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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Snowshoe who wrote (72934)	3/18/2010 1:43:13 PM
From: KyrosL	Read Replies (1) \| Respond to of 74559

There are a lot of complications for a European country going bankrupt because of cross border trade and investments. These complications are what makes Greek bankruptcy a 50% proposition rather than a 90%. Theoretically, a Greek bankruptcy and exit from the Euro should be a 90% proposition. This is because Greece's main industries, tourism and shipping, will fundamentally be untouched by bankruptcy, so a bankruptcy is theoretically attractive. I am assuming that a possible bankruptcy will take the form of re-introduction of the old Greek currency, drachma, at an initial equivalency of 1 drachma to 1 Euro, and declaring that all holdings of Greek government bonds will be paid in drachmas at the 1 to 1 equivalency. Simultaneously, all domestic Euro deposits will be converted to drachma as will all salaries and prices. The result will be an almost immediate devaluation of drachma of 50%, which may eventually settle to around a 30-40% devaluation, which is the current estimate of the degree of uncompetitiveness of domestic Greek wages.

To: Snowshoe who wrote (72934)	3/18/2010 4:01:56 PM
From: Maurice Winn	2 Recommendations Respond to of 74559

Snow, laws can be passed. That's how the laws enabling pigs at the trough got there in the first place, setting in process the enormous daylight, legalized, robbery. If people don't pay their taxes they are currently considered to be the bad people. There was a time when I considered taxes a good thing and public ownership of assets a desirable way of doing many things. But then, at least governments did actually build things such as airports, roads, water supplies, sewerage, electricity generation and nominally "good things". I physically worked 12 hours shifts from 6pm to 6am wheeling and pouring concrete, and doing other jobs, to build those things. Now, the money nearly all goes straight down the gurgler and into the pockets of the legions of hangers-on, supporters, and associated wastrels. < The governments can't just arbitrarily cut pensions, but the ones in really terrible trouble can go bankrupt. Bankruptcy is the way to force concessions > You are right that some official can't just decree that pensions are henceforth halved. But people who make laws can very easily do so provided they have the votes. As the money runs out and the snouts snuffling for more loot find the trough empty a process will take place resulting in a lot less goodies to the troughers. For now, the talk is as though the troughers can be fed in the manner to which they have become accustomed by simply raising taxes on the "rich". That will require a redefinition of "rich". Obama's voters will find that they are defined as "rich" too and have to vote for themselves to pay for more hot dates for Barry and Michelle to enjoy the high life, along with all the hangers-on. Mqurice