Crisis deepens as Greek central bank warns of euro exit

[Skalliwag]

haha I thought Canadians were supposed to be nice.

Well,everything there is so fucking old.Knock it over

He is super nice Eastboy , probably he is the only one who enjoys himself on the forum and doesn't take things too seriously ....

If you ever meet him , you find him to be an absolute gem of a guy .....

Lol.Except when I'm not.

[geezerrb]

I normally avoid political posts just as in Pattaya when conversations trend to politics, religion or race, you may call it cowardice I normally drink up and leave. particularly if I have found a BF. I wonder were the EU is heading, it has many problems to actually really address. many have been mentioned. finance, immigration the acceptance of countries into the EU that were already highlighted as "high risk" members, accepted for expansionist motives. It is the one time I am glad I am old and doubt where the EU and the rest of the world is taking "us" is the right direction.

[shadowcat]

Maybe the EUbanks shouldn"t have lent the Greeks the money in the first place. Did they conduct due dilligence? The Greeks don,t want to pay that money back. They haven,t even got it. Every body in Greece is pulling everything out of the banks as ast as they can.Thats if they ever had any money in .the bank . They are going to renege on the deal again.

[Richmond72]

Everyone's wondering if Greece will exit the euro, but I think the better question is how can Greece solve their mess of an economy without exiting the euro?

 

Let's say they get a compromise deal and Greece gets more bailout money.  Then what?  Now they owe even more to the creditors and have more money they need to pay back.  They still have a broken economy, high unemployment, overburdened government services, and a populace who are experts at not paying their taxes.  Every time they kick the can, the can gets bigger.  I guess there's always the chance that after a compromise deal Greece becomes the model economy with the population becoming suddenly way more productive and dutifully pay their taxes.  I guess that's the miracle solution that a lot of otherwise very smart people are counting on.

 

Exiting the euro will not be pleasant for Greece.  In fact, it would be incredibly ugly.  But it allows them to write off their debt and being shut out of the credit market means they'll be forced to make the hard choices that they won't make now.  Of course there's always the chance that they exit the euro and things get so bad they just turn into a fucked up failed state.  But I feel like their chances of fixing their economy are better outside the euro than what would likely happen if they stayed in the euro.  There's going to be a lot of pain involved for Greece either way.

[Eastboy]

He is super nice Eastboy , probably he is the only one who enjoys himself on the forum and doesn't take things too seriously ....

If you ever meet him , you find him to be an absolute gem of a guy .....

 

Trust your judgment LK, just taking the piss

[insider]

Even before the common currency was instituted economists were saying that allowing Greece, Spain, Italy, Portugal tp be a part of it was a bad idea, due to their cash in hand, avoid taxes, siesta half the day lifestyles. The example of the adult giving his kids access to the parents credit card was used then too.

That the deal went ahead with these countries was partly to do with lobbying by cynical politicians in said countries and partly to do with an immense overconfidence in Germany that they could "tame" these "corrupt children".

It is likely you will see more and more Russian political agendas pushed in Europe now as Putin continues to subvert the votes of Europe's members with thinly veiled bribes, watch which member states votes against further sanctions in Ukraine for instance.

[LSD]

Maybe the EUbanks shouldn"t have lent the Greeks the money in the first place. Did they conduct due dilligence? The Greeks don,t want to pay that money back. They haven,t even got it. Every body in Greece is pulling everything out of the banks as ast as they can.Thats if they ever had any money in .the bank . They are going to renege on the deal again.

No the IMF, ECB and other central banks purposely do this, they have done it before

They force governments into bankruptcy and to sell off their assets and to letting foreign companies privatize and buy up whatever they want water, electricity, gas utility companies etc...

They want to use Greece for cheap labour, they plan to do this with the rest of the world in due time.

 

Central banks literally create money out of thin air through a process called fractional reserve lending, I'll give an example of this.

Pretend there are only 3 people in the world, person A is a banker who makes loans through fractional reserve lending and person B and C are regualr people, also there is no money in circulation yet.

Person B comes to the bank (Person A) and asks for a $10,000 loan.

The bank only needs to have say $1000 in reserves (10%, or whatever the regulated reserve rate is set at), and then it proceeds to create the next $9000  completely out of thin air.

It then gives this money to person B and tells them to pay back $11,000.  So $10000 is the principal borrowed, and $1000 is owed in interest.

But wait, how can person B pay back the interest if only $10,000? has been entered into the economy?

They can't alone.

So the next day pretend Person C comes into the bank and asks to borrow $10,000.

Once again the bank makes the money out of thin air and gives it to him asking for $11,000 back.

So there is now $20,000 floating in the economy, but yet the bank is owed $22,000.

Now pretend Person A owns and shop and Person B buys things from there.

At the end of the year, Person B has spent a lot of money at the shop and Person A has made $11,000, from the money Person B spent.

Person A then is able to pay back the bank the $10,000 principal and the interest $1000 that he got from Person B.

But how can Person B pay back their loan now?

There is only $9000 in the economy.

They cannot even pay back their principal amount ($10,000) let alone the interest ($1000).

The bank can now foreclose on Person B's home and other assets.

 

This is literally how banking works.

Bankruptcy and defaults are purposely built into the system so that at the end of the day the bankers get all the assets and all the money.

 

The ECB, IMF, ADB, World Bank and the Federal Reserve Bank of America are the absolute fucking scum of the world.

[Eastboy]

No the IMF, ECB and other central banks purposely do this, they have done it before

They force governments into bankruptcy and to sell off their assets and to letting foreign companies privatize and buy up whatever they want water, electricity, gas utility companies etc...

They want to use Greece for cheap labour, they plan to do this with the rest of the world in due time.

 

Central banks literally create money out of thin air through a process called fractional reserve lending, I'll give an example of this.

Pretend there are only 3 people in the world, person A is a banker who makes loans through fractional reserve lending and person B and C are regualr people, also there is no money in circulation yet.

Person B comes to the bank (Person A) and asks for a $10,000 loan.

The bank only needs to have say $1000 in reserves (10%, or whatever the regulated reserve rate is set at), and then it proceeds to create the next $9000  completely out of thin air.

It then gives this money to person B and tells them to pay back $11,000.  So $10000 is the principal borrowed, and $1000 is owed in interest.

But wait, how can person B pay back the interest if only $10,000? has been entered into the economy?

They can't alone.

So the next day pretend Person C comes into the bank and asks to borrow $10,000.

Once again the bank makes the money out of thin air and gives it to him asking for $11,000 back.

So there is now $20,000 floating in the economy, but yet the bank is owed $22,000.

Now pretend Person A owns and shop and Person B buys things from there.

At the end of the year, Person B has spent a lot of money at the shop and Person A has made $11,000, from the money Person B spent.

Person A then is able to pay back the bank the $10,000 principal and the interest $1000 that he got from Person B.

But how can Person B pay back their loan now?

There is only $9000 in the economy.

They cannot even pay back their principal amount ($10,000) let alone the interest ($1000).

The bank can now foreclose on Person B's home and other assets.

 

This is literally how banking works.

Bankruptcy and defaults are purposely built into the system so that at the end of the day the bankers get all the assets and all the money.

 

The ECB, IMF, ADB, World Bank and the Federal Reserve Bank of America are the absolute fucking scum of the world.

 

Very well explained, it's amazing how many people don't understand this. Imagine using "musical chairs" as the basis for your economic system.

[COLD SODA]

Only 48 hrs left for Greece to default .......

[Skalliwag]

Very well explained, it's amazing how many people don't understand this. Imagine using "musical chairs" as the basis for your economic system.

See those paving trucks parked on the border?

[Eastboy]

See those paving trucks parked on the border?

 

What'll happen to the Acropolis and other ancient artefacts

[DaffyDuck]

Nothing.

[mikeyboy]

Looks like it exit time for the Greeks .  Last minute talks appear to have failed . 

 

Markets should be interesting this week .

 

Mikeyboy

[marbella]

Very well explained, it's amazing how many people don't understand this. Imagine using "musical chairs" as the basis for your economic system.

I think you got your ABC's mixed up...

[marbella]

No the IMF, ECB and other central banks purposely do this, they have done it before

They force governments into bankruptcy and to sell off their assets and to letting foreign companies privatize and buy up whatever they want water, electricity, gas utility companies etc...

They want to use Greece for cheap labour, they plan to do this with the rest of the world in due time.

 

Central banks literally create money out of thin air through a process called fractional reserve lending, I'll give an example of this.

Pretend there are only 3 people in the world, person A is a banker who makes loans through fractional reserve lending and person B and C are regualr people, also there is no money in circulation yet.

Person B comes to the bank (Person A) and asks for a $10,000 loan.

The bank only needs to have say $1000 in reserves (10%, or whatever the regulated reserve rate is set at), and then it proceeds to create the next $9000  completely out of thin air.

It then gives this money to person B and tells them to pay back $11,000.  So $10000 is the principal borrowed, and $1000 is owed in interest.

But wait, how can person B pay back the interest if only $10,000? has been entered into the economy?

They can't alone.

So the next day pretend Person C comes into the bank and asks to borrow $10,000.

Once again the bank makes the money out of thin air and gives it to him asking for $11,000 back.

So there is now $20,000 floating in the economy, but yet the bank is owed $22,000.

Now pretend Person A owns and shop and Person B buys things from there.

At the end of the year, Person B has spent a lot of money at the shop and Person A has made $11,000, from the money Person B spent.

Person A then is able to pay back the bank the $10,000 principal and the interest $1000 that he got from Person B.

But how can Person B pay back their loan now?

There is only $9000 in the economy.

They cannot even pay back their principal amount ($10,000) let alone the interest ($1000).

The bank can now foreclose on Person B's home and other assets.

 

This is literally how banking works.

Bankruptcy and defaults are purposely built into the system so that at the end of the day the bankers get all the assets and all the money.

 

The ECB, IMF, ADB, World Bank and the Federal Reserve Bank of America are the absolute fucking scum of the world.

Sorry ..I meant to say LSD got his ABC's mixed up

[Skalliwag]

What'll happen to the Acropolis and other ancient artefacts

All the old stuff?

Knock it down,let the Yanks rebuild it in Vegas like the French tower thingy.

[Eastboy]

All the old stuff?

Knock it down,let the Yanks rebuild it in Vegas like the French tower thingy.

 

lol. Have you considered a position with the ISIS Ministry of Antiquities, they have similar policies

 

Jokes aside though this could really devalue the Euro and hurt our fellow Euro BMs

[Skalliwag]

lol. Have you considered a position with the ISIS Ministry of Antiquities, they have similar policies

 

Jokes aside though this could really devalue the Euro and hurt our fellow Euro BMs

So glad I'm not anywhere near there.

Why is Europe always so fucked up?

Seems they are always on the news doing something fucked up.

You know something?I hadn't even heard of Tunisia till a couple of days ago.Looking at the Atlas,there are a bunch of countries I've never even heard of.

I'm glad I got stuck in Vancouver and never made it that far.

[Eastboy]

So glad I'm not anywhere near there.

Why is Europe always so fucked up?

Seems they are always on the news doing something fucked up.

You know something?I hadn't even heard of Tunisia till a couple of days ago.Looking at the Atlas,there are a bunch of countries I've never even heard of.

I'm glad I got stuck in Vancouver and never made it that far.

 

At the risk of being accused of always bashing America, I would remind everyone that this economic crisis in Europe was caused in large part by Europe buying all those rubbish mortgages from Wall Street.

How did you not hear of Tunisia, that's where they filmed a few scenes of Star Wars.

Vancouver sounds nice but your winters scare the shit out of me.

[mcginley]

Germany pushed for Greek membership because of the huge dairy trade between them and now Greece are public enemy number 1. Delighted, the sooner the 4th Reich crumbles the better

[THAJEC]

Will this mess around the world. I do not know why the ECB is still pumping too much money into the banks. Anyway, it will not lead to anything good, and the end is inevitable.

[Al.]

Greece is in an imposible situation even if they were granted new loans what is the point all they are doing is borrowing more to pay the interest on existing loans its a never ending cycle and the debt is growing.

 

IMO the best thing they could do is default on the loans withdraw from the Euro start printing their own money and try to get an agreement where the interest is frozen to enable them to start paying it back at some time in the future if and when conditions allow if ever.

 

At the same time they should try to remain a member of the EU to get assitance and money to rebuild their economy.

 

If they do default which appears increasingly likely the Euro will probably devalue even further though I would not expect it to be very much as the markets have already factored it in and should rebound in a somewhat short period of time.

 

The ordinary Greek people will be the biggest losers at least in the short term.

[apter]

The problem with the Greeks is it's always somebody else's fault. Never theirs. Always somebody else's.

 

Tsipras knew full well that any proposals, including his own, would never pass in parliament. His own Syriza MPs would vote against it. After 5 years of accusing the last government (Nea Dimokratia, Pasok) of passing austerity bills, he came to power promising the Greek people he would NEVER bring in more austerity packages. His policies included re-hiring all the public sector workers that had been laid off, bringing back the 13th pension payment (extra pension at Christmas) and cancelling all the privatisation programs. All excellent policies with one MINOR problem. No money.

 

He thought the EU would kotow to his demands and they called his bluff. The referendum is his way out.

 

The Greeks, as is the Greek way, started blaming everybody else. Couple of facts that might make interesting reading:

 

• All employees in Greece get 13 salaries, the 13th being a kind of end-of-year Christmas bonus. A lot of public sector employees get 14 salaries (one more for Easter). Workers in the houses of parliament get 16 salaries.
• Until quite recently, public sector workers were paid a bonus for GETTING TO WORK ON TIME.
• Tax evasion is rampant. Go to a dentist and get a €500 bill. Ask for a receipt and you have to pay €700 plus. It's all cash business.
• IMF head, Christine Lagarde, sent a list of tax evaders to all the EU countries. Germany for example, acted on the information and collected a bucket load of taxes. Greece LOST THE LIST.
• An ex-Finance Minister was recently convicted of EDITING THE LAGARDE LIST to remove names of friends and family. Sentence? 18 months SUSPENDED

 

I love Greece, don't get me wrong., Lived and worked there for years but it's a rampantly dysfunctional and corrupt country. I'll give you another example. We had a guy in the office who had mobility problems, so I applied to have a ramp installed for wheelchair access. We went to the government agency in Athens to apply for the permit and guess what... No wheelchair access. The government agency responsible for issuing permits for wheelchair access ramps, didn't have wheelchair access. They were funded by an EU grant by the way.

 

We paid 17 Billion Euro in Cyprus for the Greek government bond haircut. That came out of people's savings. Anybody with more than €100,000 in the Popular Bank lost it. You went to bed with €250,000 in the bank and you woke up with €100,000. That was a direct result of the last Greek haircut.

 

I can feel for the Greeks BUT they have the government they voted for and it's about time they started paying back some of the money. They want to be in the EU and the Eurozone, but they want the benefits without any of the obligations.

[mikeyboy]

Interesting post  Apter .   Sounds as if the Greeks will be hit hard after years of snouts in the EU money trough .

 

Mikeyboy

[socrates]

The problem with the Greeks is it's always somebody else's fault. Never theirs. Always somebody else's.

 

Tsipras knew full well that any proposals, including his own, would never pass in parliament. His own Syriza MPs would vote against it. After 5 years of accusing the last government (Nea Dimokratia, Pasok) of passing austerity bills, he came to power promising the Greek people he would NEVER bring in more austerity packages. His policies included re-hiring all the public sector workers that had been laid off, bringing back the 13th pension payment (extra pension at Christmas) and cancelling all the privatisation programs. All excellent policies with one MINOR problem. No money.

 

He thought the EU would kotow to his demands and they called his bluff. The referendum is his way out.

 

The Greeks, as is the Greek way, started blaming everybody else. Couple of facts that might make interesting reading:

 

• All employees in Greece get 13 salaries, the 13th being a kind of end-of-year Christmas bonus. A lot of public sector employees get 14 salaries (one more for Easter). Workers in the houses of parliament get 16 salaries.
• Until quite recently, public sector workers were paid a bonus for GETTING TO WORK ON TIME.
• Tax evasion is rampant. Go to a dentist and get a €500 bill. Ask for a receipt and you have to pay €700 plus. It's all cash business.
• IMF head, Christine Lagarde, sent a list of tax evaders to all the EU countries. Germany for example, acted on the information and collected a bucket load of taxes. Greece LOST THE LIST.
• An ex-Finance Minister was recently convicted of EDITING THE LAGARDE LIST to remove names of friends and family. Sentence? 18 months SUSPENDED

 

I love Greece, don't get me wrong., Lived and worked there for years but it's a rampantly dysfunctional and corrupt country. I'll give you another example. We had a guy in the office who had mobility problems, so I applied to have a ramp installed for wheelchair access. We went to the government agency in Athens to apply for the permit and guess what... No wheelchair access. The government agency responsible for issuing permits for wheelchair access ramps, didn't have wheelchair access. They were funded by an EU grant by the way.

 

We paid 17 Billion Euro in Cyprus for the Greek government bond haircut. That came out of people's savings. Anybody with more than €100,000 in the Popular Bank lost it. You went to bed with €250,000 in the bank and you woke up with €100,000. That was a direct result of the last Greek haircut.

 

I can feel for the Greeks BUT they have the government they voted for and it's about time they started paying back some of the money. They want to be in the EU and the Eurozone, but they want the benefits without any of the obligations.

 

 

All true but as Cypriots we follow Greece over the cliffs and into the sea if needs be

 

And it was not only the savings that were lost - all the Bond Holders that were missold Savings Bonds in order that Cyprus could buy the German owned Greek Sovereign Bonds at a discount (total junk and knowingly sold by the Germans) also lost their money

 

The Bank of Cyprus trading arm made 100 million Euros in commission for the sale plus the commissions from selling the Bonds to anyone they could find to sell them to with interest rate promises of 6-8%. All of these people lost their money.

 

But lets not kid ourselves - what about all the American toxic mortgage packages that were sold to whoever would buy them - with huge commissions earned - and the debts were never going to be repaid

 

These institutions and the Governments behind them are all part of the same hypocrisy - The Greeks and Cypriots were the ones to be penalised the harshest and very publicly

 

There is plenty more that happened behind the scenes but that will all come out in the future

 

If Greece is shunned and bankrupted they will not wait a millisecond before offering Naval Bases to the Russians (who have lost their Syrian Bases) - something that Europe and particularly America will not be too pleased with

 

So its a game of chess

 

My feeling is the Greek Government will fall or at least a change of leader and a solution will be reached....