Author Topic: Greece defaults...  (Read 25919 times)

rcjordan

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Greece defaults...
« on: February 15, 2012, 04:40:29 PM »
Since late yesterday, the general feel of the financial & political articles I read seem to be turning toward a Greek default (March 27th at the latest) rather than a second bailout.

Brad

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Re: Greece defaults...
« Reply #1 on: February 15, 2012, 04:57:23 PM »
The buzz is definitely there.  BBC World service just had a big segment on it today.

1. I have been thinking over the last week or so that the big economic states in the Eurozone want to push Greece out, but don't want it to appear that they kicked Greece out.

2. I think there is a media campaign going on to prepare the world public and the markets psychologically for Greece to default.


TallTroll

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Re: Greece defaults...
« Reply #2 on: February 15, 2012, 05:46:17 PM »
Don't know if you've seen much about it, but Athens has been more or less permanently in a state of riot for a couple of years now. Some days it's better, some days it's worse, but it's been bubbling along more or less since this all kicked off. It's not been pretty, and I think it'll get worse when they realise that default and reverting to the drachma actually makes things worse for them

TallTroll

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Re: Greece defaults...
« Reply #3 on: February 15, 2012, 06:59:40 PM »
The bad news is it'll be burned down by the end of the year  ;D

This could go on for some time...

rcjordan

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Re: Greece defaults...
« Reply #4 on: February 15, 2012, 07:00:03 PM »
>you've seen much about it, but Athens has been more or less permanently in a state of riot

Given where I read (US/UK/DE), yes, I knew. I'm not sure what the average US reader has heard, though. Probably very little.


>reverting to the drachma
>buy a hotel in the Greek islands for the same price as a week's cappuccino

There is a plausible argument that the resulting devaluation of the drachma relative to the euro would cause an explosion in tourism (one of the few Greek industries that might benefit).

<added>
> burned down

Buy one made of stone, Jason.

I, Brian

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Re: Greece defaults...
« Reply #5 on: February 15, 2012, 07:28:31 PM »
The question has never been *if* Greece defaults, as much as *when*. Earlier media reports had been suggesting that the default would be managed to occur next year, when the other European economies have had a chance to develop some degree of growth, and therefore feel more protected.

So don't dismiss a bail out going ahead as planned in March.

However, the really big issue has never been just about if, when, or why Greece would default. It's about how many other countries will have to as well.

Portugal, Ireland, Italy, and Spain, are all moving into effective default territory - unable to service their debts. Once Greece goes, others will follow, and it's that which will cause the actual upheaval.

In the meantime, hoping Greece will default sooner rather than later as would actually like to go on holiday there sometime soon - had my eye on taking the family to Rhodes. No point while there's a constant threat of national strikes, though.

Brad

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Re: Greece defaults...
« Reply #6 on: February 15, 2012, 10:03:11 PM »
>reverting to the drachma

The way I heard it: in the pre-Euro days countries could regain some competitive advantage by revaluing their currency in comparison to their neighbors in response to economic hardship.  The Euro killed that.  Long term there might be a benefit with going back to the drachma.

I think Brian is right.  It's "when" Greece defaults not "if".  And I'm not convinced that the Euro will survive either, there are too many underlying structural problems, the biggest one being that it is not based on the "full faith and credit" of anyone or anything.  It's all got to be scary for the smaller states in the Euro.

dogboy

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Re: Greece defaults...
« Reply #7 on: February 16, 2012, 03:30:46 AM »
If Greece goes down, the rest of the euro is doomed. Uncertainty should make the dollar temporarily strong, which should push the price of metals down, and even more later as euro banks flood the market with metals as they scramble for cash. This will probably the last best time to buy metals 'cheap', before the dollar buckles, and goes down as well.

Once everything is crashed, the only proven idea (historically) is to trade the metals for cash to buy rental properties and hotels.

Of course, you got Iran getting a bomb, and the final Shite/Sunni showdown that will go down on the oil fields of Saudi Arabia.

And that should just about do it...

« Last Edit: February 16, 2012, 03:36:30 AM by dogboy »

Gurtie

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Re: Greece defaults...
« Reply #8 on: February 16, 2012, 08:32:14 AM »
The euro isn't doomed. Too many big players have got too much invested in it to allow that to happen.

TallTroll

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Re: Greece defaults...
« Reply #9 on: February 16, 2012, 09:02:50 AM »
Gurtie, that was the exact same argument for why WWI could never happen. And the exact same argument as to why monarchy would *always* be the way European nations ruled themselves. When the Euro elites want something diametrically opposed to objective reality, reality always wins in the end.

In the long term, I agree, the Euro is a great idea. But it'll happen (and work) when the peoples of Europe are ready for it to, not when a bunch of self absorbed politicians decide it's time to get their names in the history books

Brad

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Re: Greece defaults...
« Reply #10 on: February 16, 2012, 12:21:33 PM »
Respectfully, I think a lot of Eurozone members are trying to figure out how to land the Euro plane without crashing and burning.  I'm willing to bet at least the smaller states are very quietly running "what if" scenarios about somehow leaving the Euro even as we speak.

I remember reading an article years ago (well before all this current crisis started) that even then the international financial community did not consider all Euro's to be equal for long term holding (currency reserves?) and that German Euro notes were preferred while Euro's notes issued from less wealthy/powerful/viable Eurozone states were not being held.  I'm fuzzy now on the details but it sent up warning flags to me at the time.

When the Euro first came in I made a prediction over at SEF that if it ever became a question of choice for real survival for the Euro vs. the individual nation-states that the Nation State's would all cut and run.  It goes back to that full faith and credit bit.   A common currency is nice in good times but I don't think support goes that deep in the populations.

Not fun in any event.

rcjordan

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Re: Greece defaults...
« Reply #11 on: February 16, 2012, 04:19:37 PM »
>euro doomed

It is among the peripheral euro economies. Either that, or their citizens will have to ultimately come up with significantly reduced wages and/or sell off their country's remaining natural resources and/or significantly increase productivity and/or maintain or reduce their cost of living.  Otherwise, stuck with a common currency the balance of trade with other nations will eventually hollow out their economies.

<added>
“There’s no way Greece can actually ever fully meet the conditions laid down by the EU and IMF – particularly if they keep piling on new demands. The scale of the cuts goes far beyond any fiscal consolidation – successful or failed – that any country has gone through in living memory.”

“The question is instead one of how long the eurozone’s charade of unrealistic conditions in return for more bailout cash can continue. Specifically, will Germany and other Triple-A countries accept half-baked solutions to the big unanswered questions that still haunt the efforts to save Greece?”

Worth a read: http://www.openeurope.org.uk/Article?id=8497

<added2>
Local UKIP Euro-MP Godfrey Bloom, the Party’s Economics spokesman, today called for sanity to prevail over the state of the Greek finances.

"Finally reality is beginning to dawn in Brussels and across Europe. One of the most senior European Commissioners, its Vice-President no less, has announced that, 'It is simply not true' that if Greece were to leave the Euro there would be disaster across the European financial system.

This is what we in UKIP have been saying for months, years even. The best way to help Greece, and by extension ourselves, is if we give them a helping hand down and out from the Eurozone, rather than spending billions of pounds of taxpayer's money building a golden prison.

Our Government has been playing along to the doomster dialogue in order to justify its throwing money at the lost cause.

It would do better listening to the Commissioner and wiser heads and refuse point blank to give any more to the bailouts, whether through increased IMF contributions or otherwise. No more British money should be spent making a bad situation worse"

http://www.godfreybloommep.co.uk/news.htm
« Last Edit: February 16, 2012, 04:34:29 PM by rcjordan »

Brad

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Re: Greece defaults...
« Reply #12 on: February 21, 2012, 11:19:08 PM »
Little article about how to tell which country issued a Euro note:

http://www.telegraph.co.uk/finance/personalfinance/9094221/How-to-tell-where-your-euro-banknotes-come-from.html

Nice pictures if nothing else.

dogboy

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Re: Greece defaults...
« Reply #13 on: February 22, 2012, 12:16:26 PM »
Well, it looks like they announced another flimsy tentative agreement that will kick the can down the road a while longer. I still think its doomed house of cards, not just Greece, and it will work out just like I said.  We are all caught up in a vicious cycle now. And all the governments involved are going to pay off debts with devalued currencies. I knew they would. No one has the stomach to cut off a friendly nation yet.

But the feedback cycles I mentioned before are definitely in play the way they appeared. The bail out temporarily strengthened the euro, at the expense of the dollar, and precious metals spiked. The opposite would have occurred had they not. 

Now it looks like the news is coming out that for the 20th time they announced a deal that not everyone has a agreed to, and the markets are pulling back. You can't get out of debt by printing more bills. They should have forced austerity laws on everyone, US included, while this is still a chance. Our debt is at 100% GDP. To my knowledge once it gets to 90%, there is no way out but eventual default.

Woz

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Re: Greece defaults...
« Reply #14 on: February 22, 2012, 12:55:18 PM »
Went to a talk given by Nicole Foss last night, very insightful lady.

A few of her Youtubes:-

Finance & Bubbles - http://www.youtube.com/watch?v=kYXA9XHFUCU

Decoupling - http://www.youtube.com/watch?v=FqRGVNUK5x0

Alternative Energy - http://www.youtube.com/watch?v=xmVw4xovjVg

One thing we all have to consider is the possibility of the Internet going down due to insufficient energy to power it. Not as incredulous as one would think.
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