Greece has run out of OPM

Page 7 of 10« First<45678910>
July 9th, 2015 at 9:15:39 AM permalink
Fleastiff
Member since: Oct 27, 2012
Threads: 62
Posts: 7831
Quote: Wizard
Yes -- the most unhealthy bank in Cyprus.
Iceland had unhealthy banks, disrubted the economy collapsed the government............. but the Icelandic people forced the bank owners to take the losses, not the depositors., Icelandic economy now booming...
July 9th, 2015 at 10:07:52 AM permalink
kenarman
Member since: Oct 24, 2012
Threads: 14
Posts: 4470
Quote: Fleastiff
Iceland had unhealthy banks, disrubted the economy collapsed the government............. but the Icelandic people forced the bank owners to take the losses, not the depositors., Icelandic economy now booming...


I don't think the Icelandic people forced the bank owners to take the hit. They had deposit insurance in place as many countries do but it is for a limited amount. Since then (2007) the population has not been able to send any funds out of the country and had restricted withdrawals. They let the banks declare bankruptcy rather than try and save them, the government didn't have the financial means to do it regardless.

The economy has now recovered to the point it was when it collapsed, not sure that is booming. The reason they could recover because they were able to devalue the currency and become competitive. That is the problem with Greece ont the Euro it can't happen to help them escape.
"but if you make yourselves sheep, the wolves will eat you." Benjamin Franklin
July 9th, 2015 at 11:24:25 AM permalink
Pacomartin
Member since: Oct 24, 2012
Threads: 1068
Posts: 12569
Quote: kenarman
The reason they could recover because they were able to devalue the currency and become competitive.


In October 2008, the financial crisis of 2007–08 brought about a collapse of the Icelandic banking sector. The value of the Icelandic króna dropped, and on 7 October 2008 the Icelandic Central Bank attempted to peg it at 131 against the euro. This peg was abandoned the next day. The króna later dropped again and to 340 against the euro before trade in the currency was suspended (by comparison, the rate at the start of 2008 was about 90 krónur to the euro. It is presently at 147 ISK to the Euro.

The 10,000 krónur banknote was introduced in October 24, 2013 as the 5,000 krónur was not worth enough. Even so the 10,000 krónur is only worth 67.62 euros, or a little less than £50 which is relatively small compared to the European continent.

But the Icelandic króna has been relatively unstable since it's separation from the Danish krone in 1918. In 1981, the Icelandic króna was revalued, due to hyperinflation, with 100 old krónur (ISJ) being worth 1 new króna (ISK).


Quote: kenarman
That is the problem with Greece and the Euro it can't happen to help them escape.


Can they really re-introduce the drachma? The Turkish lira and Bulgarian lev don't seem to be viable options either.
July 9th, 2015 at 1:42:03 PM permalink
petroglyph
Member since: Aug 3, 2014
Threads: 25
Posts: 6227
Quote: Pacomartin
Can they really re-introduce the drachma? The Turkish lira and Bulgarian lev don't seem to be viable options either.
What has worked, in every place that it has been tried throughout history, in any language, is gold or gold backed currency. Every fiat fails. Greed never sleeps.

It will be again. China has is amassed thousands of tons, as have other country's, except the west. Every time a money or a culture collapses it is for the same reasons, brought about by the same people.

When the "moneychangers" get control of a currency, over and over again, someone in a leadership role comes up with "fractional" reserve. And although that is still sound money policy, sooner or later some politician re-introduces "fiat" currency, backed by nothing but promises. They buy votes, and within 6 decades the same thing happens again. Over and over, again and again. History rhymes.

Unfortunately, I have come to the conclusion that this is just the way it is. Self versus spirit. When people lust for power above all else, we arrive at the "4th turning". https://en.wikipedia.org/wiki/Strauss%E2%80%93Howe_generational_theory, That is when the cycle restarts, it is "nunc fluens", forever in flux .

The average lifespan of a fiat currency ranges between 27 and 42 years. http://www.ronpaulforums.com/showthread.php?306530-Average-Life-Expectancy-Of-Fiat-Currency-Is-27-Years
The last official act of any government is to loot the treasury. GW
July 10th, 2015 at 6:27:36 AM permalink
AZDuffman
Member since: Oct 24, 2012
Threads: 135
Posts: 18136
Quote: Pacomartin

Can they really re-introduce the drachma? The Turkish lira and Bulgarian lev don't seem to be viable options either.



Has a modern country ever successfully left a currency union? I can't remember it happening.

Quote: petroglyph
What has worked, in every place that it has been tried throughout history, in any language, is gold or gold backed currency. Every fiat fails. Greed never sleeps.

It will be again. China has is amassed thousands of tons, as have other country's, except the west. Every time a money or a culture collapses it is for the same reasons, brought about by the same people.

When the "moneychangers" get control of a currency, over and over again, someone in a leadership role comes up with "fractional" reserve. And although that is still sound money policy, sooner or later some politician re-introduces "fiat" currency, backed by nothing but promises. They buy votes, and within 6 decades the same thing happens again. Over and over, again and again. History rhymes.


It is for this and other reasons I do not feel the USA will remain a united country 50 years from now. The world will be at the feet of China and a few others. Western nations think they "know better" and are dumping gold reserves. "It will be different this time" is the cry. Yes, it will be different, for the first time in 500+ years the west will not be dominant and for the first time ever Asia will. Look at the USD since 1971, what has happened to our purchasing power? Destroyed. How much money have we printed to prop the markets the last 8 years? How much more will we print?

Where the USA has been smart is to lock the world into using USD. If down in Cuba the beard wanted to get oil to run his country and buy it from Iran who hated the USA, chances are he had to cough up greenbacks. The USA can shut out people it does not like. To be in the system is to prosper, to be locked out is to starve. Try renting a car or hotel room or buying something online with no credit card and no bank account. Picture running a country that way.

So where does it end? The end of the USD will happen. At the moment nobody wants to be the new reserve because to be so you must consign yourself to trade deficits as well as have an economy large enough that there is enough of your currency moving about that people want it. But it will happen. If China amasses enough gold to back things and the USD collapses watch out, there will be Chinese folks everywhere, scooping up cheap property. Asia is overcrowded and the west will soon be dying out demographically. Strong aisan currencies will scoop up cheap western assets.

The west cemented its hold on the world starting around 1500 with the opening of the New World. The east fell behind for 500 years for many reasons besides this. We are seeing the start of a shift back to the east. There is not going to be another new world for them to open. But yes, history rhymes. We were born in interesting times.
The President is a fink.
July 10th, 2015 at 11:16:22 AM permalink
Pacomartin
Member since: Oct 24, 2012
Threads: 1068
Posts: 12569
Quote: petroglyph
What has worked, in every place that it has been tried throughout history, in any language, is gold or gold backed currency.


Greece's gold reserves amount to about 10.4 grams per capita, which is worth less than 350 Euros. So if Greece issued a gold backed currency, then certainly a lot of Euros would need to circulate at the same time. While Mexico functions on about that much printed currency, I doubt Greece could function.
July 10th, 2015 at 9:00:22 PM permalink
petroglyph
Member since: Aug 3, 2014
Threads: 25
Posts: 6227
Quote: Pacomartin
Greece's gold reserves amount to about 10.4 grams per capita, which is worth less than 350 Euros. So if Greece issued a gold backed currency, then certainly a lot of Euros would need to circulate at the same time. While Mexico functions on about that much printed currency, I doubt Greece could function.


A gold standard doesn't mean that gold alone is what supports the currency. Of course in the precious metal stores are included, silver, copper and nickel. It wouldn't be practical for users to be lugging ingots around and in times past asked their treasury's to print notes which were easier to use as a medium of exchange.

To make a nations money work, I can see a legitimate use for fractional reserve's. I think it has to be regulated. But letting private enterprise [fed reserve] control the nations money doesn't work. It's hard to keep anyone honest around large sums of money.

Money not only needs to be a means of exchange but also a store of value. The government being able to reach into the back pocket of savers, after the fact, by devaluing their life savings is killing retirees, who have played by all the rules.

Nobel Laureate Thomas Sargent explains why a gold standard would help Greece. "http://www.zerohedge.com/news/2013-11-16/nobel-winner-dares-go-there-no-reason-fear-deflation-greece-may-benefit-gold-standar

It's not just Greece, it is everywhere that has fiat printing central banks. Coincidentally or not, each country in MENA that chooses to institute a gold backed currency for Africa is soon at war with western powers.

Greece has hydrocarbon fields that reach all the way east to the Levant. http://elliny.gr/includes/event/eastmediterranean_gas_fields_jan12.pdf China or Russia will lend them the debt in a minute.

It shouldn't have been a surprise how fast Tsipras turned a 180. Somebody made him an offer he couldn't refuse. The next day, the IMF was offering up loans, and the rest is just theatre.
The last official act of any government is to loot the treasury. GW
July 11th, 2015 at 10:12:43 PM permalink
buzzardknot
Member since: Mar 16, 2015
Threads: 7
Posts: 497
Quote: Wizard
I'm not sure I follow.


Not sure where I lost you. Prior to 2005 you could file Chapter 7 every 7 years. Now it is 8 years.
July 11th, 2015 at 10:39:46 PM permalink
Fleastiff
Member since: Oct 27, 2012
Threads: 62
Posts: 7831
Quote: AZDuffman
Try renting a car or hotel room or buying something online with no credit card and no bank account. Picture running a country that way.
Argentina.
July 12th, 2015 at 7:33:23 AM permalink
AZDuffman
Member since: Oct 24, 2012
Threads: 135
Posts: 18136
It looks like Greece is getting close to exiting the Eurozone as Germany is in the position of a sugar daddy who is tired of his baby spending like there is no tomorrow and cutting her off. The question of course is if and when Euro debt will be repaid. Greece can return to their own currency, but they still have debt to pay. To convert the Euro debt to local currency is to write most of it off. To keep it in Euros is to sentence Greece to major inflation for a generation.
The President is a fink.
Page 7 of 10« First<45678910>