pensioners crying in Greece, uk residents should help them out

[marrqkashg]

Really breaks my heart to see pensioners in Greece crying over their pension being HALVED! There seems to be a lack of outrage about this in the uk. I really do think our foreign aid should go to these pensioners as they are much closer than other countries we donate to.

[CoteDAzur]

" Inflation is not required or created by capitalism."

Umm... You sound like you have the basic terms and concepts but maybe you haven't studied macroeconomics? (No judgement).

Without going into too much detail and boring the thread to tears a low and steady level of inflation is necessary for a market economy for several reasons, such as to promote spending now rather than later (i.e. if prices stagnated or decreased, there would be no reason to buy now rather than next year) and to have the possibility of decreasing real wages (by increasing them less than inflation).

European Central Bank (ECB) aims at inflation rates below but close to 2%. Not zero, and certainly not negative inflation, but 2%. That is the minimum necessary inflation I mean.

[CoteDAzur]

"If the economy collapses to the point of bank closures, the physical notes have no value anyway... If you're a prepper, you'd be better off stockpiling canned food and shotgun cartridges."

I'd recommend getting your hands on some gold.

[Gemauve]

I'd recommend getting your hands on some gold.

Even that has no intrinsic value. If you're worried about the impending zombie economic apocalypse, all you can do with gold is hit people with it.

[CoteDAzur]

Assuming we are not actually talking about a zombie apocalypse when fiat currencies collapse, gold is what you want to have. Or silver. Something that is recognisable as precious by everybody.

[EllieFAntspoo]

Without going into too much detail and boring the thread to tears a low and steady level of inflation is necessary for a market economy for several reasons, such as to promote spending now rather than later (i.e. if prices stagnated or decreased, there would be no reason to buy now rather than next year) and to have the possibility of decreasing real wages (by increasing them less than inflation). Now that is Keynesian claptrap.

Gemauve If that is the case, then why is it the only commodity never to have gone to zero? And why is it the only currency used in international trade when nations do not trust each other to honour their obligations? Fifty years of carefully crafted education has done its trick, me thinks.

A little perspective here...

In 1914 you could buy a months groceries for a person with a £1 coin, and you could buy a fish for a three pence piece. That three pence piece was made from sterling silver, and that £1 coin was called a sovereign. Today, you can still buy a months groceries with the gold in the sovereign, and you can still buy a fish with the silver in the three pence pice, but you cannot even buy a fish with a modern copper/nickel £1 coin.

Inflation destroys economies. It is not required in trade, nor is it required to grow a nation. We certainly do,not learn from history. We repeat it.

[CoteDAzur]

"Now that is Keynesian claptrap."

What?

Yes, that's why ECB has a target inflation rate of 2% and everyone's scared of deflation like it's the bogeyman. Because it's claptrap. Not.

[EllieFAntspoo]

The ECB is a privately owned bank that issued debt obligations at interest. It is the creator of inflation. What do you expect them to say? "Stop borrowing money from us and paying us interest. Just print your own and don't charge interest on it, and your inflation problem will go away." Do you honestly believe the institution directly profiting from the creation of currency is going to tell you the truth? What is their incentive to be honest with you?

[CoteDAzur]

I know what the ECB is, Ellie And it's not because ECB set inflation target at 2% that we know a steady low inflation is necessary. You are confusing cause and effect.

US Fed also has a 2% inflation target, for the same reason. Here is how they explain why:

The Federal Open Market Committee (FOMC) judges that inflation at the rate of 2 percent (as measured by the annual change in the price index for personal consumption expenditures, or PCE) is most consistent over the longer run with the Federal Reserve's mandate for price stability and maximum employment. Over time, a higher inflation rate would reduce the public's ability to make accurate longer-term economic and financial decisions. On the other hand, a lower inflation rate would be associated with an elevated probability of falling into deflation, which means prices and perhaps wages, on average, are falling - a phenomenon associated with very weak economic conditions. Having at least a small level of inflation makes it less likely that the economy will experience harmful deflation if economic conditions weaken. The FOMC implements monetary policy to help maintain an inflation rate of 2 percent over the medium term.

[EllieFAntspoo]

Yet again, you are quoting from the Federal Reserve, a privately owned bank that creates money at interest, and it is the interest itself that creates the inflation. When a Euro is created, a corresponding Euro and six cents in debt is created. The monetary pool has been increased by 1 Euro, but the monetary debt has been increased by 1.06 Euros. The debt can never been replayed, ever. It is a mathematical impossibility. But, in order for debts to be repaid, more money has to be printed to cover the interest, and that money is also printed with interest attached. The debt obligation is at compound interest, and the money supply has the be increased in ever increasing quantities devaluing the currency.

The idea that you need to stop things in shops getting cheaper, because it is in some way detrimental to society is pure BS. But it's good that you buy into the notion. The idea that human beings in their natural endeavour do not become more industrious, more efficient, and therefor more adept at utilising their labour and producing their products more ifficiently and at less cost is laughable.

Have you thought maybe that reading about why debt is good for the world from the very people who issue the biggest amounts of debt in the world is a little like quoting a pharmaceutical company's explanation as to why every child should be forced to be vaccinated, or quoting Monsanto trying to explain why GMO crops are good for you and should not be mentioned in packaging because all the thickos among us aren't intelligent enough to know what's good for them? You are falling into the same trap. Do your research. I have.

[EllieFAntspoo]

Cote That came across really crappy. It wasn't meant to be.

[CoteDAzur]

Ellie, this is not a conspiracy and I'm not drinking central banks' cool-aid. This is Econ 101. Have a good evening.

[Figmentofmyimagination]

Annielouise if you think having 7% of your GDP in the hands of the mafia is potentially destabilising, think about how concerning it must be to have 65% of your country's GDP represented by the somewhat lightly taxed equity in bricks and mortar. Fortunately for us property prices never go down. Grace of god etc.

[EllieFAntspoo]

Cote The beauty of this debate is time will tell. Either prices will get higher and higher every year and people will get poorer and poorer every year, or they will not. The BofE displays the current inflation rate in the UK as 1%. Can you honestly say you live just as well for £101 as you did last year on £100? Is you fuel bill only 1% higher? Is your food only costing you 1% more? Are the packets of food you buy the same size, of do they have less in them now? Does your SkyTV cost the same as it did a year ago? Is it just as cheap to go to the cinema?

Or are you being lied to when we tell you that inflation in the UK is only 1%?

[mimishimmi]

Those most likely to be really suffering in Greece are not those whi would ever have realky earned enough to dodge paying a significant amount of tax. The Greeks suffered so much during WW2 - apart from all the massacres, they were forced to give a massive loan to Germany which was never paid back, they basically lent again after the war to help with rebuilding Germany (by agreeing to buy West German goods on very favourable terms to Germany). I get that there is a lot of corruption on thr ground level in Greece - there is also a huge push from bankers to basically exonomically enslave entire populations though. "Our way of life" is premised on this cycle of debt and neverending war. To hear people say that Greeks deserve this makes me feel sick - we are as much a target of these elites as they are.

[DoctorTwo]

they can only move money into a Greek Bitcoin exchange

Sorry Ellie, that's not quite how bitcoin works. bitcoin is P2P money, each bitcoin owner stores it in a personal wallet, be it on their mobile, pc, usb or even as a physical coin/piece of paper. So unlike a fiat money created and owned by a private bank if you have physical possession of a bitcoin (or other Blockchain derived cryptocurrency) it belongs to you. So in that sense it's much like gold or silver, in that physical ownership is just that. Oh, and it's finite, so it has intrinsic value.

When you buy a bitcoin, or part of a bitcoin, 100 Satoshis, say, it is transferred from the sellers wallet to yours as a string of numbers. When you use your wallet to buy goods, those numbers leave your wallet and transfer to the vendor, so you can only spend your bitcoin once, it cannot be re-hypothecated.

You can, if you choose, store your btc in an exchange, but why would you given that Mt Gox and others have had their money stolen because of out of date/poor security.

Sorry if that comes across as patronising I don't mean to.

[lushilaoshi]

Sad as it is, I think there are people who need our help more.

[Capricorn76]

I feel very bad for the poor people in Greece, however, the British who are living under austerity themselves are not the right people to target to help them.

There are tons of extremely rich as well as middle class Greeks who avoided contributing to the pot on an industrial scale for decades. They preferred to do things such as invest (drive up property prices and push poor people out of) in London to hide their money. There's clearly a lack of community spirit as they won't help their own people which I'm surprised by. It is they who you should be targeting.

In addition please don't make this about helping Europeans over other people, we are all human and we should give to those in greatest need wherever they are geographically. I have no more concern for a stranger in Ireland than a stranger in Nepal.

[daisychain01]

Interestingly I just heard someone say their Greek friend living in a small fishing village told him that the EU subsidy given to fishermen for new boats was spent on .... luxuries like Mercedes cars.

So maybe the analogy up thread to the friend having their nails done when they are broke, wasn't so far from the truth!

[DameDiazepamTheDramaQueen]

Daisy - I can tell you loads of stories like that, we have Greek relatives, they've been 'getting their nails done for years.'

[DameDiazepamTheDramaQueen]

Mimi-Wrt paying tax, just about everyone dodged tax, seriously it was shocking when I was there-from local shops to doctors (yes seriously, evendoctors wanted paying in cash )

[StellaAlpina]

Sometimes I think people seem not to care about poverty because it's just so overwhelming and they don't feel they can do anything about it...so they distract themselves.

As my own tiny contribution I try to buy a sandwich/drink for a homeless person at least a couple of times a week...but then I feel guilty because there's more than one homeless person on my way to work...but if I bought them all a sandwhich that would be all my (part time) wages each day...(I guess to a certain extent it's like that with foreign aid)

[Bakeoffcake]

Daisy- that sort of thing happens in the UK too. Don't think the misuse of EU funds is purely a Greek thing.

[Superexcited]

If I borrow money due to financial hardship and continue spending frivolously and not earning more money then I will end up in increasing financial trouble due to needing to make debt repayments whilst still funding an unsustainable lifestyle.
That is effectively what the Greek govt have done and are continuing to do.

In individual peoples lives the creditors would stop lending money when it becomes apparent that the borrower cannot repay their debts and is making no real attempts to find a long term solution to their debt repayments.
Why should it be any different when it is a country borrowing?

It doesn't mean that I have no sympathy for the people of Greece on an individual level but sadly they voted for a govt who doesn't want to be financially responsible.

[sanfairyanne]

but if its a bank that needs bailing out, the skys the limit of course

[sanfairyanne]

although i expect the global financial crash is my fault for voting which resulted in a series of governments who did not reign in the banks or control their lending.