I've always wanted to own my own Greek island

[MrRiplEy[H]]

My feeling is that Greece had a couple of choices:  it could take pain now and get it over with or it could kick the can down the road and take more pain later.  It is in the process of choosing the 2nd option.  My opinion is that the largest Keynsian experiment in the history of the world is going to end in a catastrophe for more than Greece.  I feel that way based on reading:

This Time is Different, by Reinhart and Rogoff
Basic Economics, by Sowell
The Return of Depression Economics, by Krugman
The Big Short, by Lewis
Endgame, by Mauldin and Tepper
Code Red, by Mauldin and Tepper
The Death of Money, by Rickards

The world is going through an enormous experiment between (1) people who believe that a way out of debt includes creating more debt and diverting capital from private enterprise toward government projects and bureaucracy and (2) people who believe the exact opposite.

I'm in group 2.

Did your reading group mention anything about the central bank diverting the europeans banks debts to tax payers quietly while playing for time using the support packages? They've created a huge scam for the EU taxpayers basically. Banks took heavy risks and now that the risk capitalized, taxpayers pay out the risk. Banks can continue to make good profit and shell out money to the shareholders like nothing happened.

Their policy has never even aimed to save the greek economy, instead they've basically shut down the whole internal economy of greece. Almost all pensions and salaries got cut from 40 to 60%. Busineses went bankrupt in strides, people can't afford to pay their rent or heating anymore, some people can't afford to eat. Property values collapsed. It's a buyers market, the super rich have a field day buying out properties for a fraction of cost. They're going to profit immensely when the economy rises again.

[oldskool65]

Well its about time you heard the truth Guys
I used to live in London (where most of the Greeks escaping poverty have gone) and from their own mouths the real reason for the poor situation in Greece is down to
1 . The refusal of the Greek people to pay tax (Greek tv source 90% of Greeks are guilty of tax evasion)
2 . The Greek government lacking the cahones to do something about point 1
3 . Corruption amongst the major finance leaders in Greece (lies told to E.U banks by Greek Gov)
And finally what all of you fail to say is that the biggest debt owed by the Greeks is to the USA and also the highest rate of interest charged is by the US so roll your necks in   because your sub prime banking crisis triggered the economic collapse in western economies !!!!!!

[MrRiplEy[H]]

Well its about time you heard the truth Guys
I used to live in London (where most of the Greeks escaping poverty have gone) and from their own mouths the real reason for the poor situation in Greece is down to
1 . The refusal of the Greek people to pay tax (Greek tv source 90% of Greeks are guilty of tax evasion)
2 . The Greek government lacking the cahones to do something about point 1
3 . Corruption amongst the major finance leaders in Greece (lies told to E.U banks by Greek Gov)
And finally what all of you fail to say is that the biggest debt owed by the Greeks is to the USA and also the highest rate of interest charged is by the US so roll your necks in   because your sub prime banking crisis triggered the economic collapse in western economies !!!!!!

This is what lead to the situation, I've been talking all the time about the handling of the situation and it's major problems. The greek government wasn't the only one making mistakes, basically the cure offered by the central bank was worse than the disease.

[oldskool65]

Ok Ripley you are right about the current situation being made worse by the actions of the EU central banks policy of forced austerity but my annoyance is aimed at the Americans who have posted commenting on a situation they know very little about
The Media in the US is insular and never tells the whole story  and always forgets to mention that the US has the highest International interest rates on the planet so adds fuel to the ever growing pyre of Greek independence
So Scherf if you want to help the Greeks try lobbying the US to stop bleeding Europe white to pay its own debts

[Randy1]

The biggest weakness of a democracy is the elected and candidates buying votes with tax dollars.  Ask the ancient Romans about that.

All the big states, cities and the feds buy union votes here in the US.  Who was it?  Someone running for gov of california I think was caught on tape saying he would match and beat any other candidates offer to the police union or association.

Greece has no exclusive on this.  They might just be better at it.

[Scherf]

So Scherf if you want to help the Greeks try lobbying the US to stop bleeding Europe white to pay its own debts

But, I don't want to help the Greeks, I want to help myself.

I wouldn't be the first, either. A parade of German bankers were oh so very happy to help themselves to fees and bonuses when the Greeks were still borrowing, now they're bleating that the town drunk didn't pay them back - someone has to make them good! Even the arch-wiseasses at Goldman Sachs helped the Greeks get around Eurozone regulators.

Now it's MY turn to help myself to some of the good Greek greekness!

[Brooke]

Did your reading group mention anything about . . .

Yes.  That's a part of the problem well-known to folks who don't like Keynsian policy.

Their policy has never even aimed to save the greek economy, instead they've basically shut down the whole internal economy of greece. Almost all pensions and salaries got cut from 40 to 60%. Busineses went bankrupt in strides, people can't afford to pay their rent or heating anymore, some people can't afford to eat. Property values collapsed. It's a buyers market, the super rich have a field day buying out properties for a fraction of cost. They're going to profit immensely when the economy rises again.

Yep, those above books (most of them) point out these consequences.  However, I think that you are wrong about it being a buyer's market.  I think that we are in store for a much greater catastrophe first.  Then it will be a buyer's market.

Here's what I think will happen (and I could certainly be completely wrong).  First, the stock market will collapse (sometime between soon and year into the Fed raising rates).  That will cause a depression, a real one with every asset declining in value except bonds (which will go up).  In reaction, central banks will probably start to print yet more money.  But whether they do or don't, at some point after that, confidence in the whole over-leveraged debt framework of the world will finally crash (and bonds with it), purging the mountain of financial insanity that has built up.  That is when things will be the cheapest for anyone with money left.

The problem we have is that people in general don't take 5-10 hours out of their entire lives to read "Basic Economics," by Sowell or even the shorter but still great "Economics in One Lesson," by Hazlitt.  So, they vote in people who implement economically disastrous nonsense and fall for bald-faced lies about how those policies are great.  They are patsies.  The *merely* rich (those without $100 million or more) are usually against Keynsianism.  The super rich ($100M+, billionaires, and multibillionaires) are usually highly in favor of it, as they are the crony beneficiaries of the policies.

If everyone but the super rich knew what was good for them, they'd be in favor of things as explained in Basic Economics and wouldn't fall for the lies, corruption, cronyism, etc.

However, since this has been the dynamic for at least as far back as the Roman Empire, I don't hold out great hope for normal citizens ever catching on.  It seems to be programmed into human nature to fall for it repeatedly forever.

[oldskool65]

But, I don't want to help the Greeks, I want to help myself. :

[Brooke]

By the way, Greece does not owe the majority of its debt to the US.  Here is a table of who lent the money:



Also, if a lender did charge much higher interest rates on the debt, that is good, as if the rates had been lower, even more would have been borrowed, and the problem would be worse.

That is why, in my opinion, seven years and counting of near-zero interest rates are harmful, not helpful, to the world.  They are helping to build up an even larger problem.

[Brooke]

Greece has a government debt to GDP ratio of 174%.  That's very high.

But . . .

In the US it is 102%.

Japan is 227%.

By contrast, Switzerland is 35%.

[SysError]

Wheres Sulla and Pompey the Great when you need them 

IMO right idea but not my choice.  I would "vote" for Marcus Aurelius.  Who knows, maybe we will get an update to the Meditations.

[SysError]

Well its about time you heard the truth Guys
I used to live in London (where most of the Greeks escaping poverty have gone) and from their own mouths the real reason for the poor situation in Greece is down to
1 . The refusal of the Greek people to pay tax (Greek tv source 90% of Greeks are guilty of tax evasion)
2 . The Greek government lacking the cahones to do something about point 1
3 . Corruption amongst the major finance leaders in Greece (lies told to E.U banks by Greek Gov)
And finally what all of you fail to say is that the biggest debt owed by the Greeks is to the USA and also the highest rate of interest charged is by the US so roll your necks in   because your sub prime banking crisis triggered the economic collapse in western economies !!!!!!

Agree.  Well stated.  I read somewhere that if Greece walked away from the EU/debt it could very well end up on top while the rest of the west went down the tubes.  I'll have to go find source and re-read it and think about it.

[Meatwad]

Greece has a government debt to GDP ratio of 174%.  That's very high.

But . . .

In the US it is 102%.

Japan is 227%.

By contrast, Switzerland is 35%.

I think Illinois is at around 1000% by now 

[oldskool65]

Ya know Brooke I disagree with your economics but at least you present a reasoned opinion not like some posters who rant like children 

[Brooke]

Ya know Brooke I disagree with your economics but at least you present a reasoned opinion not like some posters who rant like children 

Thank you, but it's not my economics -- it's the economics of Hayek, von Mises, Bastiat, Sowell, Hazlitt, etc. 

I wish that you would read Sowell's book and see if you still disagree.

(Note:  my financial estimates of stock and bond markets are not economics -- those are just my guesses, and I could be completely wrong.)