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Brexit: give me a positive effect... XV

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matthewr said:
we only really have a couple of very crude, limited tools (rates, currencies) to steer modern economies from a macro point of view,
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'Chosen' tools which are crude. The use of blunt monetary policy is a choice of the monetarists. Interest rate juggling is certainly not the only tool, nor is it even a useful one; as several decades of doing it has demonstrated.
 
I respect your belief, Matthew, but disagree with your opinion it was a mistake.

I lived and worked in Greece during the bad days of the currency crisis 2012-2014. There was a lot of anger about everything: local politicians, EU politicians, bankers, economists etc. But I never, ever heard anybody say they wanted to drop the euro and go to a new drachma. On the contrary: all my colleagues knew that leaving the euro would hand the windfall of a lifetime to the same corrupt politicians and business interests that had got Greece in trouble in the first place and moved all their money offshore at the first sign of trouble (usually well before that). These people would just wait for the new currency to plunge and scoop up all the good assets at half price. Pensioners and anybody with savings (or with loans in euros) would be left high and dry. See what is happening in Lebanon at the moment for a real world illustration, but the Greeks didn't need that. They know their country and have been round the track before.
 
eternumviti said:
You can wrap the cocky sarcasm too.

Unlike you (by your own account), I really don't.
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You've shared some interesting titbits recently: you are aligned with the EU on Crimea but aligned with Putin on Brexit - and that GV drives an Aston (a DB2/4 no less). If he offered you a spin, would you be gracious and accept? And, are you going to the Festival of Brexit?
 
eternumviti said:
You can wrap the cocky sarcasm too.

Unlike you (by your own account), I really don't.
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I learned in life that making a decision that would create irrecoverable financial and reputational losses, based on a personal dislike for an individual, was a bad idea.
 
PsB said:
I respect your belief, Matthew, but disagree with your opinion it was a mistake.

I lived and worked in Greece during the bad days of the currency crisis 2012-2014. There was a lot of anger about everything: local politicians, EU politicians, bankers, economists etc. But I never, ever heard anybody say they wanted to drop the euro and go to a new drachma. On the contrary: all my colleagues knew that leaving the euro would hand the windfall of a lifetime to the same corrupt politicians and business interests that had got Greece in trouble in the first place and moved all their money offshore at the first sign of trouble (usually well before that). These people would just wait for the new currency to plunge and scoop up all the good assets at half price. Pensioners and anybody with savings (or with loans in euros) would be left high and dry. See what is happening in Lebanon at the moment for a real world illustration, but the Greeks didn't need that. They know their country and have been round the track before.
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I don't buy this analysis. That the Greeks didn't push for jettisoning the Euro tells me they were convinced by the falsehoods (pumped out by the EU itself and the IMF) that without the Euro Greece would inevitably spiral into an irrecoverable vortex. As if enforced austerity was a better option.

Why would all of your colleagues think it was a 'windfall' for politicians/business interests? It could have actually returned all monetary/fiscal power to the Greek government by totally preventing corrupt investors from shuttling their gains throughout Europe due to having that joint currency. Anything they would buy there would have to be in Drachma and there would only be one place they can spend these Drachma. And this idea that when they move anything offshore the currency then becomes unstable is unfounded. There's no reason for the currency to 'plunge'. I don't know why people think this is some sort of inevitability. Greece isn't some sort of desert with nothing to mobilise with its own currency.

With insightful knowledge that any currency-issuer doesn't require foreign or private investment to actually function this is brought into sharp relief. The return to national currencies cannot come soon enough. The euro, as well as being a failure in its design, has been an instrument of economic oppression and can't collapse soon enough.
 
Le Baron said:
I don't buy this analysis. That the Greeks didn't push for jettisoning the Euro tells me they were convinced by the falsehoods (pumped out by the EU itself and the IMF) that without the Euro Greece would inevitably spiral into an irrecoverable vortex. As if enforced austerity was a better option.

Why would all of your colleagues think it was a 'windfall' for politicians/business interests? It could have actually returned all monetary/fiscal power to the Greek government by totally preventing corrupt investors from shuttling their gains throughout Europe due to having that joint currency. Anything they would buy there would have to be in Drachma and there would only be one place they can spend these Drachma. And this idea that when they move anything offshore the currency then becomes unstable is unfounded. There's no reason for the currency to 'plunge'. I don't know why people think this is some sort of inevitability. Greece isn't some sort of desert with nothing to mobilise with its own currency.

With insightful knowledge that any currency-issuer doesn't require foreign or private investment to actually function this is brought into sharp relief. The return to national currencies cannot come soon enough. The euro, as well as being a failure in its design, has been an instrument of economic oppression and can't collapse soon enough.
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OK, you don't buy. Fine.
Re parag. 2 I've tried to explain the mechanism. Maybe you haven't read it, or maybe I explained it badly. Your belief that a new drachma would have held its value versus the euro or dollar is touching.
Parag. 3 is just your opinion, and what you wish for is unlikely to happen this year, next year, the year after that...
 
Kirk said:
The Nobel prize in economic sciences was awarded today. Brexiteers will be disappointed that Patrick Minford did not win.
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Instead it has been given to a token idea reflecting current problems, to make it look like they are balanced. The last economist of value to win was probably William Vickery.
 
PsB said:
OK, you don't buy. Fine.
Re parag. 2 I've tried to explain the mechanism. Maybe you haven't read it, or maybe I explained it badly. Your belief that a new drachma would have held its value versus the euro or dollar is touching.
Parag. 3 is just your opinion, and what you wish for is unlikely to happen this year, next year, the year after that...
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I did read it, that's why I rejected it. Value of a currency is not dependent upon 'markets' it is a legal enforcement based upon a tax levy. And since Greece is not some desert island with three people on it, this carries weight.
Parag 3 is not merely my opinion, it is based in fact. Your belief the Euro is a fact transcending epochs is much more touching. The very problem with the economics world is 'investor' types with only a vague working knowledge of how economies actually operate.
 
That's an interesting set of ideas you have there. Maybe you should set up a consultancy.
 
Le Baron said:
I did read it, that's why I rejected it. Value of a currency is not dependent upon 'markets' it is a legal enforcement based upon a tax levy. And since Greece is not some desert island with three people on it, this carries weight.
Parag 3 is not merely my opinion, it is based in fact. Your belief the Euro is a fact transcending epochs is much more touching. The very problem with the economics world is 'investor' types with only a vague working knowledge of how economies actually operate.
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Fiat money based on trust in Government and its ability to collect taxes: are we still talking about Greece ?
 
wacko said:
Fiat money based on trust in Government and its ability to collect taxes: are we still talking about Greece ?
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No, not 'trust'. On the legal payment of tax liabilities in the designated money of account.
 
eternumviti said:
OK, not advocating.

You see the necessity of cultural ties, whilst I understand the necessity as being more for fiscal and transfer, and thus political, union.

As an aside, one of the characteristics of the EU project that I find most distasteful is its quiet annexation of the disparate European cultures.
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Indeed. Already, EU citizens are being forced at gun point to speak either French or German. Soon, stripey jumpers and berets will be compulsory. Thank goodness we escaped just in time and can carry on speaking the Queen’s English and wearing tracky bottoms.
 
Joe Hutch said:
Indeed. Already, EU citizens are being forced at gun point to speak either French or German. Soon, stripey jumpers and berets will be compulsory. Thank goodness we escaped just in time and can carry on speaking the Queen’s English and wearing tracky bottoms.
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Yebbut who is forcing young Germans to speak better English than the English ? I wonder if that will continue...
 
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