when you run out of other people's money...

[99Percent]

What's really ironic is that it's not even other people's money. Its really just money the central banks decided to create out of thin air and lend to the Greek government.

The debate is to whether keep on creating more money to lend to this country who just spends it recklessly.

[realnowhereman]

What's really ironic is that it's not even other people's money. Its really just money the central banks decided to create out of thin air and lend to the Greek government.

One might argue that since creating money from thin air reduces the worth of every current holder's money; that it absolutely is other people's money that they are giving to Greece.

[realnowhereman]

What's really ironic is that it's not even other people's money. Its really just money the central banks decided to create out of thin air and lend to the Greek government.

One might argue that since creating money from thin air reduces the worth of every current holder's money; that it absolutely is other people's money that they are giving to Greece.

Only directly true if your assets are stored in fiat currency.

What's your point?  As long as someone other than the money printer is holding money, it's still "other people's money" isn't it?

I didn't say anything about asset holders, I said money holders.  That's a non-zero number of people.

[johnyj]

What's really ironic is that it's not even other people's money. Its really just money the central banks decided to create out of thin air and lend to the Greek government.

One might argue that since creating money from thin air reduces the worth of every current holder's money; that it absolutely is other people's money that they are giving to Greece.

A money supply increase of 3% will not create any noticeable inflation, especially those money are created to paying the debt. US FED has printed 400% money since financial crisis and the inflation is still very light. People need to save, those saving action absorbed all the newly produced money

Actually, the debt that Greece have today, has been spent long time ago. So the loss of the wealth has already happened, you can only punish Greece AFTERWARD, the reason they ran into this problem is simple: Their government loaned and anticipated they will earn more in the future, but they actually earned less in the future so that they are not able to payback the loan

Then, it will natually come to such a debate: How much extra loan you should get, in case you anticipate the future income will rise? The anticipation and its accuracy is the key. If you anticipate that your income will increase by 100% next year, then even your loan is 100% of this year's income, it is trivial.  And, each one's income increase next year will depend on how much loan the others can get and spend: No loans, no income increase

So, we could say like this: It is Greek's loan and spending raised Germany and France's income, now it is time for Germany and France to spend big and buy Greece products and raise their income in return

[realnowhereman]

What's really ironic is that it's not even other people's money. Its really just money the central banks decided to create out of thin air and lend to the Greek government.

One might argue that since creating money from thin air reduces the worth of every current holder's money; that it absolutely is other people's money that they are giving to Greece.

A money supply increase of 3% will not create any noticeable inflation, especially those money are created to paying the debt. US FED has printed 400% money since financial crisis and the inflation is still very light. People need to save, those saving action absorbed all the newly produced money

I don't see what "noticeable" has got to do with it.  It's inflation.  If it's measurable then it's happened.  Also: it's not the act of printing that causes inflation, it's the act of spending your printed money.  It doesn't all kick in at once, its effect is only felt as that new money is disbursed through the economy.  The government, who printed it, get pretty much 100% value for it though (which of course is why they do it).

The QE going on in the US and UK hasn't kicked in to cause inflation because it hasn't been spent yet.  That money was actually used to buy back bonds, so that more borrowing could take place.  It's effectively sitting on deposit at the respective central banks on behalf of the banks.  It's out there though, and once the banks start loaning it out again we'll feel it.

Actually, the debt that Greece have today, has been spent long time ago. So the loss of the wealth has already happened, you can only punish Greece AFTERWARD, the reason they ran into this problem is simple: Their government loaned and anticipated they will earn more in the future, but they actually earned less in the future so that they are not able to payback the loan

Agreed. This is true.  The money printing being used to roll over debt is effectively moving that money printing backwards in time to when it was borrowed.

So, we could say like this: It is Greek's loan and spending raised Germany and France's income, now it is time for Germany and France to spend big and buy Greece products and raise their income in return

Or more sensibly: now is the time for Greece to produce something that Germany and France wants and is willing to pay for.  Otherwise it's just a transfer payment in disguise, and it would be more efficient just to send the money instead of pity-purchasing stuff they don't want.

[pusle]

I see little difference between this crisis and the mortage crisis in the USA in 2008.
Banks exploit the hobo to take up loans they can't pay back. The only way banks can print money is by giving out loans.
They get bailed out anyway, so there is really no risk even if the hobo can't pay it back.  ( stabilizing feedback loop broken )

In the case of Greece, they take up huge loans and buy lots of stuff... like weapons from germany?.
So Germany and others keeps all the money, while greece keeps all the debt.

You'd think not having your own central bank would prevent the hobo greek from printing so much they ruin their economy.
This time they had LOTS of help to pull this off. In fact it would be much better if they had their own currency.
This would provide a feedback mechanism making sure their purchasing power would go down if they printed too much.  But the Euro won't budge even if they spend a ton.

The Greeks are so bad bla bla.. but on average they don't have a low retirement age nor high pensions and they work more than most other EU countries. So yeah I contradict myself. Sure the politicians in Greece haven't done a good job to build their country with all those loans, so the future prospects are not great. This might explain why they are targeted first. But then again, this isn't really about the Greek. This is just a symptom of the manipulation and failure of the whole system.

Greece like the banks must be allowed to fail and go bankrupt. For a country, the debt isn't really enforcable anyway.
The debt must be deleted. Greece starts with a clean slate, a new central bank and drachma 2.0. This is the way to do it.
They don't have to leave the EU, several countries including UK don't have the Euro so this is a non argument.

Each sovereign country with it's own government MUST have their own currency. The Euro destroyed that essential feedback loop holding their spending/trade balance in check. Over time all the countries should all go back to their own currency, unless they join together under a common government/budget.
The Euro should never have been invented in the first place. It's just an instrument to make the bankers more rich and create more inequality. You can claim hindsight is 20/20 but I'm damn sure several bankers saw this coming and knew how to exploit it.

[johnyj]

I don't see what "noticeable" has got to do with it.  It's inflation.  If it's measurable then it's happened.  Also: it's not the act of printing that causes inflation, it's the act of spending your printed money.  It doesn't all kick in at once, its effect is only felt as that new money is disbursed through the economy.  The government, who printed it, get pretty much 100% value for it though (which of course is why they do it).

The QE going on in the US and UK hasn't kicked in to cause inflation because it hasn't been spent yet.  That money was actually used to buy back bonds, so that more borrowing could take place.  It's effectively sitting on deposit at the respective central banks on behalf of the banks.  It's out there though, and once the banks start loaning it out again we'll feel it.

Maybe, those money has already been spent long time ago, now newly printed money are only used to refinance the debt and wait for production to keep up

Actually I think it is the central bank's tighten action caused the financial crisis, but why do they tighten? (They might concerned about the validity of the currency)

Or more sensibly: now is the time for Greece to produce something that Germany and France wants and is willing to pay for.  Otherwise it's just a transfer payment in disguise, and it would be more efficient just to send the money instead of pity-purchasing stuff they don't want.

That is questionable, what if Greece can not impress Germany and France with their products/services? And why do they need to? They could live a life without any Germany and France products, only self sufficient. Ricardo's comparative advantage theory is no longer suitable for today's high production power

[johnyj]

Greece should sell a couple of Islands to Germany and settle the debt that way.

Those islands are valuable because of their Greek history and culture, if they changed owner, the culture will not be there any more, then the island will not be attractive to travelers, just like any other small tropical islands

[realnowhereman]

Maybe, those money has already been spent long time ago, now newly printed money are only used to refinance the debt and wait for production to keep up

Yes; I think that is almost certainly the case.

Actually I think it is the central bank's tighten action caused the financial crisis, but why do they tighten? (They might concerned about the validity of the currency)

Again agreed.  I guess at the moment the Euro's problems are monetary not fiscal.  That hasn't made the fiscal problems go away though.  They're still there waiting in the wings.

That is questionable, what if Greece can not impress Germany and France with their products/services? And why do they need to? They could live a life without any Germany and France products, only self sufficient. Ricardo's comparative advantage theory is no longer suitable for today's high production power

I don't think I agree -- comparative advantage will find a way.

However, what does it matter either way?  Greece is manifestly not self-sufficient.  While they want to borrow German and French money they had better find a way to pay for it (or default).  Greece is neither producing something that they can sell to others nor defaulting on its debt.  Instead it's borrowing more.  That is a course that has an inevitable outcome.

[ribuck]

If the Greek government was to sell a few islands with self-sovereignty, the price received would be much higher.

[Kettenmonster]

If the Greek government was to sell a few islands with self-sovereignty, the price received would be much higher.

Well the problem is they don´t have a cadastral land register. Thus they can´t tell whose land they would sell.

[99Percent]

No land register, seriously?  What a joke. Maybe the EU should demand one instead of lower wages and subsidies.

[ribuck]

No land register, seriously?

This is no big deal. If land isn't on the register, ownership is established by looking at past transactions on that land.

In the UK, some property is on the land register, and some isn't. It's possible to transact both kinds of land safely.

[johnyj]

That is questionable, what if Greece can not impress Germany and France with their products/services? And why do they need to? They could live a life without any Germany and France products, only self sufficient. Ricardo's comparative advantage theory is no longer suitable for today's high production power

I don't think I agree -- comparative advantage will find a way.

However, what does it matter either way?  Greece is manifestly not self-sufficient.  While they want to borrow German and French money they had better find a way to pay for it (or default).  Greece is neither producing something that they can sell to others nor defaulting on its debt.  Instead it's borrowing more.  That is a course that has an inevitable outcome.

Comparative advantage only apply to the situation that production can not keep up with the demand, thus increasing overall production efficiency is the concern. But after production speed has outpaced demand in modern times, how to increase the demand is the  question

In another word, "Demand=Big customer", if everyone will find a big customer, they will happily make a lot of money. Then who is this "Big customer"?   ---- Greece;) since they are the one that spend more than they earn, everyone that spend less than they earn is not a customer since they take more from you than they give you

In an island with only 2 people, both A and B produce 100 shells worth of products and consume 100 shells worth of products each month, it means that their production is equal to their demand. They will never get much richer. If A managed to make some savings, then B will accumulate same amount of debt (suppose their products can not be stored for a long time)

But, if A and B both can get 100 extra shells loan to spend each month, they will have more consumption, these consumption in turn will create some extra shells of earning for both of them, so after one month their income will increase to 120 shells, and as long as their income are increasing, their loan can also increase, this has been the case for most of the countries running fiat money today

Danger arises when one of them becomes more self-sufficient. For example A could produce whatever he want and he don't really need B's products since they are of low quality, he only need B's money to buy his products. In such a case, even B noticed that his sale towards A dropped quickly, as long as B has access to the loans, he can always cover up the hole with new loan and the whole process will take decades until it runs out of control

[ribuck]

No land register, seriously?

This is no big deal. If land isn't on the register, ownership is established by looking at past transactions on that land.

In the UK, some property is on the land register, and some isn't. It's possible to transact both kinds of land safely.

You're assuming there's a Greek transaction registry that can be consulted.

Why do you assume that only centralization can work?

My own property in the UK was unregistered when I bought it. The previous owners had sufficient papers for an uncontestable transfer. Basically the owners showed that their parents had bought the property in 1910, then willed it to them when they died. The owners also showed that they had "enjoyed uninterrupted use" of the property for over 12 years, which (at the time) was legally sufficient to show that no-one else had a claim on the property. It needed three documents, and was very straightforward: a property conveyance from 1910, a will, and a council tax statement.

Even if a seller doesn't have all the documents, you can buy insurance to protect yourself against the risk of buying a property that is not the vendor's to sell. In the UK, this insurance is not expensive, which suggests that there's not much risk.

After buying the property, we chose to register it. That was a big mistake. When we wanted to exchange a tiny sliver of land with a neighbor, this became a very expensive operation needing lots of lawyers and surveyors. If we had done the same thing with unregistered property, we could have done it with a handshake and some signatures on a sketch map.

Another thing: if there's no land registry, how does the govt. know how to tax land ownership ?

In the UK, they tax the dwelling (the house), not the earth (the land). It's obvious (even to a council worker) whether or not there's a house.

[Kettenmonster]

How were these bozos ever allowed in the EU ?

Well they invented the word europe plus ... sorry for getting cynical ... they busyly bought german tanks and cold war was still very hot in those days. Nato and EU are somewhat interconnected.
Still the land register is not so much an issue, they badly need to collect taxes from those who could pay them. That is a core issue in greece these days.

No land register, seriously?  What a joke. Maybe the EU should demand one instead of lower wages and subsidies.

Compare it to bitcoin where there is no central control.
Could be land is not so important but the gain you draw from it. So how about taxing the gain and leave the land as it is?

[Kettenmonster]

 ... damned ... I forgot to explain a point about owning land.
Where does this ownership originate from?
Is it legel to sell something that never belonged to you?

[Kettenmonster]

What a joke this place is.

Nay ... be fair!
When Adam and Eve shared the apple, who owned the land this tree grew on?
 ... how would I know?

At least I am sure Adam and Eve weren´t Chinese.
Why? ...
If they were Chinese they´d rather eaten the snake than the apple. 

[nybble41]

To anyone who wants to understand what's happening to greece,
I would highly recommend reading or re-reading Warren Buffet's
classic article "squanderville vs. thriftville":

http://www.berkshirehathaway.com/letters/growing.pdf

That's an interesting article, aside from the nonsense regarding "import certificates". However, he glosses over the important point that "intergeneration inequities" are a result of the legitimization of aggression (specifically taxation) in the form of government. In short, it's the government of Squanderville which is in debt, not the people of Squanderville; but the government is going to take what it needs to pay off that debt involuntarily from the people living in the area, even though they may not be the same people as lived there and voiced their approval when the bonds were issued and thus have no legitimate responsibility to pay it off.

In a free market you can't inherit other people's debts. Any estate which has more debts than assets is simply in default, leaving nothing to be inherited. The next generation always starts out with a clean slate.

[Kettenmonster]

Sorry, I don't pay much attention to bronze age folklore and superstitions.

No worry, easy to help ...
The story is located somewhere around Gilgamesh (http://en.wikipedia.org/wiki/Epic_of_Gilgamesh).
So it is not bronze age, they already used iron in those days. 

p.s.
Damned they will torture us for being on strange topics.