Reply to: The Euro is dead

[C0ldf1re]

When are we joining the Euro ? So we all go down in one heap.

I think we already have. We just haven't yet woken up to the fact.

[SueEllen]

I can't argue with you for that and what a pity for I'd dearly love to rant. You know this one time I met this girl in Southampton, late twenties, in conversation I discovered she'd never been north of the M27. 'Winchester, where's that?' Are you serious!!?? Shocked and stunned I tell you.

Nothing surprises me.

I keep encouraging young people who are graduates with degrees in subjects you can actually get work, that if they can't get a job in the work area they want in the UK then to look abroad.

90% of the time I then get told they can't leave their partner or family.

I then point out they can move with them only to discover they haven't even looked else where in the UK.....

[scooterscot]

Luckily for the UK:
1. People are tulip at foreign languages.

2. Most young people have skills in useless subjects that are not wanted abroad, and by the time they get reasonable experience in something useful they are "settled" with family.

3. There seems to be a fear from lots of young people with relevant skills/qualifications of working somewhere else in the UK for a few years, let alone abroad.

I can't argue with you for that and what a pity for I'd dearly love to rant. You know this one time I met this girl in Southampton, late twenties, in conversation I discovered she'd never been north of the M27. 'Winchester, where's that?' Are you serious!!?? Shocked and stunned I tell you.

[SueEllen]

True. What happens when 'most people' move to pay taxes somewhere else? (i.e. not UK)

For example the young folk in Ireland are fleeing in their droves.

Luckily for the UK:
1. People are tulip at foreign languages.

2. Most young people have skills in useless subjects that are not wanted abroad, and by the time they get reasonable experience in something useful they are "settled" with family.

3. There seems to be a fear from lots of young people with relevant skills/qualifications of working somewhere else in the UK for a few years, let alone abroad.

[scooterscot]

To be fair loads of countries around the world are ****ed -
List of National Debt by Country | Economics Blog

At least the UK has a government, and most people pay their taxes.

True. What happens when 'most people' move to pay taxes somewhere else? (i.e. not UK)

For example the young folk in Ireland are fleeing in their droves.

[AtW]

At least the UK has a government, and most people pay their taxes.

[SueEllen]

I ask you, are we in the UK that different.

First time buyers: 35 years+

Graduates: £30K of debt

Public sector pensions: Someone remind how many billion we're short

UK debt: At the end of December 2010 general government debt was £1105.8 billion, equivalent to 76.1 per cent of GDP.



Bravo, yeah, we're off to a flying start. At least Greece has predictable sunny weather.

To be fair loads of countries around the world are ****ed -
List of National Debt by Country | Economics Blog

At least the UK has a government, and most people pay their taxes.

[scooterscot]

On its current course it faces a generation of ruin.

I ask you, are we in the UK that different.

First time buyers: 35 years+

Graduates: £30K of debt

Public sector pensions: Someone remind how many billion we're short

UK debt: At the end of December 2010 general government debt was £1105.8 billion, equivalent to 76.1 per cent of GDP.



Bravo, yeah, we're off to a flying start. At least Greece has predictable sunny weather.

[scooterscot]

They could devalue if they go back to the Drachma...

That's what the speculators want us to believe is the way forward.

Surely such actions would mean the Drachma would be devalued by half and rampant inflation would result. A plan that's worked for us and the US so well thus far. A default would mean no country would lend to them for years and years.

I don't think the people of Greece are going to go for that.

I think what is more likely to be the outcome of this weekend (he holds his breath) is Greece shall hand over control of it's domestic financial affairs to EU bodies who can do a better job.

[swamp]

Cracks or speculators looking to make a quick buck?

Greece full well knows departure would like leave them in a worst position than they are currently in.

If Greece could default on its debt, like Argentina, then in five years it may bounce back. On its current course it faces a generation of ruin.

[AtW]

They could devalue if they go back to the Drachma...

Yes, they could.

But all their debts are in euros, not drachmas!

And even if that was not a problem (default on debts), then they'd still have to pay upfront (especially after default as nobody will give them credit) in hard currency (USD) for oil, wheat, gas, metals etc etc.

Only strong euro members like Germany actually have way out because they can do on their own if necessary. All weak members can do is bluff and blackmail, but Germany does not strike me as the kind of country that can tolerate such stuff any further.

[CheeseSlice]

Greece full well knows departure would like leave them in a worst position than they are currently in.

They could devalue if they go back to the Drachma...

[scooterscot]

Proper cracks appearing in the Euro now

Euro falls on rumours Greece is to quit the eurozone

Of course EU ministers and ECB deny this, we're used to this mechanism of releasing information about sovereign debt now:

1. Drop a rumour about <replace with name of PIIG country> seeking bailout that appears in hundreds of tabloids and news channels worldwide.
2. EU ministers, ECB and <PIIG country> furiously deny the reports.
3. 1-2 months pass whilst market reaction is assessed, and politicians invent cover story/spin.
4. <PIIG country> admits it is seeking bailout.

Cracks or speculators looking to make a quick buck?

Greece full well knows departure would like leave them in a worst position than they are currently in.

[CheeseSlice]

Proper cracks appearing in the Euro now

Euro falls on rumours Greece is to quit the eurozone

Of course EU ministers and ECB deny this, we're used to this mechanism of releasing information about sovereign debt now:

1. Drop a rumour about <replace with name of PIIG country> seeking bailout that appears in hundreds of tabloids and news channels worldwide.
2. EU ministers, ECB and <PIIG country> furiously deny the reports.
3. 1-2 months pass whilst market reaction is assessed, and politicians invent cover story/spin.
4. <PIIG country> admits it is seeking bailout.

[doodab]

WHS - but how do you clip wings on a global scale? And our ethics are in sort supply so we're unlikely to lead the way, ever.

I don't think it's necessary. The line of argument that requires global coordination basically says that if anyone takes unilateral action a) financial services firms will relocate en masse and b) the cost of financial services will rise damaging the local economy, and that these two things will outweigh any possible benefit that comes from greater regulation.

This is an assertion largely put forward by the financial industry, and given the costs currently being borne by central government and the wider economy on their behalf, the idea that what is best for them is best for all of us is starting to look less and less credible.

If politicians were to decide that the wider economy is better served by limiting their activities, even if that risks some damage to incumbent financial services firms, then that is a de facto rejection of the above line of reasoning and instead of a need for global coordination we have competition to devise a regulatory framework that's best for the wider economy.

Of course, it's also reasonable to say that any action taken is going to be 5 years to late.