...It's hard in one's old age to have youngsters with placards outside the nursing homes chanting "Down with geezers" because they are fed up with SS and Medicare costs.
So a few years from now, we'll probably be facing this crisis again.
Interesting observations and questions. I guess the Euro swings depend on the other currency too, i.e. it is not just what is happening in Europe. Also all those world traders are operating second to second and I picture them as generally young, testosterone overdosed males.The euro is up against other currencies this morning, I think the markets believe that the recent announcements make it more likely an agreement will be reached.
So, is the euro up because:
1) The traders always bid it up by force of habit anytime an agreement with Greece is reached?
2) Traders believe that the terms are onerous enough that it will provide a disincentive for fiscal irresponsibility among other eurozone nations?
3) Traders believe the euro will be a stronger currency with Greece aboard than if Greece drops the euro?
4) Something else?
I doubt it is number 3.
There are no “good” options for now to end this Greek tragedy. A lot of people are going to get an involuntary financial haircut—pensioners, bond holders, welfare recipients, government workers, the IMF. By voting “no” on the latest referendum, the Greek voters rejected outside help, and the conditions that come with it. That means the responsibility for resolving the crisis now rests clearly with the Greeks themselves, as it should have all along.
Greece is now sitting on $350 billion of debt. It’s unpayable and the international monetary experts are deluding themselves if they believe that by some magic stroke this nation of 11 million citizens will sometime in the future come up with the funds to repay it.
Greece is already overtaxed, and adding more taxes on the few businesses that are still functioning is only going to ensure their eventual demise too. Meanwhile the Greek citizens have come to the conclusion that fat pensions and cradle to grave welfare benefits are a human right that can never be taken away. That is what they declared in the referendum. But those benefits are going to be lost. Socialism has radically reduced the standard of living of the citizens.
All of the conventional EU and IMF solutions have been designed to give Greeks time to adjust and stop their profligate ways. That hasn’t happened. The Greek citizens are simply living way, way beyond their means. This is a nation with an average retirement age of 60. This is a nation that has one in four adults unemployed and half of its young people out of work. With such countrywide levels of idleness, who is there that is working to pay for these super-extravagant benefits? Are the hard-working German citizens going to pay more taxes to pay for lavish benefits to Greek retirees? Almost certainly not. And they would be fools to do so.
Default will force everyone to take a hit. Creditors may get 50 cents on the dollar owed depending on how bleak the finances really are in Athens. Welfare benefits will have to be slashed. Pensions for retirees will be cut based on the new reality of Greece’s finances. This may seem “unfair,” but how is it fair to require young Greek citizens to pay exorbitant taxes to pay for the sins of their fathers and grandfathers. And default, at least, may provide the opportunity for a fresh start.
One implication of this solution is that investors may start to view sovereign debt as risky, not risk free. They will charge nations—especially those that have massive unfunded liabilities—higher interest rates on their debt. Making it harder for bloated governments to borrow would be a positive development. More money would flow to private sector borrowing, and less to governments.
The average retirement age for American men and women
The average retirement age for men in 2013, the most recent year for which data are available, was 63.9. For women, the average retirement age was younger, at 61.9 for 2013.
Welfare benefits will have to be slashed. Pensions for retirees will be cut based on the new reality of Greece’s finances. This may seem “unfair,” but how is it fair to require young Greek citizens to pay exorbitant taxes to pay for the sins of their fathers and grandfathers.
My children are currently forcing me to make them placards that say, "Down with Geezers!!!". But, it's not all that bad, as they are letting me select the crayons I want to use.
Greek banks have been closed for 2 weeks, so the economic damage will be severe. Hopefully it will not be catastrophic and activity can recover to close to previous levels. The challenges ahead are still enormous and the Greek people have a long and hard road ahead.
And I am not convinced they are up to it. The referendum vote of overwhelming "no" said it all. Greek government utterly failed its people with the referendum move. All it did was confuse the Greeks more. Frankly, I am surprised that there aren't riots in the streets.
Time for the Greeks to LBYM.
The referendum vote of overwhelming "no" said it all. Greek government utterly failed its people with the referendum move.
Frankly, I am surprised that there aren't riots in the streets.
Time for the Greeks to LBYM.
Osborne Considers Approving EU Funds For Greece
The Government supports the use of UK-backed emergency cash the day after the Chancellor said British help was a "non-starter".
Tsipras has inspired other European leaders to practice abrupt reversals of position, agreeing to terms they had absolutely ruled out only the previous day. The way it's going, any publicly stated categorical refusal by a European leader will be considered the same as an enthusiastic endorsement.
Case in point:
Osborne Considers Approving EU Funds For Greece
While all of this may be difficult to understand, there IS a simple explanation:Explanation of the Greek Bail Out
It is a slow day in a little Greek Village. ....
[see the quoted post for the whole story - I didn't want to copy/paste the whole thing here...]
No one produced anything. No one earned anything. However, the whole village is now out of debt and looking to the future with a lot more optimism.
....................................And that, Ladies and Gentlemen, is how the bailout package works.
It is a slow day in a little Greek village, planet earth. The rain is beating down and the streets are deserted. Times are tough, everybody is in debt, and everybody lives on credit.
On this particular day a rich German tourist is driving through the village, stops at the local hotel and lays a €100 note on the desk, telling the hotel owner he wants to inspect the rooms upstairs in order to pick one to spend the night. The owner thinks about maybe beating the tourist to death, but decides to give him some keys and, as soon as the visitor has walked upstairs, the hotelier grabs the €100 note and shoves it in his pocket.
He owes Piraeus Bank down the street €100,000 but has little intention of repaying it as his business has been contracting for several years. That bank also has claims of €10,000 on a butcher's business, €50,000 on a pig farmer, €75,000 to a supplier of feed and fuel, but in turn owes €100,000 to EFG Bank which itself has fractionally reserved claims on a pub owner and a prostitute who bought two homes on 105% LTV among many others.
At that moment the traveler comes down the stairs, states that the rooms are not satisfactory, and asks for his €100 note back. The Greek innkeeper asks "what €100 note?" The German threatens to call the police. The innkeeper says "go ahead, ask for my brother who's a Lieutenant down at the precinct, he'll help you out." The German storms out back into the night, €100 poorer.
No one produced anything. No one earned anything. However, the whole village is still buried in debt and looking to the future with a lot more optimism at the thought that maybe the Germans really are that gullible.
And that, Ladies and Gentlemen, is how the bailout package works.
And I am not convinced they are up to it. The referendum vote of overwhelming "no" said it all. Greek government utterly failed its people with the referendum move. All it did was confuse the Greeks more. Frankly, I am surprised that there aren't riots in the streets.
Time for the Greeks to LBYM.
It's worked great for Germany.
Look at their trade surplus.
I was in the center. We stayed in the "good neighborhoods" and found them troubling. Buildings decaying everywhere. Only the hotel would take a credit card.
I have spent time world wide. I personally found Athens to be very run down and i was on edge. We went several places outside of Athens that were lovely.
Just my personal experience and it happened to be before the banking issues.