Quote:
Originally Posted by g jones
The problem for the Germans is the Mediterranean nations devalue the Deutchmark.
The problems for the Greeks as I said to Bone and Nuttall, if your a Greek with a €100k and someone whispers Drachma, you shift your Euros to a bank outside of Greece. The question is if everyone thinks the same, what happens to the Drachma and the Greek economy, Greek banks? Can any of them survive? Will the position not be cataclysmic compared to where they are now? A run on the Drachma that would resemble a run on the Zimbadwean currency?
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The Greeks defaulted three times on their debts in the nineteenth century and again in 1932 (I think ... I'm trying not to use google while I still have a memory. Anyone wishing precision should visit it ... google that is, not my memory
) ... and Greece is still there. The question of capital fleeing the country is not a new one. It happenend in France (pre we- adore -our -German -brothers -and -sisters France) in the 20s ... the "right" used this as a threat to control govt. policy. This is detailed in William Shirer's "Collapse of the Third Republic." However, this could have been stopped, and the current Greek govt. could stop it in Greece, if the govt. had had the balls to legislate barriers to stop the flight of money.
The point I am trying to suggest is that those predicting a cataclysm, rather than a recession that will pass as European economies readjust to the demise of Euro in Greece, Italy, and perhaps Spain and Portugal are merely employing scare tactics ... an attempt to frighten the gullible into supporting not only the Euro, but also closer and deeper political union ... "Closer and deeper" mmm, sounds like someone is going to get uh, you know, one of the seven dirty words. And that "someone" is joe public.
I think it has come to the point where politicians, unable to sell the benefits of the Eurozone and the EU, are attempting to frighten people by suggesting that any questioning of those benefits will lead to chaos, and an economic dark age.