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Greece moves closer to eurozone exit after delaying €300m repayment to IMF

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posted on Jun, 5 2015 @ 12:02 PM
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a reply to: AugustusMasonicus
It won't stop them importing, just restrict how much they import based on what they export. They would even still be able to run a small trade deficit just nothing like what they have done over the last few years.




posted on Jun, 5 2015 @ 12:04 PM
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a reply to: Krazysh0t
Absolutely. A default and exit from euro would involve a lot of short term pain but looks increasingly the like the only viable solution to restart the economy.



posted on Jun, 5 2015 @ 12:19 PM
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originally posted by: ScepticScot
It won't stop them importing, just restrict how much they import based on what they export. They would even still be able to run a small trade deficit just nothing like what they have done over the last few years.


Their import/export ability will be contingent on the valuation placed on their currency by trading partners, which, following a default, will be marginal at best.



posted on Jun, 5 2015 @ 12:29 PM
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a reply to: Dimithae

ok, could the collapse of the EU signal to russia that the time to invade ukraine or transnistria?



posted on Jun, 5 2015 @ 12:39 PM
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a reply to: AugustusMasonicus
Yes but once they have their own currency there is a large degree of market correction that is absent in the euro. Low value of new currency will hurt imports but help exports.



posted on Jun, 5 2015 @ 12:41 PM
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originally posted by: fixitwcw
a reply to: Dimithae

ok, could the collapse of the EU signal to russia that the time to invade ukraine or transnistria?


Is there a reason why Greece leaving the Eurozone (not the EU) would in some way send that signal to Russia? If you think so it would be interesting to hear.



posted on Jun, 5 2015 @ 12:45 PM
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originally posted by: ScepticScot

Yes but once they have their own currency there is a large degree of market correction that is absent in the euro. Low value of new currency will hurt imports but help exports.


If their currency is worthless compared to the Dollar/Euro/Yuan/Pound/Yen it does not help them to export anything.



posted on Jun, 5 2015 @ 01:11 PM
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a reply to: uncommitted

i see it like this. greece leaves eurozone. britain follows suit. maybe spain or italy too? anyway, could the collapse of the euro, collapse the EU? and if it does, would the bear hunt?



posted on Jun, 5 2015 @ 01:37 PM
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a reply to: AugustusMasonicus
The currency wont be worthless as they still have goods to export. A floating currency will allow the balance of payments to stabilize at a manageable level and also free the government from externally imposed austerity that is killing economic growth.



posted on Jun, 5 2015 @ 02:01 PM
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originally posted by: ScepticScot
The currency wont be worthless as they still have goods to export. A floating currency will allow the balance of payments to stabilize at a manageable level and also free the government from externally imposed austerity that is killing economic growth.


Greece is a net importer by almost a 2 to 1 margin. If they are exporting their goods and being paid in drachmas, which have little nominal value compared to other world currencies, they will not be able to sustain their imports as other nations will want to be paid in Dollars/Euros/Etc.

It is simple economics, a Greek-backed currency will not be a medium for exchange on the world market.



posted on Jun, 5 2015 @ 02:15 PM
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a reply to: AugustusMasonicus
That is exactly what I said in my first post. The current trade deficit is not sustainable. A floating currency will help stabilise this.
A Greek currency certainly would be used as long as there is a demand for Greek goods/services.



posted on Jun, 5 2015 @ 02:26 PM
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a reply to: ScepticScot

The only way it is sustainable is if Greece magically produces everything at home to cover the $25 billion trade deficit it has by manufacturing all of the goods and services they currently import.

Reality says this will never happen.

A reissued Drachma is worthless, both to the world and to the Greeks.



posted on Jun, 5 2015 @ 03:06 PM
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a reply to: AugustusMasonicus
Sorry but you have it the wrong way round. If Greece stays in the euro with the inability to borrow further then it will need more or less instantly correct both its massive trade and public sector deficit.
By leaving the euro it can fund it's own deficit and a floating currency will allow its trade deficit to self correct.
There will be massive economic shock as imports become far more expensive but this seems to me the less worst option compared to the massive cuts in public spending and high unemployment that attempting to stay in the Euro would require.



posted on Jun, 5 2015 @ 04:43 PM
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a reply to: fixitwcw

I would think that if Russia was going to do that,it would already be matter of fact by now.I understand this is a conspiracy site and all,and people love their doom porn. But to think that a country is sitting there like a big fat spider waiting to jump on and take over other countries is too far out there. Almost all of the countries now just want trade with each other to keep their own economy's going. If you want to take WW2 as an example,if we have extremely restrictive trade with one country,then you do have to watch out for a Hitlerisk type leader coming to the forefront to 'bail' the country out. But there is no one fitting that right now. I would be more concerned with what is happening in the middle east where ISIS seems to keep getting American weapons 'accidentally' to fight with.



posted on Jun, 5 2015 @ 07:09 PM
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a reply to: Dimithae

"accidentally" (chuckles) i think we are both on the same side.



posted on Jun, 6 2015 @ 08:17 AM
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originally posted by: fixitwcw
a reply to: uncommitted

i see it like this. greece leaves eurozone. britain follows suit. maybe spain or italy too? anyway, could the collapse of the euro, collapse the EU? and if it does, would the bear hunt?


Right...... Britain isn't actually in the Eurozone, a term applied to countries that use the Euro as its form of currency. Therefore, we can't leave it as we aren't in it. There will hopefully be a referendum on if Britain should remain in the EU if only to answer the question, but Eurozone? No, never happened and no reason why it ever would.



posted on Jun, 6 2015 @ 08:19 AM
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originally posted by: ScepticScot
By leaving the euro it can fund it's own deficit and a floating currency will allow its trade deficit to self correct.
There will be massive economic shock as imports become far more expensive but this seems to me the less worst option compared to the massive cuts in public spending and high unemployment that attempting to stay in the Euro would require.


By saying I am incorrect and then stating that imports would skyrocket establishes that I am correct as that is exactly what I said will happen if they print their own, valueless currency.

Import pricing will remain high for quite awhile as a new Drachma will only have any type of value within Greece.



posted on Jun, 6 2015 @ 04:33 PM
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a reply to: AugustusMasonicus
You have repeatedly said that the new currency will be worthless/valueless. That is simply incorrect as people will still want to trade with Greece.
At the moment being part of the Euro is destroying the Greek economy both in international trade and in servicing government debt.
Getting out of the euro isn't a get out of jail free card but does at least give the government some options.



posted on Jun, 7 2015 @ 07:56 AM
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originally posted by: ScepticScot
You have repeatedly said that the new currency will be worthless/valueless. That is simply incorrect as people will still want to trade with Greece.


What currency will they use to trade with them and how will the valuations be determined?


At the moment being part of the Euro is destroying the Greek economy both in international trade and in servicing government debt.
Getting out of the euro isn't a get out of jail free card but does at least give the government some options.


And getting out of the Eurozone does nothing to mitigate their terrible fiscal, economic and social policies. You just the same dog with different fleas. 170% debt to GDP ratio does not evaporate by switching to a new currency.



posted on Jun, 7 2015 @ 07:59 AM
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say, about those greek default swaps......
ooops, that wasn't a default
it was a "deferred payment" which they will make up next time
so sorry swap holders



the major banks know there is no way they can collateralize the potential daisy chain failure that Greece represents. So they're doing everything they can to stockpile cash and keep their trading under wraps and away from public scrutiny.
What really scares me, though, is that the banks
think this is an acceptable risk because the odds of a default are allegedly smaller than one in 10,000.

moneymorning.com...

edit on Sunam6b20156America/Chicago52 by Danbones because: (no reason given)

edit on Sunam6b20156America/Chicago20 by Danbones because: (no reason given)




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