01-26-2015 04:54 AM)Handsome Creepy Eel Wrote:  

Živi zid wants to put an end to this by:

- giving the central bank the ability to print money and lend directly to the government
- conversion of all debts to local currency
- introducing a controlled short-term bout of inflation (printing) of local currency, with which to wipe out or reduce old debts
- introducing a 100% reserve rate to stop the banks from grabbing their share of money during this process

Again, as far as I can tell, all of those are sensible solutions.

After its completely unknown presidential candidate achieving a staggering 17% of the vote last month, Živi zid is currently being massively attacked from all sides. It is simultaneously being proclaimed to be ultra-left, ultra-right, feminist, LGBT, fascist, catholic, taliban, populist, nationalist, anti-people, destructive, keynesian, neo-liberal, and so on. All of the other parties in existence (including all major media) have united against it.

The whole thing is very worrying and just confirms my belief that Živi zid's ideas are right.

Some of those ideas a really bad, Handsome Creepy Eel. Central banks need to be independent or else you end up with like Venezuela, Argentina or Zimbabwe. The temptation for ignorant and incompetent governments to just print money instead of raising taxes or reduce spending is just too big. Which leads to massive inflation. Again, like we can see today, in Venezuela, Argentina or Zimbabwe. It´s the same thing. That´s why every serious and rich country of the first world hast an independent Central Bank.


FIAT is not perfect, it has many flaws. But I don´t think that a gold reserve system would solve all those problems.

[lowside]

I'm watching this unfold closely, and I like what I see. I doubt anything will happen though, just another politician wanting to be in charge. They might get a better interest rate, they might get an extension, maybe some other measures...but that's it.

What I really would like to see is Greece leaving the eurozone and default on its debt. We haven't had a Western economy default since a while. Would be interested to see how that would play out nowadays and how the powers that be would react.

None of this is going to happen of course. Also the Greek think they have a choice, which they haven't. So not much is going to change I think.

[bojangles]

(01-26-2015 09:53 AM)lowside Wrote:  

I'm watching this unfold closely, and I like what I see. I doubt anything will happen though, just another politician wanting to be in charge. They might get a better interest rate, they might get an extension, maybe some other measures...but that's it.

What I really would like to see is Greece leaving the eurozone and default on its debt. We haven't had a Western economy default since a while. Would be interested to see how that would play out nowadays and how the powers that be would react.

None of this is going to happen of course. Also the Greek think they have a choice, which they haven't. So not much is going to change I think.

It's exactly what I want too, I want Greece to leave the eurozone and the EU. I want it to default on its debts.

Of course I expect Russia to come to the rescue at that point and draw Greece into its Euroasian zone hopefully.

[Sonsowey]

"Although many of the press reports describe Syriza as “far-left”, it’s actually preaching fairly conventional economics, while the supposedly responsible officials of Brussels and Berlin have been relying on radical doctrines like expansionary austerity and a growth cliff at 90 percent. The same has to a certain extent been true in the US context.

Once again: textbook macroeconomics says that focusing on deficit reduction in a depressed economy, where the zero lower bound constrains the effectiveness of monetary policy, is a very bad idea. And although nobody will believe it, textbook macro has actually been a very good guide to the economy since the financial crisis...

And as we go into confrontation season, Saraceno gets it exactly right: we shouldn’t consider it sensible and non-radical to accept:

"the position of those who, despite having grossly underestimated the negative effects of austerity, ask for more of the same; of those who insist on advocating supply-side reforms to cope with a chronic lack of demand; and of those who boast having achieved a balanced budget one year ahead of forecasts, when Europe would benefit from a recovery of domestic demand in Germany."

http://krugman.blogs.nytimes.com/?_r=0

Austerity lead to a worse and worse depression.

[Sonsowey]

The Original Stand-By Arrangement from 2010 originally foresaw Greece dipping into a mild recession and recovering quickly. This did not happen.



The plan also called for basically flat government spending from Greece, but instead, demands kept being ratcheted up, and Greece's spending dropped precipitously.



The huge dropoff in government spending depressed the economy further, causing government revenues to drop, causing Greek debt to continue growing. Austerity has led Greece down a terrible path and its problems are self-reinforcing. And some people want more!

http://krugman.blogs.nytimes.com/2015/01...egion=Body

[lowside]

(01-26-2015 10:01 AM)Sonsowey Wrote:  

Once again: textbook macroeconomics says that focusing on deficit reduction in a depressed economy, where the zero lower bound constrains the effectiveness of monetary policy, is a very bad idea. And although nobody will believe it, textbook macro has actually been a very good guide to the economy since the financial crisis...

That's Keynesian economics, and yes, it indeed works like that because governments (and their spending) have become part of the modern economy today. Which is crazy. I don't think there is such a thing a thing as "textbook economics" from a philosophical standpoint.

[El Chinito loco]

This issue is so complex i'm baffled as to what the "best case" scenario for Greece is at this point? It seems like it's going to end up as a pauper nation no matter what because they don't have that much competitive industry and no real hope of changing that anytime soon with the population that's living there. It seems like the only thing is ancient ruins, ports, and olive oil?

[lowside]

(01-26-2015 09:57 AM)bojangles Wrote:  

(01-26-2015 09:53 AM)lowside Wrote:  

I'm watching this unfold closely, and I like what I see. I doubt anything will happen though, just another politician wanting to be in charge. They might get a better interest rate, they might get an extension, maybe some other measures...but that's it.

What I really would like to see is Greece leaving the eurozone and default on its debt. We haven't had a Western economy default since a while. Would be interested to see how that would play out nowadays and how the powers that be would react.

None of this is going to happen of course. Also the Greek think they have a choice, which they haven't. So not much is going to change I think.

It's exactly what I want too, I want Greece to leave the eurozone and the EU. I want it to default on its debts.

Of course I expect Russia to come to the rescue at that point and draw Greece into its Euroasian zone hopefully.

Well, that could happen. Or Greece could default, tell everyone to fuck off, and:

- introduce a 0% corporate tax for companies employing more than say 10 people
- introduce a constitution where the government is limited to lending no more than say 10% of GDP
- eliminate bureacracy as much as possible, simplify as much as possible but no more
- regulate where needed, refrain from doing so where it is not
- prohibition for managers working for the government to hire family members or close friends
- introduce a fairly large government anti fraud department who has the authority to heavily fine individuals (government or private) and companies [the department would be subject to random audits themselves]
- bunch of other measures I can't think of right now...

I'd be curious.

[Aliblahba]

Every time I see Greece a thread, I think "wtf did Emech do now?

[Handsome Creepy Eel]

freeuser, I agree with you on principle. But if that's the case, why are today's independent central banks doing such terrible jobs? And if their primary concern is price stability, why do we keep seeing tragicomic headlines like "Inflation low, prices rising"?

I mean, our central bank (which is just a puppet of ECB, having signed off all of its power to foreigners and turned into a glorified exchange office) openly says that their primary task if to "keep prices stable at all costs", and even if we don't count all the negative side effects, they failed at it utterly.

At this point, I'm certainly willing to take the chance with greedy governments.

[DannyAlberta]

the people of greece have soundly rejected austerity. however, it might be reframed to conclude instead the people of greece have soundly rejected reality. on what credit can a morally, psychologically and literally bankrupt nation continue to demand that it be lent more and more and more $$$ for social spending?

entitlement on this scale will be coming to north america soon enough...

[Glaucon]

very relevant and true:

by Stefan Molyneux

[Sonsowey]

Molyneux says that the Austerity in Greece has been a farce, comparing it to someone eating 10,000 calories daily cutting it to 9,600 and calling it a "starvation diet". Greek spending has actually shrunk by more than 20% during this recession. Taking away spending during a recession caused the economy to tank even harder.

Debt to GDP increased precisely because of Austerity deepening the recession

Firing public employees, slashing government spending, all caused a depression to become even worse, and despite government spending dropping rapidly, tax revenues have dropped even more rapidly due to the very austerity worsening a pre-existing recession.

Greek government spending:

[Wreckingball]

(01-26-2015 07:18 AM)VolandoVengoVolandoVoy Wrote:  

Of the people who claim the fundamental problem is that Greeks are lazy and don't want to work, are you currently living or have you lived for an extended period of time (1yr plus) in Greece?

I lived one year in Greece and my answer to your question is:
Yes.

You are lazy when:
You have two half days per week and each is paid as one full day.
You had minimum 14 months salary.
You had easter bonus, because you have to get a lamb for your family.
On the full days you work as much as on the half days.
The office hours are from 9-17 and it opens at 10 (and then they have coffee) and closes at 15(and then you have another coffee).
You cannot fire workers that are not working, because they will put chains on your door and have unions on your door.

You are poor when:
You don't produce enough to reach the break even.
Tuition is absolutely free for everyone (Greek and non-Greek), even though the costs are gigantic.
Students are entitled to free breakast, lunch and dinner (and it's not that bad)
Students are (or were) entitled to 2 free books per course.
Some students never open those books.
Some students then burn those 2 free books at the end of the year / university.
You subsidize dying businesses such as Ferry Boats between continental Greece.
You evade taxes like a boss. Covering your illegal pool with some material so that id doesnt show on a satellite picture.
You live in Zakynthos were 30 or 20 percent of the population is "blind" so you get benefits from the state.
You get a loan to pay your vacations in Asia or South America.

I compiled a "best of" list of Greece in the year 2010-2011. I need to find that.

[el mechanico]

^ Haha. The last time I was there I was thinking how can this even be possible and how much frappe can these fuckers possibly drink in one day

[Sonsowey]

"These are the lights going out across Europe, and I do not know if we shall ever see them lit again in our lifetime"

- Molyneux on Syriza's election in Greece.

[TheWastelander]

(01-26-2015 02:25 PM)Sonsowey Wrote:  

Molyneux says that the Austerity in Greece has been a farce, comparing it to someone eating 10,000 calories daily cutting it to 9,600 and calling it a "starvation diet". Greek spending has actually shrunk by more than 20% during this recession. Taking away spending during a recession caused the economy to tank even harder.

Debt to GDP increased precisely because of Austerity deepening the recession

Firing public employees, slashing government spending, all caused a depression to become even worse, and despite government spending dropping rapidly, tax revenues have dropped even more rapidly due to the very austerity worsening a pre-existing recession.

Greek government spending:

Okay, so instead of austerity..what should they have done in your opinion? Continue to spend even more?

This whole thing seems like a warning against relying on unfunded entitlements and a lazy culture. There seems to be a certain point where your country can get so far into an economic mess that isn't going to get out without A LOT of pain and political upheaval.

If Syriza fails there's a good chance Greece could swing wildly right, because the people are looking for radical solutions in order to try to delay the inevitable.

[poutsara]

(01-26-2015 01:13 PM)DannyAlberta Wrote:  

... on what credit can a morally, psychologically and literally bankrupt nation continue to demand that it be lent more and more and more $$$ for social spending?

What is morally bankrupt about Greece?