It is Obvious

Chris Rick has got altogether too much to say

What’s a Greek Urn – a lot less than it is paid.

Posted by chrisrick13 on July 4, 2015

It is obvious: a nation decides

I cannot resist adding to the ‘noise’ on Greece.

We are at the prostitute’s question  The analysis is simple.  To quote the country dweller: What’s the best way to London?  Don’t start from here.

There is nothing that can be done to return Greece’s economy to stability.  The economy has been cruelly beaten.  There will be no rise in GDP where the extra tax revenue can be used to repay debts.  Increasing taxes will shrink the economy and give less revenue (Laffer)…not that the Greeks pay taxes.  Now they are running a cash economy I would imagine tax revenue must be close to zero.  Austerity will shrink the economy but remember that the Greeks voted in a party that promised no more austerity.

Japan has debts at over 200% GDP.  It is the only country that can sustain that level of debt as the Japanese save huge amounts of their income.  More than about 85% debt and a country will never pay off that debt – look at the UK.  The IMF raised that ratio to 120% so that Greek would be ‘safe’ at 115% but it has now move on to 200%.

Nothing can be done to move to an orderly repayment of debt.

What can be done?  They are on one of those chaos curves with a fold in it when one step along the x-axis creates a huge drop in the y -axis.  Greece has to ‘crash’ to use that word in a fuzzy fashion.  The experience of all crashed economies in the past has been one of a short amount of extreme pain and then rapid recovery.

The IMF and ECB are undertaking a process of a long period of extreme pain followed by a crash and a short period of extreme pain.  I know which I would prefer.

At some point Greece will default.  Every single euro lent to Greece will be lost.  Gone.  Not done too well.  (To quote South Park).

Meanwhile we wait for a referendum vote.  Have you seen the question.  It runs to the best part of a page.  I cannot understand it.  It refers to two 30-page documents that I in common with most people in Greece have not read.  So the people of Greece are voting on a question that they do not understand and which can be interpreted in many ways depending on the result of the vote.

It is obvious: a nation decides – oh no it doesn’t


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