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2015/07/02 02:44:21
Subject: Re:Looks like Greece may be out of the Eurozone
Orlanth wrote: You have a point, this is unlikely to end well, which is why I think Greece is being used as an object lesson on the need for continued austerity.
And the need for find evidence for austerity anywhere and everywhere has stopped people learning the real lessons of this issue. But that's the way when you start with politics first, and then go looking to economics for evidence, it makes people stupid.
Anyhow, the real issue here is that the seperate countries with a single currency is actually a really unstable structure. Greece had an economic meltdown, that's not news at this point. But what flowed from that somehow managed to capture the worst issues of both a national and local economic collapse.
See, if a country with its own currency has an economic collapse, then the currency will deflate through both government actions and natural economic functions. The poor labour market will stop wage inflation, and the end result is basically a reduction in real wages that will more or less recover aggregate demand with a couple of years.
While if a single region in a country collapses, you can't deflate because the rest of the country has no issue. But instead, you see an automatic shift in transfer payments and taxes. If Wales was to collapse, for instance, then you'd see the situation offset somewhat by an increase in welfare payments in coupled with a reduction in taxes paid out - this would allow some level of stabilisation and give a grounding for eventual recovery.
But in Greece, and any other country with the Euro, neither of these things happened. The Euro doesn't shift based on Greek economic activity as it's dwarfed by France and Germany, so there's no relief in currency valuation. And what money comes in to Greece comes as debt, not as a natural part of budget transfers. And the result is, well, the Greek crisis.
It was a desperate move, but I'm not sure it was rash. The austerity already put on Greece is horrific and not working. Faced with more austerity or walking away, he's trying to prove how close Greece is to walking away.
No-one has any idea. Even the strongest proponents for austerity aren't even claiming that it will fix anything anymore, now they're just saying it has to be done. And people arguing for Greece to leave the Euro haven't considered what will happen when Greece sets up its own massively devalued currency, but at the same time owing a lot of debt nominated in Euros.
EDIT: I feel like Greece is foretelling what happens to the US' massive debt.
Totally different issue. The US owes debt in a currency it completely controls. Greece owes money in a currency in which it is a minor player.
This message was edited 2 times. Last update was at 2015/07/02 03:02:54
“We may observe that the government in a civilized country is much more expensive than in a barbarous one; and when we say that one government is more expensive than another, it is the same as if we said that that one country is farther advanced in improvement than another. To say that the government is expensive and the people not oppressed is to say that the people are rich.”
Adam Smith, who must have been some kind of leftie or something.
2015/07/02 05:20:29
Subject: Looks like Greece may be out of the Eurozone
EDIT: I feel like Greece is foretelling what happens to the US' massive debt.
Totally different issue. The US owes debt in a currency it completely controls. Greece owes money in a currency in which it is a minor player.
The US also isn't a failed economy, nor is the economy entirely dependent on the very volatile and fragile tourism industry.
We're nowhere near close to failing like Greece is. In all practical senses of the word, the US has truly unlimited credit.
Self-proclaimed evil Cat-person. Dues Ex Felines
Cato Sicarius, after force feeding Captain Ventris a copy of the Codex Astartes for having the audacity to play Deathwatch, chokes to death on his own D-baggery after finding Calgar assembling his new Eldar army.
Lots of talk from Greek people about moving abroad.
Is that something that you've thought about Shieldwolf?
This message was edited 1 time. Last update was at 2015/07/02 09:52:11
We love what we love. Reason does not enter into it. In many ways, unwise love is the truest love. Anyone can love a thing because. That's as easy as putting a penny in your pocket. But to love something despite. To know the flaws and love them too. That is rare and pure and perfect.
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2015/07/02 09:54:08
Subject: Re:Looks like Greece may be out of the Eurozone
So, in other words...
"Hey, Banks."
"Hey, Greece, what's up?"
"What is ever up, my main man? I need some dough."
"Sounds good, my lean Hellene, how much?"
"Eh, just enough to get a nice meal for my public sector. I'd say... slightly more than my GDP?"
"Aw, man, your public sector's just the cutest. Your GDP will get bigger when your economy grows, right?"
"Yeah, of course. I mean, what, is there going to be an unprecedented economic crisis the likes of which hasn't been seen since the 1930s?"
"Haha, that's why I like you Greece, you're hilarious. Here's your dough. Don't blow it all on one sinecure!"
----------------------------------------------------------------------------------------
"What the feth Greece, where's my money?"
"No, what the feth Banks, where's MY money? Actually, where's EVERYBODY'S money?"
"Hey, feth you Greece. gak happens. I owe a lot of money to a lot of people. I don't pay them back, we might as well not HAVE money."
"What the feth do you want from me Banks? My economy isn't producing. Its GDP hasn't been this small since it was a pup. I can't pay what I don't got."
"Well, then I guess I'll have to—"
"You'll have to WHAT, tough guy, you gonna—"
"Good morning Greece, good morning Banks."
"Oh, um hi, Mrs. Troika."
"Good morning Mrs. Troika."
"Now what's this I hear about you having a spat about money?"
"It's his fault!"
"No, it's his fault!"
"QUIET! I will hear you one at a time. Greece, do you owe Banks money?"
"Yes Mrs. Troika."
"Banks, did you lend that same money to your friends? And more importantly, all my friends?"
"Yes Mrs. Troika. Sorry Mrs. Troika."
sigh "Now this is very serious, Banks. Very irresponsible. I'm very disappointed, and I want you to promise it won't happen again."
"I promise Mrs. Troika."
"Now Greece, I'm going to give you the money to pay back Banks. But you're going to have to be very careful with it. Very austere. You must only use that money to pay back Banks."
"But Mrs. Troika, I also need money to fix my economy! It's not well"
"And why, Greece, is your economy unwell in the first place?"
"It's Banks' fault!"
"And..."
"Because I overfed the public sector."
"Yes. Now I don't see why I should give you more money when you've already shown you can't use it responsibly. Pay back Banks, and I'm sure your economy will be right as rain in the morning! Right as rain!"
"But it's not fair! Why doesn't Banks get in trouble?"
"Oh, look at the time, I'm late for yoga. You kids play nice now!"
----------------------------------------------------------------------------------------
"Mrs. Troika?"
"Yes, Greece?"
"My economy isn't getting better. I think it's sick."
"Greece, have you been overfeeding its public sector again?"
"I haven't! I promise I haven't!"
"Hmm, well let me take a look at OH MY WORD! Its tax system has completely collapsed! It's got corruption ALL THROUGH its public sector! Greece, when you enrolled in the Eurozone you said your economy was HEALTHY!"
"I had to! If I didn't say that, you wouldn't have let me enroll!"
"Greece, did you lie to me?"
"Um, maybe, a little? But what about my economy? Can't you—"
"Greece, get out of my office, go to your room, and think about what you've done! And do so AUSTERELY!"
"Yes, Mrs. Troika."
----------------------------------------------------------------------------------------
"Good morning, Italy."
"Good morning, Mrrrs. Trrroika."
"Good morning, Spain."
"Good morning Mithuth Troika."
sigh "Good morning Greece."
"Mrs. Troika, austerity isn't working for me! I need you to—"
"Quiet! Now Italy, have you been austere, and is your economy any better?"
"Yes, Mrrs. Trroika. A little imprrrovement."
"Spain?"
"Yeth, Mithuth Troika. No improvement, but it'th not any worsthe."
"Greece?"
"I've been austere just like you said, but it's MUCH WORSE! Now it's got civil unrest, and sagging foreign investment, and youth unemployment! I think I need to stop austerity! I'm not like the other kids!"
"Mithuth Troika, can I stop austerity too? My economy has youth unemployment real bad."
"Mrrs. Trroika, me too? Mine has... um southerrnerrs, I think? And corruption at the highest levels?"
"QUIET! ALL of you. Austerity is perfectly good for all of you, and I will hear NO COMPLAINTS! Spain, go to your room and reform your banking system. Italy, you should know better than to talk about corruption in front of Greece. Go to your room and write me two pages on Entrenched Cronyism. Greece, see me in my office. Everyone else, DISMISSED!"
----------------------------------------------------------------------------------------
"Greece, I'm very disappointed in you. Why don't you listen when—"
"No, why don't YOU listen Mrs. Troika! You KNOW my economy isn't like the other kids'! You KNOW it's special! You KNOW austerity isn't working! Why won't you loan me more money so I can make it better?"
"Greece, if you had shown you could handle the money responsib—"
"Don't bother, I KNOW why! It's because of GERMANY! It's because Germany's economy is so energetic, and Germany is always talking about austerity, and you don't have any opinions of your own it's all GERMANY GERMANY GERMANY. Well if you love Germany so much, maybe you should marry—"
"GREECE HELLENIC REPUBLIC. I will NOT tolerate that kind of—"
"You know what, maybe I shouldn't be in the Eurozone at all! Things were better when I was on my own, and if my economy got sick, I could inject Drachma whenever I needed!"
"Now Greece, you don't mean that. And besides, those days are over! You can't go back to giving your economy Drachma now. Why, you don't even have any Drachma anymore. You'd have to give it something shoddy that you threw together. Ha! Why, it would be worse than giving it Lira!"
gasp "Mrs. Troika did you just say the L word?"
"Uh, now, Greece, in a historical context it's perfectly acceptable to—"
"TROIKA SAID LIRA, TROIKA SAID LIRA!"
"Whåt, did yöu say ä teacher såid the L wörd?"
"I, uh, ohmy Sweden, I thought you weren't visiting until next week?"
"Whåt is this äbout the L wörd? And why does thåt student's econömy have youth unemployment? What kind öf place is this? I cän't enroll here."
"TROIKA SAID LIRA, TROIKA SAID LIRA!"
"Greece, go to your room!"
"NO! I don't have to do anything you say! I'm dropping out of the Eurozone, and I'll make new Drachma, and inject them until my economy feels better again! Then its tourist sector will get healthy, and it'll grow bigger and stronger than all your economies! Even yours! Especially yours, Germany!"
whimper sputter cough
"I know it's hard, now, economy, but you'll see, we'll do better on our own! We'll do way better."
"Greece, this is your last chance..."
"feth you Mrs. Troika, feth all the rest of you! ESPECIALLY YOU, GERMANY!"
slam
"You know, Mrs. Troika, this never happens where I'm from."
"Shut up, China."
"Fear is freedom! Subjugation is liberation! Contradiction is truth! These are the truths of this world! Surrender to these truths, you pigs in human clothing!" - Satsuki Kiryuin, Kill la Kill
2015/07/02 10:11:31
Subject: Looks like Greece may be out of the Eurozone
So Does anyone here knows the existence of the 'Eurasian Union' headed by Russia? I've heard the news that Putin is creating this economic union of Eastern Europe and any Ex-Soviet countries to counteract 'The West'. The next membership is expected to be China and (possibly) Thailand (If Sinophillic Military Junta still runs the cuntry and not yet ousted by student protest)
Many Greeks are now bidding their future with their former patron. Russia, At the time modern Greece shows up (1820s) their ally was Russian Empire, not Western European powers.
This message was edited 1 time. Last update was at 2015/07/02 10:52:24
Kilkrazy wrote: In general austerity has hurt all the economies that have employed it.
UK seems to be doing ok, is it true austerity though?
This message was edited 1 time. Last update was at 2015/07/02 10:50:46
We love what we love. Reason does not enter into it. In many ways, unwise love is the truest love. Anyone can love a thing because. That's as easy as putting a penny in your pocket. But to love something despite. To know the flaws and love them too. That is rare and pure and perfect.
Chaos Knights: 2000 PTS
Thousand Sons: 2000 PTS - In Progress
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Adeptus Mechanicus: 2000 PTS
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2015/07/02 10:55:36
Subject: Looks like Greece may be out of the Eurozone
Love the Greece and Mrs. Troika tale, though as my fiancee pointed out, Greece is more like "feth you Mrs. Troika, we're not paying back the banks and we don't want the Drachma either!"
On austerity, the comparison with the US would seem to suggest that Europes austerity policies prolonged the recession. Spend in a recession, austerity in the good times, should be how it works. But we have it all ass backwards.
Da Boss wrote: Love the Greece and Mrs. Troika tale, though as my fiancee pointed out, Greece is more like "feth you Mrs. Troika, we're not paying back the banks and we don't want the Drachma either!"
On austerity, the comparison with the US would seem to suggest that Europes austerity policies prolonged the recession. Spend in a recession, austerity in the good times, should be how it works. But we have it all ass backwards.
Keynesian economics don't work in open economies because the increased spending won't serve to bolster the local economy, it will only increase imports and consequently increase any foreign trade deficits.
2015/07/02 12:39:53
Subject: Looks like Greece may be out of the Eurozone
This is why I don't like one currency and economy over several different countries of various economic strength. If we all had the economies of UK or Germany it would have been okay.
DS:90-S+G+++M++B-IPw40k03+D+A++/fWD-R++T(T)DM+ Warmachine MKIII record 39W/0D/6L
2015/07/02 12:51:49
Subject: Looks like Greece may be out of the Eurozone
After a bit of thrashing around I realized the "euro" seems to be root cause so will spoiler below:
Spoiler:
"In general, those in Europe who own large amounts of euros are served by high stability and low inflation. Those who now need to earn euros, including those countries who need to pay interest on large debts, are likely better served with a slightly less strong euro leading to more export. Because with a lower euro, investors would see better chances for (companies in) southern European countries to grow themselves out of the crisis. As a result, investing there would become less risky, and that would push interest rates for southern countries more in line with the European average.[citation needed]
The contradiction here is that high macroeconomic stability in the form of ongoing historically low inflation over time leads to economic problems, creating higher interest rates and political and economic instability for the weaker partners."
I still have trouble wrapping my brain around how everything was "fine" till 2010 and then Greece "suddenly" became high risk easily viewed as double of Portugal.
What adds to this is the issue of unemployment and there are few means of fixing that and is unavailable using the euro:
"Returning to full employment at this point requires that the labor costs gap is somehow cancelled. If Spain and Greece had their own currencies, this would have easily happened through exchange rate adjustment. Since they don't, it can either happen through a decrease in nominal wages in Spain and Greece, also known as "internal devaluation", (an extremely difficult and slow process, since nominal wages, in general, exhibit downward rigidity), or through an equal increase in nominal wages (i.e. inflation) in Northern Europe, which does not happen because of active resistance from Germany."
So again, some measure of blame to Germany falls to them.
- Savings of about 1% GDP due to no currency exchange or "frictional costs".
- Eliminate exchange rate uncertainty.
- "Improved Inflation Performance" which the jury is still out since low growth and employment have been found to be an issue.
- Use the link to read further, some good benefits, the best one being creating a very currency stable environment for businesses to setup in.
- Interest rates went up to combat inflation in Germany in 2011 set by the ECB but was unsuitable / unsustainable for Portugal, Greece and Italy.
- All the members need to have similar levels of debt in order for a common monetary policy to work... obviously big problems here.
- Interesting quote here:
"Lack of Incentives. It is argued that being a member of the Euro protects a country from a currency crisis. Therefore, there is less incentive for countries to implement structural reform and fiscal responsibility. For example, in good years Greece was able to benefit from very low bond yields on its debt because people felt Greek debt would be secured by rest of Europe. But, this wasn't the case, and Greece were lulled into a fall sense of security."
- A ton of other stuff listed, use the link and read further.
You know, the euro is looking incredibly bad for Greece. It is like the loans they took out: short term gain/benefit, long term loss.
You could "blame" countries like Germany for dictating policy as the economic heavy hitter but this could be the same as taking out loans: you know what you are getting into.
Greece still needs to address it's civil and public institutions and policies but they need to cut the euro, specifically Germany's economic ties and I do not mean just the loans.
I see how Germany by it's very existence has damaged Greece economically but it is the choices made by Greece that has allowed this to happen: their responsibility more than anyone else.
Tough times ahead but precious little choice with the path given.
This message was edited 3 times. Last update was at 2015/07/02 14:33:27
A revolution is an idea which has found its bayonets.
Napoleon Bonaparte
2015/07/02 19:51:08
Subject: Looks like Greece may be out of the Eurozone
Is that something that you've thought about Shieldwolf?
Even if things go to hell, I will remain a couple of years. The miniature business is easy to transport in a foreign country, although our facilities here are great and I'd sure miss them, besides the fact I'd have to lay off the people of Shieldwolf.
Same goes for the pharmacy, I'd need to close it and fire my employees. One of which is 7 months pregnant.
Me and my wife are both pharmacists, we both have experience and speak a couple if foreign languages each. It shouldn't be hard to go abroad, from what I know it's usually unskilled/uneducated immigrants that face issues. Nonetheless immigration is never an easy choice.
I prefer not thinking about it and hoping all will be solved in the end.
I personally have already lived in 3 foreign countries due to the job of my father (Switzerland, Belgium and Italy) for a few years in each of these countries, so it's nothing new to me. My toddler would have to live a new life.
For me, I prefer he lives his life here, at his homeland.
This is more about my son than it is about me. Those of you who have children surely understand what I'm saying. Those of you who haven't, you will. Trust me. You will.
Is that something that you've thought about Shieldwolf?
Even if things go to hell, I will remain a couple of years. The miniature business is easy to transport in a foreign country, although our facilities here are great and I'd sure miss them, besides the fact I'd have to lay off the people of Shieldwolf.
Same goes for the pharmacy, I'd need to close it and fire my employees. One of which is 7 months pregnant.
Me and my wife are both pharmacists, we both have experience and speak a couple if foreign languages each. It shouldn't be hard to go abroad, from what I know it's usually unskilled/uneducated immigrants that face issues. Nonetheless immigration is never an easy choice.
I prefer not thinking about it and hoping all will be solved in the end.
I personally have already lived in 3 foreign countries due to the job of my father (Switzerland, Belgium and Italy) for a few years in each of these countries, so it's nothing new to me. My toddler would have to live a new life.
For me, I prefer he lives his life here, at his homeland.
This is more about my son than it is about me. Those of you who have children surely understand what I'm saying. Those of you who haven't, you will. Trust me. You will.
You won't have an issue finding pharmacist jobs here in the states.
Just sayin...
But, if you want your kid to grow up in Greece... well then, I understand that desire. (have have two squgigies myself )
Live Ork, Be Ork. or D'Ork!
2015/07/03 02:51:16
Subject: Looks like Greece may be out of the Eurozone
It was more election cycle cuts than real austerity - cut just after winning office, then increase spending again in the lead up to election. Unsurprisingly growth returned as spending grew.
Automatically Appended Next Post:
PhantomViper wrote: Keynesian economics don't work in open economies because the increased spending won't serve to bolster the local economy, it will only increase imports and consequently increase any foreign trade deficits.
Wrong, and wrong for the better part of 100 years. Calculations of multiplier effects have factored in leakage effects including spending on imports since people first started to consider multipliers.
Anyhow, even with imports (and taxes, and saving) you still get a multiplier of somewhere between 1.5 and 2.0 for most developed countries, where there is no crowding out (ie, where you’ve hit the zero lower bound because no-one wants to borrow to invest in the current economy). And that’s a situation that most of the developed world was in for three or more years after the GFC.
Automatically Appended Next Post:
welshhoppo wrote: This is why I don't like one currency and economy over several different countries of various economic strength. If we all had the economies of UK or Germany it would have been okay.
It’s not so much the strength of the different economies, but the overall structure. The US has managed to include both Rhode Island and California within the same currency, for instance. The difference is that the US has a single currency and a single federal budget, while the Eurozone has a single currency but separate national budgets. This means that if Rhode Island collapsed there’d be an automatic stabiliser as tax flows out of the state would drop, while payments in would remain constant or even grow (education funds would remain constant, while welfare would grow). On the other hand, Greece gets no stabilisers like that.
Basically this means that individual nations in the Euro, even the big ones, are inherently unstable if there’s no large, over-arching federal policy to balance local shocks. Given a single Euro budget of the scale needed is basically unthinkable given Euro politics, it means the Euro may actually be a pretty bad idea.
People by and large are scapegoating Greece in order to avoid thinking about that.
Automatically Appended Next Post:
Shieldwolf Miniatures wrote: This is more about my son than it is about me. Those of you who have children surely understand what I'm saying. Those of you who haven't, you will. Trust me. You will.
I understand, yeah. And I don’t envy you the choices you’ve got ahead of you – very tough.
But once again thanks for your posts in this thread, having a human story of what’s happened in Greece has been excellent. I hope we haven’t been too obnoxious in talking about your country and therefore you life
This message was edited 4 times. Last update was at 2015/07/03 03:26:27
“We may observe that the government in a civilized country is much more expensive than in a barbarous one; and when we say that one government is more expensive than another, it is the same as if we said that that one country is farther advanced in improvement than another. To say that the government is expensive and the people not oppressed is to say that the people are rich.”
Adam Smith, who must have been some kind of leftie or something.
2015/07/03 04:51:34
Subject: Looks like Greece may be out of the Eurozone
Waiting for my shill money from Spiral Arm Studios
welshhoppo wrote: This is why I don't like one currency and economy over several different countries of various economic strength. If we all had the economies of UK or Germany it would have been okay.
Indeed. This is a big problem. You simply can't have vastly different economies share the same currency. Currencies only really work when each individual economy has its own, and then you can value them against each other. When you have 1 currency and multiple economies its like having X equal dozens of different values when math only supports X having 1 value.
Separating currency reduces risk as the value of your currency isn't tied at the hip to other nearby economies, whereas if they are different you only are moderately concerned about the shape they are in in as far as the economies intermingle.
Self-proclaimed evil Cat-person. Dues Ex Felines
Cato Sicarius, after force feeding Captain Ventris a copy of the Codex Astartes for having the audacity to play Deathwatch, chokes to death on his own D-baggery after finding Calgar assembling his new Eldar army.
Grey Templar wrote: Indeed. This is a big problem. You simply can't have vastly different economies share the same currency. Currencies only really work when each individual economy has its own, and then you can value them against each other. When you have 1 currency and multiple economies its like having X equal dozens of different values when math only supports X having 1 value.
Separating currency reduces risk as the value of your currency isn't tied at the hip to other nearby economies, whereas if they are different you only are moderately concerned about the shape they are in in as far as the economies intermingle.
As I already said, you can have vastly different economies on the same currency, what matters is how the other ways in which those economies are connected. To re-use my example, Rhode Island and California can exist under the same currency, and there's no major issue. At which point you might think that it's nothing like Greece because they're individual states, while Greece is a whole country... but that's the point. Being states within a single nation means there is a powerful federal government which collects and distributes large sums from and to each state in the union, providing stability against local economic shocks. Whereas countries within the Euro, so there's no larger fiscal body to stabilise local shocks. So it's the structure of the EUro, no the size of individual member nations that matter.
The second part, about reducing risk, basically has everything ass-backwards. The point of currency isn't about being exposed to risk or reducing it, the point is that when you have your own currency you can control its value in order to manage the economy. On their own currency Greece would have devalued leading to increased competitiveness, and then could have printed more to further devalue internally, all leading to a recovery of competitiveness and therefore a much reduced recession. But absent that option Greece is stuck as is, and it ain't pretty.
“We may observe that the government in a civilized country is much more expensive than in a barbarous one; and when we say that one government is more expensive than another, it is the same as if we said that that one country is farther advanced in improvement than another. To say that the government is expensive and the people not oppressed is to say that the people are rich.”
Adam Smith, who must have been some kind of leftie or something.
2015/07/03 05:26:19
Subject: Looks like Greece may be out of the Eurozone
Shieldwolf Miniatures wrote: This is more about my son than it is about me. Those of you who have children surely understand what I'm saying. Those of you who haven't, you will. Trust me. You will.
I understand, yeah. And I don’t envy you the choices you’ve got ahead of you – very tough.
But once again thanks for your posts in this thread, having a human story of what’s happened in Greece has been excellent. I hope we haven’t been too obnoxious in talking about your country and therefore you life
Nay, nobody has been obnoxious, everyone is simply saying their own piece of mind. :-)
PS. There's fear of violent riots from the "no" sayers in the centre of Arhens this evening. As we get closer to Sunday things are heating up dangerously. As I said, people have been stressed 5 years, and they don't want to see this (over-promising) new government fail. IMHO it already has.
This message was edited 1 time. Last update was at 2015/07/03 06:31:08
Shieldwolf Miniatures wrote: Nay, nobody has been obnoxious, everyone is simply saying their own piece of mind. :-)
Cool.
PS. There's fear of violent riots from the "no" sayers in the centre of Arhens this evening. As we get closer to Sunday things are heating up dangerously. As I said, people have been stressed 5 years, and they don't want to see this (over-promising) new government fail. IMHO it already has.
Yeah, that seemed the risk with calling the referendum - it might incite a pretty tense situation. That said, I don't really know what alternative the government was left with. Like previous governments they came to power promising a better deal for Greece, but until they called for the vote they were basically facing the same decision as previous governments - give in to the demands of the troika.
I'm not saying this was a good call, I just don't know what the alternatives are.
“We may observe that the government in a civilized country is much more expensive than in a barbarous one; and when we say that one government is more expensive than another, it is the same as if we said that that one country is farther advanced in improvement than another. To say that the government is expensive and the people not oppressed is to say that the people are rich.”
Adam Smith, who must have been some kind of leftie or something.
2015/07/03 07:18:35
Subject: Looks like Greece may be out of the Eurozone
Grey Templar wrote: Indeed. This is a big problem. You simply can't have vastly different economies share the same currency. Currencies only really work when each individual economy has its own, and then you can value them against each other. When you have 1 currency and multiple economies its like having X equal dozens of different values when math only supports X having 1 value.
Separating currency reduces risk as the value of your currency isn't tied at the hip to other nearby economies, whereas if they are different you only are moderately concerned about the shape they are in in as far as the economies intermingle.
As I already said, you can have vastly different economies on the same currency, what matters is how the other ways in which those economies are connected. To re-use my example, Rhode Island and California can exist under the same currency, and there's no major issue. At which point you might think that it's nothing like Greece because they're individual states, while Greece is a whole country... but that's the point. Being states within a single nation means there is a powerful federal government which collects and distributes large sums from and to each state in the union, providing stability against local economic shocks. Whereas countries within the Euro, so there's no larger fiscal body to stabilise local shocks. So it's the structure of the EUro, no the size of individual member nations that matter.
This has far more to do with the US Economy being a functioning thing for several hundred years that has grown into what it is now. Not because there is an overarching federal government to manage it. We added states bit by bit, and everything was connected together to begin with. The EU basically tried to artificially mash together disparate economies which had been only loosely connected together for well over a thousand years.
The second part, about reducing risk, basically has everything ass-backwards. The point of currency isn't about being exposed to risk or reducing it, the point is that when you have your own currency you can control its value in order to manage the economy. On their own currency Greece would have devalued leading to increased competitiveness, and then could have printed more to further devalue internally, all leading to a recovery of competitiveness and therefore a much reduced recession. But absent that option Greece is stuck as is, and it ain't pretty.
Being able to control your own currency is a mitigation of risk. Its not the primary reason for a separate currency to exist, but its something that comes with having one vs not. And trying to abandon an independent currency has the effect of eliminating that protection, something that is important enough to make merging all these economies together unfeasible.
This message was edited 1 time. Last update was at 2015/07/03 07:18:58
Self-proclaimed evil Cat-person. Dues Ex Felines
Cato Sicarius, after force feeding Captain Ventris a copy of the Codex Astartes for having the audacity to play Deathwatch, chokes to death on his own D-baggery after finding Calgar assembling his new Eldar army.
Grey Templar wrote: This has far more to do with the US Economy being a functioning thing for several hundred years that has grown into what it is now. Not because there is an overarching federal government to manage it. We added states bit by bit, and everything was connected together to begin with. The EU basically tried to artificially mash together disparate economies which had been only loosely connected together for well over a thousand years.
No, that's just vague storytelling with absolutely no underlying economic mechanism to hold any of it together. The only way time and close ties matter is that it increases the likelihood of people being okay with pouring money in to regions in strife, which is the mechanism I already described.
And trying to abandon an independent currency has the effect of eliminating that protection, something that is important enough to make merging all these economies together unfeasible.
Yeah, that's what I just explained to you. You're repeating my point back at me as if it's new information.
This message was edited 1 time. Last update was at 2015/07/03 08:32:28
“We may observe that the government in a civilized country is much more expensive than in a barbarous one; and when we say that one government is more expensive than another, it is the same as if we said that that one country is farther advanced in improvement than another. To say that the government is expensive and the people not oppressed is to say that the people are rich.”
Adam Smith, who must have been some kind of leftie or something.
2015/07/03 13:24:26
Subject: Looks like Greece may be out of the Eurozone
Leave euro now or take bailout, get further in debt and leave euro later.
I honestly believe the debt is too high to pay off and are postponing the inevitable.
They may still be on the hook for some debt and have to negotiate something like a 30% payment deal so they are not completely cut off from the European economy.
That's my point, when you have differbwt countries under one currency, especially countries that were killing each other in living memory, things don't go very well.
It's quite clear that Greece needed help, whether by cutting corruption or having an influx of money.
When you have one state. Such as the US or UK, one country or state can support another. "Hmm, economic collapse in state A. Luckily the other states can give them support until it blows over.
In the Eurozone, state A has economic collapse and the other states aren't too keen on helping. Germany doesn't want to give away free money to anyone country, it's bad for Germanys economy, because it is spending money with no return, and its a bad impressions for poor countries who then expect free pick me ups when the going gets tough.
DS:90-S+G+++M++B-IPw40k03+D+A++/fWD-R++T(T)DM+ Warmachine MKIII record 39W/0D/6L
2015/07/03 14:05:38
Subject: Looks like Greece may be out of the Eurozone
And trying to abandon an independent currency has the effect of eliminating that protection, something that is important enough to make merging all these economies together unfeasible.
Yeah, that's what I just explained to you. You're repeating my point back at me as if it's new information.
Sure, thats what I said in the first place. Not sure why you were trying to correct me when what I said was correct.
Self-proclaimed evil Cat-person. Dues Ex Felines
Cato Sicarius, after force feeding Captain Ventris a copy of the Codex Astartes for having the audacity to play Deathwatch, chokes to death on his own D-baggery after finding Calgar assembling his new Eldar army.
As Greeks go to the polls for their referendum, the BBC's economics editor Robert Peston says essentially that a No vote will plunge the Greek banking sector into an even worse position.
Greece is free to choose, rather hard for some governments they are giving away there own tax payers hard earned money basically free, money the could be spent on own citizens and services.
They have to think about voters and the bigger picture too.
They want to get relected and that means giving fortunes into a black hole is not going to win any favours in your own country.
This message was edited 1 time. Last update was at 2015/07/05 11:57:12
Sgt. Vanden - OOC Hey, that was your doing. I didn't choose to fly in the "Dongerprise'.
"May the odds be ever in your favour"
Hybrid Son Of Oxayotl wrote:
I have no clue how Dakka's moderation work. I expect it involves throwing a lot of d100 and looking at many random tables.
FudgeDumper - It could be that you are just so uncomfortable with the idea of your chapters primarch having his way with a docile tyranid spore cyst, that you must deny they have any feelings at all.
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