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Greece and the Euro

Comments on Greece and the Euro

Morgena
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Posted 10/10/11 - 10:32 AM:
Subject: Greece and the Euro
After having listened to so many arguments about the Euro, I asked myself was it really wise to join the Euro, or was it simply a terrible mistake, or even worst someone deliberately brought the country down.
But what is the benefit of it all?

What do you think about it?
Morgena
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Posted 10/10/11 - 10:38 AM:

Oops should have been posted on the dustbin
Morgena
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Posted 10/10/11 - 10:41 AM:

http://www.youtube.com/watch?v=U71-KsDArFM
Thinker13
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Posted 10/10/11 - 11:19 AM:

I saw you posting it in suggestions! smiling face


'Dustbin' for 'The Thinking Spot(Stop!)'? I won't mind.

Mind you! You have created a topic after May 2008, which is quite a long time! nod
libertygrl
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Posted 10/10/11 - 11:47 AM:

I can move it to "Dust Bunnies" if you like, but I think it's a great Thinking Spot question smiling face

Unfortunately, I don't know a lot about this topic. My boyfriend is from Spain and has commented on it before, but it's not clear to me all the factors which have an effect here. I've been trying to do some Google research but I only see a few articles from the beginning of 2010 questioning whether it's a good idea.

How long has Greece been using the euro? And has it impacted the Euro negatively?
smokinpristiformis
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Posted 10/14/11 - 2:45 AM:

In itself, the euro is a wonderful thing that did a lot of good to a lot of people. The problem with the euro is the lack of a central economic government to support it and not enough control to prevent abuse. This is a systematic flaw. (In fact we need more Union in the European Union, certainly not less.)

In short, the story goes a bit like this: The greek government hid its debts from the EU and the world (aided by an American consultancy firm). The technical term is 'credit default swaps'. Because of economic pressure, they couldn't keep this up. As the pressure grew, the truth came out and everyone saw that Greece had huge problems to repay its debt.

The underlying problems that caused the system flaw to come to the surface, are soaring prices for materials and food. In turn, these are caused by increasing demand partnered with falling supply (material shortage/peak oil/land shortage/...).

It's basicly the same thing that happened with Lehman Brothers. The system is being pushed to its limits and cracks at its weakest point. Trust me, it happened with the american banks, now it's happening in Greece, it will happen again and it will be worse each time. The pressure on our economic model is causing the weak spots in the system to give way, again and again. The financial casino: stock trading gambles are also a weak spot in the system. Which made the french-belgian bank Dexia keel over a few days ago. And probably many more banks. All this is worsened by those who prey on the financial systems: short-selling and such - it's basicly betting on a fall of the economic system. A lot of people are making money from it, but much more people lose because of this abuse: it's like taking a hammer to an already weak spot in the wall.

What's happening in Greece now is dramatic. Those people didn't choose to be the weak spot in the system. Heck, they had no idea. Now the country is being forced to cut into its welfare, raise taxes. Its economy is shrinking at an alarming rate. Greece and its people are being smothered. It's a freaking tragedy. Instead of driving them back into the stone age, the EU should be helping them get back on their feet. Alas, nobody wants to give money to the weakest link, because of the public opinion in Germany and elsewhere. That's democracy at its worst: a-solidarity and shortsightedness are human traits too.

There's only one solution to this spiral of crises: change our economic system. Swap it for a more sustainable one. Recycle materials, reduce pressure on land, renewable energy. Strangely, what the green movement has been saying for decades and seemed like a luxury at the time, now becomes an economic necessity.

Obviously, it's also a question of reducing the number of flaws in the system. But be careful: at some point the system will crack. If the entire system is without weak spots, the ultimate crack will be all the worse. So actually we're lucky to get these warning signs. Or else: it could still be worse. And it can, probably will, get worse before we make a turn-around, which is when it will start getting better. smiling face

Congratulations if you read through all that. Anyway, it's my analysis. I havn't yet found a fundamental flaw in it, but I'm happy to hear your thoughts.

Cheers !


Edited by smokinpristiformis on 10/14/11 - 2:52 AM
Thinker13
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Posted 10/14/11 - 9:05 AM:

smokinpristiformis wrote:
In itself, the euro is a wonderful thing that did a lot of good to a lot of people. The problem with the euro is the lack of a central economic government to support it and not enough control to prevent abuse. This is a systematic flaw. (In fact we need more Union in the European Union, certainly not less.)

In short, the story goes a bit like this: The greek government hid its debts from the EU and the world (aided by an American consultancy firm). The technical term is 'credit default swaps'. Because of economic pressure, they couldn't keep this up. As the pressure grew, the truth came out and everyone saw that Greece had huge problems to repay its debt.

The underlying problems that caused the system flaw to come to the surface, are soaring prices for materials and food. In turn, these are caused by increasing demand partnered with falling supply (material shortage/peak oil/land shortage/...).

It's basicly the same thing that happened with Lehman Brothers. The system is being pushed to its limits and cracks at its weakest point. Trust me, it happened with the american banks, now it's happening in Greece, it will happen again and it will be worse each time. The pressure on our economic model is causing the weak spots in the system to give way, again and again. The financial casino: stock trading gambles are also a weak spot in the system. Which made the french-belgian bank Dexia keel over a few days ago. And probably many more banks. All this is worsened by those who prey on the financial systems: short-selling and such - it's basicly betting on a fall of the economic system. A lot of people are making money from it, but much more people lose because of this abuse: it's like taking a hammer to an already weak spot in the wall.

What's happening in Greece now is dramatic. Those people didn't choose to be the weak spot in the system. Heck, they had no idea. Now the country is being forced to cut into its welfare, raise taxes. Its economy is shrinking at an alarming rate. Greece and its people are being smothered. It's a freaking tragedy. Instead of driving them back into the stone age, the EU should be helping them get back on their feet. Alas, nobody wants to give money to the weakest link, because of the public opinion in Germany and elsewhere. That's democracy at its worst: a-solidarity and shortsightedness are human traits too.

There's only one solution to this spiral of crises: change our economic system. Swap it for a more sustainable one. Recycle materials, reduce pressure on land, renewable energy. Strangely, what the green movement has been saying for decades and seemed like a luxury at the time, now becomes an economic necessity.

Obviously, it's also a question of reducing the number of flaws in the system. But be careful: at some point the system will crack. If the entire system is without weak spots, the ultimate crack will be all the worse. So actually we're lucky to get these warning signs. Or else: it could still be worse. And it can, probably will, get worse before we make a turn-around, which is when it will start getting better. smiling face

Congratulations if you read through all that. Anyway, it's my analysis. I havn't yet found a fundamental flaw in it, but I'm happy to hear your thoughts.

Cheers !



Thanks for congratulating me! ( Well, I made through it all!). Economics is not my cup of coffee to be honest, still, your post has some very interesting points. A good analysis. It informed me about what is happening in Greece, and in Europe; as I had no idea about it.

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