Article

2010-02-15 Europe

Germans say euro zone may have to expel Greece

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Posted by Fred 2010-02-15 00:00|| || Front Page|| [7 views ] Top

#1 By, by Greece.

Posted by g(r)omgoru 2010-02-15 02:58|| 2010-02-15 02:58|| Front Page Top

#2 At least the German people understand Moral Hazard.

Posted by phil_b 2010-02-15 03:43|| 2010-02-15 03:43|| Front Page Top

#3 It's only a pity they didn't do the same for the banks.

Bailing out depositors would have been cheaper, and because bank collapses are deflationary, it's possible to safely print money without net inflation.

Posted by Bright Pebbles 2010-02-15 06:17|| 2010-02-15 06:17|| Front Page Top

#4 more than two-thirds oppose handing Athens billions of euros in credit

1) Hope German gov't listens better than ours;
2) Hope Zero doesn't take this as an "opportunity" to suck up to the world and give Greece OUR money. I know he doesn't care what 2/3s of Americans think.

Posted by AlanC 2010-02-15 06:51|| 2010-02-15 06:51|| Front Page Top

#5 Germany won't bailout Greece. Greece will default on its Euro debt and the cascade will spread to the rest of the PIIGS.

It's going to be an interesting few weeks.

Posted by phil_b 2010-02-15 08:27|| 2010-02-15 08:27|| Front Page Top

#6 If you hate the EUSSR like I do, then this is a pop-corn moment.

Posted by Bright Pebbles 2010-02-15 09:26|| 2010-02-15 09:26|| Front Page Top

#7 Germany won't bailout Greece. Greece will default on its Euro debt and the cascade will spread to the rest of the PIIGS. Phil

Short-term consequences? Euro drops, USD gains strength, US Exports to Europe decline.

Posted by Besoeker 2010-02-15 09:30|| 2010-02-15 09:30|| Front Page Top

#8 Think of a currency drop as a pay cut for everyone paid in that currency.

Would you want to trade more with someone who just had a pay cut?

Posted by Bright Pebbles 2010-02-15 09:45|| 2010-02-15 09:45|| Front Page Top

#9 Next on the radar, or EU agenda, if you please:

Portugal

Spain

The govt wants belt tightening. The unions won't do it. Everyone is up to the gunnels in debt. No easy way out. General strikes, civil unrest.

The US is heading that way, too.

Posted by Alaska Paul 2010-02-15 09:56|| 2010-02-15 09:56|| Front Page Top

#10 because bank collapses are deflationary, it's possible to safely print money without net inflation. Aren't defaults on debts also deflationary?

Posted by Anguper Hupomosing9418 2010-02-15 10:16|| 2010-02-15 10:16|| Front Page Top

#11 All reductions in debt including defaults are deflationary. This is because most debt is used to purchase real property. Less money available to purchase property results in price declines.

It's generally assumed that property deflation and consumer price deflation always occur together, because thats what happened in the 20th century (The Great Depression, Japan since the 1990s). However, IMO both were special cases and this time around we will see the opposite, simultaneous property deflation and consumer price inflation.

One reason I think this is that the main lever governments have to stimulate the economy is to put more money in consumer pockets, while less debt causes fewer productive assets to be built, ie demand increases while supply decreases.

Although, Japan's experience was putting more money in consumer pockets just made them save more. There is already evidence that Americans and Europeans are saving more, so perhaps I am wrong about consumer price inflation.

Posted by phil_b 2010-02-15 11:03|| 2010-02-15 11:03|| Front Page Top

#12 To have consumer price inflation, don't you have to have increasing consumer income, or at least increasing consumer debt? Both income & debt seem to be either flat or decreasing in the US. Sellers can jack up their asking prices to the moon, but that doesn't mean buyers will meet those prices.

Posted by Anguper Hupomosing9418 2010-02-15 11:06|| 2010-02-15 11:06|| Front Page Top

#13 Maybe Germany can......

Oh, sorry.

Wrong war.

Posted by Kelly 2010-02-15 11:12|| 2010-02-15 11:12|| Front Page Top

#14 Coming onto the radar.

Spanish intelligence probe 'debt attacks' blamed for sabotaging country's economy

Posted by tipper 2010-02-15 11:49|| 2010-02-15 11:49|| Front Page Top

#15 Feb. 15 (Bloomberg) -- The European Unions statisticians werent aware that Greece used currency swaps to disguise holes in its balance sheet, the EU said

Posted by Anguper Hupomosing9418 2010-02-15 13:16|| 2010-02-15 13:16|| Front Page Top

#16 Anguper Hupomosing9418
I'm sending you the bill for my new Bullshit detection meter, it exploded in sparks from an overload.

Posted by Bright Pebbles 2010-02-15 15:00|| 2010-02-15 15:00|| Front Page Top

#17 To have consumer price inflation, don't you have to have increasing consumer income, or at least increasing consumer debt?

Or you have a critical commodity spike as with the Arab Oil embargo of the early 70s. While they're now as much tied to the flow in dependency of income, then they were then, to maintain economic balance and domestic stability, it doesn't mean they have to execute the transactions in US dollars. If the external holders of American money start to dump their holdings for something else [and the euro isn't looking too good now], you'll see lots of dollars chasing such commodities making importing them far more expensive [in world market competition]. When its a component that effects nearly all aspect of the economy directly or indirectly [as in transportation of goods and services], you'll see overall costs rise even without an increase in consumer income or debt.

Posted by Procopius2k 2010-02-15 15:16|| 2010-02-15 15:16|| Front Page Top

#18 Bulk shipping rates have moved up sharply over the last 6 months. Indicating a commodity price spike in progress.

But perhaps just the last splurge of the China bubble, before reduced consumer demand and economic protectionism kick in.

Posted by phil_b 2010-02-15 16:38|| 2010-02-15 16:38|| Front Page Top

#19 Sometimes politicians tell the truth.

Papaconstantinou (Greek Finance Minister) said in Brussels today that People think we are in a terrible mess. And we are,

Posted by phil_b 2010-02-15 16:58|| 2010-02-15 16:58|| Front Page Top

#20 Expel Greece and the EEEEE--UUU---RRR ---OOOOO is a Zimbabwe "dollar" over night !

Posted by Daffy Speger7083 2010-02-15 18:54|| 2010-02-15 18:54|| Front Page Top

#21 So in the short term (45 days) buy US dollars and oil futures; then swap into Swiss Francs and krona.

Posted by Spanky Wheack7175 2010-02-15 19:31|| 2010-02-15 19:31|| Front Page Top

#22 "A majority of Germans want debt-ridden Greece to be thrown out of the euro zone"

A majority of Germans didn't want the Euro in the first place.

Posted by European Conservative 2010-02-15 21:07|| 2010-02-15 21:07|| Front Page Top

#23 California take heed.

Posted by rwv 2010-02-15 23:28|| 2010-02-15 23:28|| Front Page Top

#24 A majority of Germans didn't want the Euro in the first place.

That's what I recall, European Conservative. They were concerned about having to foot the bill in exactly this situation.

Posted by trailing wife 2010-02-15 23:31|| 2010-02-15 23:31|| Front Page Top

#25 In the short term - cash or gold if you are risk inclined.

The countries that have been replacing USD with EUR in their reserves will now start to dump the EUR.

Posted by phil_b 2010-02-15 23:48|| 2010-02-15 23:48|| Front Page Top

00:04 trailing wife
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