tag:blogger.com,1999:blog-17298986.post5266457951595585930..comments2024-03-28T09:16:53.211+02:00Comments on Teacher Dude's Grill and BBQ: Orwellian economics - The insane dilemma at the heart of the Greek debate.teacher dudehttp://www.blogger.com/profile/17202858180246680798noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-17298986.post-19669957703437089602020-04-01T09:34:46.684+03:002020-04-01T09:34:46.684+03:00I basically found your webpage page and expected t...I basically found your webpage page and expected that would express that I have genuinely regarded the experience of looking on the web journal areas. The latest Tweets from <a href="https://www.idolbirthdays.com/" title="Celebrity birthdays" rel="nofollow">Celebrity birthdays</a> with 22 million users visit our website each month.<br />Susanhttps://www.blogger.com/profile/08035164273592355585noreply@blogger.comtag:blogger.com,1999:blog-17298986.post-52160238621533001252015-02-02T02:19:42.220+02:002015-02-02T02:19:42.220+02:00Two and two only makes five because the austerity ...Two and two only makes five because the austerity debate has been falsified. The depression in Europe has been caused because banks no longer lend to small businesses, the biggest employers and drivers of economic growth. <br /><br />The real economy has little to do with government spending. This is clearly shown by the fact that Troika bailout loans to Greece have had absolutely no effect on unemployment.<br /><br />One reason for the Eurozone crisis and lack of credit growth, is that banks have had to substantially increase capital reserves during an economic downturn. <br /><br />The other reason is that European banks are hardly lending to Europeans at all. The ECB is easing while the FED and BOE are about to tighten. Bond yields in US Treasuries and UK gilts are assured. European banks are able to borrow funds from the ECB at almost no interest, so they are buying zero-risk US and UK treasuries, rather than purchasing high-risk European commercial bonds. <br /><br />If the European banks lent to local small businesses, the European economy would grow and governments would earn enough tax revenues to pay down their debts, instead of rolling them over. But the banks are rather using ECB funding to leverage up and make huge profits from USD/Euro carry-trades.<br /><br />The ECB has failed to get the banks to lend to small business: now it is attempting to flood the market with €60 billion of liquidity per month. This might do the trick. But if zero interest rates have achieved nothing, why should QE be any different.<br /><br />Stimulating the Greek economy by writing off large chunks of Greek Government debt is completely fallacious. How does that get EXTRA liquidity into the Greek private sector? Bailout loans do not go into the real Greek economy - they simply go towards paying Greece's creditors. For instance the Greek government must pay off €7 billion due in 2015. The Troika is expected to lend the Greek government €7.2 billion in its next tranche of bailout money to service this debt. This Troika money completely by-passes the real economy of Greece, and at the same time makes absolutely no difference to Greece's state debt: Greece is borrowing from Peter to pay Paul<br /><br />Let us say that Greece defaults on its €7.2 billion repayment, or extends the term to fifty years. So what? What difference does that make to the unemployed? Where is the government supposed to get funds to spend and create jobs for 25% of the workforce? From the tax that the 75% employed workers are paying? This is a circular argument.<br /><br />Greece is bankrupt. Its only hope is to print its own money to buy its own assets, rather than selling, for example, Piraeus port to foreigners. Greece must stop financing the government with ever-increasing "foreign" debt. When the ECB prints Euros to lend to Greece, they are issued in the form of a loan from all 19 Eurozone central banks. If the Greek central bank prints Drachmas, it owes nothing to ECB members such as the Bundesbank. <br /><br />Greece will take a long time to pay off its loans with its own heavily devalued currency. But the most important result of reverting to the Drachma is that Greece will immediately stop borrowing from other European lenders in order to finance the Greek state. It is this fact that is probably the biggest threat to the financial elites of Europe.<br /><br />As long as Greece uses the Euro, it is forced to borrow. Greece must exit the Euro. Only then will two and two cease to be five.Anonymoushttps://www.blogger.com/profile/15032831966976229089noreply@blogger.com