Good thing Labour didn't win the last election...
Jeff
If Britain were Greece
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JollyGreen
- Posts: 2047
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If Britain was Greece....it would be a lot sunnier!
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mulberryhawk
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- Joined: Thu Oct 29, 2009 12:37 am
why?Good thing Labour didn't win the last election...
When you have a blazing inferno, you're unlikely to put it out by dousing it with petrol!
Labour's answer to the economic situation is more spending - the very thing that helped get us into this mess! Plus, there's a good chance that a Labour government would have caused bondholders to demand much higher interest rates from the UK government.
Jeff
Labour's answer to the economic situation is more spending - the very thing that helped get us into this mess! Plus, there's a good chance that a Labour government would have caused bondholders to demand much higher interest rates from the UK government.
Jeff
mulberryhawk wrote:why?Good thing Labour didn't win the last election...
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mulberryhawk
- Posts: 165
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but the greeks havent spent since the crisis.....thats the point its the austerity thats causing the economy to spiral out of control.
http://blogs.telegraph.co.uk/finance/am ... A6-greece/
http://blogs.telegraph.co.uk/finance/am ... A6-greece/
But what's the alternative to Greek austerity? Spending more money they haven't got, and playing a game of chicken with the Germans?
If you're living beyond your means, with huge debts that are accumulating eye-watering interest, you either cut down on your expenditure or go bankrupt.
Also, considering the following:
A. Britain is a net importer, so more stimulus might merely cause wealth to leak out of the economy.
B. Spending might boost GDP and even temporarily stimulate the economy, but will that cause the economy to grow? Economic growth happens due to exports, investment and innovation, and I just don't see how so-called economic stimulus can realistically pay for itself. For example, building a prison might contribute to GDP, but I'm damned if I can see how it will make us wealthier as a nation.
Jeff
If you're living beyond your means, with huge debts that are accumulating eye-watering interest, you either cut down on your expenditure or go bankrupt.
Also, considering the following:
A. Britain is a net importer, so more stimulus might merely cause wealth to leak out of the economy.
B. Spending might boost GDP and even temporarily stimulate the economy, but will that cause the economy to grow? Economic growth happens due to exports, investment and innovation, and I just don't see how so-called economic stimulus can realistically pay for itself. For example, building a prison might contribute to GDP, but I'm damned if I can see how it will make us wealthier as a nation.
Jeff
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mulberryhawk
- Posts: 165
- Joined: Thu Oct 29, 2009 12:37 am
The Greeks are unable to issue their own currency ( unlike the UK ) so they have no option to devalue and thus improve their competitivness.
They have in effect borrowed in a foreign currency and are trying to regain competitivness by internal devaluation.
The debt stock increases as the economy shrinks, in effect compounding their spiraling bond yields.
In contrast the UK have yet to actually start making the serious fiscal cuts necessary. And as the BOE can issue their own currency, they can buy gilts thus driving down the UK`s cost of borrowing.
There is little differance between the Tories or Labour if you look closely at what they are actually saying and doing. Both recognise that cuts need to be made its just how fast and how deep that they disagree over.
Its a currency problem in greece and the rest of the periphery not a debt problem. Look at the debt that the US, Japan and UK have and yet look at their bond yields. Because they can issue their own currency and for want of a better phrase monetize their own debt.
Just to point out im neither left or right leaning before I get accused of being red mulberryhawk or something
They have in effect borrowed in a foreign currency and are trying to regain competitivness by internal devaluation.
The debt stock increases as the economy shrinks, in effect compounding their spiraling bond yields.
In contrast the UK have yet to actually start making the serious fiscal cuts necessary. And as the BOE can issue their own currency, they can buy gilts thus driving down the UK`s cost of borrowing.
There is little differance between the Tories or Labour if you look closely at what they are actually saying and doing. Both recognise that cuts need to be made its just how fast and how deep that they disagree over.
Its a currency problem in greece and the rest of the periphery not a debt problem. Look at the debt that the US, Japan and UK have and yet look at their bond yields. Because they can issue their own currency and for want of a better phrase monetize their own debt.
Just to point out im neither left or right leaning before I get accused of being red mulberryhawk or something
Mulberryhawk
If I were Greek, I'm not sure how I'd feel about leaving the Eurozone. On the one hand, it might give the Greeks an opportunity to wipe the slate clean, and try to build an export-lead recovery using a new currency that was cheap on the exchange markets. But on the other hand, for Greece to leave the Euro could trigger another Lehmann-style event, potentially creating a far worse situation. Plus, Germany would have no incentive to continually hand them billions of euros!
But on balance, I think the current situation is unsustainable, so Greece should probably bite the bullet rather than putting off the inevitable...
As for our debt and America's, there's more than one way to default, and by printing money we're effectively forcing the bond holders to take a haircut. The risk is that sooner or later those bond holders will want to grow long hair, and will demand higher interest rates to compensate them for further involuntary haircuts that they sense are awaiting them down the road...
Jeff
If I were Greek, I'm not sure how I'd feel about leaving the Eurozone. On the one hand, it might give the Greeks an opportunity to wipe the slate clean, and try to build an export-lead recovery using a new currency that was cheap on the exchange markets. But on the other hand, for Greece to leave the Euro could trigger another Lehmann-style event, potentially creating a far worse situation. Plus, Germany would have no incentive to continually hand them billions of euros!
But on balance, I think the current situation is unsustainable, so Greece should probably bite the bullet rather than putting off the inevitable...
As for our debt and America's, there's more than one way to default, and by printing money we're effectively forcing the bond holders to take a haircut. The risk is that sooner or later those bond holders will want to grow long hair, and will demand higher interest rates to compensate them for further involuntary haircuts that they sense are awaiting them down the road...
Jeff
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mulberryhawk
- Posts: 165
- Joined: Thu Oct 29, 2009 12:37 am
Jeff,
I just wanted to bring to your attention that the Greeks have cut farther and faster than any country in the OECD and it has not worked. As you were linking the Greek situation to a labour government, I was merely trying to point out that the greeks have actually taken a more conservative austerity front loaded approach to cuts as opposed to a labour approach.
You`re right the current situation is unsustainable and there is going to be considerable pain no matter what they choose.
As regards the UK and US debt well its either default by inflation or deflation take your pick. And I think the latest inflation figures are making their way back to the 2% target which is what was predicted by the BOE last yr. If you were a bondholder now what would you do? sell them and buy stocks.....
I just wanted to bring to your attention that the Greeks have cut farther and faster than any country in the OECD and it has not worked. As you were linking the Greek situation to a labour government, I was merely trying to point out that the greeks have actually taken a more conservative austerity front loaded approach to cuts as opposed to a labour approach.
You`re right the current situation is unsustainable and there is going to be considerable pain no matter what they choose.
As regards the UK and US debt well its either default by inflation or deflation take your pick. And I think the latest inflation figures are making their way back to the 2% target which is what was predicted by the BOE last yr. If you were a bondholder now what would you do? sell them and buy stocks.....
Sorry, but I don't trust B of E inflation predictions: http://www.bbc.co.uk/news/business-14085513
Jeff
Jeff
mulberryhawk wrote:And I think the latest inflation figures are making their way back to the 2% target which is what was predicted by the BOE last yr.
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mulberryhawk
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I thought you dident trust the bbc either, but maybe just when they support your argument.... 
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onemichael
- Posts: 69
- Joined: Sun Apr 19, 2009 10:05 am
The main problem with Greece is it is in the Euro. It should never have been allowed to join in the 1st place. They are not alone Spain, Portugal and even Italy should not have joined. All these countries had borrowing at a higher level than was allowed under the conversion arrangements. Greece join because it knew it could carry it debt over to the Euro and instead of borrowing at 8/10% it could borrow at close to the same rate as Germany. So it just bowwered more. Greece is bankrupt it is sucking in all the money from the IMF just not to default on its repayments. It has no chance of it surviving within the Euro, the fear Germany and France have is once the unthinkable happens and Greece leaves. Then so will the rest of the countries I mentioned above.
Yes even our banks will and government will take a hit in a big way. If Greece does not leave or be allowed to leave in an orderly way there will be revolution. When Police and army pay is being cut and the peoples are rising up as they are, there will be no police there to stop them. In fact they may even join in. Greece is being held in a currency for political reasons not econmic reason.
When a country can't feed its own poeple and they are losing their homes there is nothing left. Greece is being run from Brussels to an EU agenda, they were even told that they should not be havinng an election. If a party stands on a ticket of leaving the Euro, Brussels has said it will not reconzise that party. Who is running their country and whos happy to see the country get into more and more trouble just to keep the Euro project going. If you went to your bank manager and asked to borrow enough money to make your next repayment you would have no chance, so you would go to the likes of wonga.com. Then you are in complete trouble. The only kind thing to do for Greece is to cut up its credit card.
Yes even our banks will and government will take a hit in a big way. If Greece does not leave or be allowed to leave in an orderly way there will be revolution. When Police and army pay is being cut and the peoples are rising up as they are, there will be no police there to stop them. In fact they may even join in. Greece is being held in a currency for political reasons not econmic reason.
When a country can't feed its own poeple and they are losing their homes there is nothing left. Greece is being run from Brussels to an EU agenda, they were even told that they should not be havinng an election. If a party stands on a ticket of leaving the Euro, Brussels has said it will not reconzise that party. Who is running their country and whos happy to see the country get into more and more trouble just to keep the Euro project going. If you went to your bank manager and asked to borrow enough money to make your next repayment you would have no chance, so you would go to the likes of wonga.com. Then you are in complete trouble. The only kind thing to do for Greece is to cut up its credit card.
Well swerved!
I believe that the BBC has a deeply engrained liberal bias, but I don't think they go around publishing fabricated stats. That would make life way too easy for their enemies!
Jeff
I believe that the BBC has a deeply engrained liberal bias, but I don't think they go around publishing fabricated stats. That would make life way too easy for their enemies!
Jeff
mulberryhawk wrote:I thought you dident trust the bbc either, but maybe just when they support your argument....
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mulberryhawk
- Posts: 165
- Joined: Thu Oct 29, 2009 12:37 am
Haha I dident swerve anything Jeff, ok maybe the way inflation is reported is questionable but you cant post up the inflation figures as you did when they were running at 4% + and then once they show signs of coming back in line start criticising the data as being unreliable.
How can that be consistant
How can that be consistant
Just a bit!
In May 2009, the predicted Q2 2010 inflation was well under 1%. The true figure was about 3.5%! So the B of E were only about 250% out!
If Mervyn King picks a horse in the Grand National, I'm laying it!
Jeff
In May 2009, the predicted Q2 2010 inflation was well under 1%. The true figure was about 3.5%! So the B of E were only about 250% out!
If Mervyn King picks a horse in the Grand National, I'm laying it!
Jeff
mulberryhawk wrote:ok maybe the way inflation is reported is questionable