Greek Debt Crisis Simplified

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Old Jul 7, 2011, 9:30pm   #29
 
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I'm not so sure I would be appreciating the euro due to interest rates alone. There are other currencies that have far more appeal.
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Old Jul 7, 2011, 9:31pm   #30
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Re: Greek Debt Crisis Simplified

As a corollary to the above, I can’t help feeling a little bemused at the concept of increasing wealth in poorer nation states by giving them money with the intent they buy stuff from the existing manufacturing base of the (relatively wealthy) producer states, when they quite sensibly decide to use their free (cheap is more politically correct, but free is more realistic in inflationary and risk terms) money to enhance their own infrastructure and manufacturing capacity in order to offer significant competition to the same groups they were ‘supposed’ to be buying from.
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Old Jul 7, 2011, 9:36pm   #31
 
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Re: Greek Debt Crisis Simplified

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Originally Posted by TheBramble View Post
As a corollary to the above, I can’t help feeling a little bemused at the concept of increasing wealth in poorer nation states by giving them money with the intent they buy stuff from the existing manufacturing base of the (relatively wealthy) producer states, when they quite sensibly decide to use their free (cheap is more politically correct, but free is more realistic in inflationary and risk terms) money to enhance their own infrastructure and manufacturing capacity in order to offer significant competition to the same groups they were ‘supposed’ to be buying from.
How could they be expected to buy, when they're broke in the first place, where is the logic here?
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Old Jul 7, 2011, 9:45pm   #32
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Re: Greek Debt Crisis Simplified

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How could they be expected to buy, when they're broke in the first place, where is the logic here?
That was the point. Give them money. Now they can buy. Sorry, not talking specifically about Greece. Was responding to Martinghoul's wider comments on EU membership selection criteria and longer term socio-politico-financial intent.
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Old Jul 7, 2011, 9:49pm   #33
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Re: Greek Debt Crisis Simplified

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One thing I have been struggling to work out is how the euro is holding its weight against sterling.
Well everything's relative, right? The euro is a piece-a-crap, but then again, so is Sterling. You know the scary Greek numbers (deficit etc)? Check them against ours, there's not that much difference.

So I put it down to Sterling being garbage rather than the euro being good.
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Old Jul 7, 2011, 9:50pm   #34
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Re: Greek Debt Crisis Simplified

Hey man, long time. How ya' been....
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Old Jul 7, 2011, 10:04pm   #35
 
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Re: Greek Debt Crisis Simplified

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Of course, convergence could also be achieved by going in the other direction too.
As to convergence, you're correct, without a doubt. Convergence is achieved by making richer states poorer and poorer states richer. Again, it's really all about whether you believe the intangible benefits are worth it. For both the convergence argument and for the fringe benefits, I am pretty sure that the one precedent we have, i.e. the US, suggests that it's all worth it in the end. In fact, if you look at American history, it's amazing how many parallels you find. For example, the states did face a very similar situation that the EU is facing now and, funnily enough, as one of the results of the bargain reached the capital of the US is Washington, rather than New York.
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As a corollary to the above, I can’t help feeling a little bemused at the concept of increasing wealth in poorer nation states by giving them money with the intent they buy stuff from the existing manufacturing base of the (relatively wealthy) producer states, when they quite sensibly decide to use their free (cheap is more politically correct, but free is more realistic in inflationary and risk terms) money to enhance their own infrastructure and manufacturing capacity in order to offer significant competition to the same groups they were ‘supposed’ to be buying from.
Well, that would actually be OK, because, as long as you're in the same boat and everyone plays by the rules, there's hope that there's enough pie for everyone to get a slice. It's the whole idea that trade, in general, is good for everyone in the long run and the more of it and the freer it is the better. To be sure, in all this, Greece is a special case, 'cause, quite clearly, they didn't do any of what you describe above.
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