A really nice troll pic.

Edited July 5, 201511 yr by Shahenshah

well what would you have expected >_>

 

how this will "help" the situation is another matter, but I doubt that was the inteded goal anyway

This is a huge mess. A country with big entitlements and not enough cash to cover them, taking loan after loan to keep the money flowing to the unearning masses, unwilling to cut back to save their country, and then they get angry when it's time to pay the loan back. Sounds a lot like what will happen here in the U.S.A., ten-fold, if we don't do something to change the way things are being done.

Could this be a preview what may happen in Puerto Rico too? They have a huge debt at 70 billion and with a poor economy. 

Could this be a preview what may happen in Puerto Rico too? They have a huge debt at 70 billion and with a poor economy. 

 

Likely not, because of some important differences:

 

First, the debt-to-GDP ratios are vastly different:

68% for Puerto Rico (this is easier to pay off)

177% for Greece

 

Second, interest rates charged on that debt (comparing 10 year maturity bonds):

8.4% for Puerto Rico (this makes for smaller payments each month/quarter/year)

14.8% for Greece

 

Third, international exposure of those bonds.  The more widely spread the bad debt is, the worse the problem is worldwide.  Puerto Ricans own more of their debt (42% of the total) than Greeks own of theirs (<17%).  This means that if things go badly in Puerto Rico, it will be bad for the people on the island, but the rest of the world will not be affected in the same way we would be with a Greek default.

 

Fourth, Greece has been in default for ~50% of its existence as an independent country - they have historically failed to make their payments on debt.  Puerto Rico, despite its problems, has paid its obligations for this month, and, though it may require a renegotiation on its debt, is a much more willing partner to make reasonable compromises than Greek PM Tsipas appears to be.

 

This is a huge mess. A country with big entitlements and not enough cash to cover them, taking loan after loan to keep the money flowing to the unearning masses, unwilling to cut back to save their country, and then they get angry when it's time to pay the loan back. Sounds a lot like what will happen here in the U.S.A., ten-fold, if we don't do something to change the way things are being done.

Apart from the fact that Greece takes loans all the time to cover its needs as a country,it's really not the case,and is under no circumstances as simple as one would think it is. I mean,it's not just about cutting back on expenditures! And Greeks don't get angry because it's time for them to pay the loan back! Unfortunately,the Media have presented the whole situation in a way,so that the Greeks eventually seem like the lazy people of Europe (while they are the most hard-working in Europe,just behind the Czechs) who are not willing to pay their loans back. I repeat,and I would like to stress that THIS IS NOT THE CASE,and one should come live in Greece in order to make safe conclusions about the situation here.

Edited July 6, 201511 yr by Antonio

One key difference is USA can always print more money and create its own debt and keep doing that until dollar remains a global reserve currency, which it will for the foreseeable future. Greece cannot do that.

 

IMF's own report says austerity has failed. Also 80% of the vaik out fund never went to Greek economy, it went to private creditors, tldr the debt was shifted from big corporate banks to different EU govts and they charged a lot higher interest on those loans from Greeks as a price of that transaction, that money bailed out no one.

 

Off course Greece has itself to blame for most of the mess, but no one here has done them any favors, private lenders gave the money for profit without due delligence, then they told the politicians to get in line and fix only their mistakes and in return they can squeeze higher interests from Greeks via austerity aka bond slavery.

The days of the US dollar as the global reserve currency are numbered.  BRIC members are currently actively assembling massive amounts of extra US dollar contracts world wide in significant numbers.

Apropo to this conversation, those members court Greece in the middle of this crisis... might ought wish them well, BUT to the subject at hand ... the US dollar is NOT as secure as the US would have you believe.

 

It's well said nothing happens overnight which is why it's important to recognize this has been happening for a while now.  The BRICs are being laid for the dollars downfall ... as it were.  Think ahead.  'nuff said.

Two things Greeks need to keep in mind:

 

1. I'm sure the creditor nations understand they need to take a haircut on their loans (aka they know it won't all be paid back). This was in their original package and 

2. Their situation will not get better if they do not change their policies. They have the most generous pensions in the EU with the worst tax base in the EU. The sooner that stops, the better for Greece. If they changed their policies and let their finances get some stability (not growth, but stability), then companies would start investing and creating jobs. Uncertainty is poison for job markets.

 

The referendum means #2 is not happening. Any money going to Greece without a policy change will not improve their situation and only worsen the rest of the EU. Lots of people criticized the EU for not having any teeth. Time to develop some.

 

The joke is that Tsipiras thinks this gives him some moral obligation to continue to steal from the EU.

 

Could this be a preview what may happen in Puerto Rico too? They have a huge debt at 70 billion and with a poor economy. 

 

Likely not, because of some important differences:

 

First, the debt-to-GDP ratios are vastly different:

68% for Puerto Rico (this is easier to pay off)

177% for Greece

 

Second, interest rates charged on that debt (comparing 10 year maturity bonds):

8.4% for Puerto Rico (this makes for smaller payments each month/quarter/year)

14.8% for Greece

 

Third, international exposure of those bonds.  The more widely spread the bad debt is, the worse the problem is worldwide.  Puerto Ricans own more of their debt (42% of the total) than Greeks own of theirs (<17%).  This means that if things go badly in Puerto Rico, it will be bad for the people on the island, but the rest of the world will not be affected in the same way we would be with a Greek default.

 

Fourth, Greece has been in default for ~50% of its existence as an independent country - they have historically failed to make their payments on debt.  Puerto Rico, despite its problems, has paid its obligations for this month, and, though it may require a renegotiation on its debt, is a much more willing partner to make reasonable compromises than Greek PM Tsipas appears to be.

 

 

Oh that makes sense, its a US territory that doesn't have much influence as Greece does on the world bank on the larger scale. 

I still think that both Greeks and Puerto Ricans could do better with the student/geriatric solution. Court universities and retirees from the States or Europe. Get student loan and social security money. Profit!

Can someone dumb this down for a clueless American please?

 

This is a huge mess. A country with big entitlements and not enough cash to cover them, taking loan after loan to keep the money flowing to the unearning masses, unwilling to cut back to save their country, and then they get angry when it's time to pay the loan back. Sounds a lot like what will happen here in the U.S.A., ten-fold, if we don't do something to change the way things are being done.

Apart from the fact that Greece takes loans all the time to cover its needs as a country,it's really not the case,and is under no circumstances as simple as one would think it is. I mean,it's not just about cutting back on expenditures! And Greeks don't get angry because it's time for them to pay the loan back! Unfortunately,the Media have presented the whole situation in a way,so that the Greeks eventually seem like the lazy people of Europe (while they are the most hard-working in Europe,just behind the Czechs) who are not willing to pay their loans back. I repeat,and I would like to stress that THIS Is NOT THE CASE,and one should come live in Greece in order to make safe conclusions about the situation here.

 

This is coming from one that voted no? Must be, because if you voted yes I think you would be really pissed right now.

You voted no, assuming the EU was bluffing and will buckle to the terms. I think you're wrong. Try running your socialist government without other people's money... things are about to get really bad when you thought it couldn't get any worse.

The Greece having the biggest pensions? You joking right? Perhaps 5 years ago before they cut them in half. And some more recently >_>

 

I did enjoy the "yes" camp shooting itself in the foot by going around and getting public endorsements from the guys who actually made the pile in the frst place (the former government parties).

One key difference is USA can always print more money and create its own debt and keep doing that until dollar remains a global reserve currency, which it will for the foreseeable future. Greece cannot do that.

IMF's own report says austerity has failed. Also 80% of the vaik out fund never went to Greek economy, it went to private creditors, tldr the debt was shifted from big corporate banks to different EU govts and they charged a lot higher interest on those loans from Greeks as a price of that transaction, that money bailed out no one.

Off course Greece has itself to blame for most of the mess, but no one here has done them any favors, private lenders gave the money for profit without due delligence, then they told the politicians to get in line and fix only their mistakes and in return they can squeeze higher interests from Greeks via austerity aka bond slavery.

Not really Shah, fir printing to work you need to have a large export sector, i.e. be an export drifen economy, which Greece is not. Exports contribute only about 13% to the GDP. Printing wont do much for its competitive advantage. If youmcan not achieve that, then you can not service the debt via the currency depreciarion re currency of loans.

 

IMF doesnt say that, it points out three scenarios, bottom line being that Greece didnt follow true on what it commited tomunder them2nd MoU. In addition, the loans given by the member states weremgiven at substantially better (read lower) interest rates than Greece would have to pay had it gotten said loans on the financial markets.

 

Finally, Greece borrowed the money and spent it ... Thus it must return it. EU member states already proved,t heir solidarity by preventing a Greek default in 2012. Saying that that is somehow tantamount to 'bond slavery' is false and can nit be supported by facts.

The Greece having the biggest pensions? You joking right? Perhaps 5 years ago before they cut them in half. And some more recently >_>

 

I did enjoy the "yes" camp shooting itself in the foot by going around and getting public endorsements from the guys who actually made the pile in the frst place (the former government parties).

Relatively apeaking Betsy, having taken in to account the size of the employees contribution, the retirement age, the size of the pension re received pay etc etc

 

The Greece having the biggest pensions? You joking right? Perhaps 5 years ago before they cut them in half. And some more recently >_>

 

I did enjoy the "yes" camp shooting itself in the foot by going around and getting public endorsements from the guys who actually made the pile in the frst place (the former government parties).

Relatively apeaking Betsy, having taken in to account the size of the employees contribution, the retirement age, the size of the pension re received pay etc etc

 

Sure they have some culture of "black money", who hasn't?

 

The thing is that the cuts being asked are visible and immedeatly, nobody likes that. Sorry for sounding like a politician but they are better off "masking" the cuts (or tax increases) in a round about way to keep it off people's mind.

 

From my personal observations, people complain less about tax increases then about spending cuts. Less =/= not at all. Hence that austerity is idiotic, you basically tell everyone "you aint getting this", while pulling up some VAT's will go in with "well lets do with 1 less per week".

 

 

 

This is a huge mess. A country with big entitlements and not enough cash to cover them, taking loan after loan to keep the money flowing to the unearning masses, unwilling to cut back to save their country, and then they get angry when it's time to pay the loan back. Sounds a lot like what will happen here in the U.S.A., ten-fold, if we don't do something to change the way things are being done.

Apart from the fact that Greece takes loans all the time to cover its needs as a country,it's really not the case,and is under no circumstances as simple as one would think it is. I mean,it's not just about cutting back on expenditures! And Greeks don't get angry because it's time for them to pay the loan back! Unfortunately,the Media have presented the whole situation in a way,so that the Greeks eventually seem like the lazy people of Europe (while they are the most hard-working in Europe,just behind the Czechs) who are not willing to pay their loans back. I repeat,and I would like to stress that THIS Is NOT THE CASE,and one should come live in Greece in order to make safe conclusions about the situation here.

 

This is coming from one that voted no? Must be, because if you voted yes I think you would be really pissed right now.

You voted no, assuming the EU was bluffing and will buckle to the terms. I think you're wrong. Try running your socialist government without other people's money... things are about to get really bad when you thought it couldn't get any worse.

 

Uhm,I didn't even vote,because I'm not eligible to,I'm not 18. And I'm not pissed,don't worry,we're just discussing!  Anyway,the EU was,in a way,bluffing.First,all other European politicians said if Greeks voted ''No'',they would automatically be led out of the Eurozone,and less-likely,the EU.However,right after the referendum,they said that the EU was ready to negotiate with Greece.Quite strange,isn't it? I'd also like to add,that a vast percentage of the Greek debt is illegal,and even the IMF (Christine Lagarde) urged a restructuring of it,so we don't run our government with other people's money! And one last thing: believe me,things just can't get worse than they already are,even with a Grexit (unlikely to happen) and wth the drachma being issued.    Besides,you can't impose measures that ''kill'' an entire nation,only to get money back! That's what our government wants to do,it wants to improve the conditions of the new agreement,so that it gives Greece even a tiny prospective to exit the crisis and grow,both socially and economicaly.

Edited July 6, 201511 yr by Antonio

 

Uhm,I didn't even vote,because I'm not eligible to,I'm not 18. And I'm not pissed,don't worry,we're just discussing!  Anyway,the EU was,in a way,bluffing.First,all other European politicians said if Greeks voted ''No'',they would automatically be led out of the Eurozone,and less-likely,the EU.However,right after the referendum,they said that the EU was ready to negotiate with Greece.Quite strange,isn't it? I'd also like to add,that a vast percentage of the Greek debt is illegal,and even the IMF (Christine Lagarde) urged a restructuring of it,so we don't run our government with other people's money! And one last thing: believe me,things just can't get worse than they already are,even with a Grexit (unlikely to happen) and wth the drachma being issued.     Besides,you can't impose measures that ''kill'' an entire nation,only to get money back! That's what our government wants to do,it wants to improve the conditions of the new agreement,so that it gives Greece even a tiny prospective to exit the crisis and grow,both socially and economicaly.

 

 

You don't have Euro in the banks, and you will not get any unless the ECB send you some, which they are unlikely to do. What will you use to pay for stuff in a month? If you start printing Drachma right now, It will not be reads for a good year or so.

 

 

You don't have Euro in the banks, and you will not get any unless the ECB send you some, which they are unlikely to do. What will you use to pay for stuff in a month?

 

There are still money in the banks,although too little.However,one can still withdraw up to 60 Euros per day.And,Greece might get more money via ELA,of the ECB.This will be decided in today's Eurogroup.

 

 

If you start printing Drachma right now, It will not be reads for a good year or so.

 

Look,I really don't know whether Greece runs out of money or not.It depends on how the negotiations will be conducted.However,I don't think that we would start printing Drachmas,because the government is going to fall.The Greek people didn't elect Tsipras nor voted ''No'' in order for him to lead us out of the Eurozone,or the EU.But,even if we left the Euro and adopted the Drachma,of course the situation in the country would be awful (provided that Greece is an already economicaly weak nation) for a year or so,like you correctly stated,but no country remains unchanging (in the field of economics) like that.So,Greece would boost its industry (because now we import almost everything,apart from food  ) since importing stuff would be impossible,and the economy would improve,and all Greeks would live their lives with dignity (I couldn't say the same for the current situation...  ).Anyway,I don't think we're leaving the Euro!  Besides,a Grexit wouldn't only be devastating for Greece,but for the entire Eurozone,as well,as we import almost everything (like I said before).So,it would be a lose-lose decision.And,let's be realistic,if Greece adopted the Drachma,it would have sooo many needs to cover,that it wouldn't bother paying its debts back,at least until the situation improved vastly.The Europeans are not crazy enough to lose so much money because of egoisms from both sides.

Printing Drachma actually could be more beneficial over a longer period vs the suggested austerity

Printing Drachma actually could be more beneficial over a longer period vs the suggested austerity

I,partly,agree with you!  On one hand,during the transitonal period,things would be very hard,as ccabal86 correctly stated.Drachma would be a very ''weak'' and cheap currency compared to the ''strong'' and expensive Euro.As a result,Greece would not be able to import goods from the Eurozone countries,but from countries that have ''weaker'' currencies,as well,like Romania,Bulgaria,Russia,Turkey etc.On the other hand,however,the currency would probably become ''stronger'' after a year or so,and domestic industry would begin to flourish (OK,at least as much as it can flourish here in Greece  ).So,the economy would get better,and Greece would begin to pay off its debts.Like you said,I also think austerity would be the least beneficial solution,because the suggested terms are too harsh for the Greek people and the country itsself (if you want I can PM them to you),and there won't be any chance for Greece to recover from the crisis until it pays a whole of its dept back.

The EU allowing Greece into the Eurozone was their own mistake, as Greece already had a very bad record of financial accountability. They don't pay their taxes, the government doesn't come knocking on the door when you owe taxes, and the government spends a lot of money because 'socialism' is not a bad thing at all... And now that they're in trouble, because of Greeks and the Greek government, they're acting like typical spoiled brats and put the blame on other parties.

 

If only war was an option...

Can someone dumb this down for a clueless American please?

Germany issued a credit card to Greece, who had a bunch of other credit cards that Germany didn't know about. These other credit cards were issued by other EU countries, like Italy, Ireland, and Spain. Those countries had their own credit cards with Germany and were barely making their minimums, but Greece was paying them extra so there was no problem. Four or five years ago, Greece realized they couldn't make their minimum payment so they cried to Germany about it. 

 

Worried that these other countries would all stop paying their credit card bills because of the money lost in Greece, Germany convinced the IMF and the EU to take over all of the credit cards in exchange for control over Greece's spending. Greece didn't like that, so they went to the mall with their new EU & IMF credit cards and went to some restaurants and bought some movies. When they got home to watch the movies, the lights went out because they hadn't paid their IMF bill. 

 

Now Greece wants lower minimum payments and more credit cards, but wants to keep eating at restaurants and buying movies. They even had a vote to verify it. Germany doesn't think this is a good idea and just wishes it had never issued the cards in the first place.

 

I posted this on the OWF, but I know some people are more visual and don't visit the OWF. The raccoon is Germany. The cat is Greece. The oar is austerity.

http://www.vgcats.com/comics/images/051024.jpg

Thank you!

 

Much clearer now!

Thank you!

 

Much clearer now!

If it's one thing Americans can relate to, it's credit cards. Oh, we don't understand credit cards, but we can relate to them.

 

 

the government spends a lot of money

 

Excuse me for asking,  but what are these huge expenses? I mean,where,as far as you know,does the government spend money on?

 

If only war was an option...

 

OK,now your exaggerating...  You can't declare war for economic issues! Then,Greece should have declared war on Germany for the compensations for all the Nazi attrocities and for the money that Nazi Germany forced Greece to borrow to,with conditions that were sooo in favor of the German side...