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

a reply to: AugustusMasonicus
So you did make up me saying that no one pegs their currencies.
en.m.wikipedia.org...:Fixed_exchange_rate
All the biggies like cook island dollar on that list.......

originally posted by: ScepticScot
a reply to: NavyDoc Depends on what you are spending it on.

Right. Roads and ports can be revenue generators and they can produce more than they cost and thus debt for them could be considered a "good investment". The welfare state is a revenue black hole.

a reply to: ScepticScot

Sure, focus on Cook Island but leave off the massive economies of the Saudis, UAE, Bahrain, Kuwait and Hong Kong.

Comical.

a reply to: NavyDoc
I agree with you about welfare but probably coming at it from a different direction. Cutting government spending on say health care or defence (not entirely random examples) makes no sense if the effect is to remove people from productive tax paying jobs. Instead have them on welfare as solely a drain on government spending, not purchasing to stimulate private sector and with the opportunity loss to society of their potential labour.

originally posted by: ScepticScot
a reply to: NavyDoc
I agree with you about welfare but probably coming at it from a different direction. Cutting government spending on say health care or defence (not entirely random examples) makes no sense if the effect is to remove people from productive tax paying jobs. Instead have them on welfare as solely a drain on government spending, not purchasing to stimulate private sector and with the opportunity loss to society of their potential labour.

The difficulty with increasing the debt to increase "tax paying jobs," is that, if they are governmental jobs, you are not really creating wealth or new revenue, you are just engaging in a vicious circle.

a reply to: AugustusMasonicus
Seriously? Massive economies?
So despite the fact that most the worlds countries use floating exchange rates including USA, UK, all EU countries, Canada, Australia etc etc etc you still defend your nonsense statement about foreign exchange works?
I think anyone with even basic economic knowledge can spot the comedian.

originally posted by: ScepticScot
Seriously? Massive economies?

Uh, yeah. Massive.

Saudi Arabia $748 billion
UAE $402 billion
Kuwait $175 billion
Bahrain $32 billion (with only 1,300,000 people)
Hong Kong $274 billion
Total $1,631 trillion

Greece would be in 4th place on that list at $242 billion.

So despite the fact that most the worlds countries use floating exchange rates including USA, UK, all EU countries, Canada, Australia etc etc etc you still defend your nonsense statement about foreign exchange works?
I think anyone with even basic economic knowledge can spot the comedian.

Yup, very funny. Maybe you can tell us again how Greece is going to prosper once they ditch the Euro and start reissuing Drachmas tied to nothing and worth about the same as colored rocks and shells you can collect on the beaches of Skorpios.

a reply to: AugustusMasonicus
And you haven't noticed a recurring theme in your list of countries?
The fact is that western developed democratic countries use floating currencies. Talk of it being pegged is pointless as I can see no way they could keep it at a fixed rate even if they want to. If they had that level of currency reserves we wouldn't be having this discussion.
To reiterate again your idea that a new Greek currency would be completely worthless is just not based on fact. It would certainly be valued a lot less that the Euro but that in my view would be a good thing for the Greek economy.
It would also as I stated earlier allow them to deal with the public sector deficit in a more controlled way rather than further tanking the economy with massive cuts.
This doesn't solve the structural problems of the economy by itself but gives the government a bigger toolbox (Frankie Howard just rotated a full 360.) to deal with the problems.

a reply to: NavyDoc
Depends really what you mean creating wealth. Very few government jobs create a physical end product with a value however the jobs still have value (well most of them). An increasingly smaller number of private sector jobs create a physical end product.
Public sector jobs also create demand for the goods and services the private sector creates.
I would argue that government borrowing only becomes a bad thing when an economy is sitting at or near full employment. I am pretty sure we are not there in the US or Europe. Certainly not in Greece.

the euro is done for....this will push the dollar way up....

originally posted by: ScepticScot
And you haven't noticed a recurring theme in your list of countries?

Yeah, that there are economies much larger than Greece's that peg their currency.

To reiterate again your idea that a new Greek currency would be completely worthless is just not based on fact. It would certainly be valued a lot less that the Euro but that in my view would be a good thing for the Greek economy.

Right. Still waiting on you to explain how they would inflate their way out of a deficit while simultaneously trading with other nations who have currencies valued much higher than theirs.

Maybe after you explain how this will happen you can go claim your Nobel Prize for Economics.

a reply to: AugustusMasonicus
So despite your inability to come up with an example of a comparable nation to Greece that uses a fixed currency or explain how they would fix a currency you are still on this path? Got to give you credit for consistency.
Unfortunately that consistency seems to extend to incorrect terminology. "inflate their way out of a deficit"? As deficit is current requirement you can't really inflate out of it. I will give you the benefit of believing you meant debt(again).
My position remains the same as in my previous posts. Having their own currency will allow them to reduce the debt through economic growth and yes inflation at a manageable rate overtime.
The costs of doing this in my view is going to be mainly felt in the costs of imports. Given the balance of payments imbalance and minimum import levels of certain basic goods then this is going to be most evident in luxury goods.
However as Greek exports become more attractive and demand for domestic goods rise this should stimulate economic growth improving the tax base and overtime increase the currency value.
Sadly no Nobel memorial prize (economics doesn't have a real one) for stuff that would be covered in any decent first year course.
None of which means I am right and you are wrong. Just that I have presented an argument for one possible solution where so far your argument seems to be that Greece is just plain fecked.

originally posted by: ScepticScot
So despite your inability to come up with an example of a comparable nation to Greece that uses a fixed currency or explain how they would fix a currency you are still on this path?

When you say comprable do you mean on the verge of bankruptcy? Please be specific.

Having their own currency will allow them to reduce the debt through economic growth and yes inflation at a manageable rate overtime.

Sure, they can pay themselves with their new currency and enjoy the skyrocketing inflation.

The costs of doing this in my view is going to be mainly felt in the costs of imports. Given the balance of payments imbalance and minimum import levels of certain basic goods then this is going to be most evident in luxury goods.

When you have nearly a $27 billion trade imbalance it will be felt everywhere.

Sadly no Nobel memorial prize (economics doesn't have a real one) for stuff that would be covered in any decent first year course.

Uh, huh. They have been giving out a Nobel Prize for Economics since 1969.

None of which means I am right and you are wrong. Just that I have presented an argument for one possible solution where so far your argument seems to be that Greece is just plain fecked.

An arguement that printing their way out of a financial catastrophe is not really a possible solution.

a reply to: AugustusMasonicus
Seriously, give it up on the fixed currency. You were wrong and if you don't want to admit it at least move on.
As I have stated to the point of boring myself there are costs of going down the route of a new currency. Personally I don't think given the massive levels of unemployment that inflation is going to be the biggest or most pressing concern.

Do you think Alfred Nobel was alive in 1969? The clue is the name of the prize. My comment was a bit of an economics in-joke regarding the validity of the award.
I still find myself struggling to find what you think the best solution to Greece's economic problems should be in any of your posts?

originally posted by: ScepticScot
Seriously, give it up on the fixed currency. You were wrong and if you don't want to admit it at least move on.

Wrong on what? You claimed peg currencies were not the norm; I gave you 61 countries that use this method along with a good amount that have larger economies than Greece.

As I have stated to the point of boring myself there are costs of going down the route of a new currency. Personally I don't think given the massive levels of unemployment that inflation is going to be the biggest or most pressing concern.

It will be one more massive issue to add to the others.

Do you think Alfred Nobel was alive in 1969? The clue is the name of the prize. My comment was a bit of an economics in-joke regarding the validity of the award.

He does not need to be alive, the award is given out despite your instances it was not, retarded 'in-joke' or not.

I still find myself struggling to find what you think the best solution to Greece's economic problems should be in any of your posts?

They need to seriously overhaul their pension and social programs. Their retirement age is too low and they have far too many government employees.

Frankly, I think there is no solution, the hole appears too deep to climb out of and I am not sure if they have the desire to do so.

a reply to: AugustusMasonicus
A list of mainly city states and nations with overwhelming reliance based round a single export. The majority of countries including every single comparable country use floating exchange rates. You also have still failed to explain how you think countries that use fixed rates would have a problem with a new Greek currency?
Again at what point did I insist that no prize was given out? I have lost track now is this the third time you have just made up something I have said?
I even used (one of) the correct names for the award. If you don't know the history and controversies surrounding the award you might want to look it up.
Oh and nice use of the word "retarded". Real classy........
And finally some actual input into what you think the issues with the Greek economy are. Don't think many people would disagree with the need for reform. My view is that it would be better to do this in a realistic way overtime. Having an independent currency would allow the government to manage down real debt levels without destroying what remains of demand levels in the economy through European central bank demanded cuts.
The ECB has to make decisions based on the whole Euro Zone and at the moment the economies of Germany and North Europe are just too different from Greece.

originally posted by: ScepticScot
A list of mainly city states and nations with overwhelming reliance based round a single export. The majority of countries including every single comparable country use floating exchange rates. You also have still failed to explain how you think countries that use fixed rates would have a problem with a new Greek currency?

Stop shifitng the goal posts, it is pathetics. You made your claim, it was proved wrong.

As for trading with Greek currency why would a country not want to value their currency in a stronger position against a Greek one? If they did not it would lower the value of their own currency.

Again at what point did I insist that no prize was given out? I have lost track now is this the third time you have just made up something I have said?

In your first comment regarding it:

Sadly no Nobel memorial prize (economics doesn't have a real one)...

No qualifier or explantion, just 'doesn't have a real one'.

I even used (one of) the correct names for the award. If you don't know the history and controversies surrounding the award you might want to look it up.
Oh and nice use of the word "retarded". Real classy........

Aww, did I offend you? *tiny violin plays*

The PC police do not bother me.

And finally some actual input into what you think the issues with the Greek economy are. Don't think many people would disagree with the need for reform. My view is that it would be better to do this in a realistic way overtime. Having an independent currency would allow the government to manage down real debt levels without destroying what remains of demand levels in the economy through European central bank demanded cuts.
The ECB has to make decisions based on the whole Euro Zone and at the moment the economies of Germany and North Europe are just too different from Greece.

The Grek people have shown very little stomach for the drastic social cuts in their pension/welfare system and with the huge amount of superfluous goverment jobs. Until they wake up and smell reality there is no fix for this even if they happened to mint gold plated Drachmas.

a reply to: AugustusMasonicus
My statement was that fixed exchange rates are not the norm. Link from wiki below confirming exactly that. en.m.wikipedia.org...

a reply to: AugustusMasonicus
Just to reiterate countries fo not pick their exchange rates. Even those who have pegged rate do not set it against each currency individually (how on earth do would they?)

I am sorry my Nobel prize comment went over your head. I assumed as you were posting about economics and felt confident enough to state that I didn't understand foreign exchange that you had some knowledge on the subject. This mistake was obviously entirely mine.

Not offended at all by your charming use of the word "retarded" just enlightened a little about who I am talking with.

And of course the ordinary Greek people should be over the moon about mass unemployment and declining standards of living being demanded by incredibly wealthy people in another country.

a reply to: ScepticScot

Hi,I don't know the first thing about economics but it seems to me that from what you are saying is that if Greece were to exit the euro and default on their debt they will just issue their own currency and everything will be hunky dory again.
A couple of questions.
What consequences for the them will there be should they exit the euro and default?
If Greece were to default on the debt who is going to have any faith in the value of their knew currency?
What does Greece produce that it can trade with other countries to sustain itself?