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  • Greek economy about to collapse?

    http://news.goldseek.com/RonPaul/1266346918.php

    The Greek government is the latest to come close to default on their massive public debt. Greece has insufficient funds in their treasury to make even the minimum payments that are now coming due. Their debt level is about 120 percent of their gross domestic product and their public sector absorbs what amounts to 40 percent of GDP. Any talk of cutting costs and spending is met with violent protests from the many Greeks heavily dependent on government payments. Mounting fears of default have sent shockwaves through their creditors and all of the eurozone countries.
    Dude, seriously, WHAT handkerchief?

    snooggums' density principal: "The more dense a population, the more dense a population."

    Iliana: "You're a great friend but if we're ever chased by zombies I'm tripping you."

  • #2
    Re: Greek economy about to collapse?

    Apollo must be MAD!!!!!!!!!!!!!!!!!
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    • #3
      Re: Greek economy about to collapse?

      That's one of the better articles that I've read by Ron Paul. He makes some good points, including this statement:

      Many have strong ties to Goldman Sachs and the case could easily be made that default could have serious implications for big US banking cartels. Considering the ties between the Fed and these big banks, it is not outlandish to wonder if the US taxpayer is secretly bailing out the entire world, country by country
      Some would wonder how Goldman Sachs could possibly be involved in the Greek debt crisis, but todays news - I might add that Paul released this article on 02/17/10 - shows a much bigger story concerning Goldman Sachs and Greece.

      Fed Reviewing Goldman’s Moves on Greek Debt
      The Federal Reserve is examining the financial stratagems devised by Goldman Sachs and other big banks to help Greece mask its ballooning debt over the last decade, The New York Times’s Nelson D. Schwartz reports.

      Ben S. Bernanke, the Federal Reserve chairman, said in testimony before Congress on Thursday that the Fed was “looking into a number of questions relating to Goldman Sachs and other companies related to their derivatives arrangements with Greece.”

      In 2001, Goldman helped Athens quietly borrow billions by creating a derivative that essentially transformed a loan into a currency trade that did not have to be disclosed under European rules. The deal helped Greece stay within the limits on deficit spending that were key to Greece joining the euro, the common European currency now used by 16 countries.

      Goldman earned $300 million in fees from the transaction, according to several bankers familiar with the deal. In 2005, Goldman sold the derivative, known as a currency swap, to the National Bank of Greece, before restructuring it into a British legal entity called Titlos in 2008. Link.
      Ahhh, those nasty derivatives again, and their ugly cousin the credit default swap. This is my biggest problem with the banks on Wall Street, - except the fact that they are greedy douchebags - is that they would rather invest into risky SCHEMES instead of investing into America. Sure they make the bank and their stockholders truck loads of money, but they don't benefit the country as a whole.

      Would Some Big Banks Profit From a Greek Debt Default?
      Holders of Greek debt could also suffer if Greece defaults. That is, unless you happen to be a big bank or other institutional investor who has bought a credit default swap to offset any loss incurred should Greece actually default on its sovereign debt. But Goldman Sachs Group (GS) -- which has used such credit insurance to bet against Greek debt and earlier helped mask Greece's debt problems -- could come out as a winner. And that has caught the eye of Fed Chairman Ben Bernanke.
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      • #4
        Re: Greek economy about to collapse?

        @mpx40

        This is exactly what is meant by "to big to fail". Those big banks had their tentacles, and their bad investment devices, everywhere in the world. If they would have went under many other countries would have suffered tremendously.
        I’m not racists, I have republican friends. Radio show host.
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        • #5
          Re: Greek economy about to collapse?

          Originally posted by El_Gringo_Grande View Post
          This is exactly what is meant by "to big to fail". Those big banks had their tentacles, and their bad investment devices, everywhere in the world. If they would have went under many other countries would have suffered tremendously.
          Sure, thats the new definition of "to big to fail". Wich from the governments perspective goes something like this: "Oh my God, those greedy blood sucking maggots" - the bankers - "have too much exposure into risky financial instruments" - or schemes for short that they created with little or no regulation - "now we have to give them some tax payers money" - more like sell more US Treasury Securities and go into outlandish debt - "or they'll take us all down with them". The old definition used to mean that a banks portfolio was so diverse that loses in any one market could be made up through other market investments the bank had, meaning that the bank used sound business principals because that was the smart thing to do. Obviously Goldman Sachs and many others like them do not fit the parameters of the latter defintion.

          I can't totally disagree with your point about bailing them out, as the collapse would have been much more catastrophic. But, excepting the new definition of "to big to fail" as just part of the way things are done these days is unacceptable to me. Something has to be done to stop this recklessness.

          Give me a venture capitalist any day over Wall Street, at least they are investing directly into the American economy and creating innovation, jobs, and businesses.
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          • #6
            Re: Greek economy about to collapse?

            Originally posted by mp40x View Post
            Sure, thats the new definition of "to big to fail".
            That has been what they where saying from the beginning. I remember one quote I heard on an NPR interview way in the beginning with one of them that specifically said if we didn't rescue/bailout/shore up these institutions entire countries could go under. It stuck with me because I thought it was ludicrous. Over time I realized that it was probably true.

            You are right that one big problem was deregulation. It did allow tremendous growth. But the growth was so fast nobody really understood what was going on.
            I’m not racists, I have republican friends. Radio show host.
            - "The essence of tyranny is the denial of complexity". -Jacob Burkhardt
            - "A foolish consistency is the hobgoblin of little minds" - Emerson
            - "People should not be afraid of it's government, government should be afraid of it's People." - Line from V for Vendetta
            - If software were as unreliable as economic theory, there wouldn't be a plane made of anything other than paper that could get off the ground. Jim Fawcette
            - "Let me now state what seems to me the decisive objection to any conservatism which deserves to be called such. It is that by its very nature it cannot offer an alternative to the direction in which we are moving." -Friedrich Hayek
            - "Don't waist your time on me your already the voice inside my head." Blink 182 to my wife

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            • #7
              Re: Greek economy about to collapse?

              This is exactly what is meant by "to big to fail". Those big banks had their tentacles, and their bad investment devices, everywhere in the world. If they would have went under many other countries would have suffered tremendously.
              I HATE that phrase with a passion; let them all fail like they rightfully should! It saddens me to see such little faith in what's left of the free market and competition between these large companies and big banks. Pretend I'm a big bank, I would loan out as much money as fast and recklessly as possible and collect the largest amount of interest I could get away with. Why should I worry? The entire monetary system is designed so I can do this perpetually, even when these loans go bad and would normally have to declare bankruptcy like everyone else! Here comes Mr. Bailout to save the day, and all I had to do was scare Congress with tales of anarchy and martial law! I'm living in a practical banker's utopia. What a great career I got myself into!

              I just have to line up at the discount window at the Fed building and they write a check for all the money I want, then I'll loan it to all these smaller banks, corporations, and individuals. So just for the service of loaning "money" that required no labor or real human effort to create, I charge them all interest on it and get filthy rich!

              The Fed will at some point have a hand in bailing out Greece, they certainly have the power to do so at their discretion.
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              • #8
                Re: Greek economy about to collapse?

                There's a lot going on in Greece these days involving their economic problems:

                First, the Greeks are boiling mad about the German media attacking them about their possible default on their debt:

                Greek consumer group calls for German goods boycott

                Greece's oldest consumer group called on Friday for a boycott of German products and stores to protest a magazine cover of Venus de Milo making an obscene finger gesture which has infuriated Greeks.

                In its latest issue, German magazine Focus showed the famous armless classical statue now at the Louvre raising her middle finger under the headline "Cheats in the euro family" to suggest that Greece deliberately misled EU peers to cheat its way into the euro.

                "Greeks are no crooks, we want the German government to condemn this most improper publication," George Lakouritis, President of Greece's Consumer Institute (INKA), told Reuters.
                Some Greeks are actually calling for Germany to pay reparations for the WW2 Nazi occupation of Greece:

                Greece angers Germany in gold row

                Greek Deputy Prime Minister Theodoros Pangalos has accused Germany of failing to compensate Greece for Nazi occupation during World War II.

                Mr Pangalos made the remarks during a wide-ranging BBC interview about Greece's financial difficulties.

                "They [the Nazis] took away the Greek gold that was in the Bank of Greece, they took away the Greek money and they never gave it back," he said.
                The mayor of Athens went as far as saying this:

                The Mayor of Athens, Nikitas Kaklamanis, has also waded into the dispute. "You [Germany] owe us 70bn euros for the ruins you left behind," he said.
                The Greek Deputy Prime Minister had this to say:



                Meanwhile, the Greek civil servants are striking and protesting about proposed budget cuts:

                Nationwide Strike Paralyzes Greece

                ATHENS—Tens of thousands of Greeks took to the streets Wednesday as much of the country went on a 24-hour strike against government austerity measures.

                A small group of youths threw Molotov cocktails at police, who responded with tear gas. However, the 20,000 people who filed through downtown Athens—a relatively large crowd for a Greek strike—mostly limited themselves to chanting anti-government slogans.

                Public- and private-sector unions called the strike to protest a range of measures aimed at reducing Greece's budget deficit. The government has announced a freeze on civil-service wages, cuts in public-sector entitlements and the closing of tax loopholes for certain professions, including some civil servants.
                Well, the drama is endless it seems. The Greeks defintiely know how to protest, not sure if anyone remembers the 2008 Greek Riots, It was quite a spectacle.
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                • #9
                  Re: Greek economy about to collapse?

                  "Too big to fail" (it's "too"! with two o's!) is an excuse to keep the bankruptcy system from reassigning assets to more responsible holders (ie. creditors). Had the banks not been bailed out, their assets would be distributed to their creditors and life would go on, now under hopefully better management. The assets wouldn't just evaporate. By bailing out the original firm, the original (mis)management is left in place to carry on business as usual.
                  Dude, seriously, WHAT handkerchief?

                  snooggums' density principal: "The more dense a population, the more dense a population."

                  Iliana: "You're a great friend but if we're ever chased by zombies I'm tripping you."

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                  • #10
                    Re: Greek economy about to collapse?

                    Originally posted by ScratchMonkey View Post
                    "Too big to fail" (it's "too"! with two o's!) is an excuse to keep the bankruptcy system from reassigning assets to more responsible holders (ie. creditors). Had the banks not been bailed out, their assets would be distributed to their creditors and life would go on, now under hopefully better management. The assets wouldn't just evaporate. By bailing out the original firm, the original (mis)management is left in place to carry on business as usual.
                    The problem is that there is no 'real' value to the assets, thus they (the assets) really can't be redistributed to creditors. All the value that people held was stock, and what other people were willing to pay for that stock. Well if a company is bankrupt that stock is worthless. So all your value is in effect gone.

                    This isn't a Casino where money just changes hands, and you're either up or down. No, this is an auction house. In a casino the value of a chip never changes, only who owns the chip. But in an auction house just because you paid $100 for a trinket, doesn't make the trinket worth $100. The trinket is only worth what people are willing to pay. One day it could be $50, another day it could be $1000; doesn't change the fact it is still just a trinket.

                    Now some would argue that the loans a bank issues are real assets, well if people can't repay the loans then they have no value. If they have no value you can't really give them to others to manage when there is nothing to manage. So yeah just like a trinket, the 'value' really did all just evaporate or at least enough of it did that it created a lot of this mess.

                    Now don't get me wrong I think that there a few of these so called 'insiders' who should be brought up on charges. In some cases the emotional side of me would like to seem them hung too, but that won't help anything at this point.

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                    • #11
                      Re: Greek economy about to collapse?

                      If there's no value in the assets, there's no company to fail, and you can just shut it down.

                      If the company's worth keeping propped up, it must have something that will be valuable at some point in the future. So in redistributing assets, you're handing around stuff that might not have any value right now, but it's supposed to eventually be worth something.

                      There's no value in keeping those assets in the current (mis)management's hands. Turn them over to other institutions that better know what they're doing.

                      And if there really is nothing there to save, and you're just trying to stop domino effect, then give your bailout money directly to the creditors. Except that by investing in the failure, they demonstrate that they are equally incompetent and don't justify the bailout, either. Keep moving the bailout downstream until you can find someone who was justifiably ignorant of what was really going on.
                      Dude, seriously, WHAT handkerchief?

                      snooggums' density principal: "The more dense a population, the more dense a population."

                      Iliana: "You're a great friend but if we're ever chased by zombies I'm tripping you."

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                      • #12
                        Re: Greek economy about to collapse?

                        Originally posted by ScratchMonkey View Post
                        "Too big to fail" (it's "too"! with two o's!)
                        If the spell checker didn't catch it then there ain't no problem.

                        Originally posted by ScratchMonkey View Post
                        is an excuse to keep the bankruptcy system from reassigning assets to more responsible holders (ie. creditors). Had the banks not been bailed out, their assets would be distributed to their creditors and life would go on, now under hopefully better management. The assets wouldn't just evaporate. By bailing out the original firm, the original (mis)management is left in place to carry on business as usual.
                        It wasn't that there where no assets, it was that nobody could figure out what the assets where. They also couldn't figure out who owned what, who owed who, what each parties liabilities where etc.

                        One of the big fears was that the entire system would be completely locked up for years. So nobody would loan out money, even to the solvent entities, because they wouldn't be able to figure out if the entity taking the loan was solvent. The entire system had become opaque. And I believe one of the fundamental requirements of a free market system is that each party understands what the other is offering.

                        Deregulation and the failure to enforce remaining regulation had caused the system to loose all transparency. Yes, there was bad things out there but the amount of bad stuff did not, it turns out, warrant the amount of fear the system was acting on. That fear was caused by the unknown brought about by the exotic and incomprehensible financial devices (and the out right side bets) placed on those devices.
                        Last edited by El_Gringo_Grande; 03-02-2010, 08:59 AM.
                        I’m not racists, I have republican friends. Radio show host.
                        - "The essence of tyranny is the denial of complexity". -Jacob Burkhardt
                        - "A foolish consistency is the hobgoblin of little minds" - Emerson
                        - "People should not be afraid of it's government, government should be afraid of it's People." - Line from V for Vendetta
                        - If software were as unreliable as economic theory, there wouldn't be a plane made of anything other than paper that could get off the ground. Jim Fawcette
                        - "Let me now state what seems to me the decisive objection to any conservatism which deserves to be called such. It is that by its very nature it cannot offer an alternative to the direction in which we are moving." -Friedrich Hayek
                        - "Don't waist your time on me your already the voice inside my head." Blink 182 to my wife

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                        • #13
                          Re: Greek economy about to collapse?

                          Originally posted by El_Gringo_Grande View Post
                          If the spell checker didn't catch it then there ain't no problem.
                          http://www.greaterthings.com/Humor/Spelling_Chequer.htm

                          I have a spelling checker.
                          It came with my pea sea.
                          It plane lee marks four my revue
                          Miss steaks aye can knot sea.

                          Eye ran this poem threw it,
                          Your sure reel glad two no.
                          Its vary polished in it's weigh.
                          My checker tolled me sew.

                          A checker is a bless sing,
                          It freeze yew lodes of thyme.
                          It helps me right awl stiles two reed,
                          And aides me when I rime.

                          Each frays come posed up on my screen
                          eye trussed too bee a joule.
                          The checker pours o'er every word
                          To cheque sum spelling rule.

                          Bee fore a veiling checker's Hour
                          spelling mite decline,
                          And if we're lacks oar have a laps,
                          We wood bee maid too wine.

                          Butt now bee cause my spelling
                          Is checked with such grate flair,
                          Their are no fault's with in my cite,
                          Of nun eye am a ware.

                          Now spelling does knot phase me,
                          It does knot bring a tier.
                          My pay purrs awl due glad den
                          With wrapped word's fare as hear.

                          To rite with care is quite a feet
                          Of witch won should be proud,
                          And wee mussed dew the best wee can,
                          Sew flaw's are knot aloud.

                          Sow ewe can sea why aye dew prays,
                          Such soft wear four pea seas,
                          And why eye brake in two averse
                          Buy righting too pleas.
                          Dude, seriously, WHAT handkerchief?

                          snooggums' density principal: "The more dense a population, the more dense a population."

                          Iliana: "You're a great friend but if we're ever chased by zombies I'm tripping you."

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                          • #14
                            Re: Greek economy about to collapse?

                            ^ Rhyme of the Modern Maligner? I couldn't get past the third verse... 2 pain full. LOL.

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                            "The true genius shudders at incompleteness - and usually prefers silence to saying
                            something which is not everything it should be." — Edgar Allan Poe

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