Greece

Oh they knew but nobody wanted to believe it was flawed.

The UK knew and stayed out precisely because of the 1992 UK ERM disaster, have to admit I was wrong on that one as I thought at the time we should join the euro but we definitely dodged a bullet on that one.

Plenty of folk in the UK tried to make the rest of Europe see that fiscal union without deep political union could never work for long and apparently this is not the first time Europe tried to adopt a common currency there have been many previous failed attempts in history going back hundreds of years.

It has long been held that a debt to GDP ratio of about 40% was sustainable, I think that is roughly the debt ratio we had been running during the boom years.

The bit that always got me and that I found hard to understand is that the deficit which is the annual overspend per annum i.e the difference between what we borrow and what we repay, always seems to be positive, this means that the total national debt which is the sum total of all the overspends over all time just keeps growing forever how?

I can only assume that we somehow compensate for this by printing money, i.e. making money appear out of thin air which all central banks do to some extent or other.

The other confusing bit about all this is that we hold a large part of America's debt i.e. they owe us money, but we also owe them money and the French owe us money and we owe the German's, then there are the Chinese who the newspapers keep telling us are the ones lending everyone else money, well how come they are running a 2 trillion dollar public debt, so who lent them all that? And how did a country full of poor people working for next to slave wages manage to scrounge together all the money to lend to everyone else in the first place.

Of the BRIC countries 3 of them are in that list, India owes as much as China and Brazil is just a bit behind us, erm................................ no wonder they employ rocket scientists in the City of London finance markets these days (Math and Physics specialists) they bleedin need them to make sense of all this insanity.

Take a further step back and figure that the total world GDP is somewhere around 20 to 30 something trillion dollars then figure the fact that the total value of the financial derivatives markets worldwide is somewhere near 600 TRILLION dollars and then tell me that any of it makes sense or tell me that there is not a massive disaster waiting for all of us just round the corner.

You have to laugh, my sig on this site is a special piece of very important maths it applies to the nature of reality but it kind of applies to finance as well these days, essentially that little bit of maths says nothing can be known with absolute certainty and this applies oh so much to economics these days.

I liked this joke :-

The QE thing so far has been a clever idea because it's not the government printing the money, it's the Bank of England (BoE) and they don't inject the cash into the real economy what they do is buy up goverment debt, i.e. they let the government borrow the money for fixed periods at low interest.

What the BoE is buying is GILTS, government bonds, the same thing that pension funds are obliged by the regulator to buy into. In the old days GILT yields were quite high which meant that the pensions annuities that were backed by Government bonds were paying out a reasonable amount of interest but the effect of the BoE intervening in the market is that GILT yields have been kept artificially low this effectively means that peoples pension savings are being devalued but in the meantime it lets the government borrow at very low interest rates, GILT yields are effectively less than inflation so the government is effectively stripping value from pension savings, both mature pension savings and ongoing pension fund savings.

Maybe this is what is offsetting the tendency to for printing money to result in hyperinflation? Still don't forget that inflation has been relatively high this last few years and wages have not kept up so there has been a genuine squeeze on the economy and that may also have partly compensated for the injection of several hundred billion quid in the form of QE.

It might still be too early to tell if these measures have injected capital without significant inflation but it may just be that the inflation is hidden in the asset stripping of pension funds and other investments.

No World PRODUCTION is about 30 Trillion dollars Per Annum but the DEBT that is sloshing around the system is over 600 Trillion, the derivatives market is a place where everyone has bet against everyone else, it's like one of those huge domino rally's everybody has re-insured their debts over and over and over again, if someone tips one of the domino's at the head of the chain it ALL unwinds but the pattern is so complex that NO ONE really has any idea who will win and who will lose how can a world that makes 30 trillion worth a year of value have a financial market that is 20 times larger than our total production and about 40 times bigger than the largest economy the US?

It's all completely INSANE :vhappy:

Your not the only one mine too

The point is they can't reduce the national debt because we spend more each year than we take in in tax and other revenues, as long as any government runs a deficit they are increasing that countries national debt, but this seems somehow to have been acceptable and the norm in the past, it's stuff like this that I really never quite grasped but someone somewhere must be running the show and be making sense of it all

I doubt Greece will leave the Euro. It would be a disaster and all of Europe would suffer even more for it.. Nope, for now I think the austerity measures will get watered down to fit the Greek and French (and dare I say it, but most of the UK as well).

They don't want to, 70% of them want to keep the Euro but the only real solution for them is for the whole of the Eurozone to take responsibility for Greece, Spain, Portugal and Italy, there has to be collective devaluation of the Euro which will hurt Germany but will support the south, it is very very hard for them to do that as there is no political mandate for this anywhere.

In the meantime events will take their toll, if the runs on the banks escalates it won't matter if they stay in or leave, the imagined disaster will have become a self fulfilling prophesy.

Greece is a country of approximately 10 million people, only twice the size of Scotland or Ireland for that matter and yet its financial mess is freaking the entire Eurozone.

I hope they don't leave but I am not entirely sure that any of this is under anyone's control at this point in time.

I will say that in my view (gut feeling) the Greek people are in for 30 years or more of misery if they do stay in the Euro.

I wouldn't sell at all, but rent................ That would ensure a continuous stream of income if things don't go to plan in Pinas...........

An even better idea, indeed...!!!!!!!!!!!!!

Give the management contract to a reputable letting agency, and they will keep an eye on things for you for 15/20%, maybe less.