Greek Gov Ready to 'Shave' Bank Accounts

tommyjo

New Member
Greek banks prepare plan to raid deposits to avert collapse


could this action ever come to the US
... or would the FED just keep printing money
- and this disaster is only because the credit give to Greece has dried up

If you understood monetary systems, you would know that what is happening to Greece cannot happen here.

Had you been following this slow motion train wreck since it began 5+ years ago, you would know that Greece's default on loans was inevitable. Austerity does not, and never will, fix a badly damaged economy. Only growth will.

But you only know what the right wing propaganda internet sources tell you. You think the withdrawal of additional credit last weekend was the cause of Greece's problems? You don't understand and likely never will. Go back to reading Young Conservatives or Briebart...
 

Merlin99

Visualize whirled peas
PREMO Member
If you understood monetary systems, you would know that what is happening to Greece cannot happen here.

Had you been following this slow motion train wreck since it began 5+ years ago, you would know that Greece's default on loans was inevitable. Austerity does not, and never will, fix a badly damaged economy. Only growth will.

But you only know what the right wing propaganda internet sources tell you. You think the withdrawal of additional credit last weekend was the cause of Greece's problems? You don't understand and likely never will. Go back to reading Young Conservatives or Briebart...

In other words.
Blah blah blah, I have not a single clue as to what I'm talking about but I'll spew my venom anyways, blah blah blah

Crawl back under your rock.
 

GURPS

INGSOC
PREMO Member
If you understood monetary systems, you would know that what is happening to Greece cannot happen here. - Please enlighten us Mr Krugman

Had you been following this slow motion train wreck since it began 5+ years ago, you would know that Greece's default on loans was inevitable.

Austerity does not, and never will, fix a badly damaged economy. Only growth will. - right because continuing to spend money you don't have is the answer

You think the withdrawal of additional credit last weekend was the cause of Greece's problems? - Socialism is pretty cool, until you run out of Other Peoples Money - well Mr Krugman .. without additional credit extension, yes it all comes to a screeching halt - while not the cause, this is certainly the result


Austerity


In economics, austerity is a set of policies with the aim of reducing government budget deficits. Austerity policies may include spending cuts, tax increases, or a mixture of both. Austerity may be undertaken to demonstrate the government's fiscal discipline to their creditors and credit rating agencies by bringing revenues closer to expenditures. In most macroeconomic models, austerity policies generally increase unemployment in the short run. This increases safety net spending and reduces tax revenues, partially offsetting the austerity measures. Government spending contributes to gross domestic product (GDP), so reducing spending may result in a higher debt-to-GDP ratio, a key measure of the debt burden carried by a country and its citizens. Higher short-term deficit spending (stimulus) contributes to GDP growth particularly when consumers and businesses are unwilling or unable to spend. This is because crowding out (i.e., rising interest rates as government bids against business for a finite amount of savings, slowing the economy) is less of a factor in a downturn, as there may be a surplus of savings.

There are other views contrary to traditional macroeconomic theory. Under the controversial theory of expansionary fiscal contraction (EFC), a major reduction in government spending can change future expectations about taxes and government spending, encouraging private consumption and resulting in overall economic expansion.

[clip]


Justifications

Austerity measures are typically pursued if there is a threat that a government cannot honor its debt liabilities. Such a situation may arise if a government has borrowed in foreign currencies that it has no right to issue or if it has been legally forbidden from issuing its own currency. In such a situation, banks and investors may lose trust in a government's ability and/or willingness to pay and either refuse to roll over existing debts or demand extremely high interest rates. International financial institutions such as the International Monetary Fund (IMF) may require austerity measures as part of Structural Adjustment Programmes when acting as lender of last resort. Austerity policies may also appeal to the wealthier class of creditors, who prefer low inflation and the higher probability of payback on their government securities by less profligate governments. More recently austerity has been pursued after governments became highly indebted by assuming private debts following banking crises. For example, this occurred after Ireland assumed the debts of its private banking sector during the European debt crisis. This rescue of the private sector resulted in calls to cut back the profligacy of the public sector.




How the Case for Austerity Has Crumbled
 
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GURPS

INGSOC
PREMO Member
this should make TJ's head explode ... a VMWare Engineer Explaining the Greek Problem


What exactly happened to the Greek economy?

I know that they need money from other European countries and they are heavily in debt. I know that the basic commodities have become very costly there too.
But what happens on a more basic level? They run out of foreign reserve, but can't they get things by trade?



Kostadis Roussos, principal engineer at VMWare

There are macro reasons, which are simple and easy: too much corruption etc.

But that doesn't explain why exactly the Greek economy chose to implode in 2008.

The short answer is the following:

The Greek Economy starting approximately in 1984 started a massive expansion of the amount of money the government spent within the economy. This expansion continued throughout the next 20 years.

The problem with the expansion is that it was not fueled by taxes but through debt.

There were two sources of debt income. The first was the EU which gave the Greek economy a lot of money to improve the country. The second was inflation. What most non-Greeks and most Greeks under the age of 30 don't remember, is that in the period around 1981->1992 we experienced rapid devaluation of our currency and our savings. In fact sometime in the 1988->1992 period -- I can't remember the exact timing inflation was on a hyper-inflationary trajectory ... Stores were offering discounts if you paid in cash now, and prices were changing very rapidly.

Before monetary union access to EU debt was harder than it became after the union.

So up until EU monetary union the situation was unstable and heading to a fall but the rate of accumulation of debt was low.

However, the evil cocktail was brewed and drunk. The cocktail was the following: many Greeks derived some income from the state. This was either indirect - working for a firm that had contracts or directly for the state. The only way to increase income was to get the state to give you more. The only way the state could get more was to borrow. In the past when the amount giving out exceeded the amount coming we would have inflation.
 

itsbob

I bowl overhand
If you understood monetary systems, you would know that what is happening to Greece cannot happen here.

Had you been following this slow motion train wreck since it began 5+ years ago, you would know that Greece's default on loans was inevitable. Austerity does not, and never will, fix a badly damaged economy. Only growth will.

But you only know what the right wing propaganda internet sources tell you. You think the withdrawal of additional credit last weekend was the cause of Greece's problems? You don't understand and likely never will. Go back to reading Young Conservatives or Briebart...

What austerity exactly?

So instead of telling us all we know nothing about it, give us facts. Tell us the why and how, and give us the differences in economies that can ensure it not happening here (or US territories like Puerto Rico, or US States like California).

You accuse most of us of reciting verbatim from conservative sites, that i, for one, never read, yet you do the same.

Copying and pasting from liberal sites with no knowledge or actual thought put into it. You believe what you read, and echo what you read no matter how wrong and convoluted it is.

You're the worst kind of liberal. Too stupid to think for themselves so just swallows the party line hook line and sinker..
 
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PeoplesElbow

Well-Known Member
Sure everyone knows when you can't pay your bills that you need to continue to spend like a drunken sailor (no offense meant to drunken sailors).
 

Larry Gude

Strung Out
...could this action ever come to the US...


Could??? You miss the auto bail outs? You miss TARP? Quantitative easing?

It's been going on in the US, non stop, from fall of '08 up to last fall, 6 full years of transferring about $1 trillion a year out of the economy and into Too Big To Fail.

We can quibble that it has not been a direct 'shave' as per your link yet that pretends money isn't fungible. We can pretend that the debt the Fed has taken on isn't owed to them and that it was the best, or even a good use of the power to borrow from the economy. Yet, if we take a couple different views, it's pretty easy to see how enormous the impact has been.

What if we'd simply written off $6 trillion this past six years instead of lent it to ourselves?
What if we'd put that $6 trillion into the economy by simply handing out $3,000 a year to every man, woman and child in the US for six years?

The ONLY solution to the Greek problem is to WIPE out their debt and lend them new money at higher rates. There IS business to be had with them. It just got out of balance and the people who were chasing profits by lending to them simply need to swallow the loss and get on with new business. They can pay SOMETHING. They just can't pay what is owed. So, that deal went bad. Time for a new deal.

It's that simple.
 

Larry Gude

Strung Out
Only growth will. ..

And how does that growth happen with debt you can't manage? You shed the debt. It's just that simple. Any growth that would be high enough to service the old debt and new debt would simply devalue everything in sight, including the value of the old debt. Now, you and I both know that that is the goal; to make the old debt look smaller via 'growth' but it doesn't change reality. It is simply crushing the value of current dollars to make it sound better. It is playing monopoly with the new boards where $500 bills are labeled $500,000. It sounds bigger but it changes nothing.

Write the #### off. Charge higher interest rates, they'll naturally borrow less but it will me NEW business and the lenders will be making real earnings instead of simply adding zero's to the new, effectively taking those zeros from the old and calling it good.

Write it off.
 

Merlin99

Visualize whirled peas
PREMO Member
O
And how does that growth happen with debt you can't manage? You shed the debt. It's just that simple. Any growth that would be high enough to service the old debt and new debt would simply devalue everything in sight, including the value of the old debt. Now, you and I both know that that is the goal; to make the old debt look smaller via 'growth' but it doesn't change reality. It is simply crushing the value of current dollars to make it sound better. It is playing monopoly with the new boards where $500 bills are labeled $500,000. It sounds bigger but it changes nothing.

Write the #### off. Charge higher interest rates, they'll naturally borrow less but it will me NEW business and the lenders will be making real earnings instead of simply adding zero's to the new, effectively taking those zeros from the old and calling it good.

Write it off.

Larry, you make a hell of a progressive. You rail on about "To big to fail", but someone proposes it on a national scale you're all for it. Sell off all of the assets, Parthenon included, and pay you debts. Self converting a loan to a grant is bad for everyone.
 

Larry Gude

Strung Out
O

Larry, you make a hell of a progressive. You rail on about "To big to fail", but someone proposes it on a national scale you're all for it. Sell off all of the assets, Parthenon included, and pay you debts. Self converting a loan to a grant is bad for everyone.

Good point and one worth debating. :buddies:

Here is the difference, as I see it:

Remember the Resolution Trust Corp, Bush 41's best achievement? They identified a major problem, proposed a reasonable fix, set it up, fixed it and, not totally but essentially shut it down. In my view, that was a FANTASTIC use of the size, scope and power of the federal government.

TARP, nominally, was a one time thing so, so far, so good. That said, it was effectively written into law with Dodd/Frank. It is NOT shut down. Further, with QE, it went on for 6 years and NO ONE honestly thinks it won't happen again the moment Wall Street shows any signs of coming down off the crack high.
 

Larry Gude

Strung Out
Then what?? In the case of a country like Greece, specifically, where everyone not retired by age 45 and collecting 14 months of astonishingly generous pension checks ""works"" for the government.

The FIRST question is; WHAT is the problem?

In my mind, something that is not working, at all, comes first. Then we can move on to then what.

That said, I answered that; higher interest rates. That alone will temper Greek borrowing, same as it would anyone else. Money was cheap so, Greece borrowed a lot and the people
that lent it were, it seems, more interested in lending it than how it was gonna get paid back.


Why is writing off debt such a problem for so many people? If you owe me and you can't pay but you are a going concern that wants to do new business with me, I can either not lend and NOT get paid back or I can write old debt off, lend you new money at higher rates to make back my loss. You'll borrow less because of the rates and I'll make as much or more off of less risk. This is not some radical concept.
 
The collective ingratitude of the Greek people, demonstrated by their no vote on this referendum, is astounding. I hope their creditors don't back down and come back to the table with more lenient and/or forgiving terms. They've been far too gracious and far too forgiving already, and what they've asked for has been plenty reasonable.

Yes, of course, the austerity they demand means a lower standard of living for the average Greek and less growth (or more contraction) for the Greek economy. But tough luck, the Greeks have been living too far beyond their means (i.e. beyond what their real productivity could justify) for far too long. They got to live the high life without putting in the work to pay for it, now they have to pay the bill without getting to enjoy the high life. The austerity will do real harm to their economy well into the future, but that's the price they need to pay for their actions - reality catches up with all of us eventually, and the more we try to avoid it the more likely it is to be a mother ####er when it does find us. Reality is knocking Greece, answer the door or not she's coming in. Yes, they'll be a compounding effect from an austerity-inhibited economy trying to pay back debts. But that's your problem. At least you will be able to pay those debts back, if you're willing to suffer a sufficiently reduced standard of living - if you're willing to accept not being spoiled brats like you've so long been.

Their creditors have made them more-than-fair offers, offers that might allow them to survive as a nation. If they think they'd be better off remaining indignant, by acting like babies and just defaulting, they're as unrealistic as they are ungrateful. Their creditors of course don't want to lose all of their money, and other nations' economies would be impacted somewhat (and to varying degrees); but Greece would get the worst of it. And they'd be worse off than they would taking the deals that have been offered. They think the austerity that has been asked of them is bad, I don't think they understand how bad bad can get. But they'll find out if they, in effect, force the EU to kick them out or choose to leave on their own. Unless their creditors buckle, that's basically what this no vote is - it's a vote to leave the EU. Again, I hope their creditors stay strong and we can get on with getting this over with. Without other people willing to finance their unproductive lifestyles, they just can't support themselves to anywhere near the standard they expect - even to the austerity level they're refusing to accept. Their only hope is that their creditors cave in to their unreasonableness, indulge their unconscionable defiance.

A nation of 11 million plus people can't be supported by 155 people working, especially when only 80 of those people are doing something other than make-work type stuff. They think they should be able to live 75 years while only working for 2 of them, and only working 15 hours a week when they do. Hopefully they're about to get a long overdue introduction to reality, how unpleasant an introduction it will be is up to them. It sure seems like they want it to be as nasty an introduction as it can be. So be it. Please, please, please to their creditors: They're bound and determined to dig their own grave, for all ours sake let them go ahead and jump into it so that we can begin to put this silliness behind us. It's time the world, and the rest of Europe in particular, tells the Greek people to go #### themselves.
 
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Larry Gude

Strung Out
The collective ingratitude of the Greek people, demonstrated by their no vote on this referendum, is astounding. I hope their creditors don't back down and come back to the table with more lenient and/or forgiving terms. .

So, what do you propose, just start backing trucks up and repossess the islands one at a time until they relent?

You don't know any Greeks, do you? Next step; their new bestest buddy Uncle Vlad and ZILCH for the current creditors.
 

Larry Gude

Strung Out
It's time the world, and the rest of Europe in particular, tells the Greek people to go #### themselves.

I hear you and then the next question; are you OK with them going to Russia and the creditors getting nothing? Or maybe a partial settlement from Putin?
 

Gilligan

#*! boat!
PREMO Member
I hear you and then the next question; are you OK with them going to Russia and the creditors getting nothing? Or maybe a partial settlement from Putin?

What money is Putin going to use ...and what on earth would it buy him if he had it waste on supporting a permanently-failed country like Greece?
 
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