Hudson: Euro Serfdom

[goodrich4bk]

Re: Hudson: Euro Serfdom

The last time I checked, Steve, Greece is not Mexico. Mexico "dug out" by exporting oil, drugs and illegal emmigrants. The oil brought in royalty income, the drugs brought in drug lords and cash, and the emmigrants brought in remittances.

Greece has no oil or drugs to sell. It could export its citizens, and that is exactly what will happen whether they default or get bailed out. Their children will leave just like the Irish did and and now doing. The "math" that you don't want to discuss will not change. The economy will shrink, not grow, as Greece exports its children. When the stone cannot be squeezed for more blood, the taxpayers in Germany and France will be forced to make good the Greeks bad debts. Your morality play will be irrelevant.

As for your other prescription --- "cut taxes" --- how does that increase Greece's ability to pay its debts? If you've been paying attention at all, the IMF/ECU solution is to RAISE taxes, not lower them. The Irish are being told to RAISE their corporate tax rates, not lower them. The creditors you seem so fond of supporting against those "dead beats" have only one solution --- increase taxes.

Then there's your suggesting of lowering the cost of land, the cost of housing, the cost of energy. Hmmm. How do the Greeks do this? By legislative fiat? I think not. In a free market, there are only two ways to lower the cost of anything: make more of it (increase supply) or lower demand. So the Greeks should make more land (loosen land regulations), more houses and more energy? Care to explain that idea further?

Let me suggest a very simple way to lower the cost of Greek land and housing: default. Return to a sovereign currency, preferably backed by gold and silver.

Finally, what's this about tearing out the "solar energy crap" and "get real"? It appears to me that sun is an important Greek resource. Why the hell shouldn't they invest in solar? Because you think its not "real"? Or are you just a Canadian shill whose country benefits from selling a resource that you have a lot of (oil) vs. a resource that you don't have much of (solar)?

[llanlad2]

Re: Hudson: Euro Serfdom

Starving Steve

Maybe a dead-beat nation should pay-back its debts?

Steve - if you lent money to someone and charged interest and didn't get it back how the can you complain if they default? If you don't want to lose money don't lend it. Especially to a bunch of deadbeats.
Would you have lent money to the Greeks? Thought not.
If you had would you expect someone else to pay you back after the deadbeats "defaulted"? Cos that is what you are saying.
Interest is charged to take into account risk. It is your fault if you lent to a high risk borrower and charged too little interest to cover your losses.

If it was Canada that owed the money would you prefer that the Canadian Govt signed all future oil revenue over to the Germans, put up your taxes, closed hospitals and schools, increased pension contributions, raised retirement age, etc etc or would you rather your govt say "fuck you " to the billionairres who lent you the money in the first place.

Maybe next time the financiers should think about investing/lending their money to wealth producing projects- not govt debt and housing.

What's ironic is the Germans doing to the Greeks what the French did to the Germans in 1920s when they couldn't maintain debt payments. I don't remember the German public taking kindly to their forced payment of debt back then.

[Starving Steve]

Re: Hudson: Euro Serfdom

You fire the city and regional planners, and you service land in all directions. You flood the urban land market with land for homes and apartments, and land for industrial parks, land for shopping centres, etc.

You might have to initially raise taxes on consumption in order to dig-out of debt, but you can reduce taxes for producers and for exporters. Why would you tax the goose that lays the golden egg? Also, you can maintain a strong currency. You can treat investors and savers well. You can give entrepreneurs opportunity to relocate their businesses to your country, and you can welcome them with incentives, low taxes, cheap land, de-regulation, and cheap utilities.

You want to reduce the cost of living and reduce the cost of producing. So you reduce energy costs by flooding the electric grid with energy--- cheap energy, like a 7 cent per kwh electricity, as with Duke Power in the South-eastern U.S.

You want to build dams in Greece to catch the winter rainfall and impound the fresh water. You want to generate hydro-electricity from the out-flow from the dams. You build atomic power plants near cities like Athens. You drill for oil and gas by fracking rocks, and you drill off-shore.

You build freeways, not donkey paths. You build high-speed rail-lines to other countries. You raise your speed limits and get rid of the cops and their radar traps.

Yes, you back the currency with gold and silver, but the currency should be the Euro and not the drachma. The Euro is used throughout much of Europe, and you require the Euro to encourage trade between Greece and the rest of Europe.

Solar is the most expensive source of energy for electric power, even in Greece. Passive solar is joke because you radiate the heat gained during the day upward and back out to space during the night. And during the winter, the sun is too low in the sky to amount to anything as a source of energy. Windmills are a joke because you need constant wind, not just during winter storms but all year long, in all kinds of weather.

Yes, you don't want dope and illegal drugs to be produced in Greece, but you might want to think about producing pharmaceuticals for export? Mexico does.

[goodrich4bk]

Re: Hudson: Euro Serfdom

Lower taxes? That's exactly what the Greeks have done for the past decade! They cheated their tax collectors and Goldman helped hide the shortfall in tax collections while the Greek government floated bonds to make up the shortfall. Do you really not know that the Greeks created this problem by not taxing themselves sufficiently and borrowing the difference?

Steve, if lower taxes would increase revenue why wouldn't the IMF and ECB be recommending that the Greeks do exactly that? Instead, the IMF and ECB are demanding that the Greeks RAISE taxes. And that is exactly what they are recommending in Ireland --- that Ireland must RAISE the corporate tax rate.

To be honest, I think you're thinking here is a wee bit schizophrenic. In your earlier posts you demanded that the Greek "dead beats" send every last penny to Frankfurt and Paris. Now you are suggesting that they spend that very same penny on freeways, oil exploration, dams and tax cuts. Which is it, Steve? Should these dead beats place their children in peonage to repay the debts of previously incompetent Greek administrations or should they say "hell no", not in our name, and kick the bastards out of the country?

I know what I would do.

If you think the Greeks should lower their taxes and do all of the other things you recommend, then the FIRST thing they should do is default on their unpayable debts and start saving for their own future. It will be a long slog, but their children will be better off for it.

[c1ue]

Re: Hudson: Euro Serfdom

Why is Mexico now doing fine? Why is the Bank of Mexico now buying gold?

The last time I respond to your idiocy.

Mexico is doing fine because Mexico had numerous peso devaluations.

The peso devaluations did exactly what Hudson says above.

Greece, in contrast, is not being allowed to do so. It is instead being forced to sell everything.

Now I'm happy that you think this is fine. Apparently you channel the bankster ethic - in that a bad loan made for bad reasons to people who can't repay it is not the creditor's fault, rather it is the borrower's fault.

It is exactly that attitude which makes the banksters smile.

Only poor people pay taxes and pay back debt which is unpayable.

[Raz]

Re: Hudson: Euro Serfdom

Starving Steve

Steve - if you lent money to someone and charged interest and didn't get it back how the can you complain if they default? If you don't want to lose money don't lend it. Especially to a bunch of deadbeats.
Would you have lent money to the Greeks? Thought not.
If you had would you expect someone else to pay you back after the deadbeats "defaulted"? Cos that is what you are saying.
Interest is charged to take into account risk. It is your fault if you lent to a high risk borrower and charged too little interest to cover your losses.

If it was Canada that owed the money would you prefer that the Canadian Govt signed all future oil revenue over to the Germans, put up your taxes, closed hospitals and schools, increased pension contributions, raised retirement age, etc etc or would you rather your govt say "fuck you " to the billionairres who lent you the money in the first place.

Maybe next time the financiers should think about investing/lending their money to wealth producing projects- not govt debt and housing.

What's ironic is the Germans doing to the Greeks what the French did to the Germans in 1920s when they couldn't maintain debt payments. I don't remember the German public taking kindly to their forced payment of debt back then.

It takes a criminal government to flay the hide off its citizens in order to bail-out a bunch of bankers.

Since 2007 the only sensible action I've observed in this worldwide debacle was the Icelandic nation telling the British bankers and their bought-and-paid-for government to drop dead.

I have little sympathy for [legitimate] deadbeats (those who clearly knew what they were signing and obligating themselves for), none for bankers, and only rage for the Central Bankers and politicians that serve the F.I.R.E. interests.

[Starving Steve]

Re: Hudson: Euro Serfdom

The last time I respond to your idiocy.

Mexico is doing fine because Mexico had numerous peso devaluations.

The peso devaluations did exactly what Hudson says above.

Greece, in contrast, is not being allowed to do so. It is instead being forced to sell everything.

Now I'm happy that you think this is fine. Apparently you channel the bankster ethic - in that a bad loan made for bad reasons to people who can't repay it is not the creditor's fault, rather it is the borrower's fault.

It is exactly that attitude which makes the banksters smile.

Only poor people pay taxes and pay back debt which is unpayable.

What peso de-valuations did was drive capital out of Mexico and into the United States. Those de-valuations also drove people and industry out of Mexico and into the U.S. Those peso de-valuations also left the Mexican economy in ruins, and the people of Mexico in rags.

If de-valuation was such a cure for economic decline and stagflation, why wouldn't the world's investors now be falling all over themselves to invest in Zimbabwe, Cuba, North Korea, Israel, Nigeria, or Bolivia?

Only when central banks have completely abandoned Keynsian economics and have thrown Samuelson's textbook on economics into the paper re-cycling bin, have those central banks been able to turn inflation around into de-flation, economic decline into growth, despair into confidence, and poverty into prosperity.... The Bank of Mexico now buying gold underscores the point that I am trying to make. Money is now flowing into Mexico, and the peso is rising against the U.S. dollar.

[don]

Re: Hudson: Euro Serfdom

Time and again, with some legitimacy, the sheeple are flogged here on the 'tulip. What's paid little attention to is the billions - yes, billions - that were spent by the creditors, using the best available (best being a relative term) mass psychologists to convince those very sheeple that going into debt was okay. You could sleep at night with your cards maxed out, as long as another card was in the mail.

[Starving Steve]

Re: Hudson: Euro Serfdom

Time and again, with some legitimacy, the sheeple are flogged here on the 'tulip. What's paid little attention to is the billions - yes, billions - that were spent by the creditors, using the best available (best being a relative term) mass psychologists to convince those very sheeple that going into debt was okay. You could sleep at night with your cards maxed out, as long as another card was in the mail.

The people were not dumb, nor were they being conned by banks. With inflation, especially with accelerating inflation, paying-back debt was easy, especially if you delayed the repayment as long as possible. Inflation worked in your favour because your income increased as the value of money decreased. Also whatever you bought would increase in value, especially any commodity like real estate would increase in value. The sooner you purchased something that you needed, the better it would be for you. It was a great game, and it lasted for decades. As I said, the people were not dumb. They caught-on to this inflation game (run by central banks) real fast, and they worked the inflation game to their benefit.

I was one of the rare dummies who saved money. I saved during the inflation, and I suffered. Whatever the interest rate was on bank CDs or government bonds, it was not enough to cover the decrease in the value of money. The real return on interest paid to savers was negative in most countries, if not all countries, every year. And if you even broke-even, you ended-up in a negative return on your savings, once you paid taxes to the government on the nominal interest income that you received..... As I said, it was quite a game, and it took decades before I really caught-on to it. (I was the dummy.)

And what really made the inflation game difficult for me to understand was the fact that interest rates paid to savers tended to nominally increase. But it was an illusion. The rate of nominal interest paid to savers was always equal to or less than the rate of inflation during the term of the investment, so the real rate of return to savers was negative. I would end-up being fleeced, and those who slept at night with their credit cards maxed-out were the winners in the inflation game.

This is why I have little patience for Hudson's line that the people of the PIGS who have run a Club Med are victims. If the people in Club Med are serfs, it is because the savers and producers of the world have caught-on to how the inflation game works.

[flintlock]

Re: Hudson: Euro Serfdom

It takes a criminal government to flay the hide off its citizens in order to bail-out a bunch of bankers.

Since 2007 the only sensible action I've observed in this worldwide debacle was the Icelandic nation telling the British bankers and their bought-and-paid-for government to drop dead.

I have little sympathy for [legitimate] deadbeats (those who clearly knew what they were signing and obligating themselves for), none for bankers, and only rage for the Central Bankers and politicians that serve the F.I.R.E. interests.

Exactly Raz!

[goodrich4bk]

Re: Hudson: Euro Serfdom

From Steve:

"This is why I have little patience for Hudson's line that the people of the PIGS who have run a Club Med are victims. If the people in Club Med are serfs, it is because the savers and producers of the world have caught-on to how the inflation game works."

Nowhere does Hudson claim the PIGS people (I see you've stopped calling them 'deadbeats') are victims. To the contrary, he is explaining to you, Steve, that the victims are the taxpayers who will end up paying for ECB/IMF bailout of Greece's creditors.

BTW, your ealier posts were quite complimentary of the wonderful economic gains the Mexicans made once they started producing things and drilling for oil. Why don't you bless us with a contribution to the "Murder City" post today so we can more clearly understand what it is about Mexico that we should emulate?

[dcarrigg]

Re: Hudson: Euro Serfdom

Exactly Raz!

I second that.

[dcarrigg]

Re: Hudson: Euro Serfdom

Let's say that I live in Des Moines, Iowa; Detroit, Michigan; Phoenix, Jackson, El Paso, New Orleans, or any of dozens of U.S. cities, why couldn't I make payments on a $100,000 mortgage at 3.47% annual percentage interest?

I think one can buy homes for far less than $100,000 in many U.S. cities, but let me just take 100K as an example. So then the dead-beat is asked to pay about the same amount toward re-payment of the principle, give or take. Do you mean to tell me that the dead-beat can not pay $589 per month for the mortgage?

Let me understand this in detail: The debtor can not work roughly 98 hours per month flipping burgers or stacking shelves at Wal-Mart to earn $589 and make good on the payments of the mortgage?????????????? $6 per hour and the dead-beat would rather go on vacation or smoke or order-in pizzas??????????

As I say, I am baffled and lost!

And wasn't it Barney Frank who got up in the U.S. Congress and said that the poor in America were shut-out of the housing market........blah, blah, blah?

Gosh, I don't want to sound-off like a conservative because I am a social-democrat. But really, this really makes me raise an eyebrow! Liberalism was supposed to be about government giving people a social safety-net and about government giving people jobs on vital public-works projects like with the Works Progress Administration under FDR during the Great Depression. Liberalism was never to be about underwriting dead-beats who choose not to work, to stay home, purchase new cars, buy beer, make kids, and enjoy good times on the public purse.

SS:
I think you are baffled and lost because your figures are way out-of-line with reality.

You live outside of Vancouver, right? On what planet do you find $100k houses? Did you take the DeLorean back to 1985? Double that and you come closer to 2011's median. There are local markets (not in cities - especially not anywhere within a work-day's drive of salt) that one can still find $100k houses in, but there usually are not many job options in those places.



Add in some change for taxes and upkeep and realize that J6P don't have no 800 FICO score and you're looking at closer to $1,500/mo. At Federal Minimum Wage, $7.25/hr, you're talking $340 more a month than full time gross income. This is why minimum wage workers don't buy anything in the way you're describing. They rent and/or have section 8 vouchers. At least this is the case where I come from.

Besides that, all of this was assuming a vanilla fixed-rate mortgage. Add in the ARMs (only useful for speculation) and all other breed of insanity, and you've got yourself a recipe for trouble. J6P can work, he's not necessarily a deadbeat, but he probably don't get the fine print, especially when a salesman doesn't clearly explain the risk (because there's a fat commission check waiting on the other side for the origination).

It wasn't dead-beats that got us into this mess. Sure, both U.S. parties smiled from ear to ear as more people happily 'bought' their first home and banks happily 'securitized' mortgages. The elite and the rabble were happy - 'till the booze ran out and we got the mess we're in now. Tricky loans can get you booted out of your house in a hurry. A job loss can do the same.

There are people that can't find work but legitimately want to. One million just applied at McDonalds for 62,000 jobs last month. 6.2% success rate. It ain't always just being a dead-beat for the sake of it (although yes, we all know that sometimes it is).

[dcarrigg]

Re: Hudson: Euro Serfdom

Yes, you back the currency with gold and silver, but the currency should be the Euro and not the drachma. The Euro is used throughout much of Europe, and you require the Euro to encourage trade between Greece and the rest of Europe.

SS, buddy, this is way off. There's no gold (or silver) backing the Euro. There have been no Drachmae in circulation since 1999. Greece uses the Euro. Why else did you think Germany and France gave a flying damn about the PIIGS? By the way, the Greek bonds require paying back debt at 23 points, which is higher than the interest charges put on the Visas given to college kids with no credit history and no job.

Greece - 5000 years with no defaults
College kid - 18 years with no job

I think it's just worth considering.


P.S. we know you hate wind and solar, man - but it's not always relevant to the conversation at hand. And no, I don't mean to tell you to like wind or solar. I don't mean to get into a debate on the matter or to see you take personal offense to it. It would just be nice if you could keep to the topic and not continuously 'slip it in.' We get it. You really, really, really despise renewable energy. We get it. We really get it. We really, really, really get it. Now can we keep it to threads about renewable energy and not slip it into the Eurozone debt crisis?

[dcarrigg]

Re: Hudson: Euro Serfdom

and Greenspan, Paulson and possibly Bernanke should be executed as per the Coinage Act of 1792.

That's a little intense for my tastes. The coinage act spelled out death as a punishment for bilking people out of bullion in Sect. 19. It also mandated that half-cents be coins. Old laws are old. Now-a-days we create six dollars by buying a soda with a credit card at the convenience store. I think we're all going down for the long dirtnap if we try to enforce strange old death penalties.