Greece is a basket case. It's not all that complicated to understand if you have a solid grounding in economics and human nature. Tsipras and Varoufakis are lefties elected to erase the consequences of a country spending far more than they earned for a prolonged time period. They face an impossible task and they know it, so they are busy blaming others for their obvious impending failure to do what they promised to do. Breaking promises seems to be the Greek national pastime. No sane person would want to negotiate with these bad faith actors even if they weren't deluded socialists.
This is essentially correct. Greece has had a negative trade balance for a very long time now, with no improvements on the horizon.
Greece will get kicked out of the EU. The EU is going to crumble because Greece is far from the only country in such economic dire straits. They are merely the first to default. These sovereign defaults will either take down many large European banks or usher in an era of massive currency devaluation. As nation after nation in the EU goes back to their own national currencies, Germany will find itself in a position of having nobody to sell it's goods to that has any money. Capital will flow in torrents into safe places, first Switzerland and England but later and in greater volume the USA.
This is completely wrong and demonstrates a clear lack of understanding of both European politics and European economics. Our institutions are complex and never straightforward. Even most Europeans don't understand them. You would do well to learn more about them before saying rediculous things like that.
Nevertheless: Greece will not be kicked out of the European Union. They will not leave the Eurozone or be kicked out of it. Leaving either the Eurozone or the Union would not absolve their debts. There will be more negotiations. A settlement will eventually be reached. The EU will continue to heavily subsidize Greece, which Greece is dependent on to survive. Their economy will take a turn for the worse but they'll still be better off than in any other situation.
As a whole, the EU is still running a trade surplus and is as such doing okay. Despite what you believe, Germany amounts to only 20% of the EU's economy and does not dominate European policy. This percentage is actually shrinking as eastern Europe developes. There is no massive currency devalutation nor is there one in the making. There isn't a single serious effort to reinstute national currencies, as not a single country would stand to benefit from it.
There is a whole lot of exaggeration when it comes to European economic and political instability (which is mostly just perception), and it seems you've fallen prey to it.
In short-terme I agree with you. But, longterm and in case of Greece: They won't stay in Euro because the simple fact, that they need a "softer currency". Their economic strenghts is not strong enough. For the next months I think, we will see some compromises on both sides (EU and Greece), because nobody has an interest that Greece leaves the Euro. But in longterm... I don't think they will stay. I don't think Euro will survive the next 10 years. We already see a "tearing dynamic" (don't know if it's the right word) in the EU-population. The next elections of the South-States could bring another parties like Syriza to power. Even germany (I'm from germany) is not immune for more extrem parties. And: Greece is just earlier than some others. Every state is over-indebted and some others will come to trouble soon. The only antidote are more liabilities and the central bank pumps the market... It's mathematically impossible that this game will end well.
Most important: It's all about the banking-system. That's why even Obama and the US-finance-industry is in custody about Greece. The banking-system is over-indebted, more than the EU-States! It's like a house of cards. It doesn't need much to crash it.
Why? What would that accomplish? Greece doesn't need a softer currency. Greece desperately needs economic growth.
Yes, but if you look at greeces economy: To be economic-competitive they would have to lower wages (20-30%)... that would lead to civil war. They don't have much export, more import. If they could depreciate their own currency it would attract money and investments, help the export, help the tourismus-industry. If they will stay in Euro they will stay in dependence.
It's not that easy... they would need help in the first time, too. But there will be no economic growth in greece with Euro. They need a more flexible currency. The central bank devalues the Euro and says, the reason is deflation. The real reason is the banking system and to help the export-economy. But that is not enough for greece. Same for the most south-states.
The trouble with Greece, politically speaking, is not extremists (Syriza aren't extremists, just idiots). It is corruption.
I did not say extremists, I said "more extreme". And I don't think they are idiots. In my opinion they are very rational and they have the right to speak for the normal Greece-citizens who are suffering. And yes, corruption is a big problem, but it's a problem in the highest EU-circles as well. We live in a time where banks can do anything. They are keeping profit for private and demand that the EU-citizens pay their losses. The money other states send to greece... it was not to rescue Greece, it was to rescue creditor-banks. Germany (just for example) sends money of his citizens to greece and greece sends it back to german banks... I would name that dynamic raid. ;-)
Greece scores very badly on this, just like every other country in the Balkan area plus Italy. Unless Syriza manages to come down hard on curruption, there isn't a lot of hope.
The whole system is corrupt! Greece is just more obvious. Germany protects a corrupt Siemens-Manager who is accused, but Germany denies to deliver the man to greece (just one example!). Greece is more extreme than most of the other countries, but there is a lot of corruption on every stage.
The rest of the Union is doing alright and most members are doing their best to improve the situation. While it is natural for people to be sceptical of their government in the midst of a downpour, most Europeans (think 60%+) are still in favour of staying with the union. The percentage is even higher amoung the European youth, so there's hope for the future. The real disagreement is not about the union, but about policy.
Yes... it's about policy, but also about simple maths. It's impossible to pay back the liabilities. Even Germany pays nothing back, not even if the economy is doing very well.
Take a look:
http://www.aref.de/kalenderblatt/mehr/pics/staatsverschuldung_deutschland_entwicklung.pngIt nearly doubled the last ten years. And Germany is maybe the "healthiest" country in the EU. The second largest outgoings of the State budget are interest-load.
Actually, most Eurozone countries are doing okay with respect to debts. It's important to keep in mind that it's the relative percentages that count, not the nominal amount. Higher debt isn't a problem if your economy can shoulder it.
Yes... but debts are rising every year and accelerated and the interest is rising as well. The economy would have to grow every year and endless. Impossible. Such a system won't survive and never survived. There are just two scenarios: Massive Inflation or currency collapse (or both at same time).
The problem with Greece is that it can't. It imports nearly twice as much as it exports and their government spends a whopping 160% of GDP. The economic troubles of any other EU country pale in comparison. Yes; Italy, Ireland and Portugal are still spending too much, but not as crazy much as Greece.
Yes, right. But the main-problem is the lack of wealth-distribution!!! If 1% on this planet holds more then the whole rest, and thats a fact, it can't end well. Thats impossible. It's a worldwide problem, not just of the EU and indeed not just of greece. The USA has the same problems. China as well. The richest become richer, the normal become poorer and the poorest sleeping under bridges. For now there is just one antidote: More debts. And again: It's not just about the countries, it's mostly about the banking-system. The collapse of just one bigger bank can lead to a worldwide economic depression. I just say Lehman... ;-)
The central banks aren't 'pumping' the markets, by the way. They are transferring wealth from the people to themselves through financial markets. QE is just a very advanced way of taxation. The net effect is cheaper loans for the governments.
There is no contradiction. And yes, cheaper loans for governments but also for the banking system and stock markets. People are wondering why there is no inflation because all of the money... The inflation is in the stock-markets, because most of the money never reaches the real economy.
Greece is a basket case. It's not all that complicated to understand if you have a solid grounding in economics and human nature. Tsipras and Varoufakis are lefties elected to erase the consequences of a country spending far more than they earned for a prolonged time period. They face an impossible task and they know it, so they are busy blaming others for their obvious impending failure to do what they promised to do. Breaking promises seems to be the Greek national pastime. No sane person would want to negotiate with these bad faith actors even if they weren't deluded socialists.
This is essentially correct. Greece has had a negative trade balance for a very long time now, with no improvements on the horizon.
Greece will get kicked out of the EU. The EU is going to crumble because Greece is far from the only country in such economic dire straits. They are merely the first to default. These sovereign defaults will either take down many large European banks or usher in an era of massive currency devaluation. As nation after nation in the EU goes back to their own national currencies, Germany will find itself in a position of having nobody to sell it's goods to that has any money. Capital will flow in torrents into safe places, first Switzerland and England but later and in greater volume the USA.
This is completely wrong and demonstrates a clear lack of understanding of both European politics and European economics. Our institutions are complex and never straightforward. Even most Europeans don't understand them. You would do well to learn more about them before saying rediculous things like that.
Nevertheless: Greece will not be kicked out of the European Union. They will not leave the Eurozone or be kicked out of it. Leaving either the Eurozone or the Union would not absolve their debts. There will be more negotiations. A settlement will eventually be reached. The EU will continue to heavily subsidize Greece, which Greece is dependent on to survive. Their economy will take a turn for the worse but they'll still be better off than in any other situation.
As a whole, the EU is still running a trade surplus and is as such doing okay. Despite what you believe, Germany amounts to only 20% of the EU's economy and does not dominate European policy. This percentage is actually shrinking as eastern Europe developes. There is no massive currency devalutation nor is there one in the making. There isn't a single serious effort to reinstute national currencies, as not a single country would stand to benefit from it.
There is a whole lot of exaggeration when it comes to European economic and political instability (which is mostly just perception), and it seems you've fallen prey to it.
Euros just today are trading at 0.89/USD. That's a huge devaluation already and will be trading at par soon if this continues. As for defaults, that is effectively what happens when a country devalues it's currency (or re-institutes it's currency) and repays expensive money with cheap money. The U.S. Did it in 1971 when Nixon took us off the gold standard. It's a soft default ( a hard default is when they simply don't repay at all).
I understand that the European financial and political situation is enormously complex, but I don't need to know all the ins and outs to see that a monetary union with no fiscal (much less political) union is untenable given the very different incentives and motivations of the various players. How long will German Taxpayers subsidize the profligacy of the South? If they take a haircut on Greek bonds, what's to stop the other peripheral countries from doing the same? It's as if a family has a problem child and if they show tough love the kid will rebel and run away, but if they go soft, they other children will rebel also, (correctly) perceiving the preferential treatment as favoritism.
This latest demand for WWII war reparations is just icing on the cake. Hardly any Germans living bear any responsibility for the Nazis. If I was a German, I'd rather burn my money than give it to Greece. Now supposedly they are cozying up to Russia as well so we can ad "disloyal" to "lazy" and "dishonest" as descriptors of Greeks. Germany and the other creditor nations won't cave. They can't or their electorates will (rightly) boot them out of office.
Germany is not that strong as many are thinking. "We" are a export-nation. Without a strong export the unemployment will rise hard. It's in german-interest to keep the south in the game because it could be the end of the Euro if south-states would leave. And that's why our government is in a weak position. They won't pay the demand for WW2 but they will make concessions. But, it's just playing time (delay the dynamic). It won't help long. It did not help in the past it won't stop the dynamic.
You judge Europe as if it's a singular behemothic superstate.
HUH?? I implied nothing of the sort. It's a multi-juristictional bureaucratic nightmare, But which country is in which organization is not really relevant to my point which is that
a monetary union cannot succeed without fiscal and/or political union. I used to think the U.S. Dollar was the worst possible form of currency, marrying fiat with fractional reserve lending, but you Europeans actually surpassed us. You combined the inflationary instability of fiat with the inflexibility of hard currency AND fractional lending. Wow, that's an accomplishment. I mean I know the Euro is nothing like a PM-backed currency, but to member states that need to adjust monetary policy differently, it might as well be.
and the winner is.... german export blitz.
to the german export industry the euro is not a nightmare but a wet dream come true. an economy with such export strength would sooner or later get a stronger currency = higher prices for their goods = less sales. germany is (ab)using the weak PIGS countries as class a weapons in the currency war. it could not work better for them.
all this just to get a giant trade surplus.
Are you insane or just stupid? What good does it do to "sell" exports to people on credit when they default on the credit? How beneficial is it to give your stuff away? A trade surplus just means you're giving more stuff than you're getting. That's BAD not good. A weak currency helps your exporters but hurts you when you have to import the raw materials and energy. It's also terrible for capital formation (savings). There's a name for a condition where everybody works but nobody gets paid. It's called "slavery".
Yes, right! But: If you think about it who benefits and who loses from export: The bigger corporations benefit, the middle class loses. And that's simply the game in the EU (and I think, in the USA as well).
What follows is: Jobs in the middle-class got lost and the corporations can lower the wages... And you can call it a modern version of slavery and the EU is on the way to go in this direction in the whole EU, but mainly in the South! If they should be successful the big corporations will have an El Dorado in the south and the EU would be like an extremer version of Germany.
But: There is a lot pressure against it. Greece is just one example. My "prophecy" is, that it will shred the Euro in the next 5 years.
By the way: It could help Bitcoin.
Personally i have a hard time valuating Darkcoin at over 300k, but heh. The price is decided by that bull whale and as soon as he will stop being greedy and start taking profit, the whole domino will collapse in a blink of an eye.
The irony about Darkcoin is it is probably one of the worst anonymous solutions of any claimed anon coins out there on the market but it has the marketing pizazz with the name which is what carries it.
I think, the better name is Bitcoindark. And maybe... the better solution as well.
What happens if Greek banks don't reopen tomorrow? I'm giving them only a 15% chance of opening.
Those banks can't handle even one full day of withdrawals. depositor's haircuts?
What happens after banks are closed for two weeks? Civil unrest? riots?
"OXI" on the referendum is not the end of the story. It's just getting started.
I don't think they will reopen this week. It's all about the ECB and if they will give higher Emergency Liquidity Assistance or not and they use it to make pressure on Greece. With other words: They (presumably) give as much as needed that the banks won't go into complete bankruptcy but not enough to open the banks and/or to remove capital controls.
So, the Greek government is under much pressure. It's like poker... and it will be a blame game. It's possible that there is already a decision for the Greek-bankruptcy. In that case other states will say "no" to any suggestion of the Greeks, the ECB won't give more ELA and time would do the rest. Than they would say: The Greek-government is to blame, because their suggestions were not acceptable and they didn't accept the austerity-plans.
That's just a theoretical scenario but it's possible I think. But either way, there won't be a solution the next days. The german government needs two votings. One for new negotiations and the second to agree or disagree if there should be an arrangement between Greece and the other states and institutes (like IMF).
The other scenario is that Merkel is bluffing but would and will agree the Greek-suggestions... but her problem is that many representatives of her own party won't agree. She would get a majority in any way, but she always wants a "own-majority".
Under the line: The End-result is unpredictable I think, but that they'll make much pressure on greece is predictable and the ELA is a useful tool to hold the pressure. And furthermore: It's not so easy for the ECB to raise it, because it's already against their own law.
Regarding Bitcoin: I don't believe that the Greeks will have much influence on the price in a direct way. But maybe indirect about falling stock-markets and psychology, because the expectation could be that they could raise the price.
Edit: ELA:
https://www.ecb.europa.eu/mopo/ela/html/index.en.htmlValidating Satoshi (Or Not)
SUMMARY:
1. Yes, this is a scam. Not maybe. Not possibly.
2. Wright is pretending he has Satoshi’s signature on Sartre’s writing. That would mean he has the private key, and is likely to be Satoshi. What he actually has is Satoshi’s signature on parts of the public Blockchain, which of course means he doesn’t need the private key and he doesn’t need to be Satoshi. He just needs to make you think Satoshi signed something else besides the Blockchain — like Sartre. He doesn’t publish Sartre. He publishes 14% of one document. He then shows you a hash that’s supposed to summarize the entire document. This is a lie. It’s a hash extracted from the Blockchain itself. Ryan Castellucci (my engineer at White Ops and master of Bitcoin Fu) put an extractor here. Of course the Blockchain is totally public and of course has signatures from Satoshi, so Wright being able to lift a signature from here isn’t surprising at all.
3. He probably would have gotten away with it if the signature itself wasn’t googlable by Redditors.
4. I think Gavin et al are victims of another scam, and Wright’s done classic misdirection by generating different scams for different audiences.
(...)
https://dankaminsky.com/2016/05/02/validating-satoshi-or-not/
4. I think Gavin et al are victims of another scam, and Wright’s done classic misdirection by generating different scams for different audiences.
I would not characterize Gavin as a victim... .
For some reason, the way that this scenario is playing out, Gavin seems to be lacking good judgment and is coming across as wanting to be scammed.
Whatever the reason(s) why Gavin believes in Wright might be, I don't believe in bad intentions. And he has (had) to handle more impressions and informations then the rest of us, also more subjective information (direct communication) etc. And the situation with Wright most likely was convincing.
With other words: I don't blame him for believing it. What I see as a mistake is that he (Gavin) wrote a blogpost. That was premature and I'm sure he regrets it.
Whatever the reason(s) why Gavin believes in Wright might be, I don't believe in bad intentions. And he has (had) to handle more impressions and informations then the rest of us, also more subjective information (direct communication) etc. And the situation with Wright most likely was convincing.
With other words: I don't blame him for believing it. What I see as a mistake is that he (Gavin) wrote a blogpost. That was premature and I'm sure he regrets it.
No, it isn't just an example of a simple mistake , but gross negligence with extreme levels of credulity after a great amount of evidence discrediting Wright from last year, now more evidence from many different sources discrediting wright further with clear explanations on how and why Craig Wright is a likely fraud and at minimum lying with evidence provided.... and after all this Gavin still suggests he believes CW is Satoshi. This is far beyond any mistake , and raises some serious questions to either his competence or authenticity. Either way, both classic and core should permanently revoke his commit access.
I'll wait for the next days to see if G.A. distances himself from his post and gives further explanations. For now I think it's a wild mixture of impressions and a more psychological not-easy-situation. Can't explain precise what I want to say in english.
But in general my opinion is: Gavin did a lot for Bitcoin and I never had any doubts about his integrity. In this case he was too credulous and with a lack of professionalism. But: Bitcoin is not a company, G.A. is no "CEO", everybody is free to believe and free to say his opinion and also to change an opinion. And I believe that will happen if Wright doesn't show real proof for the public.
My own conclusion for now is that it's possible that they've "lost" funds but I it would be too early for the bitcoin-market to react on those rumors. And for now I don't believe lost ETC-funds would lead into an insolvency.
https://www.reddit.com/r/Bitcoin/comments/4vl5gd/coinbase_has_all_funds_to_cover_user_deposits/But, not sure - I would like to hear other opinions.
