Will Greek Finance Minister Varoufakis Support Cryptocurrency In Greece? 253
giulioprisco writes New Greek Finance Minister Yanis Varoufakis, former Economist-in-Residence at game developer Valve Corporation, sees something like Bitcoin — or, more likely, a state-controlled "Fedcoin" — possibly playing a role in the (necessarily creative) rescue of the Greek economy. "The technology of Bitcoin, if suitably adapted, can be employed profitably in the Eurozone," he said.
Betteridge's law of headlines (Score:5, Insightful)
Will Greek Finance Minister Varoufakis Support Cryptocurrency In Greece?
No
As obvious as the question is stupid.....
Why? (Score:4, Informative)
Greece doesn't need a currency, it needs liquidity - a crypto currency won't bring that. The entire current issue is not about which currency to go for, its how Greece keeps paying its creditors - if they can't service their current debts, their ability to borrow goes through the floor, and a crypto currency isn't going to reverse that. Greece can't back its own crypto currency with anything it has a monopoly on either because it doesn't have anything that valuable.
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That's why it's time to purge the books. The banks can easily afford it. The most they might lose is a fleet of new jets and yachts, and they might have to buy cheaper hookers and drugs. The 'debts' are predatory and fraudulent.
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No they can't.
It will cause a great depression not seen since WWII. Reason being is the way the books are counted at the banks. Imagine the game of hot potato in kindergarten? Now imagine each time you caught it counted as an asset. When you throw it it counted as another asset.
Debt = assets. Not liabilities today??
See the problem? So since everyone is in a web of IOUs you close one down and it impacts the others and the house of cards collapss in a domino effect hence 2008 financial crises. Difference is w
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I guess you didn't hear that even Greece is now running a primary surplus. You know what that means? The Goverment spends less than it collects in taxes.
Spain had been running a primary surplus for a long time and the banking sector fail still brought them down.
Re:Why? (Score:4, Informative)
In other words, you cannot buy a car with a car loan, get a job which requires the use of the car, then claim you shouldn't have to pay back the loan because you'd be making money if it weren't for those pesky car loan payments. Eliminating the car loan from your calculation also necessitates eliminating the car.
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Also the same with business reliance on lines of credit to pay employees and suppliers.
No one pays in cash and that is a common misconception today. Wall Street likes smooth lines and no bumps which lines of credit pay for daily operations. No lines of credit POOF out of business even if you have money it means suppkiers who put in 90 days pay as they too used a line of credit can't pay your employer. So the cash reserves will go with them as well.
Lovely. In 1929 only the few big titans of industry was so d
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You nuts? The seas are already polluted enough. Find a different way to get rid of your trash!
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That worked well for Zimbabwe, hasn't it?
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And we all know how well Smoot-Hawley worked, right?
It should also be pointed out that Weimar Germany went that route once too. And that worked almost as well as Smoot-Hawley....
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There's one problem it won't fix: the Greek debts to EU are not going to shift to the a currency just because Greece does. The debts to the rest of the EU will remain in Euros, and if the Greek "new Drachma" devalues massively compared to the Euro, the relative loan repayments in new Drachma will go up correspondingly.
Greece can't print their way out of the loans. They can print their way to cheaper exports, yes....but the can't print their way out of the loans.
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And the reason a financially independent Greece would keep paying Euro loans is...?
Frankly, Euro was doomed from the beginning. As long as national currencies could float relative to each oth
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I want to see how a "financially independent" Greece does, really, except it won't be pretty. If the historical record is any indication, they'll be the third-poorest Balkan nation, ahead of maybe Macedonia and Albania but behind everybody else, with a GDP per capita at a healthy 15-20% of the EU-12 average and an economic growth in the low 50 points of one percent when times are exceptionally good.
Unless they have another coup d'etat or, maybe, get bought wholesale by Istanbul or Moscow with all the expec
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What about the stuff they don't produce locally and have to import, like such vital things as oil and gas ?
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Russia might just be interested enough in having an ally inside the EU to consider striking a deal. I could well see Greece dropping any kind of embargo on the grounds that if the EU shits on me, I'm under no obligation to play along with their embargo anymore.
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Oh dear. First, Greece is on the Euro - they can't print more money.
Second, money is just a representation of value/wealth. It is not value/wealth in and of itself. The true value is productivity. Anything you do to alter the money supply changes nothing if productivity is not altered. All that happens is you just add or subtract a zero to every number used in the accounting boo
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If part of the "deal" was that I have to starve my population but I have to buy German submarines for the money instead, I guess I'd be a tad bid pissed as well.
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Greece doesn't need a currency, it needs liquidity - a crypto currency won't bring that.
Actually, what is needs is a lack of liquidity. It needs to live within it's means. If it's overextended then
maybe bankrupcy is the right thing to do. A crytpcurrency might help if it can't be manipulated and used
to print new money. I wouldn't say bitcoin is super stable at the moment but a stable currency backed by
something that can't be faked would go a long ways to fixing greece and the other economies that like
to print their own money instead of balancing their budgets.
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This.
Monopoly money by another name would stink as bad.
Taxation (Score:2)
The government of this game developer wants to re-employ many of the laid off people so fixing the tax system is probably the only option they have left to keep the country from again falling over.
And such a currency can include many safeguards to ensure taxes are going to be paid.
Re:Taxation (Score:4, Interesting)
My favorite story about Greece's problems:
In the 90's a governmental committee was formed for the sole purpose to close a particular dam. After a decade, the dam was closed and demolished. That committee still exists. They don't go around closing other dams, they, I assume, just make sure the dam is still closed.
Source: Planet Money
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If you think this kind of thing doesn't happen everywhere you are deluding yourself. How many Yucca Mountain studies have been done by now?
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That was because the house majority leader at the time was from Las Vegas.
Needless to say the locals heavily oppose it in their backyard.
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Fact: Greece has less government employees per capita than Germany.
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Germany also has one of the worlds highest per capita of government, but they collect taxes. Interestingly Greece actually spend significantly more on military than Germany per capita, that is the sort of shit that gets them in this mess. When you have such insanely high levels of government you have to be incredibly careful on how you run your economy and ensure you have a healthy tax base that actually pays tax.
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Why did you think Merkel was kowtowing to Putin regarding Ukraine? Germany has cut their armed forces substantially since the fall of the Soviet Union. Just look at the amount of Leopard 2 tanks they sold to other countries including Greece. The Germans today have less Leopard 2 tanks in their army than the Greeks!
That's why Putin can do whatever he damned pleases.
That's one of the reasons the Greeks are miffed at Germany. A large fraction of the Greek government expenses were spent in German military hardw
Whatever they do (Score:2, Interesting)
I just hope they hold up and tell the banks and Germany to go to hell. That is what they were elected for. Now, if they do, there could very easily be another military coup ordered by those banks. Unfortunately, it looks like compromise for the benefit of financial institutions is still the only thing on the menu. This 'crypto-currency' thing looks like a diversion.
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Greece gets that support from the EU, their only alternative is this guy Putin and he has already been seen in Athens.
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Did you read that notice about the formation of the BRICS bank [wikipedia.org]? It is supposed to start operating in the middle of next year. Basically the BRICS are creating the XXIst century equivalent of COMECON as a counter to the G7 nations.
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I don't believe they'd burn their fingers on a Greece without EU support.
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Greece has untapped oil reserves [bloomberg.com].
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An independent that buys it's own rig is a recipe for failure, besides 100 million Bbls is peanuts and Greek oil is notoriously difficult to get up.
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And the US Geological Society estimates there are around 22 billion barrels of oil in the Ionian Sea, off western Greece, and another 4 billion barrels in the northern Aegean Sea.
http://www.aljazeera.com/progr... [aljazeera.com]
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I wonder, under what terms will BRICS bank lend Greece anything.
Greek Myths (Score:3)
I'm pretty sure the River Styx freezing with Aphrodite and Helen of Troy ice skating naked while Dionysus hands out brews and bags of trainwreck is less mythological than the possibility that Greece's economy will start looking up with the current megasocialist nanny state political mindset going on over there. "Crypto" currency is right, like...literally.
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"Crypto" is also a terrible misnomer for cryptographically secured currencies :-)
They aren't hidden. They are public. BitCoin only works when the entire transaction ledger is available to all it's users.
In contrast, banks keep their ledger as private as possible. Historically this stems from the fact that you had to keep it secure - or people would just alter it. Then the secrecy became something that people relied on and almost more important than the security.
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Harsh, but cryptic.
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People got fed up paying for the mistakes of bankers and politicians. They decided to put an end to it, and look out for themselves. The government is supposed to be the will of the people, and work for their benefit. Now it is, now it does.
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The problem is that there aren't any truly capitalist states, nor has one ever existed. The capitalists you think are persecuting these ochlocratic countries are just a just a bit more capitalist than they are. A truly capitalist state would be vastly more harmonious and progressive than most any other kind of state, the misery and repression begin when capitalism begins to slip into fascist corporatism. At least IMHO.
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Fascism is the natural end state of capitalism; the concentration of power eventually means that the state and the corporation merge and things are done for the benefit of the corporation.
You can't have unregulated capitalism without it devolving into fascism. I think the UK and the US are already there - the essential dishonesty of our leaders, who publicly claim to want to do the best for us, then turn around and do the best for their corporate masters. The careful creation of a rhetoric of "them and us"
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Then how do you know that
?
If 20th century taught us anything, it's that ideologies that promise Earthly paradise in return for absolute obedience are extremely suspect.
Re:Greek Myths (Score:5, Insightful)
More like the capitalists don't dare let them succeed. It would show the world that there was another way, and demands to go that way would escalate in other states.
I will assume that you are not a troll. The fault lies within the Greeks themselves. You cannot forever consume more than you produce. No matter who you are. Capitalist or socialist. Greece has borrowed to support their lifestyle since WWII, if not before. They are constantly running an operating deficit. Nobody wants to lend Greece money because Greece does not want to change their ways. They want to consume more than they produce. The Greeks would't lend themselves the money!
Austerity is not the problem, it's a solution. Did you Notice that Greece has not proposed one solution in which they pay back the debt? They only demand they are bringing to the table is that they can't be asked to reduce their spending. It's humiliating.
Now some will come forward and say that a recession is not the time to reduce spending. This is right when you are not always running a deficit and when the burden of your debt is manageable. Greece was forgiven 100 billion euros already. If the Greeks don't want the austerity measures let them propose a solution to the repayment of all the loans including the 100 billion which was forgiven on the condition of austerity.
I am more of a socialist than a capitalist. I honestly believe that the state needs to help even the field in order to produce more than is consumed which translates to building wealth. Yeah I agree with you the boogieman did it. It's just that the boogieman in this case it's the Greeks who think that they are entitled to live beyond their means.
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"They want to consume more than they produce"
if you were familiar with what the EU *forced* us to do when we entered the euro, you wouldn't say this.
they basically paid us to stop exporting.
Re:Greek Myths (Score:4, Insightful)
Austerity is not the problem, it's a solution. Did you Notice that Greece has not proposed one solution in which they pay back the debt?
Actually Greece is proposing to pay back all of their debt. What they are saying is that instead of crippling austerity that is ruining Greek people's lives they want to first fix their economy, recover and when times are good pay off the debt. It worked well in other countries, such as Britain after WW2. Rather than paying off debts to the US and banks the government rebuilt the country. Lots of jobs, lots of investment and stimulus. Then when things were booming again debt was paid off.
Austerity has already failed in Greece. Eventually it might pay off the debt but people still need to live in the mean time. Massive unemployment and people not being able to afford basics like food and electricity are not a solution.
Cryptocurrency won't work in Greece (Score:2)
For the same reason that it wouldn't work in Argentina. Any successful cryptocurrency gets its tradable value from the perception that the money supply is strictly limited, as in the days when currencies were based on the issuing country's gold reserve. For a cryptocurrencies,money supply is limited by some publicly available and testable mathematical formula.
For any government whose dreams exceed its revenue, this means instant and long-lasting austerity. It would be like the Euro, but even stricter.
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Gold was ancestrally popular because each country could print no money exceeding its share of the world's gold (and in early times had to actually circulate bullion coins as money), and the supply of gold increased at a modest amount each year that roughly matched the total value of fungible goods and services in each country. This meant that an ounce of gold traded for about the same quantity of goods century in and century out, with no inflation or deflation.
Then the industrial revolution dramatically inc
Too bad their currency can't buy them (Score:2)
As it will be worth less than the paper it is printed on if they default on their debt which they plan on doing.
Re: Umm... Lulz.... (Score:2, Insightful)
Most of Europe does, actually, seeing as he is negotiating with the rest of the Eurozone to make a deal that will save Greece's car crash of an economy. If Greece implodes, it could take the entire Eurozone with it by causing domino defaults, because Greece owes a lot of money to other nations that are already in dire fiscal straights
an ignorant American might not care, but President Obama has already weighed in to support Varoufakis in seeking debt relief, as he does not want a major trading partner to co
Re: Umm... Lulz.... (Score:4, Insightful)
The European economy is contrary to 5 or 6 years ago presently plenty strong enough to absorb the exit of Greece from the Euro.
But for the EU it is a matter practicality and also of honour to keep the lot together, it is the difference between a continuing struggle and complete failure for the Greek economy and people.
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Once the possibility of someone exiting the Euro becomes real other countries will be tempted or pushed out basically making it pointless.
It was an economic marriage. And like in any marriage there are good times and bad times. Unfortunately some in Europe don't think of it this way.
Re: Umm... Lulz.... (Score:5, Interesting)
Once the possibility of someone exiting the Euro becomes real other countries will be tempted or pushed out basically making it pointless.
It was an economic marriage. And like in any marriage there are good times and bad times. Unfortunately some in Europe don't think of it this way.
Not pointless - there's real economic benefit to a single currency for Europe.
If it's a marriage, then Greece is the abusive, cheating spouse. They've gone from irresponsibly spending more than they could ever repay (since they can't inflate their way out of debt), through a brief attempt at surviving austerity (terms of the debt relief they got - everyone knew it would suck), to saying "screw you, we're too big to fail, we're gonna spend spend spend, what are you gonna do about it?"
Greece was in a better economic position than most of Eastern Europe at the start of all this, with a better standard of living (even had they chosen to live within their means) than many later entrants in to Euro. But they chose to spend vastly more than they were making, running up the highest debt-to-GDP ratio in Europe, inflating that standard of living artificially until they could borrow no more.
What the US thinks of that isn't very relevant, but those Easter European countries that made real sacrifice to join the Euro, and who have been keeping their debt down and surviving with a much lower standard of living than Greece and directly paying for Greece's first bailout in some cases aren't impressed with Greece's excuses. At this point, a "Grexit" will be less disruptive than continued bailouts.
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Sounds great, we should join - UK, I look forwards to a much lower standard of living.
Re: Umm... Lulz.... (Score:5, Informative)
There's also this big lie that "Greece has been saddled with debts that they could never pay". Greece's state assets are worth an order of magnitude more than their debts. They could sell off a tenth of them and have all of their debts in the clear right away.
Obviously, they don't want to privatize everything, and I don't blame them. But the concept that this debt is impossible to service is simply a lie. They just don't want to. Heck, they could do it without excessive pain to the middle class or extensive privatization if only they'd go after their wealthy - there's a couple dozen Greek billionaires and countless more in the next eschelons. And these are the biggest tax dodgers who don't pay anywhere close to their fair share. But Greece is apparently either unable or unwilling to go after them.
Re: Umm... Lulz.... (Score:4, Insightful)
But Greece is apparently either unable or unwilling to go after them.
The old government was, because of the strong ties between the old parties and the business moguls. The new government has no such ties, and has, in fact, announced steps to do exactly what you say they should do.
But, of course, since they're evil communistsocialistliberalevilcommitraitors, it doesn't matter what they actually do, does it?
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Ask the Czechs and Poles why they're dragging their feet so they don't get in the Eurozone.
Fact is anyone with an economy that matters has tried to steer well clear of the Euro for quite some time now ever since the troubles started. And if countries start being ejected it will only precipitate the destruction of the Eurozone.
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Perhaps. I'm of the opposite opinion - that if countries start being ejected for financial mismanagement, the skeptical might be encouraged that the Euro is a currency run by grown-ups. But we have no actual data either way - perhaps we'll see the experiment performed, and then we'll know.
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" it's about how much the ordinary people of Greece should suffer for borrowing excesses of it's previous government in the past."
It's about how much the ordinary people of Greece should suffer for the lending excesses of German banks.
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The Euro had all sorts of problems. That spurious inflation on the beginning was one. As for the increase in trade it went mainly in one direction and actually exacerbated the current problem.
Do you know what caused the inflation? Germany printed a bunch of DMs before the Euro came into the market. In order to keep their inflation low, and fullfill the ERM convergence criteria, they kept the DMs stashed in the banks and kept them out of the market. Once the Euro came online they converted all these bogus DM
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... do you have a source?
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For what? The money printing?
https://www.richmondfed.org/pu... [richmondfed.org]
Figure 6 pg 41. Also that chart conveniently does not show the amount of DMs they printed when they absorbed Eastern Germany. They converted Eastern German currency to DMs on a 1:1 basis when black market value was 10:1!
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If you have the patience, can you please give me a short explanation how to read the chart? Thank you in advance.
Re: Umm... Lulz.... (Score:4, Informative)
Nearly every EU country has a couple of conspiracy nuts claiming *.* screwed them during or before unification.
The problem is not someone loaned bad or good money to Greece, the problem is Greece wasn't and isn't able to hold up it's own pants, all due to their own lack of courage to fix their tax and economic imbalances.
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Greece has problems. But the talk they were the only ones that cheated their way into the Euro is just plain bunk. Basically everyone cheated their way into it. Germany set the rules and they were the first to break them when they started running up a deficit followed by France. Just because currently they are running up less of a deficit doesn't mean they won't the future. Do the German government think China is going to buy their stuff forever? Good luck.
The Chinese high-speed rail buildup is a good examp
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I don't hate Germany. I hate near sighted politicians. And I don't know why you think I'm Greek.
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It's easy for Americans who've never had to live with a weak, low circulation currency to say "EURO BAD!". But they've never seen the consequences. How even in a good economy your money steadily becomes more and more worthless because inflation of such currencies is almost always worse than that of stronger currencies. How you pay out the nose for loans because of the higher risk of inflation or currency swings. How many companies won't even work with transfers to / from your currency.
Big, strong currencies
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Or you've for the past ~15-50 years been living under a rock.
Had you not been living under said rock and like me been travelling the world and the EU you would have had first hand experience of the vast steps forward we've made.
Oh yes, because you live under a rock you've likely not heard the populists in France and Denmark are after the recent attacks by domestically bred terrorists keeping VERY quiet with their stale demands to close the borders to keep out trou
Re: Umm... Lulz.Markets will Rule (Score:4, Interesting)
Prediction is Greece will exit the EU because of inefficient use of all forms of resources. They have been pseudo-socialist giveaway state for so long w/1 in 3 workers working for the state's institutions, they've collectively forgotten market economics is what runs countries effectively.
Venezuela is the prime example of wasteful redistribution policies by a government which collapse a society (military takeover is next.)
Greece will change fairly soon and it will be somewhat painful or they will deteriorate toward Venezuela's position, in which case it will impoverish Greece's working class.
Re: Umm... Lulz.Markets will Rule (Score:4, Informative)
You've read too much propaganda.
The crisis in Greece has many reasons. Inefficiency is a problem, but not a crisis cause. The fact that the country had a strongly interconnected (not to say, inbred) web of corruption between politics, administration and business is much more likely to have been a leading cause.
The greek "giveaway state" is such a cheap myth. They don't even have social welfare the way that those who cry loudest (e.g. Germany) have.
The real problem is that Greece was heavily in debt to foreign banks. Instead of giving them a way out, the governments of the countries of those banks pressured them into paying their debts and interests, and cutting spending. When your economy is in a crisis, every economist who's not a total idiot knows that cutting government spending will deepen the crisis. What a surprise, that's exactly what happened.
And now comes the magic trick: The amount of debt that the EU, European Central Bank and IWF consider "acceptable" is calculated based on a countries GDP. Greece actually cut spending a lot and last year ran on a balanced budget, something that our own Mrs. Merkel didn't manage to do with our country. Greece debt has actually decreased. However, due to the magic trick, Greece debt ratio has become worse, not because of more debt, but because of less GDP.
It's like telling you that because you're in debt, you need to sell your car to pay me. And after you've done so, telling you that because your net worth has now declined, you've now got a different credit rating and owe me more money for the higher risk.
Re: Umm... Lulz.... (Score:4, Interesting)
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If I were an investor, I'd be glad to see the Euro kick out any countries that undermine the currency.
Re: Umm... Lulz.... (Score:5, Insightful)
The fact that the Troika hasn't been willing to give one iota on the Greece issue should be enough of a reflection on how little consequence they think an exit of Greece from the eurozone would be. Germany in particular doesn't want to give any ground (I imagine all of the nazi-name calling has played no small part), but they're hardly alone, many countries are taking a very hardline stance on Greece. Most parties feel that the consequence of giving way to Greece could be significant, but the consequences of their exit - while not completely painless - would not be that dramatic.
On the other hand, in Greece, there's only one route for exit, and that's capital controls (or a rapid conversion over the weekend) where everyone's assets are converted to some kind of new-drachma, which instantly devalues to half its value or less. Which is why everyone is taking their euros out of the banks, they're not stupid (unfortunately, thieves aren't stupid either, breakins have become an epidemic as they look for people hoarding money at home).
I can't see a cryptocurrency helping in any way... if anything I'd guess it'd only serve to unnerve markets even more and lose even more value as a consequence. I could picture it maybe as a simultaneous and rate-locked currency to a physical New Drachma, maybe. But it sounds IMHO like an incredibly risky move even then. I mean, one presumes for example that there's a government-controlled master key to "print" more cryptocoins? Then that means that your entire economy can be crushed overnight by someone hacking, physically stealing, misusing, cracking, or whatnot your master key. Isn't that an unnecessarily big risk to take? And on an individual level it seems full of problems as well...
Don't get me wrong, I don't think cryptocurrencies are inherently an evil or shouldn't exist. But I would have serious second thoughts about such a massive nationwide rollout on a country that's already in chaos.
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A crypto currency would be like buying gold to hedge against the inevitable inflation or devaluation of the currency. It wouldn't be a matter of printing more, it would be a matter of will this dollar still buy a dollars worth of something if the value is cut in half. But with a crypto currency, the initial scarcity could be negated if there was a one time creation of enough currency to cover the expected load and the key would be destroyed (or useless) and unlike investing in gold to hedge the value, it wo
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Whatever they convert it into, New Drachmas or Cryptodrachmas, it's still going to devalue like crazy. Both, being backed by the same entity (the state) will have the same credibility problem. Except even moreso for the cryptocurrency because of all of the concerns that carries with for many investors.
Re: Umm... Lulz.... (Score:5, Insightful)
If Greece implodes, it could take the entire Eurozone with it by causing domino defaults, because Greece owes a lot of money to other nations that are already in dire fiscal straights
Two years ago maybe, when the whole euro-zone was in a depression [tradingeconomics.com] and there weren't plans in place but now they've prepared and the Greek economy is only about 2% of the total. Germany has been very ready to play hardball and let Greece fall on their sword if they don't stick to the rescue plan. You have to remember that once you've made sure the other dominos won't fall many want to make Greece an example of what happens when you spend irresponsibly. So does their new PM really want to go "all in" and find out if they'll really get kicked out of the-euro zone? That's some real high stakes poker there if he gets called they tell him to get out.
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The Eurozone is still in a depression. Even Germany is in a situation of under-employment as a large fraction of the people they count as employed only have part-time low paying jobs.
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Ok, three problems, since even the term "punishment" makes it also obvious that EU is not a cooperative looking for the common good of it's citizens, but tool for the G
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I'm not in favour of making Greece an example; most Greece people didn't ask for the mess they are in and are hardly to blame for being ruled incompetently in the past. That said, it's complete nonsense to blame the unfortunate financial situation the country is in on Germany or the remainder of the EU. Greece has been completely incompetent in raising taxes and clientelism and corruption are widespread. I can imagine the austerity measures to be impopular, but let's not forget that the EU has been dumping
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Your problem is that you don't have to convince yourself of that, but since you want Germans to pay for the mess the Greece are in, you have to convince the Germans. And knowing how they are pissed off with the Greek and have had just about enough of it, you'll have a hard time doing that.
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secondly, because once out of Euro Greece can pay back their loans with newly printed bitdrakhmas, and Germany will take the biggest hit of that being the biggest creditor
Normally you have to pay back loans in the currency that they were given. If you only have another currency, then you have to find someone willing to exchange them. The exchange rate isn't likely to be very good for a little while. That said, it would probably be great for the Greek economy, as a very weak currency will make exports very easy for them.
The other problem that you're not mentioning is that, if Greece leaves the Euro then Putin will be very happy to extend trade deals to them to get around
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There are two problems with making Greece and example: they did not spend irresponsibly, they became insolvent only after Germany forced them to shrink their economy
LOL you must be from Greece, their debt-to-GDP ratio was poor to begin with increasing every year through budget deficits. They went insolvent because the market understood they had no chance of paying their debts and interest rates skyrocketed [wordpress.com]. It's rather hilarous to blame Germany and the EU for the terms of the loans when the market would sooner lend money to a drunken hobo than to Greece, it was either that or bankruptcy.
You can of course argue that they're now trapped in an evil circle where the auster
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There is little chance of Greece leaving the Euro. For a start it would take at least a year to set up a new currency to use. A year of limbo with Greece still using the Euro but having no interest in its future.
Of course, setting up a new currency wouldn't even begin before months of negotiations to agree a procedure for an exit. There is currently no mechanism for a country to leave the Euro. Then there needs to be a new treaty to set it up.
Neither side will wait that long, there will be an agreement in t
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And if they did leave the Euro, wouldn't the new currency be weak and make it practically impossible to pay off a debt that is Euro based. I don't think people who want Greece to leave have considered the consequences. / I could be wrong, I'm no currency expert.
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Germany is playing hardball exactly because it can not afford Greece to step out of the austerity program.
If Greece does it, and survives - even if badly, it just needs to survive - then Spain, Portugal and Italy will certainly follow, with Cyprus, Ireland and others close behind.
Merkel has presented austerity as "without alternative" in the same way she has run her own country (disclaimer: I am german). Every major decision in her entire reign was never justified by being the best option or shown to be pro
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Greece and the EU are currently like two poker players going all-in with their mortgage money, knowing that if the other one doesn't fold they can't pay and lose their house.
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... continuing a bit.
The reason the can't escape completely the loans is simply, if they dare to say that they don't pay, then who's going to loan them money after that? Right, nobody.
How they would be able to do trade with other nations after that? Right, paying everything in front in euros or dollars, nobody else would trust them otherwise.
So, where would they get those euros / dolallars? Now, that's the real tough guestion, and I don't have an answer for that. Nor I think has Mr. Varoufakis either, and t
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I don't think anything that bad will happen Greece defaults, sure the government may not loans, for a while, that will just force them live within there means, while removing any interest burden. Who in their right mind lending more money to Greece anyway, and simply not trying to recover as much money back as they can. Private companies will still get loans, the wouldn't have defaulted.
If you lend people money to take on a risk (Isn't that the justification for charging interest), and if you lend too much
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The Greeks have done nothing but cook the books and lie to get into EU, get loans to spend on handouts and now they blame everyone but themselves.
The public in Greece voted for every single one of these crooks and are to blame.
I think the best course of action is to toss them out, they were never fit to be in. They even hid public debt in their train company to pass EU requirements all to be able to borrow cheap with no intention of paying back.
Sorry, I don't want to pay for the Greeks early retirements.
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Like I said before, They need to do like Iceland. The 'debt' is a result of bankers fraud and is not legitimate. And yes, a lot more nations should do the same. It's time to put things in the proper order and make the banks serve and not rule. That would mean instituting a public bank, through their post office or whatever.
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You do realize that to import goods, you have to pay for them, right?
You do realize that without international trade Greece would resemble Somalia, right?
Yes, Greece can declare itself another North Korea and cut itself off from the world if it wants to give the global financial system the middle finger. But hey, good luck with that...
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Greece, as my high school history teacher would put it, is a basket case. It survives only on the handouts from the EU.
I worked on an EU funded research project, where Greeks were involved, the National Technical University of Athens (NTUA) and the Athens Technology Center (ATC). Although some of those folks had PhDs, none of them were even close to being productive as a US high school student.
Whine, moan, bitch and complain, someone else was responsible for their failure. I couldn't even hear it any m
Re:Umm... Lulz.... (Score:5, Funny)
Yes, just like we wiped out North Korea, Vietnam, Iraq, and Afghanistan, and just how we've just about wiped out ISIS and stuff.
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Don't forget your incredible victory against drugs!
Re:Will Greece borrow more and then default? (Score:5, Insightful)
Iceland did the right thinag. The Government shouldn't be forced to pay the debts of failed private companies. Even if they are banks. The PIIGS are all suffering because they followed the EU command to assume private banking debts. Notice how even in Greece, which had the most government debt, supposedly they had to cave in early because other 'the ATMs wouldn't have money to dispense next week' because of a banking run. Bah.
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If only the PIIGS had done that too.
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Nah. All they had to do was let the Greek banks fail and handle it as any other business bankruptcy. The bank assets would be resold on the market and used to repay the creditors who would then have to write down the debt on their books. Instead they're just kicking the can down the road and letting the debt snowball.
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In other words cryptocurrencies are a Ponzi scheme. Plus Bitcoin is deflactionary like the man himself said.
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This, and it's kinda obvious:
When in danger
When in doubt
Run in circles
Scream and shout
Even if it's a useless fucking idea, it's an idea.
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What do you mean? If I knew my bitcoin wallet doubled its value every year, I would spend/invest NONE of it. And since everyone else would do the same, the value would grow even further and further, until it wouldn't. Then there is incentive to spend, thus flooding the market with bitcoins, which results in inflation, which forces to spend even more, before value is lost even further. Sounds like solid economical base to me.
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A rose by any other name...