Greece: 48 Hours to the End

[waauw]

You mean this bit?

The stability and growth of the EU is the highest priority for the U.S. and neither of those objectives can be achieved if Greece has just enough cash to continue on its drunken bender.

Why does that mean the US would give Greece anything?

They wouldn't. They have tremendous power over the IMF, and did you see the US doing anything? No.

[mrswdk]

You mean this bit?

The stability and growth of the EU is the highest priority for the U.S. and neither of those objectives can be achieved if Greece has just enough cash to continue on its drunken bender.

Why does that mean the US would give Greece anything?

I don't know why. I was addressing Russia and China.

Oh right. You think Russia and China would give free money to Greece in order to stabilize the EU? These days I'm pretty sure Russia doesn't have the money to go giving Christmas presents to people like Greece, nor the will to give help to their main rival in Ukraine (the EU), so it'd be a question of whether or not China is willing to help.

China also wants a strong EU, but are the benefits of a strong EU big enough to balance out the cost of bailing out all of Greece's colossal failings? Especially when a bailout is only going to mean that Greece will fail to reform and this whole cycle will start again in a decade or two.

[saxitoxin]

You mean this bit?

The stability and growth of the EU is the highest priority for the U.S. and neither of those objectives can be achieved if Greece has just enough cash to continue on its drunken bender.

Why does that mean the US would give Greece anything?

I don't know why. I was addressing Russia and China.

Oh right. You think Russia and China would give free money to Greece in order to stabilize the EU? These days I'm pretty sure Russia doesn't have the money to go giving Christmas presents to people like Greece, nor the will to give help to their main rival in Ukraine (the EU), so it'd be a question of whether or not China is willing to help.

China also wants a strong EU, but are the benefits of a strong EU big enough to balance out the cost of bailing out all of Greece's colossal failings? Especially when a bailout is only going to mean that Greece will fail to reform and this whole cycle will start again in a decade or two.

that's nice

[mrswdk]

Well met, fellow.

So in summary: the US, Russia and China would not, as patches so gleefully assumed, help Greece in the event of it deliberately bankrupting itself

[saxitoxin]

Well met, fellow.

So in summary: the US, Russia and China would not, as patches so gleefully assumed, help Greece

if you say so

[mrswdk]

Well met, fellow.

So in summary: the US, Russia and China would not, as patches so gleefully assumed, help Greece

if you say so

I do.

[saxitoxin]

Well met, fellow.

So in summary: the US, Russia and China would not, as patches so gleefully assumed, help Greece

if you say so

I do.

I agree you have made a post to the message board.

[mrswdk]

Well met, fellow.

So in summary: the US, Russia and China would not, as patches so gleefully assumed, help Greece

if you say so

I do.

Ando bien pedo.

Time for your siesta.

[waauw]

All Greece has to do is circle the wagons and hold on. They can get help from Russia, China, even the US if she needs. The Eurozone won't invade Greece, not a chance in hell.

Russia can't replace the EU. They don't have the economic strength for that. The US could but hasn't shown any interest in helping. China has only been interested in Greece because they see it as a cheap portal into europe. However if they were to get kicked out, China has very little reason to care about Greece.

Who the f*ck of you Europeans are willing to fight for Draghi, Lagarde or Juncker? Not fight as in a figurative sense, but enlist, train, kill and possibly die for? Hahahah! Like to see how many of you Europeans will line up for that.

Read the text again. I was merely reacting to saxi's hypothesis of Greece intentionally terrorizing the rest of the continent by illegally printing money.
In this hypothetical situation, the people of the eurozone would have to fight to save their country, not for the people you mentioned. If someone keeps throwing stones at you, doesn't your instinct tell you to fight back eventually?

The pressure is on the ECB. The longer it goes where Greece doesn't pay the harder it gets for the ECB. The IMF confirmed without any doubt left what everyone already knows, Greece cannot pay the debt. No amount of shaming, finger wagging or threats can get blood from a stone. The IMF stated quite clearly in their report that Greece must have debt relief. That means someone is taking a hit, and by someone that means the ECB.

Its not Greece's fault that the ECB turned what was privately owned Greek debt into public debt as it was early on. That's what is the real danger. The ECB created this systemic mess, not the Greeks. Greece's default means exposure risks for Spain, Italy, France and Germany of 17, 24, 27 and 35 billion euros respectively. The first three can't afford that hit at all. Spain topples, then Italy then France and Germany gets holding the bag.



This is not Greece's fault at all. The ECB decided to structure like this, shifting the liability and risk from private holders to public debt.

The debt can't be collected, but before the ECB monetized the Greek debt, a default would have ruined private individuals and firms.

It's a good thing private debt has been turned to public debt. The risk of contagion was much larger when it was private. Governments are more resilient than corporations and can endure the pain much better. At least now there is a chance at saving the system and restructure more calmly. The most important thing to avoid is global anarchy.

So this insistence that Greece pay its debts is the equivalent of holding a gun to one's own head and threatening to pull the trigger if the Greeks don't pay, as Handelsblatt illustrated (Translation: "Give me the money or I'll shoot")-




As long as the Greeks stay united they'll prevail, they'll get real debt relief, creditors will take the hit (i.e. the ECB) and European governments will have to explain to angry voters why they chose to go along with the likes of a Mario Draghi idea to put the European taxpayers on the hook for an obviously unpayable debt.

They'll prevail? How so? By running out of food, medicine and fuel? By having all commerce come to a halt?
If things go the way they are, Greece might end up dependent on the Red Cross.
You can hardly call that prevail.

I agree Mario Draghi should've never become chairman and that eventually the system will have to come down somehow. Personally I preferred the German banker. It's better to decline smoothly and slowly through austerity rather than fast and abrupt through hyperinflation. Anarchy is too unpredictable, whilst slow declines can be pointed into the right direction.

[saxitoxin]

Who the f*ck of you Europeans are willing to fight for Draghi, Lagarde or Juncker? Not fight as in a figurative sense, but enlist, train, kill and possibly die for? Hahahah! Like to see how many of you Europeans will line up for that.

Read the text again. I was merely reacting to saxi's hypothesis of Greece intentionally terrorizing the rest of the continent by illegally printing money.
In this hypothetical situation, the people of the eurozone would have to fight to save their country, not for the people you mentioned.

Well, first, it wasn't my hypothesis, it was what the Telegraph reported was an option being considered by the Greek government.

That said, were it to occur, why wouldn't EU governments just start printing francs, marks, and guilder? That seems more plausible than invading Greece.

[saxitoxin]

Greek Army preparing "Operation Nemesis" to control public disorder -

Greek security forces have drawn up a secret plan to deploy the army alongside special riot police to contain possible civil unrest after today’s referendum on the country’s future in Europe. Codenamed Nemesis, it makes provision for troops to patrol large cities if there is widespread and prolonged public disorder.

http://www.thesundaytimes.co.uk/sto/new ... 577226.ece

[Dukasaur]

Sure you're right in that aspect? But what's the solution? Give up? Let the entire global financial system collapse? If that happens, the world will endure a crisis that has never been witnessed in history. Not at this scale.
If european banks fall, so do american banks, japanese banks, australian banks, etc.

Well, one possible solution would be to abolish fiat currencies entirely and move to a world of hard-backed money.

A second possible solution would be to stay with fiat currencies, but privatise them entirely. Get the stupid idea that governments "guarantee" the value of the currency completely out of people's heads. Any bank can print a bank note, but it is guaranteed only by that bank and whatever scheme it has going, and each note has a giant warning label "CAVEAT EMPTOR: This note might be worthless tomorrow!" or something along that effect. People could learn to deal with unreliable currencies, provided only that they weren't being brainwashed with this absurd idea that the government fairy "guarantees" that a dollar will be worth a dollar in perpetuity.

A third possible solution would be to stay with the current system, but make banking executives at every level personally liable for unwise loans they make, and make politicians at every level responsible for money they spend. You approved $12 billion for the purchase of frigates that don't float? There goes your parliamentary pension! Giuseppe at the ECF approved a loan to cover it? Say bye bye to his villa! Imagine a world where people treated public money as their own and took care of it as if there were real consequences for bad decisions!

Three perfectly workable scenarios, but none of them will be adopted. What will the politicos and the bankers cook up? I don't know, but I'm sure the taxpayers will get hosed. That's why we have the bad system we do in the first place -- because it helps ensure that wealth is transferred from the working taxpayer to the elites.

[mrswdk]

A second possible solution would be to stay with fiat currencies, but privatise them entirely. Get the stupid idea that governments "guarantee" the value of the currency completely out of people's heads. Any bank can print a bank note, but it is guaranteed only by that bank and whatever scheme it has going, and each note has a giant warning label "CAVEAT EMPTOR: This note might be worthless tomorrow!" or something along that effect. People could learn to deal with unreliable currencies, provided only that they weren't being brainwashed with this absurd idea that the government fairy "guarantees" that a dollar will be worth a dollar in perpetuity.

Sounds good.

[warmonger1981]

Politicians and bankers will never be held liable for anything. Are SDR's a possibility tied to a basket of currency? Federal Reserve Notes are guaranteed by the "full faith and credit" of the United States. So what does "faith" constitute and where does "credit" come from? Doesn't sound very promising does it? Does any of the current trade deals America is working on TPP or TPA deal with a global or regional currency crisis? Or is that more backroom deals not allowing public to weigh in only global corporation and central banks to dictate trade?

[GoranZ]

Whole Greek story in 1 picture

[Lord Arioch]

LoL no kidding!

[patches70]

Greece wins when they get the inevitable debt restructuring to the point it is actually payable. That means the ECB takes a haircut on what it owed to them.
The US has already helped Greece, but most probably didn't notice it. The IMF's report was written a while ago but it was suppressed by the troika. It was pressure from the US that the IMF actually released it just in time for the referendum. The IMF's report was a tacit admission that Greece should hold out for debt relief from EU creditors. The troika didn't want that report made public, especially just before the referendum.

You all think "well what's Greece gonna do when they run out of food!" and the answer is simple, just hold on. They won't be allowed to starve to death. Essential supplies will still be delivered-
https://ca.news.yahoo.com/drug-companie ... nance.html

but the chaos in the financial markets will spread. An agreement has to be made or that financial instability will only get worse. Not just for Greece, mind you. This will force Brussels to the table and after as much hemming and hawing as they can muster they will agree to debt relief which includes forgiving significant amounts of Greece's debt.

Despite the turmoil there are still plenty of ways that individuals and firms can make money. Especially if they know certain things are coming down the pipe ahead of time. Goldman Sachs put out a report last week of their version of what they think is going to happen in the case of a Greek "no" vote. Draghi will use this crisis as a way to enact his own accelerated QE which as we know is direct injections of money directly into the financial markets. Goldman Sachs is going to make a shit load of money front running as is every investor on the planet. At least we know what it is that Goldman Sachs wants.

Now the EU is hoping that the Greeks turn on each other. If that happens it gives a good show to the rest of the PIIGS the consequences going against Brussels. The Greeks may very well start acting like animals to each other! Shortages happen, people get desperate and such. But in times of adversity when this can happen, alternatively what can happen is that the Greek people really pull together. If Greece can manage the latter the EU is fucked.

[spoiler]Personally I think Greece should offer this deal. A 75% haircut and a repayment schedule of 1% over the next 30 years (that was Greece's last compromise offer before this all went tits up) and give the EU 24 hours to accept/reject. It would be rejected. At that point Greece should tell the EU that they will sue the EU if they try to kick Greece out of the Eurozone. There is no mechanism in which Greece can be kicked out after all.
Greece then finalizes the gas pipeline deal with Russia and offer China a lease into perpetuity for a deep water port and let Chinese imports flow into Europe like a flood.
I'd kick Goldman Sachs out of Greece and ban them from ever operating there again and arrest any former Sachs employee working in the Greek government and kick them out of the country as well. Kick out all the EU bureaucrats and declare the EU debts null and void. The bankers get nothing (they had their chance to get something). Start printing the new drachma and be ready to welcome lots of Russian and Chinese tourists to warm, sunny Greek beaches.[/spoiler]

Its interesting to note, the IMF isn't too bothered by losing their money they lent to Greece. They broke their own rules in the first place loaning money to Greece. This means the US is willing to forgive all of Greece's debt owed. If Greece looks to start forging closer ties to Russia and China the US will step in and tell Brussels to make a deal and make it quick in no uncertain terms. Greece is a strategic NATO ally after all. From the US' POV there is a much bigger game afoot than the ECB's problems. All Greece has to do is show Washington that the ECB is putting the US' plans at risk and its all over for the ECB. The ECB will fold like a chair.
Oh, and the US won't let Greeks starve to death. So all you Europeans who think that we'll let the EU blockade Greece over money owed, you might wanna rethink that 'cause we ain't gonna go with that line.

Even if you don't want to admit it, ultimately, Europe does what the US tells her to do.

This just in, "The IMF stands ready to assist Greece"-

[spoiler]Just hours after receiving a clear mandate from the Greek people to stand firm in the face of calls for more austerity, the Greek government, squeezed by an acute liquidity shortage in the collapsing banking sector, is set to head back to the negotiating table seeking to "restore liquidity" and find a "sustainable" solution to the country's debt problem. From Bloomberg:

LEADERS OF GREEK RULING AND OPPOSITION PARTIES ISSUE JOINT STATEMENT BACKING EFFORTS TO REACH DEAL WITH CREDITORS
GREEK POLITICAL PARTIES SEEK AGREEMENT TO COVER FINANCING NEEDS
GREEK LEADERS SAYS GOAL IS TO SECURE COUNTRY'S FINANCING
GREEK LEADERS: DEAL SHOULD TACKLE DEBT SUSTAINABILITY PROBLEM
GREEK LEADERS: RESTORING LIQUIDITY IS TOP PRIORITY
Speaking of finding a "sustainable" solution (i.e. one that includes writedowns), the IMF, whose well-timed report on the necessity of Greek debt haircuts might well have played a vital role in cementing a victory for the "no" vote on Sunday, is now "ready to help" the Greeks. Here's Christine Lagarde:

"The IMF has taken note of yesterday's referendum held in Greece. We are monitoring the situation closely and stand ready to assist Greece if requested to do so."
The question of course, is this: what type of "assistance" is the IMF planning to provide?

The Fund's recommendation is for EU creditors to haircut their portion of Greek debt, something Germany is profoundly unwilling to consider. Case in point (from Reuters):

The German government signalled a tough line towards Greece on Monday, saying it saw no basis for new bailout negotiations and insisting it was up to Athens to move swiftly if it wanted to preserve its place in the euro zone.

"Greece is a member of the euro. It is up to Greece and its government to act so that this can remain the case," Steffen Seibert told a government news conference. "It depends now on what proposals the Greek government puts on the table."

Pressed on what concessions Berlin might be willing to make to Greek Prime Minister Alexis Tsipras, a finance ministry spokesman dismissed the idea of a debt restructuring sought by Athens and favoured by the International Monetary Fund (IMF).[/spoiler]

And as you all should know, the IMF is the US-

(Emphasis mine)

Pressed on what concessions Berlin might be willing to make to Greek Prime Minister Alexis Tsipras, a finance ministry spokesman dismissed the idea of a debt restructuring sought by Athens and favoured by the International Monetary Fund (IMF).

So, you all should see clearly where the US stands in regards to how things should proceed forward with Greece. Debt relief whether Brussels and Germany like it or not.


Its time for the ECB and the EU to admit defeat. They won't because they've gotten themselves into one hell of a mess and they got no way out but the longer they resist the worse its going to be for them.

[riskllama]

if only BBS were still here. he'd know what to do...

[Lord Arioch]

I will second that!

[mrswdk]

Personally I think Greece should offer this deal. A 75% haircut and a repayment schedule of 1% over the next 30 years (that was Greece's last compromise offer before this all went tits up) and give the EU 24 hours to accept/reject. It would be rejected. At that point Greece should tell the EU that they will sue the EU if they try to kick Greece out of the Eurozone. There is no mechanism in which Greece can be kicked out after all.
Greece then finalizes the gas pipeline deal with Russia and offer China a lease into perpetuity for a deep water port and let Chinese imports flow into Europe like a flood.
I'd kick Goldman Sachs out of Greece and ban them from ever operating there again and arrest any former Sachs employee working in the Greek government and kick them out of the country as well. Kick out all the EU bureaucrats and declare the EU debts null and void. The bankers get nothing (they had their chance to get something). Start printing the new drachma and be ready to welcome lots of Russian and Chinese tourists to warm, sunny Greek beaches.

lol. Tell the Eurozone, the EU and the IMF to go f*ck themselves, then wait for the windfall profits brought by one gas pipeline, cross your fingers for a boom in tourist numbers, and hope that the revenue from this will completely offset the total collapse of the Greek economy that would come about from a Greek default on its debts. Excellent plan. Hats off to you, sir.

[Lord Arioch]

Good BBS female clone arrived!

[waauw]

Sure you're right in that aspect? But what's the solution? Give up? Let the entire global financial system collapse? If that happens, the world will endure a crisis that has never been witnessed in history. Not at this scale.
If european banks fall, so do american banks, japanese banks, australian banks, etc.

Well, one possible solution would be to abolish fiat currencies entirely and move to a world of hard-backed money.

A second possible solution would be to stay with fiat currencies, but privatise them entirely. Get the stupid idea that governments "guarantee" the value of the currency completely out of people's heads. Any bank can print a bank note, but it is guaranteed only by that bank and whatever scheme it has going, and each note has a giant warning label "CAVEAT EMPTOR: This note might be worthless tomorrow!" or something along that effect. People could learn to deal with unreliable currencies, provided only that they weren't being brainwashed with this absurd idea that the government fairy "guarantees" that a dollar will be worth a dollar in perpetuity.

A third possible solution would be to stay with the current system, but make banking executives at every level personally liable for unwise loans they make, and make politicians at every level responsible for money they spend. You approved $12 billion for the purchase of frigates that don't float? There goes your parliamentary pension! Giuseppe at the ECF approved a loan to cover it? Say bye bye to his villa! Imagine a world where people treated public money as their own and took care of it as if there were real consequences for bad decisions!

Three perfectly workable scenarios, but none of them will be adopted. What will the politicos and the bankers cook up? I don't know, but I'm sure the taxpayers will get hosed. That's why we have the bad system we do in the first place -- because it helps ensure that wealth is transferred from the working taxpayer to the elites.

• Your first option: The problem with abandoning fiat currency is that the solution is not solved. History has shown governments will just end up manipulating the gold ratios(using goldstandard as a reference). It also makes governments prone to steal other nations gold in case of war and to confiscate all national reserves. It also leaves open the question, what type of goldstandard would you use? In the end you'd still be in a system similar to fiat currencies.
• Your second option: Hayek's idea of free market currencies is interesting, but it does bring along very negative effects. Instead of having the respective governments control the money, you'd have private bankers do so. After 2008 it should be plain they are hardly the better option. Secondly having a system of mulitple currencies within a country would have the opposite effect of fascilitating trade. The prime reason so many nations joined the euro was to get rid of currency exchanges, and the costs they come with. There is a great deal more to be said about this, but I think I've made my point.
• Your third option: So in the end you'll end up with a system similar to the american medical sector. Doctor makes a mistake? He gets sued and as a result medical fees skyrocket. Transferring this situation to banks, you'd have banks raise their interest rates on loans phenomenally as every single banker needs a compensation for the increased risks they're taking. Additionally your system is not very different from the eurozone-Greece situation. Market volatility is nigh impossible to predict. Instead of the Greek people being held responsible for their mistakes, you'd have bankers held up personally responsible for theirs. Keep in mind, bankers are just as human as any other person. Imagine someone gives a loan to a company and that company goes bust when a huge market crash occurs. The guy didn't mean evil, but gets screwed nonetheless. Hence the guy is for instance responsible for the loss of 50 million dollars and is in debt for the rest of his life for a nominal price of 50 million dollars. This doesn't solve anything, because most likely the guy won't be able to cough up the 50 million and will either dissapear or commit suicide. The losses would still be there and the system would still shake.

All in all, your suggested systems do have their strengths but they equally hold their own set of weaknesses.

[waauw]

@patches I'm done making arguments against you. We're getting nowhere and honestly you seem to be writing an entire book. It gets tiring after a while.

PS: The worst part of your argumentation is that you're overestimating american power. This isn't the cold war anymore. US hegemony has faded and europeans, just like the rest of the world, feel less pressure to obey american demands. Try reading some german newspapers once in a while. It should wake you up on the changing euro-american relations.

[patches70]

lol. Tell the Eurozone, the EU and the IMF to go f*ck themselves, then wait for the windfall profits brought by one gas pipeline, cross your fingers for a boom in tourist numbers, and hope that the revenue from this will completely offset the total collapse of the Greek economy that would come about from a Greek default on its debts. Excellent plan. Hats off to you, sir.

Its not going to come to that, Greece will get debt relief and the ECB will take significant losses. This is inevitable. The longer the Greeks can hold out the better terms they'll eventually get. What the ECB is worried about isn't Greece, they can take those losses. Its the rest of the PIIGS that scare the living shit out of them. When Greece gets its eventual debt relief, Spain will be next and then Italy. Though the ECB can survive Greece, it can't survive Greece, Spain and Italy.
What the ECB counting on, praying for and attempting to provoke, is riots and chaos in Greece. Once that happens they can (somewhat) safely take the losses because Spain and Italy will see what happens to Greece and won't go that route. If the Greeks don't go killing each other and stand fast, the ECB will still cave (they have to in the end) and it will be a blueprint of what Spain and Italy need to do to get their own debt relief (which they need).

This whole mess is because the ECB didn't let Greece default back in 2010 like she probably should have. This can can't be kicked any longer but that's about the only thing the ECB knows how to do.
Besides, it shouldn't matter if Greece defaults because we've been told for years that the contagion is contained and the spillover can be managed. What do you think? Is the Greece contagion contained?
I suppose we'll see soon enough.

[saxitoxin]

Russia waits in wings as Greek debt crisis deepens

Russian President Vladimir Putin must be finding it hard to contain a wry smile as the European Union struggles with Greece's debt problems.

Events are playing into his hands by diverting attention from the conflict in Ukraine and offering him a chance to exploit differences in the EU which might undermine unity on sanctions against Russia over Ukraine.

But Russia is now one of the few countries Athens might realistically turn to for money and state-run media are having a field day, depicting the EU as a discredited and dysfunctional empire in terminal decline.

"I do think that they're going to use Greece as a tool against Germany, as a tool against the European Union," Yevgenia Albats, a prominent Russian commentator and editor of the independent New Times magazine, told Reuters.

Few would rule out entirely the possibility that Putin is still waiting for the best moment to come to Greece's rescue, or that Prime Minister Alexei Tsipras might make a last-minute request for aid after making two visits to Russia this year.

http://www.reuters.com/article/2015/07/ ... LP20150703

spread 'em, mrswdk