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TranceAddict Investors Club @ Marketocracy (pg. 173)
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| Comrade Stalin |
| quote: | Originally posted by Capitalizt
eh? All we've seen is a trillion in newly printed money.. |
They're loan guarantees.
| quote: | | Bullish short term of course, but there is no free lunch. |
Loan guarantees in exchange for huge cuts in government spending is a free lunch? |
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| Shakka |
| quote: | Originally posted by Comrade Stalin
Loan guarantees in exchange for huge cuts in government spending is a free lunch? |
No. Just unrealistic and foolhardy to believe. |
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| saluyamo |
| How did the Greece bailout go from 120billion Euros to 1trillion Euros? |
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| Comrade Stalin |
| quote: | Originally posted by Shakka
No. Just unrealistic and foolhardy to believe. |
So what's your solution? Let Greece default? |
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| Shakka |
| quote: | Originally posted by Comrade Stalin
So what's your solution? Let Greece default? |
Didn't say that. But if they do default, then real money is used to cover their bad debt so it's not just "loan guarantees." Real money is at risk, and lots of it.
Plenty of countries have defaulted on their debt and the world did not end. Brazil, Argentina, Russia, etc. More debt doesn't solve the problem of more debt. Everyone needs to take their medicine and move on but most are too afraid to make the hard decision. |
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| Shakka |
| quote: | Originally posted by saluyamo
How did the Greece bailout go from 120billion Euros to 1trillion Euros? |
They're trying to staunch the issue before it spreads. Remember Paulson's bazooka? |
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| Capitalizt |
Yes krypt, they should default.. The entire world has gone bailout happy but there is simply NO MONEY to pay for any of it. The wealth needed for the bailouts over the past few years did not exist. Every penny is being paid for by borrowing and printing, and this Greece thing is just going to make it that much worse..
http://www.economicpolicyjournal.co...ar-madness.html
| quote: | Trillion Dollar Madness
European policy makers have unveiled an unprecedented loan package worth almost $1 trillion and a program of bond purchases to stop the sovereign-debt crisis. The Federal Reserve will also play a role through currency swaps.
The 16 euro nations agreed in a statement to offer as much as 750 billion euros ($962 billion), including International Monetary Fund backing, to countries facing instability and the European Central Bank said it will buy government and private debt.
There is nothing more to be said other than this is potentially the greatest inflationary plan ever designed. Although statements have been made in the past that the EU has failed to follow through on, the statements issued last night appear to have a sense of seriousness about them, especially the ECB announcement to buy government and private debt, and the Federal Reserve launching of currency swaps. Both these actions suggest spectacular inflation may not be far away. Although the ECB statement says the purchases will be sterilized, meaning they won’t increase the overall money supply in the system, one wonders how long this will go on. A sterilization of the money printing would mean that money would be drained out of other sectors of the EU economy to be given to the governments of the PIIGS, who are proven irresponsibles with money. Draining from the potentially productive sectors of the EU economy to give to the PIIGS is almost as insane as printing the money without sterilization.
That no objection to this madness has come from any finance minister or central banker signals how far down the road we are from any real concern about inflation or the taking away from the productive sectors of the economy. Indeed some of the the statements coming out of the emergency meeting of EU finance ministers are simply absurd.
“The message has gotten through: the euro zone will defend its money,” French Finance Minister Christine Lagarde told reporters in Brussels early today. How opening up the printing presses defends the euro, she did not explain. The last I looked printing money destroyed a currency. It did not help the currency.
As for other parts of the plan that call for EU members to chip in with bailout funds, Venkatraman Anantha- Nageswaran of Bank Julius Baer & Co put it best, “It might temporarily calm nerves but questions will come back later on how they will pay for this package when all of them need fiscal consolidation." |
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| Shakka |
| Just curious, what do people think would/could happen if Greece were to default (and/or Spain, Ireland, Italy, Portugal, U.K., USA, etc)? The world only ends once. |
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| Capitalizt |
| quote: | Originally posted by Shakka
Just curious, what do people think would/could happen if Greece were to default (and/or Spain, Ireland, Italy, Portugal, U.K., USA, etc)? The world only ends once. |
Would it not STRENGTHEN the EU if they were to kick Greece out and allow it to happen? It would prove they are serious about fiscal responsibility and the demands they place on countries who want to be a part of the union. It would bolster confidence in both the EU and the Euro. As for Greece..They've brought this mess upon themselves and enabling their habit with endless financing isn't solving anything. It's time to face the music. They'll need to make tough decisions to restructure their economy. Sure it will be painful and will likely send some shockwaves to other nations..but as you said earlier, it won't be the first time this has happened. We'll pull through. |
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| Comrade Stalin |
| quote: | Originally posted by Shakka
Just curious, what do people think would/could happen if Greece were to default (and/or Spain, Ireland, Italy, Portugal, U.K., USA, etc)? The world only ends once. |
A domino effect of defaults would occur freezing international financial markets. I think a $1 trillion loan guarantee is worth it. |
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| Comrade Stalin |
| quote: | Originally posted by Shakka
Didn't say that. But if they do default, then real money is used to cover their bad debt so it's not just "loan guarantees." Real money is at risk, and lots of it.
Plenty of countries have defaulted on their debt and the world did not end. Brazil, Argentina, Russia, etc. More debt doesn't solve the problem of more debt. Everyone needs to take their medicine and move on but most are too afraid to make the hard decision. |
I would have rather seen a debt restructuring but this contagion risk is just too much. |
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| Comrade Stalin |
| quote: | Originally posted by Capitalizt
Would it not STRENGTHEN the EU if they were to kick Greece out and allow it to happen? It would prove they are serious about fiscal responsibility and the demands they place on countries who want to be a part of the union. It would bolster confidence in both the EU and the Euro. As for Greece..They've brought this mess upon themselves and enabling their habit with endless financing isn't solving anything. It's time to face the music. They'll need to make tough decisions to restructure their economy. Sure it will be painful and will likely send some shockwaves to other nations..but as you said earlier, it won't be the first time this has happened. We'll pull through. |
Well the loan guarantees require austerity measures. They are facing the music. |
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