Greeks lining up at ATMs

[motion]

Originally Posted by tabs

The Western MC consumer society is over.

I concur.

[tabs]

Originally Posted by Jose_JGC

In my crystal ball I see Greece issuing a new currency called Greek Euro, initially valued to one Euro…just a hunch.

To add to the discussion in this forum, IMHO the capitalistic system is the best one so far and the origin of the capitalistic system crises is corruption.
Corruption has led to constant public deficits and it is a huge set of hidden deals between people in the political parties, people in the public sector, bankers and private entities; all resulting in wasted public spending.
The Capitalist systems need to be perfected to include more controls to admissions and promotions in the public sector and to public spending.
Jose

While the parable of the Ant and the Grasshopper is true in that the Ant by working hard and saving can provide himself with more security than the Grasshopper. The theory of Capitalism and or Socialism has never been sustainable models. At some point they each fail. The great American engine of prosperity was attained because a continent needed development and failed during the Great Depression. After WW2 a world needed rebuilding and prosperity followed. Socialism came to a screeching halt in the former USSR in 1990 and the US is headed for the same type of implosion in the future. Thus it is not adherence to an economic theory that drives economies but the vagaries of time and space. Most economic theory is just fanciful constructs

[Neilk]

Originally Posted by Iciclehead

Little thought exercise for you.

Calculate the budget hit for the US (state and federal) if interest rates went to more normative levels of, say, 2.5% over inflation, call it 5%,

Debt service cost would effectively double.

Now, take every mortgage, loan and outstanding debt in the US and add 4%...say double a good mortgage rate to 7% from its current 3.4%. How big of a hit will that make to the average American's home budget.

Now, take the loss of revenue that your mortgage deductibility effects on US tax receipts.

Cry a lot...and perhaps start buying gold.

What I am describing is not madness, but the practical levels that ought to be in place had we not done this idiocy called quantitive easing and if we would have been able to avoid the sub-prime crisis. It is the "norm" we ought to have....and yes, it would foment a crisis that would whack our economies for the rest of our lives, much the same way as the 30's influenced the mindset of a whole generation.

Dennis

I see where you are going with this, but I think the revenue loss from the mortgage deductibility wouldn't be as bad as the revenue loss from the crashing housing market. Most people would probably stay in their current houses with their 4% mortgage rate rather than move into a bigger or smaller house at 7%.

[tabs]

Originally Posted by motion

I concur.

You do not get to buy a house, a new car, a big screen TV on a Ronald McDonald job's salary. Those are the kind of jobs that are being created in the highly touted Barrack Obama economic recovery. To be fair it is not all his fault as the trend was in that direction anyway. He does deserve to be slammed for spinning it though.

The only justifiable reason why the economy should be spinned is because you don't yell fire in a theater as it might cause a panic.

As far as the FED QEing programs, better the devil you know than the devil you don't by rolling the dice. Is it optimal, NO!

Now here is the kicker..In 2008 and onwards it was a reasonable expectation that a Stimulus Bill and or a QE program would resurrect a moribund economy. Some like myself said what we are dealing with this time is a different animal the likes of which we have not seen before and that this is essentially a "new normal." As time has moved on and programs have not taken hold of as expected the sentiment is changing that none of the old tried and true since the Depression remedies is going to work. They are beginning to be at a loss as to what to do remedy the situation and time is beginning to work against them as the system that is in place is ultimately not sustainable.

Figure it this way. The FED printed roughly some 3.5T USD which they spent 2.5T in buying US Treasury Bonds. The US government spent the money in running the government???? but the velocity of that money unexpectedly fell off a cliff once it hit the private sector. Result is a moribund economy that is growing at roughly the rate of population increase. There is no real growth in the economy just an inflation of the number of people


Here is a lovely scenario for your enjoyment. Sooner or later that in spite of the FEDs monetary hi jinxs the economy will fall into a continued recession where the economy contracts to a point of equilibrium commensurate with the true buying power of the American consumer. One would call this with a whimper and not a bang scenario. Think of it this way the economy just slowly contracts year over year for a decade or three.

[sammyg2]

Originally Posted by tabs

While the parable of the Ant and the Grasshopper is true in that the Ant by working hard and saving can provide himself with more security than the Grasshopper. The theory of Capitalism and or Socialism has never been sustainable models. At some point they each fail. The great American engine of prosperity was attained because a continent needed development and failed during the Great Depression. After WW2 a world needed rebuilding and prosperity followed. Socialism came to a screeching halt in the former USSR in 1990 and the US is headed for the same type of implosion in the future. Thus it is not adherence to an economic theory that drives economies but the vagaries of time and space. Most economic theory is just fanciful constructs

Please provide examples of pure (or near pure) capitalist systems that have failed.
Thanks in advance.

[dlockhart]

Originally Posted by sammyg2

Please provide examples of pure (or near pure) capitalist systems that have failed.
Thanks in advance.

And herein is my reason for being a An-Cap and agorist. (to the degree possible )

https://en.wikipedia.org/wiki/Agorism

[dlockhart]

I posted this some time ago over in PARF.

.



Yannis is a smart cookie. He would certainly like to have the lines of credit afforded by being in the EU if possible. I'm not sure Germany will swallow that, so it will be quite interesting to see what he does if there is a Grexit.

[Porsche-O-Phile]

I think tabs is back on the meds today. Great posts and pretty much spot-on. The "whimper not a bang" situation is the most likely I totally agree. There will be ups and downs along the way but we will certainly see an overall trend downward and a reversion to the mean as the cost of all our giveaway programs and "government-mandated charity" comes home to roost. We've let millions upon millions of unskilled, non-contributing people sponge off our educational and support / health & human services programs for decades and it's finally coming due. Also consider the net effect of globalization (which I've posted on at length before). It creates a race to the bottom. We will not "uplift" people living in crushing or near-crushing poverty who outnumber us 10,000-to-one. They will - if given the chance - drag us down to their level. Globalization and the rapid embrace of government-sanctioned corporatism in recent years gives them that chance. There is no more manufacturing in the west. There probably won't ever be again. So that factors into the equation as well. All of it means what you say - the middle class way of life is going to change and get more difficult and more expensive. It'll be more of a struggle. The Baby Boomers were the last generation in America to live better than their parents (at least for a few generations to come, that might turn around in the future but it won't be for a while).

I'd like to think that a sufficient bit of "pain therapy" might encourage future generations to be less brain-dead when it comes to deifying so-called "progressivism" but maybe I'm too much of a realist. It'll end up being cyclical - one of those "those who forget history are condemned to repeat it" situations more than likely...

I just hope that we (meaning the USA and the west) remain viable and strong enough as we take our lumps in the coming years to fight off the REAL threats - communism and Islam. Both are very real evils that seek weakened, poor societies to exploit for their own ends and the rise of either in a post-high-water-mark United States or Europe would be a very scary prospect. I worry more for Europe in that regard, but it's certainly a potential threat to us as well here in the good ol' USA.

[tabs]

https://www.youtube.com/watch?v=OY3Qxm6BoUI

This guyz thinking is flawed.

1. He without question believes that stimulus packages result in an economic jump start.

2. His EIB Investment bonds that would be funneled into the private sector. This presumes that there would be a velocity of money once the money hits the private sector. The consumer is basically tapped out with high debt levels and there is no velocity of money. Thus the private sector is loath to invest money without assurance that there is a viable consumer there to buy their product.

[Por_sha911]

Originally Posted by tabs

All U Boyz have to offer is just how evil socialism is....what a fking self diddling joke that shows the true ignorance of this group. That is not the question that should be postulated and discussed. The real question is what is going to happen and the ramifications there of.

1) Those who fail to learn from history are doomed to repeat it. We need to point out the error of socialism so that people will realize what caused this problem and hopefully the next generation will not drink the tax and spend kool aide.
2) Attempting to predict "what is going to happen (and the ramifications there of", is the epitome of self diddling. If I had some control over the situation I suppose I could attempt to do something to mitigate the repercussions. If you have answers then I suggest you get off your pompous posterior and go talk to the people who are in control. I'm sure they'll listen to you.

[Iciclehead]

Originally Posted by Neilk

I see where you are going with this, but I think the revenue loss from the mortgage deductibility wouldn't be as bad as the revenue loss from the crashing housing market. Most people would probably stay in their current houses with their 4% mortgage rate rather than move into a bigger or smaller house at 7%.

There is a built in lag, effect will take a few years to roll in....but people eventually need to renew their mortgage.

Interesting calculation is that, with a fiscal platform that makes more sense, the other side (those of us with cash assets) will be getting a greater return (say 4 or 5% versus current 1%), which makes us "richer".

However the logical effect of money markets is devaluation of the currency with the problem which does not immediately affect my local purchases, but makes imports dearer, exports more competitive...a different dynamic shall we say.

So which currencies will be devalued against which? It is a "beggar thy neighbour" game, my bet is that the Yuan will be a winner, impacted by reduced exports to G7 nations and their "wolf at the heels", namely their requirement to keep raising standard of living for their people otherwise they face revolution.

If the EU performs the requisite surgery to excise everyone except:
Belgium
France
Italy
Luxembourg
the Netherlands
Germany
Denmark
Austria
Poland
Estonia
Latvia
Lithuania
UK
Finland
Ireland

....with maybe a question mark about the Italians

so, turf the Greeks, Hungarians, Slovaks, Portugal, Spain, Croatia, Romania, Cyprus and Malta

They may have a chance to right their fiscal ship, given they shoot half the Brussels bureaucrats and embalm the rest and centre only on those matters affecting trade, free flow of goods and services. The Euro may die out of this, but I think the list of countries I would see being retained are close enough in approach (!!) that a euro **may** work. Deutschland, Deutschland uber alles...

If the Americans get a talented leader next time who will bite the bitter pill of austerity and simplification, it definitely has a fighting chance. It means strangling some of the tea party guys, hoping for early heart attacks for the supreme court justices, stop this nonsense about anthropologic climate change and just FOCUS, FOCUS, FOCUS

Please embalm Hillary....or at least continue the process...she is not the right critter.

But the effect on the market could be high, valuations are a little out of line, deflating US currency will erode the corporate cash piles while they watch....effects corporately will be spending which is a positive, effects privately means that those people who's assets are in the market will be hurting.

Where do we end up?

Lot of moving parts....very dynamic, ripe for explosive events and cusps.

Dennis

[HardDrive]

I invested in precious metals today. (I'm only partially kidding, $50 a box.....sheesh!)

[Hydrocket]

Had Greeks merely paid their income tax, like most developed nations do, they wouldn't be in this predicament. 1/3 of their debt is unpaid income tax. $86 BILLION!!

[Iciclehead]

Originally Posted by Hydrocket

Had Greeks merely paid their income tax, like most developed nations do, they wouldn't be in this predicament. 1/3 of their debt is unpaid income tax. $86 BILLION!!

Pay attention to the culture....defined as that what people do when no one is looking ....

Laws that fit the majorities view of fairness get passed, those that don't get bypassed.

'We often fail to understand that the informal, tacit greek culture is stronger the explicit EU culture in that setting.

But I am very drunk, have a beautiful, naked, willing girl beside me and I actually do not give a crap about any you relativistic morons at the moment. .

**** off and die Ziggy,Dipso, Webb et al,,,

Dennis, the guy who is one slug away from ending this vale of tears....I hope I do not wake up tomorrow morning.

Dennis

[tabs]

Originally Posted by Hydrocket

Had Greeks merely paid their income tax, like most developed nations do, they wouldn't be in this predicament. 1/3 of their debt is unpaid income tax. $86 BILLION!!

What is the effective tax rate?

[tabs]

Originally Posted by Iciclehead

Pay attention to the culture....defined as that what people do when no one is looking ....

Laws that fit the majorities view of fairness get passed, those that don't get bypassed.

'We often fail to understand that the informal, tacit greek culture is stronger the explicit EU culture in that setting.

But I am very drunk, have a beautiful, naked, willing girl beside me and I actually do not give a crap about any you relativistic morons at the moment. .

**** off and die Ziggy,Dipso, Webb et al,,,

Dennis, the guy who is one slug away from ending this vale of tears....I hope I do not wake up tomorrow morning.

Dennis

With regards to your above exposition much of the FED action is with regard to PENSION plans which need an 8 percent return to meet obligations. The only way to meet this return requirement is?

So why the fuk are u talking to us and not playing hide and seek

[Porsche-O-Phile]

Originally Posted by Hydrocket

Had Greeks merely paid their income tax, like most developed nations do, they wouldn't be in this predicament. 1/3 of their debt is unpaid income tax. $86 BILLION!!

I see your point but it's entirely possible that if they HAD paid their income taxes they'd still be in this situation or a worse one. Firstly many western model countries (including the USA) routinely overspend tax receipts anyway so it might've emboldened Greece to overspend more wildly than they did if they knew they had a few extra billion coming in each year. Secondly the taxes coming out of the economy may have put enough of a drag on it where it created other problems - sluggish growth or recessions, flight of businesses to other locations, etc. Think Laffer Curve. I don't know where Greece's inflection point is or has been but it's possible that the taxes would've harmed the country to the point it stifled them - perhaps why people didn't pay it!

I'm speculating here of course and I don't think you're wrong - just tossing out some possible alternatives.

Of course the best thing here - the real lesson - is that government has to be small, limited, focused and efficient. NOT the trend in the west at all, sadly.

[onewhippedpuppy]

Originally Posted by Iciclehead

But I am very drunk, have a beautiful, naked, willing girl beside me and I actually do not give a crap about any you relativistic morons at the moment. .

Which begs the question - WTF are you doing posting here?

[dlockhart]

A twist.

​Varoufakis threatens EU with court as Greek default looms — RT Business


Of course laws only mean what those in power really want them to mean, so the EU will manufacture a legal means to deal with this.

[Iciclehead]

Originally Posted by tabs

With regards to your above exposition much of the FED action is with regard to PENSION plans which need an 8 percent return to meet obligations. The only way to meet this return requirement is?

So why the fuk are u talking to us and not playing hide and seek

You and I are on the same page on this, logically if you take the fact that most of the pensioner's costs are in local US currency, a dropping exchange rate as a means devaluing debt, with attendant increase in interest rates will in fact allow the kinds of returns you mention.

Now....nominal versus real, Joe and Mary Q. Citizen get fewer real dollars as you dick with the inflation numbers to cause slower inflation of payouts than what the real inflation rate is, ostensibly allowing you to honour your commitment to citizens even though you practically are screwing them over with a pitchfork.

Oh yes, I really, really, really need to not type late at night after my nightly drink.....hide and seek, hide the pickle and all sorts of games take on a whole new level when you are trying to type.



Dennis