Euro Debt: Let's stop this mindless ponzi borrowing and lending today.

Inix (03Jan2011) wrote:

Re: ECB/IMF announcement of Greek bondholders haircut- what is holding them back?
Yawn. And after this, let's just let Italy default, Spain default. And while we're at this, Ireland as well. And maybe, the US will than choose to default on the debts as well, so the world is square.
Its so convenient for people to keep saying cut this cut that and reduce debt and increase revenue. Only that in a country that has no economic growth, no government to spur growth, where got taxes huh?

Tks for reply but just off the cuff, I wouldn't trust a bankrupt government so much as to allow them free reign over the state printing presses so that they can seem like miracle healers to us. These guys are thieves from the very start. Every dollar printed is NOT a dollar earned- it is a dollar stolen from those who are holding on to the said currency. It is deflationary upon the value of currency which is simply why when you go to the supermarket, everything costs more nowadays.

And there is limit to how high the GDP can grow: how many humans have you seen exceeding 120yrs? Yes the old testament (Bible) is full of them but my point is, there are limits to growth. Excess carbon emissions means higher sea levels aka less farm land to grow food= food costs more money to produce. Yes your GDP would seem inflating BUT heck, what's the point, with all the work and money spent on climatic disaster relief, fighting increasing cancer rates from unhealthy lifestyles and polluted living, sub-prime crises, mini-bond sagas and worse- war expenses (both tangible and not) when trade wars escalate into world wars.

These investors who buy Greek debts are rich, they know the worth of such things and many a time, for higher returns, they choose sovereign debt with the highest rate of return repayments- they are willing acceptors of risk in exchange for a handsome interest gain. So when there is a default, shouldn't they suffer some pain? Why make everyone else, especially the poorest in society bear the debt when a haircut would do the trick- only consequence from this is that Greece would not be able to borrow money for a very long time. In any case, Greece under a mountain of debt (>140% GDP (2010est.)), is likely to demand low interest loans from the ECB- and there cannot be any logical reason why the Germans might accept such venture unless their idea is to make Greece a colony of themselves. Since September, the market has priced Greek bonds at beneath EUR 50 (for face value EUR 100) a piece; today, an >80% haircut is expected. With a debt of >140% GDP and a GDP of >USD 300 Billion, but for the inflationary act of printing (stealing) money, where do you think the ECB is going to find USD 300 B to bail small Greece out in addition to Spain, Portugal, Ireland, Italy, all large countries would soonest clamor for money the moment their bonds are due for maturity repayment or for interest repayments that can only be expected to increase with more funds spent stimulating the economy?

When you give people the confidence that the government is solvent and honest, one that does not steal from the poor to pay the rich who misplace their money. Which knows how to tax fairly and spend wisely, which maintains a sense of law and order and a high quality of education in a country, whose frugality is matched by its charity. Which respects people's cash savings without the need for them to resort to gold/ property hording to maintain the value of their cash savings. Citizens who have dignity to care for themselves because their savings earn reasonable interest rates and are not eroded by inflation by the time they are old, are also unlikely to place further burdens on a country's ailing health care system and might even choose to invest some capital in useful industry- then you have REAL growth. Otherwise, welcome to the country of Zimbabwe: a country still without its own currency and whose population of 12.5Million remains at the mercy of foreign currency whilst remaining at the bottom of the pit where per-capita GDP is concerned.

If money were grease, it might be better to take a walk rather than continue trying to add extra grease (money) into a car with a damaged (corrupt), dirty (debt laden) engine (economy) and an almost empty petrol tank (exhausted natural resources).

Give the people of Greece a break, let them repay their debts at a reasonable price and rate. There is no need for them to remain bankrupt indebted to the ECB for generations to come. Lets stop this mindless lending. Let the economy stand on its own two feet; stop the PONZING the world economy today.

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04Jan2011: ECB/IMF announcement of Greek bondholders haircut- what is holding them back?