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Find it hard to believe that anybody still thinks there is a solution. For as long as there is fractional reserve banking there will be moral hazard. Once that's finally blown up we will just be left with real hazard, Eden Hazard and the Dukes of Hazzard.
What's interesting about it, is that this is the elephant in the room no politicians wants to admit or even own up to: something that it's always been very evident from an economic point of view, i.e. Greece won't be ever able to repay its debt.
Common sense economically speaking but not, as it seems, politically popular...
I think the politicians' method here is to simply wait long enough, and then they can just pretend it all went away. After all, there hasn't been much or any public discussion about it for a long time.
Hey Bob. But the reality is, nothing really goes away, especially with the internet and public opinion. What really gets me about politicians is, they did not want to provide a workable solution a year ago and they simply kicked the can down the road with more new loans to repay the old debt.
All in the name of doing what's popular, not what's right.
EDIT:as an afterthought, you're right that the whole Greece issue hasn't been on the spotlight for a while. I suspect that's bound to change in a couple of months time - if I'm not mistaken some large repayments are going to be due then, which I think will bring the whole thing back in focus...
I would not normally post a link to an hour long talk I have not quite finished, I have been watching it over a number of days. It is however directly relevant to anyone interested in this thread. I like his analogy of bitcoin being a digital version of the gold standard and why neither would work.
He got roped into Greek politics, interesting inside recount of the crisis.
" Yanis Varoufakis is a Greek economist who was a member of the Parliament of Greece between January and September 2015. He represented the ruling Syriza party and held the position of Minister of Finance for seven months.[3] He voted against the terms of the third bailout package for Greece.[4] In February 2016, Varoufakis launched the Democracy in Europe Movement 2025 (DiEM25).[5]"
I think the way we try to handle the european crisis is fundamentally flawed.
We are heading into the eighth year of the financial and debt crisis. Industry production for Spain, Italy, Portugal and Greece are still below pre crisis levels and unemployment and especially youth unemployment rates are still hovering around double digit values.
The approach for handling the crisis here in Europe was austerity (deflation) in combination with loose monetary policy. Unfortunately this recipe was not successfull. This situation is a breeding ground for the rise of radical political parties.
I do believe in the power of trial and error. Perhaps itīs time to tackle an alternative route.
As has already been pointed out, it's simply not possible to run a one-size-fits-all monetary policy among divergent fiscal and regulatory regimes as they're currently trying to do here in the EU.
At this moment, the EUR is WAY too cheap for the German economy, driving huge trade surpluses and leading to notable increases in goods prices (ahem, inflation), whereas this exact same EUR, trading at these exact same levels, is WAY to rich for the likes of Greece and even Italy, which is yet another slowly unfolding fiscal disaster.
The beaurocrats inside the EU and ECB know only one thing and that is to maintain the status quo at all costs, or, as Draghi put it, "WHATEVER IT TAKES!!!" The problem is that none of those buffoons seem to realize that the only thing that can resolve these issues is either a break-up of the monetary union or a full-on central, autonomous European state that writes laws, regulations, tax policy, and spending for everyone in the union and uniformly applies and enforces every. single. bit of it. And that ain't gonna happen.
So a break-up is inevitable - the only questions being how and when.
Italy may soon provide a few clues...
But in the end, could this all just be a silly distraction from the real issue? (*ahem* demographics and aggregate accumulated debt burdens of the major advanced economies)
We're living in some interesting times, my friends. Cheers
