Greece special report

[girl gone mad]

If you really want to know what the Greece crisis is all about, economist Yanis Varoufakis, who appeared on 60 minutes last Sunday, put this excellent piece together for Channel 4 News in February. Learn why profligacy is not to blame and austerity is not the solution:

[dixiegrrrrl]

1. This deserves much more views.

Would you consider cross posting in the Video/Images forum also??

Max Keiser has had this guy on his show a couple of times, talking about Greece. Quite educational.

[Mojorabbit]

2. I agree. More people ought to see this. nt

[Prometheus Bound]

3. I'm afraid his "simple" 3-step solution is far from simple.

Three step solution:
1. Unify Europe's banking sector and recapitalise its the banks forcefully.
2. Centralise a large part of the Eurozone's public debt via the ECB.
3. Use the EIB to shift idle savings into productive investment in the countries that need it most.

I know he sounds a like a serious man, but only inflationary printing of trillions of Euros can accomplish that.

[girl gone mad]

4. It would not be inflationary.

The goal is to reverse the debt deflation cycle caused by mass deleveraging to avoid more widespread depression. The inflation already occurred when the banks created a private debt bubble. The ECB must step in to provide stability as any true central bank would, otherwise there is no point in having a monetary union at all.

[Prometheus Bound]

5. The ECB's balance sheet is already over 3 trillion euros.

And in the most recent 1.3 trillion expansion the quality of collateral it accepted from banks of very low quality according to former European Central Bank Executive Board Member Juergen Stark. I take that to mean worthless shit.

So they have definitely stepped in (to save the European banks). How long can they keep that up, before the Germans go ballistic and/or people lose confidence in the ECB because of its non-performing balance sheet.

[bemildred]

6. Money is not real.

It's little ones and zeros on magnetic media, we can do whatever we like with it.

[Prometheus Bound]

7. Yes, that seems to be the attitude.

And as long as we all believe, it holds together. Well, to some extent.

But when people stop believing, the carnage will be terrible.

I guess, finally, we're not far from that point, though I'm constantly amazed at how long this can-kicking shtick can go on.

[bemildred]

9. Nobody with money has an interest in crashing the system.

So I am not much concerned about how they play with the money supply. I worry about real world issues like the environment, and the crap they sell us as "food", and the ludicrous foreign policy we have pursued these last 60 years and seem so unwilling to give up no matter how much money it requires us to "create" from nothing, and the failure of our economy to distribute goods and services where they are needed.

[girl gone mad]

8. So where is the inflation?

The ECB should do precisely what central banks were created to do: monetize the Eurozone public deficits to increase money available to the private sector. More private debts will need to be written down, but the impact can be mitigated through appropriate government spending calibrated to restore full employment.

[golfguru]

11. Debt is the worst possible solution of all choices

I can't think of any country which has achieved long term prosperity by going into massive debt. Ditto for individuals for that matter when debt is incurred for consumption.

[golfguru]

10. Pathetic results in Europe

editing typo's


UNemployment in European countries: Spain (23.6pc), Greece (21pc), Portugal (15pc), Ireland (14.7pc) and Slovakia (14pc).

Can't blame it on anything else except overly generous social benefits which their
economies can not afford. Here in Oregon it is the same problem, the PERS program
(public employees retirement system) guaranteed 8% return on retirement funds for
ever. When stock market was going up, it was fine but then disaster struck and the
state is in dire straits now.

[girl gone mad]

12. Yes, thanks for summing up the harebrained neoliberal view. n/t