Options
Default, Print or War?
gulliverfoyle
Posts: 6,318 Forum Member
✭
In the current economic debt crisis i can only see 3 options
Default : the PIIGS,US Japan etc just say sorry guys were not paying
Print: the ECB FED etc just inflate our way out by diluting the $hit out of the debt
War : probably the end result after the 2 above options
Default : the PIIGS,US Japan etc just say sorry guys were not paying
Print: the ECB FED etc just inflate our way out by diluting the $hit out of the debt
War : probably the end result after the 2 above options
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Comments
I certainly hope it doesn't come to war but it's absolutely a plausible consequence.
Civil war maybe in Greece, but I doubt anything like the two World Wars
I hope the politicians will all be sensible and work out a compromise, work out new treaties or agreements in the light of the changed situation over the next few weeks. We now have EU leaders stating publicly Greece may (will) leave the Eurozone soon although there is no way to do that at present.
The politicians know the Euro as it stands is finished but they're panicking because they have no clue what to do next.
We're watching utter chaos and it's going to manifest itself into something far, far nastier than we in the UK have seen so far.
I feel desperately sorry for the Greek people who are being pummeled by all this.
However, one of his solutions is for us all to throw more cash at something he says will not work:
You would have thought, given that he says "monetary union is a flawed concept and always has been," that his solution would be to scrap monetary union. It isn't.
http://www.guardian.co.uk/business/2011/nov/03/eurozone-crisis-policymakers-lose-control
I don't think they do. Or at least Merkel and Sarkozy still want to carry on with it. However the EU has the same basic flaw as the old ERM. Interest rates tend to be set for the benefit of the Bundesbank.
It is not accident that almost all the countries that are having problems (Spain, Portugal, Italy, Greece) are Southern European. These are often poorer than the rich Northern with a predominatly agrarian economies.
The reason I think civil war is a possibility is simply because the man in the street, just does not know how bad it can get - if the Drakma is returned and plummets like a stone in value with the resultant rampant inflation. It would not surprise me if you get a repeat of the inflation that best Germany - where people used to use wheel barrows of money and the price of coffee increased while you were queuing to pay for it!
In that respects keeping the Euro and Greece in it might be the best thing. At least then you could have an orderly withdrawal.
The Euro may be dead - but it's collapse must me managed - and the best way of doing that is to let the Southern countries leave in an orderly way.