Solution to the PIIGS debt crisis....

Discussion in 'Economics' started by achilles28, Jun 21, 2011.

  1. morganist

    morganist Guest

    It won't perpetually solve the problem it just restructures the debt a higher interest rate for the same repayment just over a longer time.

    Even if the current problem is solved can you really see that level of debt being repaid even if it is, the affect to the aggregate demand cuvre will put the economy through the floor for the next twenty years.

    What happens if the repayments fail to the IMF? does the IMF, ECB etc go bust too?

    It doesn't really solve the problem it just postpones it and makes someone else responsible for the loss.
     
    #11     Jun 21, 2011
  2. Huh? I bot all my bonds at par and that's the price I will demand. What you're suggesting therefore is a one-off full bailout of all the periph sovereigns (i.e., for example, you want to forgive the currently outstanding EUR 300bn worth of Greek debt)? Or did I misunderstand?

    Is this type of "solution" something that I, as a German taxpayer, should feel all warm and fuzzy about? Moreover, this doesn't really solve the bigger picture issues of either Greece or the EMU.
     
    #12     Jun 21, 2011
  3. morganist

    morganist Guest

    Isn't there a fundamental issue with the basis of the system. It is based on what was produced not what is produced so repayment becomes impossible in economic contraction. The repayment is inflexible too.

    The situation is inevitable.
     
    #13     Jun 21, 2011
  4. Well, there's the question of timing, innit? Also, ultimately everyone in the EMU does realize that the ccy union is only viable with an orderly system of fiscal transfers, like they have in the US.
     
    #14     Jun 21, 2011
  5. morganist

    morganist Guest

    You mean they will have to implement a SGP that actually works?
     
    #15     Jun 21, 2011
  6. Not sure what your SGP actually stands for, but the answer is yes, I imagine.
     
    #16     Jun 21, 2011
  7. morganist

    morganist Guest

    Stability and Growth Pact. It is the fiscal requirements of eurozone members.
     
    #17     Jun 21, 2011
  8. Yes, I know what it is, but I have never associated it with the abbreviation SGP. At any rate, SGP, as it exists now, is for sissies. Ultimately, the solution is a single centralized fiscal and tax authority (briefly mentioned by Trichet in one of his speeches).
     
    #18     Jun 21, 2011
  9. morganist

    morganist Guest

    I think you might like my book would you like a copy. If you do pm me your email.
     
    #19     Jun 21, 2011
  10. Eight

    Eight

    Boycotts can work. Don't do any business with any of the PIIGS... shove them off the edge of the world and let them fight over the scraps that are left of their economies and then they can rebuild from the ground up...
     
    #20     Jun 21, 2011