I note that comments have pretty much stopped. I guess folk are like me, waiting for the results of the referendum. I see it as having two possible results, a 'No' vote kills the Greek economy and a 'Yes Vote' kills the Greek economy since neither leads to economic sanity or real reform.
Fox is reporting the exit polls seem to be heavily leaning 'No', which means no new funding and the euros in circulation run out in days. Expect the world markets to take a hit tomorrow.
This graph shows increased government spending as a percentage of GDP, which is the exact opposite of "austerity". But leftist frauds like Paul Krugman are incapable of acknowledging the failure of their tax-borrow-spend big government religion. Even when failure is staring them in the face, they will still find a way to blame someone else. In this case, they are blaming nonexistent "austerity" for the profligate spending and borrowing policies of Greece. It requires an incredible amount of intellectual dishonesty to blame nonexistent "austerity" for the problems that were caused by decades of spending and borrowing too much.
That is the typical arrogant excuse trotted out by leftists like Paul Krugman. They haughtily inform us that governments are exempt from the basic laws of economics because they have the ability to cycle magic pieces of paper through the economy and fix everything that way. Don't worry about things like inflation or the misallocation of resources via malinvestment. The magic pixie dust of "money velocity" will solve everything.
A "No" Victory Appears Probable: What Happens Next According To Deutsche Bank http://www.zerohedge.com/news/2015-...ble-what-happens-next-according-deutsche-bank I guess the question now is, will it take another 5 years for the next European country to follow Greece's lead? And if more countries begin to unravel, how will central banks fight against the falling prices of financial assets (aka price discovery) when rates are already so low?
So for a fan of MMT, weak growth after rock bottom rates, massive global quantitative easing and stimulus doesn't discredit MMT because it was the wrong kind of QE and stimulus. But the Greek collapse discredits Austrian economics even though the ECB, Euro system, and Greek politics run completely counter to Austrian ideas. Seems legit.
Amazing, isn't it? Countries that aggressively reject Austrian school theory and embrace big government taxing, spending, and borrowing policies can blame all their financial problems on... the Austrian school?
We've been through this. QE is a non-event, there was no real stimulus, no fiscal expansion... I've been predicting the economy correctly for 6 years now and never once have I said it was going to be good as long as the obstructionist Republicans were preventing any action. But, on the plus side, Greece being destroyed by austerity has been a boost for my theory. Not going to lie. - - - Updated - - - Define "run out of money". Are you saying there is a limit to how much made up money a country can make. Greece happens Greece happens Until you understand the difference between Greece's monetary system and the US/Japan/China's monetary system, you will not understand the role debt plays. It's very complicated, but you guys fail to understand the elementary level topics. No reason to expand on it until you can figure out the basics. - - - Updated - - - Austerity is any measures to reduce the deficit which is exactly what Greece was trying to do, it's what the US has been trying to do... it is all austerity. Austerity destroyed Greece, that's the only real fact we know out of all this.
Just pointing out double standards and how you selectively allow for nuance when it supports your worldview. And QE wasnt very popular with anybody outside of the financial media. Youve yet to establish it was a non-event. The Fed bought financial securities, and this propped up the prices for those securities. This is where MMT has always fallen short. When you have price distortion after central banks buy financial securities, MMTers just say big deal, the Fed exchanged one asset for another of equivalent value. This is very narrow minded because prices arent being set by the market when the Fed buys securities. Its like saying its a non-event if the Fed were to buy peoples houses at a price that was above market value.
They simply need to offer China a place for one large naval base in return for money, a trade deal and other support including a realistic plan to develop their economy where they can. Why not if the EU turns on them then China would be the safe bet to get money from.
Haven't selectively allowed anything. My position has not changed in 6 years other than a higher understanding in high level banking. Other than that, no matter how you spin it, QE did very little and definitely was not "money printing". And yes, having trillions of dollars in deficits does put the Fed in a position to have to manipulate the bond market as high interest rates on savings assets would be counterproductive to what the economy needs. The Fed did not manipulate the stock market, they simply lowered the rates on government bonds. Everything they have done makes sense when you understand how it works and none of it was done for some conspiratorial reason. They didn't do it so the government can afford interest payments, they didn't do it to help their banking buddies, they did it for one reason and one reason only... to keep money flowing. But it definitely is not as big of a deal as you are making it out to be.
Overspending and living on borrowed money killed Greece...I predict the Greeks will soon look back on 'austerity' as the good old days.
So you call it a non-event but then you admit that they manipulated the bond market. Manipulating the interest rate of risk free government debt impacts prices of bonds throughout the bond market. That market is all about spreads. And then you act as if its a conspiracy theory that it increases stock prices? Low rates make it very easy for companies to raise debt and buy back their own shares. Thats just a very obvious side effect of suppressed interest rates. The bond market is much larger than the stock market anyway.
I just fear they will not learn the lesson and blame everyone else but their own corrupt governments for the last 20 years.
The Euro is alread down almost 2%...who knows what it will look like tomorrow. Before some laud the negative impact on the rest of evil Europe, consider a 2%, 5% even 10% fall in the Euro is far better than a 100% crash of the Greek economy.
All they were doing is targeting their rates. Qe really did nothing, it was a non-event as it just kept interest rates where the fed wanted them.
Nope. A lesson needs to be taught/learned here. Let 'em crash & burn in the mess they have sanctioned.
I agree...it is past time an example was made to remind folk that the basic rules of economics are not trumped by a vote.
