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Ze, 'Ow you say, Deflation Watch. Eurozone edition
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Enforcement of the debt is another matter, and in this case probably more direct that going to court.
Well, if Europe disintegrates, you may get to see a lot of that on a slightly larger scale.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
Do you think the whole system of expecting debts to be repaid should be sacrificed just to keep the EU limping along.HAMISH_MCTAVISH wrote: »Well, if Europe disintegrates, you may get to see a lot of that on a slightly larger scale.0 -
It seems obvious to me that the fault belongs to both parties, it's not rocket science to acknowledge the fact that interest rates were set at completely the incorrect rates in greece.
If you can borrow money at half the proper market rate, of course it will set off a huge boom. When the boom collapses, and you then try a contractionary monetary policy, well, there is a reason that Greece has faced a depression.
None of this is rocket science: both countries are to blame.“The ideas of debtor and creditor as to what constitutes a good time never coincide.”
― P.G. Wodehouse, Love Among the Chickens0 -
Why if cheap money is offered does it have to be taken?It seems obvious to me that the fault belongs to both parties, it's not rocket science to acknowledge the fact that interest rates were set at completely the incorrect rates in greece.
If you can borrow money at half the proper market rate, of course it will set off a huge boom. When the boom collapses, and you then try a contractionary monetary policy, well, there is a reason that Greece has faced a depression.
None of this is rocket science: both countries are to blame.0 -
Why if cheap money is offered does it have to be taken?
Are you serious? In the real world, any CEO of a company who refused to take a loan at substantially below true market rates would be sacked in an quarter. And most nonexperts would just look at a credit agreement, think I can afford that, and take the extremely cheap deal and think they were going to repay it.
I can't think of any examples where over an economy people have refused cheap money. Can you?“The ideas of debtor and creditor as to what constitutes a good time never coincide.”
― P.G. Wodehouse, Love Among the Chickens0 -
Are you serious? In the real world, any CEO of a company who refused to take a loan at substantially below true market rates would be sacked in an quarter. And most nonexperts would just look at a credit agreement, think I can afford that, and take the extremely cheap deal and think they were going to repay it.
I can't think of any examples where over an economy people have refused cheap money. Can you?
And when it all went belly up as the company could not make the payments, they would go bust, he would get the sack and all the workers would probably lose their jobs.
Borrowing even cheap money without the means to repay even the interest is a daft (and probably criminal) thing to do.
This is what Greek governments have done and put their own people into dire straits by doing it without addressing the taxation issues need to make payments.0 -
The problem with you is that you lack the ability to see the bigger picture and how everything is inter-related. Hamish explained but you just can't see the wood 'cause of the trees.
I see no reason to muddy the waters. Do not borrow money you have no way of servicing is a pretty good starting point. Do you dispute that?
Yes the Greek people are suffering, but their own elected governments took them into that state.0 -
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Who said they thought they wouldn't be able to repay it? Governments, peoples, companies all share two things: none of them are rational agents, and none of them are acting in efficient markets.
Germany, as a whole, had access to the same information as greece, and Germany thought Greece could repay the money.“The ideas of debtor and creditor as to what constitutes a good time never coincide.”
― P.G. Wodehouse, Love Among the Chickens0 -
But Germany do not owe the money.Who said they thought they wouldn't be able to repay it? Governments, peoples, companies all share two things: none of them are rational agents, and none of them are acting in efficient markets.
Germany, as a whole, had access to the same information as greece, and Germany thought Greece could repay the money.0
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