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Another European county, Greece, goes bankrupt!

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beenthere
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Postby beenthere » Sat, 22 May 2010 12:57 pm

Add Spain, Italy and Ireland. Iceland is already bust.

I am more concerned about Japan and her sovereign debt.

anneteoh

Postby anneteoh » Sat, 22 May 2010 3:09 pm

beenthere wrote:Add Spain, Italy and Ireland. Iceland is already bust.

I am more concerned about Japan and her sovereign debt.


Is the IMF, and the way it distributes blank cheques the root of the malaise in this surge of national debts worldwide?

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Postby beenthere » Sat, 22 May 2010 11:45 pm

The IMF is blameless in this case. In the heyday of the booming economy and loose credit, many nations issued bonds after bonds. Of course, bonds were supposed to be great investments since they are backed by a sovereign nations. Much of the funds were poured into unproductive sectors - [like buying overpriced houses in CA at th peak of the housing bubble]. In addition to the loose fiscal policies, many of these countries also had structural problems in their fiscal policies. Add to that the severe recession of 1007/2008 - the debt burden of these countries got untenable due to stimulus spending, lower tax revenues and having to shore up the financial sector. At some point you are not making enough to even pay off the interest.

anneteoh

Postby anneteoh » Sun, 23 May 2010 12:26 am

beenthere wrote:The IMF is blameless in this case. In the heyday of the booming economy and loose credit, many nations issued bonds after bonds. Of course, bonds were supposed to be great investments since they are backed by a sovereign nations. Much of the funds were poured into unproductive sectors - [like buying overpriced houses in CA at th peak of the housing bubble]. In addition to the loose fiscal policies, many of these countries also had structural problems in their fiscal policies. Add to that the severe recession of 1007/2008 - the debt burden of these countries got untenable due to stimulus spending, lower tax revenues and having to shore up the financial sector. At some point you are not making enough to even pay off the interest.


Thanks. The Uk govt and councils also invested in Iceland which led to huge losses; added to that, ministerial corruption and spending of public money; and of course, the white elephants of ungenerated income in 'social' welfare (good and needy as they are) centres, including free education for all. The whole debacle started with a couple of huge private Investment Funds e.g. The Maxwell, Lehman brothers, and a couple of other names who squandered huge sums of investors' money, including govt's and ran off or were put behind bars. Hope I'm not repeating this.
So far, there're no creative or productive measures, simply 'austerity' ones which mean the onus is on the citizens.

Seems like since HM's 'annus horibilis' announcement - nothing's going right for poor UK. What are the underpinning factors e.g. the recent BP oil spills near the Gulf of Mexico. It was amazing to watch the crude oil gushing out unstoppably. One would expect BP to have the technology to block or repair the rented pipes immediately; but it went on for weeks if not months. Is this a country that has stopped short and reversed?

I believe Indonesia was in such an economic mess, some years back now which led the country into a 'run away' economy so that its currency had almost no value. Is this likely in Europe, ( not in the uk?).

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Postby richard III » Sun, 23 May 2010 9:45 pm

interesting thread, believe there is really good points made, even though I get the idea that some posters just got into it to highlight the brilliance of Singapore over the rest of the world, wouldnt want to debate on that. What I think is that coupled with the downturn, reasons by all known, Europe sins are due to the lack of a serious entity that regulates fiscal behavior of its members, there were strict deficit rules required for a country to join the community, but they were not enforced once a new member joined. The fiscal account of the previous greek goverment was grossly overstated for years reason why it just ran away. I cannot but simpathize with the germans position in this, but its just not viable, they will have to pitch in, but once politics are involved in a thecnical matter, anything can happen. Ireland itself has come to terms with with its own fiscal behavior, as well as Spain, UK is in my humble view, the eternal survivor...It will never go under for the simple reason of the resilience of its people, and the heritage of being the craddle of western capitalism, industry and technological knowledge, how many bussiness cycles has Europe gone through in modern History?. The EU almost singlehandedly brought out of poverty about 800 million people when the iron curtain failed. I beleive they will do it again.
To finish I would like to point out that this thread should be in another section like general discusions....and some of the posters are invited to check the thread the Singaporeans Doha debates in that section

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Postby sundaymorningstaple » Sun, 23 May 2010 11:24 pm

You are right Richard III. Now that the troll who initiated this thread is no longer in our midst and the discussion has gained a more serious and healthy note, I'm moving it back into the General Forum where it "now" belongs.

Thanks for a good suggestion.

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raden888
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Postby raden888 » Mon, 24 May 2010 12:54 am

Well , IMF and World Bank have no play in this crisis but the EU does. All those wheeling and dealing to satisfy member states encourages situations like these. Greece thought it was getting easy money, billions were pouring in from EU since the 90's but then the attitudes remained the same.How do you expect the government to function if people do not pay their taxes?Productivity remained stagnant.


On another note, during the Asian Financial crisis, the world bank and IMF were dead set against bail outs! Their mantra was let the system, government or companies fail as they are inefficient.Pointing the mess due to 'weak institutions'. However, this time around there wasn't much from them. I suppose you can't disturb the golden goose as the EU and the US are their major contributors.

If it were personal finance, I would not live beyond my means as I would know, all it takes is just one or two missed payments then I will go under,perhaps governments should think along these lines too.

I pity Germany.

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Postby Splatted » Mon, 24 May 2010 12:55 am

sundaymorningstaple wrote:You are right Richard III. Now that the troll who initiated this thread is no longer in our midst and the discussion has gained a more serious and healthy note, I'm moving it back into the General Forum where it "now" belongs.

Thanks for a good suggestion.

moderator


awww.. and here I was about to add a catchy, yet unnecessary beat to this thread

http://www.youtube.com/watch?v=rY0WxgSXdEE

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Postby ScoobyDoes » Mon, 24 May 2010 2:00 pm

raden888 wrote:I pity Germany.


It is impossible to pity Germany.

As a prime initiator of the Euro along with France and a couple others, as a major defendor and user of it, as a linchpin in Europe itself, Germany cannot blame anybody else but themselves for not aiding in the enforcement of the rules they, in majority, drew up.

Whilst we might complain the US is too hands-on, too much the World's Police System etc. in truth it simply sees a problem and goes out to fix it.... either correctly or incorrectly tbut that's a minor detail ;)

When countries around Euroland, including France, Greece, Spain all bending and in some cases breaking the rules that defined the Euro, the largest player did little but issue a minor complaint in government. Why? because it too was bending the same rules when it needed to.

So, the fact is that Greece did the same but on a much larger scale. It was only saying "Hey, just copying our big cousins" though at the end was a story of Keeping-up-with-the-Jones that failed.

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Postby raden888 » Mon, 24 May 2010 3:00 pm

ScoobyDoes wrote:
It is impossible to pity Germany.



Good chuckle! How about this for conspiracy theories, it may open a can of worms but here goes:

I have always thought that there was an eerie resemblance between the EU and the 3rd Reich. Perhaps when, the Germans realised they were losing the war ,conjured a back up plan to rule Europe. They began a mass media campaign and won the hearts of the simpletons but encountered British resistance yet again. :lol:

I suspect Britain would be in dire straits at the moment if she had adopted the EURO and would be at the mercy of Brussels .

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Postby Vaucluse » Mon, 24 May 2010 4:26 pm

raden888 wrote:Perhaps when, the Germans realised they were losing the war ,conjured a back up plan to rule Europe. They began a mass media campaign and won the hearts of the simpletons but encountered British resistance yet again. :lol:

Groan . . shades of dad's Army here

I suspect Britain would be in dire straits at the moment if she had adopted the EURO and would be at the mercy of Brussels .

Oh, quite. Luckily Britain is in such good shape . . . The mercy of Brussels . . . are you another 'professional' like the dimwit who posted here earlier?



The war lives on in the minds of the weak and the hearts of The SUN reader


can't remember who said that, but it is quite applicable at times
......................................................

'nuff said Image

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Postby ScoobyDoes » Mon, 24 May 2010 4:44 pm

To be fair V, I think the UK would be in a much worse place IF it were currently part of Euroland.

The fact now it does have some degree of flexibility with regards its own policies without screwing with "limits" impossed by somebody else means it has a better chance of clearing its problems than the bulk of Euroland.

Personally, I would kick Greece out of the Euro Zone and tell them to get their act together. Don't spend money they don't have. <must>

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Postby richard III » Mon, 24 May 2010 4:59 pm

Good point Scooby, I wouldnt debate the german problem as I do not have the info as if germany bent the rules...I doubt it though, since its numbers have been sound all this time even when they had to pull east germany kicking and screaming all the way into the market system. I believe though that politics should stay out of the picture, which is doubful, it may even cost Merkel and her party the next term.....as for the states, no doubt they are quick to respond, they learned the lesson in 1929, even though I do not agree with their way of reacting, socialists when they are losing money but when things are good, they are the epitome of capitalism.....but then again, was there a better solution?...as papandreu, looks like obama will pay for the previous goverments sins.
As my forecast on greece...greek solution, topple the goverment,default and renegotiate when the dust settles, tough for Europe though, but given their history I am sure the union will prevail....if the will is there.

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Postby raden888 » Mon, 24 May 2010 5:51 pm

Vaucluse wrote: are you another 'professional' like the dimwit who posted here earlier?


Just failing miserably at being a troll.I don't have what it takes to be one. :lol:


I'm not trying to say Britain is good shape, it's in super bad shape but would have been worst off if it were part of the Eurozone.


The Greeks toppling the government will not change anything. Same ol Same ol. They have to change their attitude towards government.

Real change will take at least a generation ,however, after this bail out ,it is most likely that they will slip into their old ways..Blaming everyone else except themselves for their predicament along the way.

anneteoh

Postby anneteoh » Mon, 24 May 2010 10:45 pm

raden888 wrote:
Vaucluse wrote: are you another 'professional' like the dimwit who posted here earlier?


Just failing miserably at being a troll.I don't have what it takes to be one. :lol:


I'm not trying to say Britain is good shape, it's in super bad shape but would have been worst off if it were part of the Eurozone.


The Greeks toppling the government will not change anything. Same ol Same ol. They have to change their attitude towards government.

Real change will take at least a generation ,however, after this bail out ,it is most likely that they will slip into their old ways..Blaming everyone else except themselves for their predicament along the way.


Bailing out seems to be the practice , including Britain where the govt's been bailing out bank after bank, hence reversing the captialist system into a communist one, while the banks in communist countries are reversing to capitalist independence of govt grips. Brown believes he's saved the world from collapsing altogether.

There's nothing for free - I believe is what every layman knows; but the big 'uns like banks, hospitals, schools etc are all state funded. Somewhere along the line there was much mismanagment. Strange how no one noticed the imbalance and called for state emergency and control.

The EU's too big - to look after. If smaller countries fail to get their balance right, a bigger conglomerate will not be able to solve all other's problems including theirs. Member countries also pay too much to keep the EU going.

You've got a point there re the initial purpose for setting up the EU - it was to prevent more wars like that of WW2. Countries like UK and the Scadinavian countries hold on to their own currencies. But there are other rules and regulations that might be useful or prove a hindrance to the UK.
Will the EU stave off future wars forever? That's the real point - apart from famine and drought that is.


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