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Greece





Guanko
we are a ****** Chaos
deanhills
Right. Greece is going through sad times. Went out to dinner during the long weekend and there were a couple from Greece providing music at the restaurant, the lady was singing and her husband was accompanying her with piano. Great voice. They had to do it to survive as they had a business in Athens that folded. Great to have something like that to fall back on.
slimviking
deanhills wrote:
Right. Greece is going through sad times. Went out to dinner during the long weekend and there were a couple from Greece providing music at the restaurant, the lady was singing and her husband was accompanying her with piano. Great voice. They had to do it to survive as they had a business in Athens that folded. Great to have something like that to fall back on.


Greece should keep themselves out of euro.
Euro was a disaster. nobody got an advantage from it.
deanhills
slimviking wrote:
deanhills wrote:
Right. Greece is going through sad times. Went out to dinner during the long weekend and there were a couple from Greece providing music at the restaurant, the lady was singing and her husband was accompanying her with piano. Great voice. They had to do it to survive as they had a business in Athens that folded. Great to have something like that to fall back on.


Greece should keep themselves out of euro.
Euro was a disaster. nobody got an advantage from it.
Can't agree with you more, so should Spain, Portugal and Italy.
darthrevan
When you watch tv with Greece it seems it had a great economy but now you wonder what happened.
Bondings
slimviking wrote:
Greece should keep themselves out of euro.
Euro was a disaster. nobody got an advantage from it.

There were and still are a lot of advantages to the Euro, even for Greece. The problem is that there is no alternative universe we can compare with that did not choose for the Euro. And who knows, that one might have been a lot worse.

The issue is that Greece has a structural structural problem with their expenses being way bigger than their income - even when not counting the debt interests that need to be paid. It's not the huge debt that is the actual problem. For a long time the Euro has caused them to have to pay very low interests on their debt, but due to the inability to balance their budget, the situation exploded.

If Greece would have its own currency, it would be able to create a huge inflation and hence reduce debt (compared to gdp). However this doesn't fix the structural problem of having more expenses than income. The resulting inflation could spiral out of control and you could get a Zimbabwe-like situation. In any case, Greece would probably not be in a better situation if it wouldn't have joined the Euro and leaving it now (even after being allowed to default the whole debt) might not cause a better situation either.
darthrevan
Bondings wrote:
slimviking wrote:
Greece should keep themselves out of euro.
Euro was a disaster. nobody got an advantage from it.

There were and still are a lot of advantages to the Euro, even for Greece. The problem is that there is no alternative universe we can compare with that did not choose for the Euro. And who knows, that one might have been a lot worse.

The issue is that Greece has a structural structural problem with their expenses being way bigger than their income - even when not counting the debt interests that need to be paid. It's not the huge debt that is the actual problem. For a long time the Euro has caused them to have to pay very low interests on their debt, but due to the inability to balance their budget, the situation exploded.

If Greece would have its own currency, it would be able to create a huge inflation and hence reduce debt (compared to gdp). However this doesn't fix the structural problem of having more expenses than income. The resulting inflation could spiral out of control and you could get a Zimbabwe-like situation. In any case, Greece would probably not be in a better situation if it wouldn't have joined the Euro and leaving it now (even after being allowed to default the whole debt) might not cause a better situation either.


Ever country should create a budget and balance as well, just as we need to in America as well.
deanhills
Good point. I can't imagine a country more in debt than the United States right now. Wonder what the situation would have been like, if it had been a member of the European Union? Particularly when calamity struck as a result of huge excesses at the end of 2008.
Bondings
deanhills wrote:
Good point. I can't imagine a country more in debt than the United States right now. Wonder what the situation would have been like, if it had been a member of the European Union? Particularly when calamity struck as a result of huge excesses at the end of 2008.

While the USA does have a lot of public debt and is at the top of the list of indebted countries, it definitely is not that big as a % of the gdp, it's about 100% of the gdp. Japan actually has about 200% debt. The USA also doesn't have a big problem with this debt as it can easily be lowered by raising taxes (which are pretty low compared to other countries). Countries like Greece don't have this option.

Of course the private debt of the citizens of the USA is a different thing and that might cause problems (and has been part of causing the credit crisis).
darthrevan
Bondings wrote:
The USA also doesn't have a big problem with this debt as it can easily be lowered by raising taxes (which are pretty low compared to other countries).


Eh even if they raised our taxes, they would just raise the spending anyway and wouldn't do any good. Besides, maybe they should just lower spending Cool
deanhills
Bondings wrote:
deanhills wrote:
Good point. I can't imagine a country more in debt than the United States right now. Wonder what the situation would have been like, if it had been a member of the European Union? Particularly when calamity struck as a result of huge excesses at the end of 2008.

While the USA does have a lot of public debt and is at the top of the list of indebted countries, it definitely is not that big as a % of the gdp, it's about 100% of the gdp. Japan actually has about 200% debt. The USA also doesn't have a big problem with this debt as it can easily be lowered by raising taxes (which are pretty low compared to other countries). Countries like Greece don't have this option.

Of course the private debt of the citizens of the USA is a different thing and that might cause problems (and has been part of causing the credit crisis).
Can't help but wonder how desensitized the world economy has become with regard to looking at debt. What is really holding the world economy together as common sense says that Governments have been printing much more money than they have as collateral, consistently, continuously over many years. If these statistics existed in the 1950s, during a period when accounting had been much more transparent and up front, a country with 100% debt would have been considered bust. No one would have done business with a country that has 200% debt.

Checked the statistics in Wikipedia and looks as though Japan's debt is much larger as percentage of GDP than Greece's. Just 30% less than Zimbabwe's. I'd say the world economy is in serious trouble. Banks, insurance companies and your big tycoons are OK however as they've managed to flourish with world debt.
http://en.wikipedia.org/wiki/List_of_countries_by_public_debt
Bondings
@deanhills, the debt of the USA was actually over 100% in the early fifties due to the second world war.



@darthrevan, yes indeed lowering the spending would help too. I just wanted to mention that there exists an easy fix to decrease the debt in the USA (I didn't say that it is a good one). And because there exists an easy fix, the USA doesn't pay much interest on its debt. Countries with problems don't have easy fixes other than heavily lowering expenses (which decreases gdp and hence doesn't help that much).
deanhills
Thanks for pointing that out Bondings. Great graphs. And of course a learning curve for me. Smile

Problem is that the debt is now so high that repayment is at rates that may be much higher than the US can afford.

Just had a look at the savings rates of countries, and looks as though the US personal savings rate is not that high at all. So if they are only to rely on taxes, it's going to be interesting to see to what extent US citizens can afford the higher tax rates. Taxes may be higher in Europe, but Europeans get plenty of services for it that US citizens aren't getting for theirs. Point being that significant amounts of dollar millions in the US are going into funding an overly large Government that isn't doing that much for its citizens in comparison with the other developed countries. There has to be a good reason that Presidents have been reluctant to raise taxes.

Just found this interesting article on household savings rates world wide, and how much higher those are in Europe, particularly in France, than in the rest of the world. The US household savings is very low in comparison. I've selected it for highest to lowest for the year 2012.
Source: http://www.gfmag.com/tools/global-database/economic-data/12065-household-saving-rates.html#axzz2BFWXtfwF

darthrevan
deanhills wrote:
Thanks for pointing that out Bondings. Great graphs. And of course a learning curve for me. Smile

Problem is that the debt is now so high that repayment is at rates that may be much higher than the US can afford.

Just had a look at the savings rates of countries, and looks as though the US personal savings rate is not that high at all. So if they are only to rely on taxes, it's going to be interesting to see to what extent US citizens can afford the higher tax rates. Taxes may be higher in Europe, but Europeans get plenty of services for it that US citizens aren't getting for theirs. Point being that significant amounts of dollar millions in the US are going into funding an overly large Government that isn't doing that much for its citizens in comparison with the other developed countries. There has to be a good reason that Presidents have been reluctant to raise taxes.

Just found this interesting article on household savings rates world wide, and how much higher those are in Europe, particularly in France, than in the rest of the world. The US household savings is very low in comparison. I've selected it for highest to lowest for the year 2012.
Source: http://www.gfmag.com/tools/global-database/economic-data/12065-household-saving-rates.html#axzz2BFWXtfwF



yeah this big govt isn't doing any good for us. On the taxes they will get money for taxes no matter what, even when taking your stuff or garnish your bank account or freeze it so you can't access it without a judge's order.
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