I answered this in the edit of my previous post. Specifically, that the IMF, arguably, deserves more faith in these matters than any other body on this planet, given their track record.
Can I have that paper you stated. The IMF did not deal with Equador or Argentina very well in my opinion.
Many economists fear that Greece will be another IMF battle ground. Greece should listen to how Argentina solved its debt woes with the IMF or it may suffer for many years. http://www.voxeu.org/index.php?q=node/5018
I keep reading questions... such as how can they repay it. As an american I have been conditioned to respond they will just spend more by printing more... But here the Greeks can't exericse their right to inflate their way out. Ironically I find myself arguing inflation is a sovereign right. As an anti- internationalist I find myself thinking that the Greek politicians had no right to surrender their peoples right to govern themselves. (even if it was bypopular vote.) I postulate to myself that the greeks should disavow their Euro Debt arbitrarily establish the drachma at a 1 to 1 ration with the euro. And see what happens. Note: inflation in a system with progressive tax rates is theft. I am therefore arguing that the Greek government should re establish its rights to screw the population itself rather than surrender it to foreigners.
Argentina was an unmitigated disaster, indeed. Not entirely sure about Ecuador. It was interesting reading the IMF paper on the lessons of Argentina. On the other hand, they seem to have done all right with Turkey. Here's the IMF Staff Report: http://www.imf.org/external/pubs/ft/scr/2010/cr10110.pdf
This is the most paradoxical statement I have seen in a while. I can tell you what happens. Assuming drachma is free-floated, it immediately goes to 0.0001 of a Euro and probably stays there for a while. This ain't rocket science. Given that the Greek govt originally issued the EUR-denominated debt, hasn't it been screwing the Greek people all along, rather than the foreigners?
Where a floated currency goes - it not as obvious at it may seem on "paper". If it were so obvious wouldn't the U.S. dollar be a hell of a lot lower. Wouldn't the "intrinsic worth" be altered if the Greeks brought in central bankers to play games... the way our fed does? What if they hired volker and they did not have to print money to pay off any old debt. Would investing in greece be similar to a bank issuing a credit card to a person who just cleared bankruptcy. What if they started to raise interest rates. Doesn't a raising of interest rates almost always cause currency strengthening.
It is pretty obvious to me and probably to a whole bunch of other people. There's also quite a few precedents. What could possibly lead you to this conclusion? Firstly, the Greeks already have a central bank and, surprise, it employs central bankers. There's also the ECB. Secondly, you're gonna have to be a little bit more specific about the "games" central bankers play. What on Earth does Volcker have to do with money and not having to pay old debt? In the world of sovereigns, people who go through a bankruptcy generally don't get any credit cards for a decade or more. Strengthening only happens if there are enough investors that want to hold assets denominated in the higher yielding ccy. Moreover, it's not like raising rates is costless, as high interest rates don't exactly do wonders for the domestic economy. Just ask Volcker. Also, why don't you read the infamous story of Soros, pound sterling and the ERM?