Bad days ahead for the European single currency

[Amph]

well not really, the fault it is not with the ECB or europe zone, but with greece only, so they are the dead weight here and removing the diseased part of the european would only bring benefit to the euro union, since they do not need to pay loan to a country that can't pay it back ever

Is my understanding of things incorrect? Isn't it true that no country will ever be able to pay all of its debts back? Ever!

well yes, but i was talking about another type, of loan, about the loan that it was lended to save their ass, not about the standard loan that every country of the europe get, because of the vicious circle that is sustaining the whole fiat ecosystem

well i'm not talking about italy and spain, but especially romania and bulgaria, the countries that you mentioned in the other quote

Romania and Bulgaria are two of the most corrupt and crime-ridden nations in the European continent. I agree that the GDP is growing in these nations. But that is solely due to the European Union subsidies and grants. And these two countries don't have the resources to sustain the GDP growth. What happened in Greece will occur in Romania and Bulgaria as well. But in their case, the effects will be even worse.  

i don't know, guessing is good and all but the fact is that greece has done something very wrong compared to other, to be in this condition, and they were in a bad situation since 2004 at least which is not too far away from their entry into Europe(2002)

they did a mistake in "recruiting" Greece, on the other hand italy and spain were not in a bad shape before the euro union, i'm not sure about spain, but seeing how i live in italy i'm sure about it

[eerygarden]

well not really, the fault it is not with the ECB or europe zone, but with greece only, so they are the dead weight here and removing the diseased part of the european would only bring benefit to the euro union, since they do not need to pay loan to a country that can't pay it back ever

Is my understanding of things incorrect? Isn't it true that no country will ever be able to pay all of its debts back? Ever!

well yes, but i was talking about another type, of loan, about the loan that it was lended to save their ass, not about the standard loan that every country of the europe get, because of the vicious circle that is sustaining the whole fiat ecosystem

well i'm not talking about italy and spain, but especially romania and bulgaria, the countries that you mentioned in the other quote

Romania and Bulgaria are two of the most corrupt and crime-ridden nations in the European continent. I agree that the GDP is growing in these nations. But that is solely due to the European Union subsidies and grants. And these two countries don't have the resources to sustain the GDP growth. What happened in Greece will occur in Romania and Bulgaria as well. But in their case, the effects will be even worse.  

i don't know, guessing is good and all but the fact is that greece has done something very wrong compared to other, to be in this condition, and they were in a bad situation since 2004 at least which is not too far away from their entry into Europe(2002)

they did a mistake in "recruiting" Greece, on the other hand italy and spain were not in a bad shape before the euro union, i'm not sure about spain, but seeing how i live in italy i'm sure about it

These further loans are inevitable for all nations, in time. Maths dictates.

Just checking you and I have read the same page.

[VeritasSapere]

well not really, the fault it is not with the ECB or europe zone, but with greece only, so they are the dead weight here and removing the diseased part of the european would only bring benefit to the euro union, since they do not need to pay loan to a country that can't pay it back ever

Is my understanding of things incorrect? Isn't it true that no country will ever be able to pay all of its debts back? Ever!

That is correct, that seems to be how most macro economic systems work presently, all fiat currency is based on debt with the country and its people as the collateral. This is by design which is one of the reasons I think these fiat currencies are doomed to fail eventually, especially now that feasible alternative asset based currencies exists. Watching and waiting to see this house of cards fall so that we can finally separate the power over monetary policy from the state like we once did with church and state.

The separation of church and state, that would be an interesting topic to visit. Do you have anything to recommend, either video or literature? Although with the amount of free time which I have I probably have a preference on video.

The separation of church of state has many examples historically that prove it to be a good principle. Its beginnings historically can be said to lie within the protestant reformation which gives good examples for why this separation is so important. Later these ideas where further developed in the philosophies of John Locke and Voltaire. It became very important in the American revolution since John Lock's philosophy was important in the thinking of the founding fathers. Thomas Jefferson is often attributed to be the first to use the term as we know it today. You could always read the literature of these individuals which can be very rewarding but of course more time consuming. other wise I would recommend a good historical documentary maybe about the American revolution or the protestant reformation, plenty to be found on YouTube and Bittorent. The first hour of this historical podcast talks about the roots of the protestant reformation as well and is rather entertaining to listen to.

http://www.dancarlin.com/product/hardcore-history-48-prophets-of-doom/

I can not think of anything more specific at this moment other then Wikipedia or other articles online. The history makes strong points all by itself though, and shows why this is such an important principle in political philosophy. I hope that one day most people will feel the same way about separating the monetary power from the state as well.

[yayayo]

Everybody talks about Greece, and there are plenty other topics on this board, but only a few millions people are concerned. So let's not talk about Greece.

I want to raise the bigger issue here, which is the European single currency. Several hundreds millions of people are using it every day, and it's very, very likely that the European currency will go down against the US dollar, the Swiss Franc and BTC. Do you share my concern?

I share your concern, but I don't think that the US-dollar is a more secure investment than the Euro. In the end, all fiat currencies will be worthless, because they are constantly inflated.

how greece mini economy affect bitcoin or europe? i really dont understand. can someone explain for me?

The effects are not direct, they are indirect: People fear that other countries (Portugal, Spain, France) might collapse as well, since they also have substantial debt burdens. The keyword is "contagion effects" by loosing trust in the safety of government bonds (which are in an epic bubble compared to the debt levels of most western countries). If investors start selling those government bonds, it's possible that governments won't be able to refinance themselves.

ya.ya.yo!

[countryfree]

Obviously, I overestimated the market reactions. € is down 0.5% against the dollar, and the Dax (German index) is down 1.5%. It's been a bad day, but we've seen worse. Note that there was more of a reaction with BTC, which is up about 5% in 24 hours.

Still, this isn't over yet. We're still waiting for a solution to the Greek problem, and nothing's in sight.

[cellard]

Everybody talks about Greece, and there are plenty other topics on this board, but only a few millions people are concerned. So let's not talk about Greece.

I want to raise the bigger issue here, which is the European single currency. Several hundreds millions of people are using it every day, and it's very, very likely that the European currency will go down against the US dollar, the Swiss Franc and BTC. Do you share my concern?

I share your concern, but I don't think that the US-dollar is a more secure investment than the Euro. In the end, all fiat currencies will be worthless, because they are constantly inflated.

how greece mini economy affect bitcoin or europe? i really dont understand. can someone explain for me?

The effects are not direct, they are indirect: People fear that other countries (Portugal, Spain, France) might collapse as well, since they also have substantial debt burdens. The keyword is "contagion effects" by loosing trust in the safety of government bonds (which are in an epic bubble compared to the debt levels of most western countries). If investors start selling those government bonds, it's possible that governments won't be able to refinance themselves.

ya.ya.yo!

I think the US is way safer than the Euro. You can hate on the US all you want, but they are still the most powerful nation ever, with the currency that has the biggest network effect ever. Yes, fiat scam and whatnot, but as long as people keep accepting dollars, the dollar is very real. If Ben printed you 1 million dollar, would you accept it, or would you say "I dont want your debt-based fake money".
That's the thing.
Im not saying all fiats are scams prone to end sooner or later, the question here is if they can extend it for ages.

[EternalWingsofGod]

Correct me if i'm wrong, but shouldn't it do exactly the opposite?
Given the fact that EU is now "loosing" Greece, which is nothing but a dead weight; shouldn't the EUR get stronger, since the overall economy of EU will be stronger w/o them. Seams logical,right?

cheers

Technically losing Greece doesn't look so bad on paper as it gets rid of dead weight, allows tGreece a chance to declare bankruptcy and clean house. Then under a reset they would have good financials and the possiblilty to rejoin the Union at a future date, but the main concern is that Greece is one part of the dead weight with other struggling components in the union that they will need to deal with at a later date so how it impacts the economy will be a good question.
Also leaving the EU might be bad for their passport and border control but that's not certain atm.

[DirtyUniverse]

Everybody talks about Greece, and there are plenty other topics on this board, but only a few millions people are concerned. So let's not talk about Greece.

I want to raise the bigger issue here, which is the European single currency. Several hundreds millions of people are using it every day, and it's very, very likely that the European currency will go down against the US dollar, the Swiss Franc and BTC. Do you share my concern?

I share your concern, but I don't think that the US-dollar is a more secure investment than the Euro. In the end, all fiat currencies will be worthless, because they are constantly inflated.

how greece mini economy affect bitcoin or europe? i really dont understand. can someone explain for me?

The effects are not direct, they are indirect: People fear that other countries (Portugal, Spain, France) might collapse as well, since they also have substantial debt burdens. The keyword is "contagion effects" by loosing trust in the safety of government bonds (which are in an epic bubble compared to the debt levels of most western countries). If investors start selling those government bonds, it's possible that governments won't be able to refinance themselves.

ya.ya.yo!

Ah, yes. Thanks for explain. I got my answer

[yayayo]

I think the US is way safer than the Euro. You can hate on the US all you want, but they are still the most powerful nation ever, with the currency that has the biggest network effect ever. Yes, fiat scam and whatnot, but as long as people keep accepting dollars, the dollar is very real. If Ben printed you 1 million dollar, would you accept it, or would you say "I dont want your debt-based fake money".
That's the thing.
Im not saying all fiats are scams prone to end sooner or later, the question here is if they can extend it for ages.

What you said (highlighted) can be said for any fiat currency, it's not an argument that the dollar is superior. Of course I would accept a million USD, but I would also accept a million EUR (which still has a bit higher valuation) - but in both cases I would not hold the fiat - I would buy other assets as soon as possible.

The USD has the biggest network effect now - but there's not much more room for growth, so the magnitude of the USD dominance could also be interpreted as a risk factor.

ya.ya.yo!

[countryfree]

If one looks at history you can see how debt cycles repeats itself over and over again. It is intrinsic for any debt to have a write off. No debt is payed 100%. I dont know maybe in jupiter or in mars... but on planet earth it has being like that since the beginning. In the past nations used to invade other nations in order to collect. Since the nuclear era started the cost benefit of this strategy becomes questionable. The huge debt from South America (in the 80s) was corroded by the dollar inflation. The coming euro inflation (and dollar inflation) will corrode Greece's debt as well. They are doing the right thing in being a pest and kicking the can down the road. Foreign debts are not payed they are rolled over (and over and over and over again)

Most debts are paid back 100%. Germany has a lot of debt, and so does Japan, Belgium or France, and these countries have always paid back in full. A few lousy countries in Africa, or Argentina, haven't paid back, and they're now blacklisted everywhere.

Back to the subject, it seems the small reaction we've seen yesterday is already forgotten. Everything looks like it's business as usual. Surprising...

[Hazir]

Eurozone is not ganna be shaken by Greece as much as you might think. This country is not important in the bigger picture. They didn't have anything worthy beside tourist attractions.
Greece lost even this because who is gonna visit them now, when crisis is raging? Euro as a currency is safe, I would be more worried about recent news from Asian markets. Huge Asian crisis incoming.

[grendel25]

There's every reason to be concerned if you are hopeful for a strong Euro.  The Euro-Zone is afraid of what other countries like Greece may do.  It is widely accepted that Greece going back to their own currency is in the best interest of Greece but bad for the Euro because those in charge of the Euro lose money so the Euro does poorer.  And there are other countries that may end up doing what Greece has done.  The Euro Zone will have to reconsider how they address debt collection and debt management if they want all of Europe to participate.

[bryant.coleman]

Eurozone is not ganna be shaken by Greece as much as you might think. This country is not important in the bigger picture. They didn't have anything worthy beside tourist attractions.

The markets didn't crash, as everyone was expecting a NO vote in the Greek referendum. But it will be wrong to say that the Eurozone is not going to get affected as a result of this.

Greece lost even this because who is gonna visit them now, when crisis is raging?

Most of the tourists to Greece come from countries such as Russia and China, which are outside the Eurozone. So I am not predicting a significant dip in the Greek tourism sector.

[HigsonPP]

Losing Greece has its pros and cons for Europe. Greece with its unpayable debt was like a dead property which should be getting removed , but Greece is a country itself which should not measured just by its financial terms , but also the sentiment of people living in it. It was a distortion of Europe's principle of keeping all the countries under it intact. Greece lost it , but somewhere the whole Eurozone lost the challenge.

[EternalWingsofGod]

Greece lost even this because who is gonna visit them now, when crisis is raging?

Most of the tourists to Greece come from countries such as Russia and China, which are outside the Eurozone. So I am not predicting a significant dip in the Greek tourism sector.

It does raise the question of where Greece goes if they do decide to leave the Eurozone.
The Russians are willing to welcome them with open arms into the BRICS and it does seem like a good choice if they do leave the European Union and it does explain why the tone seems to be changing in the EU so much for those sanctions.
http://www.ibtimes.com/greece-can-easily-get-funding-brics-bank-russia-1998515

[rayhan]

Do you really think so? Bad days are no doubt ahead for the Eurozone. But there's always a light in the end of the tunnel. Countries round the globe have suffered worse. But then gradually they pick up the mess , clean it up and move on to become stronger,. That's how we need to look at it. We need to have a positive approach towards it. That's how it works.

[GotaPauj]

What will happened if greece fails? euro will go up or down?

[manselr]

If one looks at history you can see how debt cycles repeats itself over and over again. It is intrinsic for any debt to have a write off. No debt is payed 100%. I dont know maybe in jupiter or in mars... but on planet earth it has being like that since the beginning. In the past nations used to invade other nations in order to collect. Since the nuclear era started the cost benefit of this strategy becomes questionable. The huge debt from South America (in the 80s) was corroded by the dollar inflation. The coming euro inflation (and dollar inflation) will corrode Greece's debt as well. They are doing the right thing in being a pest and kicking the can down the road. Foreign debts are not payed they are rolled over (and over and over and over again)

Most debts are paid back 100%. Germany has a lot of debt, and so does Japan, Belgium or France, and these countries have always paid back in full. A few lousy countries in Africa, or Argentina, haven't paid back, and they're now blacklisted everywhere.

Back to the subject, it seems the small reaction we've seen yesterday is already forgotten. Everything looks like it's business as usual. Surprising...

Defaults happen all the time, there's nothing revolutionary about it. What's shocking is how the bureaucrats are basically telling people what to vote. "If you don't vote Yes, this will happen to you". Greece just should default at this point, tons of countries have defaulted before, its not the end of the world.

[Amph]

What will happened if greece fails? euro will go up or down?

it's already going down massively, not soo long before we can touch 1:1 ratio, i believe that in the case of the greece will be out of europe, the price might drop to 0.9 for a short time

[countryfree]

I can't understand why the Greeks are so awful. They had their referendum last Sunday, the whole of Europe was waiting for them to go back to the negotiating table on Monday, but they waited till this late evening to show some proposals. 5 months of bargaining already, and this isn't over, they just made us wait another 4 days. They want a debt reduction? A haircut as some people like to say, I suggest they'll get one, a small one, on the very condition they leave the European Union for good.

The European people and the European currency would be better without them.