Soros, Galbraith and Stiglitz on resisting inevitability in Greece

Yves is holed up at the Institute of New Economic Thinking (INET) conference in Cambridge. The effort, sponsored by George Soros, is a much needed collaboration of ideas to help prevent a crisis like the one we are now experiencing. She claims they are working hard of course. Hence, her lack of posts.

Marshall Auerback reported yesterday on some ideas by Perry Mehrling. This was the first highlight of the goings-on in Cambridge to hit the blogosphere.

However, for now, it is Greece which is on everyone’s mind. I’ve said my piece on this, so let’s see what some of the INET leaders are saying. Bloomberg News is at the conference. Yesterday they asked a number of the speakers for their views on the now critical state the sovereign debt crisis in Greece has reached.

Below are three videos of James Galbraith, Joseph Stiglitz and George Soros giving their opinion of what is at stake.  Bloomberg finishes this off with a fourth interview with Armored Wolf’s John Brynjolfsson back in the US.

Let’s start with Soros as he is the sponsor of the event in Cambridge. He says Greece cannot survive unless the Germans agree to loans at a concessionary rate of interest. Trying to shoehorn a bailout into a market rate would kick the can down the road (see Greece And The Potential Upside In An IMF Rescue).



Galbraith points out that the euro zone acts as a unit with current account surpluses on the one side being met by deficits on the other.  I have said that this financial sector imbalance must be tackled internally unless the Eurozone attempts to shift problems caused by sclerotic growth at its core externally by running a large external surplus (see Spain’s debt woes and Germany’s intransigence lead to double dip).



Stiglitz starts by reiterating Soros’ point, namely that Greece is so indebted there is no way it can prevent an eventual default unless it receives lending at a concessionary rate. But he sees this whole affair as "sad for Europe" as it demonstrates a lack of "solidarity" in Europe in the face of economic turmoil. Stiglitz points out that the U.S. federal system works in part because of automatic fiscal transfers, something that Europe has on a national level but not on a European level (see The Eurozone is unworkable in its present state).

Stiglitz says something else I find interesting. He suggests it is Germany which is the free rider here – that Spain and Greece would have seen their exchange rates adjust without the Euro such that the build up of external imbalances would never have reached this scale.  I think that is certainly true.  Moreover, I would add that Spain and Greece would also have run more restrictive monetary policies at the end of the last decade as well.



Those are the ideas from Cambridge. I would sum them up as : Greece may be a clunker now but it could be Greece Lightning if policy is done right.

John Brynjolfsson has a different view and points to the politics of the situation. As I have intimated in the past, the political problem is that Greece has run large fiscal deficits in good times and bad. This isn’t a situation like in Spain where the government balance was in surplus during the last decade. Nor is it one like in Ireland where the government has unilaterally undertaken severe austerity measures. Greece is a special case of poor fiscal management. So the political brinksmanship is an attempt to extract enough pain from Greece to reduce moral hazard going forward, but without collapsing the euro system and the eurozone economies.

That said, Brynjolfsson points out that the situation in Ireland’s banking sector is still very dire (see The €22bn question: Should Ireland’s largest corporate failure be put to the sword or saved? from the Irish Independent). So, it’s not like Spain and Ireland have smooth sailing ahead either.  He sees the market’s Friday rally as a technical rally more than based on anything fundamental. In his view, the lenders to Greece are going to have to take losses. It’s called market discipline.

But, in the main, market discipline is not where we are headed. Instead, it is all bailouts all the time. Brynjolfsson makes a lot of points near the end of his five minutes about the distortionary effects of bailouts that I have made in the past. The problem in Japan has been an unwillingness to take credit writedowns and to instead flood the system with easy money. This only props up marginal companies, misallocates resources and lowers productivity and the incentive to invest in capital (see Japan: stimulus without reform leads to a policy cul de sac).

Moreover, policy makers in the U.S. or Japan who are giving out the easy money are pushing on a string. Lenders won’t lend and borrowers won’t borrow in an balance sheet recovery. Instead, what happens in a global financial system without capital controls is that the money ends up blowing up asset bubbles that pop in a destabilizing way. This is exactly what we see happening right now, one reason I am less sanguine about commodities or China medium-term than is Brynjolfsson.

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About Edward Harrison

I am a banking and finance specialist at the economic consultancy Global Macro Advisors. Previously, I worked at Deutsche Bank, Bain, the Corporate Executive Board and Yahoo. I have a BA in Economics from Dartmouth College and an MBA in Finance from Columbia University. As to ideology, I would call myself a libertarian realist - believer in the primacy of markets over a statist approach. However, I am no ideologue who believes that markets can solve all problems. Having lived in a lot of different places, I tend to take a global approach to economics and politics. I started my career as a diplomat in the foreign service and speak German, Dutch, Swedish, Spanish and French as well as English and can read a number of other European languages. I enjoy a good debate on these issues and I hope you enjoy my blogs. Please do sign up for the Email and RSS feeds on my blog pages. Cheers. Edward


  1. velobabe

    having a few doubts about this soros run thinker tanker inconvenience of truths pow wow.

  2. chris trakas

    all bailouts, all the time – at the national/institutional level, but not individually. Heaven forbid that people should receive “concessionary rates” huh? No, we get usury instead – given that cash advances on credit cards are just about the only way to “borrow” money anymore.

    And this they call the “free market?”

    … privatize the profits, socialize the losses. where have we seen this before?

    1. Andrew Bissell

      And this they call the “free market?”

      Actually, the only people I see calling it the free market are either bank propagandists (using that term for obvious reasons), or those who wish to attack capitalism by conflating it with the corporatist system of the past 50-odd years.

  3. Ishmael

    Ed says “This is exactly what we see happening right now, one reason I am less sanguine about commodities or China medium-term than is Brynjolfsson.”
    In general, I agree with you. Now what is the long term. The last time the world saw a commodity bubble was in the early 80’s and everyone thought it would continue for ever. It collapsed and took 20 years to recover. I remember seeing stacks of iron ore several hundred feet high at closed steel mills in Western Australia.

    If debt is defaulted on, people who ran into commodities thinking it will save them will from hyper-inflation will have their heads handed to them.

    Sound familiar!

  4. Anonymous Jones

    I find the endgame in the Soros suggestion somewhat opaque. He clearly believes Greece cannot avoid default without a transfer of wealth from German taxpayers (via a loan with below-market rates). Surely, an outright Greece default would generate numerous hardships for many (including some German taxpayers), but the moral hazard generated with this type of bailout is extreme (why would any lender now fear a default by any country that has adopted the Euro?). At some point, the lenders to Greece have to share in some of this pain, no matter how damaging it may be to the financial markets (which, IMO, would not be so great anyway (though definitely crippling to some), and even if I’m wrong on that, then we’re screwed anyway). This sort of dovetails with GW’s debt repudiation post. Everyone wants to make it black or white. I’m all for people adhering to their covenants, but seriously, we have developed bankruptcy laws for a reason (some people end up in untenable positions debt-wise (intentionally, negligently or through no fault of their own) and simply cannot repay the money). Labeling a capital investment a ‘loan’ does not mean you have magically turned your capital into a risk-free investment. That’s just not reality.

    1. Kevin de Bruxelles

      I agree but I have to just add that I find these videos hilarious! Anglo-Saxon after Anglo-Saxon concern trolling for Europe! As if there are no problems in, say, uh, Anglo-Saxon countries? You think these guys may be just slightly panicked that the Anglo –Saxon banking system will not be able to withstand a Greek default?

      The message is: Germany you and the Eurozone alone MUST bail Greece out just like WE bailed out Wall Street. Obviously though those Euroweenies are just not getting the message and thus the necessity to have lots of Anglo-Saxon economists coming over to have a teach-in on bailouts.

      In the end what we are seeing here is a battle of organizational principles. The best choice the Eurozone ever made was to include Greece; who have served as the canary in the coalmine. Their explosion will be small enough for Europe to deal with, whereas if Greece had not been included and it was instead Spain who were to first to explode then that would have been a real crisis. The Anglo-Saxon’s tried to impose their organizational model on the weakest Euro links but luckily Greece was included and have now collapsed before any real damage could be done.

      But I have to think that these Anglo-Saxons are freaking out at what will happen to Anglo-Saxon banks if Greece were to simply default. They must realize that Greece could choose to selectively default on their non-Eurozone (Anglo-Saxon) debt. The US and UK would then have to either lick their bank’s wounds or escalate to the military level, where the Euros are rather weak.

      So I have to give credit to Angela Merkel. She is holding a pretty strong hand and it is now clear we are down to two choices for the endgame. The bailout solution will be international, in other words not limited to the Eurozone, and the amounts donated will be proportional to the risk each country holds. Or Greece simply defaults, probably first on their Anglo-Saxon debt (in return for low interest loans from Germany and France!), and each country then just bails out their respective banking system.

      Bring it on!

      1. KFritz

        Conflating a small, spendthrift nation with US financial institutions and their absurdly overpriced help and leadership doesn’t hold up intellectually. The Germans derived benefit selling goods to the PIIGS nations. The American public has derived negative benefits from our interactions with Wall Street. Greece’s standard of living is middle class and only partially earned. It will have to ‘eat some bitter’ and reduce its standard of living somewhat. Can the same be said of Wall Street?
        Frau Merkel is being punitive with Greece, at least in part, to bolster her standing with a populace that won’t recognize its position of responsibility. Stiglitz got the imbalances part right.

        1. sgt_doom

          Negative — it is all financially interconnected – the profit shifting to Ireland, the CDS and off-balance sheet debt in Greece, the situation in Spain, all financially interconnected.

          People who truly understand what is going on, will understand it when I state that the underlying financial structure of hedge funds, leveraged buyouts, securitizations and credit derivates, and so forth, is all the same.


  5. ray l love

    If only those Germans and those Chinese would stop producing so much stuff. Those Germans with their efficiency and their worker’s being treated so fairly — and those Chinese making so much progress on poverty. Why is it so difficult for some peoples to learn the importance of shirking responsibility and that of living on debt.

    Eventually, these ‘productive’ nations will begin to understand that healthy economies succeed because they allow their financial services sectors to do the heavy lifting.

    1. Patrick

      NO! The macro problem is the exchange rate. If Greece had it’s own currency, it would have dropped relative to Germany and made Greece more competitive. With Greece more competitive, the markets would not have lost confidence in it’s ability to service its debt – which is large but not unmanageable IF they can service it at a reasonable rate. Without its own currency, the only option is a grinding deflation in prices and wages which increases the real value of debt and leads to a death spiral.

      It’s gone so far now that the only sensible option is for Greece to default and leave the Eurozone. The former is easy, the latter not so much.

        1. Patrick

          Ha! Sorry. But so many people actually believe the rubbish that it’s sometimes hard to tell when someone is being sarcastic and when they’re being dumb.

  6. purple

    Has anyone thought about how to achieve ‘growth’ in a world of diminishing populations , and therefore diminished markets? Japan is the future. Every country in the world is seeing their population growth rates slide, and the ‘advanced’ countries are all tilting towards less than zero, excepting immigration.

  7. Canucklehead

    It really looks like Soros is talking his book. A lot of old time MSM influence is on display here.

  8. K Ackermann

    Ed, I just wanted to thank you for holding down the fort and keeping the latest news in front on my eyes.

    1. K Ackermann

      P.S. for the next antidote, you should post bikini-clad women. Yves is in a whole different country. What’s she gonna do?

  9. Panayotis

    It is time that Greek debt is prolonged and restructured either with discount and/or par bonds since these yields and the level of debt are unsustainable. The Greek economy cannot make it with close to 12% of GNP going abroad for servicing the foreign owned debt. It is also time that Greece shifts sme of its borrowing domestically as the Greek private sector is net saving and has low private debt ratio. It is also time that the private sector becomes more productive as it lacks entrepreneurial incentives and is not investing. The problem is not wage cost but absence of technology and innovation, high transaction and infrastructure costs. It is easier for Greek firms to impert and market than produce and export. At this point the public sector is the only source of investment and one reason why austerity measures are the wrong medicine because they will bring a serious output shortfall and drop of effective demand.

  10. Ishmael

    So my SO was born in the US to US citizens but she is 100% Greek. Her mother was born here to Greek parents went back to live in Greece but escaped when the Nazis invaded. Her father was born in Greece but became a US Citizen. Lots of her relatives split their time in Greece and here. So, I said to her the other day, if Greece melted down it might be an ok place to live and watch the US melt down. She was at dinner with some of her relatives the other day (I was working) and she said they were aghast. Their comment was you do not want to go live in Greece now. Everything is so corrupt that if you are not part of the upper elite you will get screwed.

    So here is the problem with Greece. Corruption and cronyism through out the whole system. Really this probably dates back to the Greek civil war in the 50’s as I have talked to some of the old timers. What was labeled as communists were really people who wanted to clean up the system, but Britian and the US kept the same corrupt group in place.

    Throwing more debt at a serial defaulter will not solve the problem. Greece needs to clean up its act. It will not do so until pressure is put on them. This will probably in the end be a slow market default.

    1. Vinny

      “So here is the problem with Greece. Corruption and cronyism through out the whole system. Really this probably dates back to the Greek civil war in the 50’s as I have talked to some of the old timers.”

      Actually, that dates back 700 or 800 years, to the Turkish occupation of Greece. Greece is not the only country with such endemic corruption — all Eastern and South-Eastern European nations that were under the Ottoman Empire share this propensity for corruption. Trust me on this one: the EU or the IMF will not change a habit that is 800 years old.

      On the other hand, I completely agree that Greece is the best place to watch the US (as well as Western Europe) implode.


  11. ray l love

    The austerity measure choice is complicated. Discounted, or below market loans, can not be made to all of the nations that might benefit from them. So, is Greece more deserving than the long list of developing nations that in some cases might be more beneficial regarding global aggregate demand, or where the most poverty reduction is likely to occur? If cheap capital were unlimited the question would be fairly simple, but it is more a matter of efficiency within the confines of whether Greece’s ‘public spending’ is as worthy as ‘private spending’ in the developing nations. Global aggregate demand is the bigger problem and so ‘austerity’ must be applied where it will do the most good. There is no choice of eliminating austerity altogether, globally speaking, just a choice of where it will do the most good. Is it more efficient to invest in a corrupt, failed, bureaucracy, or in a nation with unlimited potential?

  12. Panayotis

    Ray you love,

    You know nothing about Greece so leave your ignorance in Texas or maybe in Nevada. Whether Greece follows an austerity program is for Greece to decide and not you. Austerity is not good to apply anywhere in the world and is not a question of which country deserves it.

    1. ray l love


      I said nothing about where to “apply” austerity, I said: “There is no choice of eliminating austerity altogether, globally speaking, just a choice of where it will do the most good.” So, I am saying that there are limits on how much austerity can be eliminated.

      Have you ever noticed how common it is for those who distort the context of what others say, and how frequently these low-integrity types to resort to something so juvenile as name ‘twists’ (Ray you love), among the fringe groups?

      Perhaps if you were to address your arguments directly and honestly at that which you disagree with, as opposed to childish and rude attacks, you might learn why fringe thinking relies so heavily on empty, counter-factual rhetoric, and tactics that ‘should’ be embarrassing.

  13. Panayotis


    Your relatives are exxagerating. Greece has corruption but not everybody is corrupt and they do not deserve to end in a slow market default. Greeks can make it as long as they can restructure public debt because private debt levels are not a problem like in the US, Britain, Spain etc. If the drachma was restored domestic private production would have become competitive. Otherwise, the emphasis should be tourism, construction and services. Greek human capital abroad can help by returning to offer know how.

    1. Ishmael

      Panayotis — Just so you know, my reponse to her was, “So, what is their point, sounds like the US.”

      Just so you know, when the fires occurred in Greece, we did send money through the Greek church.

    2. Vinny

      Lots of Greeks from the US would like to return “home”. The problem is that it is now much harder to sell property in the US. We were lucky to sell our properties in Chicago in 2007, before the real estate market took a nosedive.


  14. kevinearick

    aet is going to absolutely love this one:

    (tools are tools)

    Smarter, Not Harder

    The smarter, not harder population charges the battery. The cartels discharge the battery to their loads. After a few generations of jumping the safeties, downhill human habit formation, the cartels start disregarding the smarter, not harder population. Once they gain minority control over the majority, they start hunting down the smarter, not harder population, and employ extortion in an attempt to get the same battery re-charged. At that point, the smarter, not harder population has already built the next battery, and the old battery discharges.

    Now, they have to come to you to wire up the new system. Their primary objective is to maintain control, and they want the new wiring job as cheaply as they can get it. They don’t want to apply so much pressure that they get cut off (socialism), but they also want to apply the maximim pressure they can to reduce cost (capitalism). And you cannot force people to choose freedom over slavery.

    During the demographic acceleration mega half-cycle, all kinds of misdirection was employed to hide the Family Law hinge, but this time around, that is not possible. From experience, they know they have to dismantle the current family law system in order to install the new battery, but they have never before had to place the process under the microscope. So, what little charge remains in the old battery is being discharged, as they hem and haw, trying every tool they have collected over the years, to avoid the only pathway to their future.

    Some individuals are working madly, pre-fabbing supply to meet the expected demand, some are preparing for armaggedon, and many are sitting idle, hoping that no change will be required on their part. In the meantime, we negotiate price. Those choosing to remain idle will get a sufficient subsidy rate, but the days of government paying people to have children are coming to an end, and if it’s armageddon, they will be dead.

    Work smarter, not harder. You live in interesting times. A fresh pair of hands, to go along with experience, delivers the best result. When you have ruled out all the other possibilities, the one remaining is the solution. Whether it is a white swan or a black swan depends upon your perspective. What we are doing here is dialing everyone in to the top chessboard, in the pyramid of chessboards.

    Now that we are reaching saturation, the economic slave economies have to go, at least until the cartels get out into space. I wouldn’t expect the cartels to give them up without preparing for a fight.

    Yes. It is possible to devalue all the currencies and assets simultaneously, and close all the exits. You are watching a cascading global brownout, which will ultimately fall below the forward bias threshold, if an agreement is not reached.

    how’s that for tautology? They love their words. Add something engineering to something business that sounds powerful, in a plausible mythology for how the system works, and give them some words to impress each other with, and to fight over. that will keep them busy and out of your hair.

    the less capable technicians will randomly “solve” recursive circuit problems and pass them on to the call centers, keeping all the managers there chasing each other’s tails as well.

    (use the tools; don’t use the tools)

  15. kulicuu

    also having some doubts about this soros-run thinker tanker pow wow thingie (paraphrasing). I’d been reading a lot of Engdahl recently, who claimed Soros among others was very involved in setting up the Greek drama to distract from dollar woes.
    To see these sclerotic control-freak clods holing up in an “Institute for New Economic Thinking” is surely cosmic irony with the Orwellian twist. Some enterprise of such nature is surely called for at this critical global juncture, but I doubt those attending Soros’ pow-wow are qualified for it, in spite of their talents for obfuscation and bs.

    1. Andrew Bissell

      You can tell from the people who got top billing at this conference — including the 3 featured in the videos above — that the working thesis is that the crisis was caused by simply having the wrong people in power doing the wrong things, and all we need to do is “get it right next time,” and pull the levers of government tinkering with the markets in just the right sequence, and with a little more force. That the same governments which have already failed spectacularly should be doing more, including showing “solidarity” via bailouts of various failed actors (who in reality should be encouraged to default on unpayable public and private debts), seems to be taken as read.

      I’ll pass.

      What’s the over/under on someone at this conference proposing that to prevent future crises we really need to have a Global Super-Fed so that currencies can be devalued throughout the entire world en masse?

      1. kensey

        How different is Soros from someone like Mozillo? He is cold blooded and ruthless when it comes to getting a trade to work. I wonder what stake he has in the outcome here? I mean add Bill Gross and Barney Frank to this cabal and you have all the requisite pieces at the same table.. to do anything, to anyone.

  16. Panayotis

    Ray you love,

    Before you judge others, read your comment to Tom Hickey in Billyblog. What I said is that you are ignorant of Greek matters.Do you know anything about Greece to make judgement calls regarding whether they should be allocated any capital or whether they have any potential? Maybe you should first understand your own statements before you comment on what others say!

  17. ray l love


    That reminds me of the other common denominator regarding fringe folks: Hypocrisy.

    First, from someone who I have never exchanged words with(?), I get this: “You know nothing about Greece so leave your ignorance in Texas…”

    Then, shortly thereafter, this: ” Before you judge others…”. Followed by this: “What I said is that you are ignorant…” So, “[d]o you know anything”, about how foolish your blatant hypocrisy is?

    Plus, ‘fringers’ seem to have an aversion to free speech: “Do you know anything about Greece to make judgment calls…”, maybe you would be more comfortable at a site where everyone agrees with you. A place where obscure terms and run-on sentences are made to seem philosophical.

    And I have only once had an exchange with “Tom Hickey” and it had nothing to do with Greece? What I did say to Tom was somewhat embarrassing, I’ll give you that, but how was I to know that you have ‘names’ other than the one posted?

  18. PJM

    Once upon a time, an poor boy left the school at ten years old and started working for a old man, in a workshop.

    Later, with sisteen years old, he started his own company, delivering metal tools to a bunch of companies around his village.

    At forty years old he had a big problem. He was single, without children and he was alone with a big fortune. He suceed as entreprenneur, he is very rich but he wants to leave the company by her own means.

    He gave a professional management to the company and he retired from executive functions and started travelling around the world, to meet new cultures and adventures.

    Two years later his company started to have huge losses. The management told him that the market was more dificult than ever, management complained a lot about the lack of commitment from workers to the management goals and complained that the company maybe is the wrong core business.

    The self-made man was astonished. Before his retirement, the company was very profitable, the customers were very satisfied and the workers worked happily and without disagreements with the boss. The banks allways provided capital to company expansion and lines of credit to support some huge purchasing orders from foreigner costumers.

    The self-made man now is married with a small children. Beautiful children indeed. His wife is very nice and he started to love having more time for the family. He didnt want to comeback to exceutive functions in the company. Company must survive to him and after him.

    He had an idea. A good idea indeed. Why dont ask outsiders the busines an opinion about the company, it business, their strengths and weaknesses? So he payed to ten economists to give him solutions for his problem and how to return to profits and having costumers and workers satisfied. That economists were very known in their Universities as teachers of economics and management.

    What was the results? He asked to ten economists for answers and they retrivied 17 answers/solutions to put profitability back to the company.

    This is a beautiful and fictioned story. Not far from the reality of these days.

    1. PJM

      Economists are very good trying to explain… The past. Concerning the future, they allways give answers/solutions acording their political agenda, concerning their own ideology, beliefs and so on.

      Economists pretend to be scientists but they arent. They are philosophers, propagandists, ideologues but not scientists.

      If you have doubts, read this:

      What has chnaged in USA? Oh! Mr. Obama suceed mr. Bush. Not much is very diferent from both Admnistrations. Only the party has changed. But the ideololy give answers acording the political agenda behind the economists. As we can compare mr. Krugman words, then and now.

      The first time I had economic lessons the name of chair was Political Economy, like old days in Italy, about one century ago. Even that has changed and now they call Economy and pretend to give respect to the profession. They pretend that Economy is science, they put a lot of mathematical constructions behind their aims, as in the first: statistics about economic human behaviour. I remember Umberto Ricci, probably the first modern economist and the first to understand the real economic problem. Surely he was the first Liberal economist, stricty sensu. But he allways gave to human economic behaviour the real thing: psychology economics. Nice! The first one to introduce the modern Financial Behaviour chair.

      Thats it. Economics isnt science and is only political philosophy. Or we can say, economics is psychological economic statistics. Not science by self. Statistics is Science, but not economics. Economics isnt science. Economics today are more like religions, with their dogmas, high priests, gurus, their propaganda, moral values, and so on.

      Hey! Who can deny the human creativity? He can create religions pretending to be science. Isnt funny?

  19. Vinny

    In my opinion, Greece is simply the victim of Western European colonialism. And such colonialism needs to be resisted.

    As such, Greece should default, it should bring back the drachma, and it should seek its future away from Western Europe. Western Europe has gotten used to using and abusing weaker nations. Right now Germany and France expect to set a precedent with us so then they can enforce the same (or harsher) terms on others.

    The beauty is that we don’t need Western Europe. Where I am in Greece, most investment is done by Russians and Eastern Europeans. Most new hotels are being built with Russian money, and more and more Russians, Polish, Ukrainians, and Romanians are buying retirement properties here. Greece could also benefit from toning down the anti-Americanism, and try to leverage its strategic position. At least, for the sake of all the Greeks that made a good living and got a good education in the US, if nothing else. My point is, Greece does not need Western Europe.

    Finally, as I wrote here before, if Germany thinks it will sell another poorly-built Volkswagen or Mexican-made Mercedes in Greece after what they are doing, then think again, Angie. If you haven’t noticed, there are more Hondas and Toyotas here than anywhere else in Europe already. And, by the way, please do take your next summer vacation to the North Sea.

    If anything, this is showing Greece who its friends and enemies are, and this, my friends, is a lesson worth at least 30 billion fiat Euros.


  20. M. G. in Progress

    In the the latest Ponzi, somebody is doing God’s work as Leaders of the 16 eurozone nations have agreed to fund up to 30bn euros in emergency loans for debt-hit Greece, if the country wants the cash.
    The price of the loans will be fixed using IMF formulas, and be about 5%. Luxembourg Prime Minister Jean-Claude Juncker, speaking for eurozone finance ministers, said there were no elements of subsidy in the loan proposal. “The total amount put up by the eurozone member states for the first year will reach 30bn euros,” he said. Mr Juncker added that the financing would be “completed and co-financed” by the International Monetary Fund.
    I wonder if the above is the right way to stop the Ponzi game.

  21. Panayotis

    Ray you love,

    Again I ask the question, “Do you know anything about Greece?”. Answer the question! I guess the only comments you seem to make is to try and insult others which shows your insecurity!Your partial admission of guilt also shows that you have no courage to accept your misbehavior! As about my comments you obviously have not read my work which was the basis of my debate with Tom in billyblog. If you do not like or do not understand something you read and does not concern you or you are ignorant about as for Greece or my published work in Economics and other topics, I suggest you move on or leave your comments in Texas!

    1. ray l love

      That is the other fringe quirk: presumption. What makes you think I have, or would read any of your work? I didn’t read your conversation with Tom except for maybe a sentence or two; and, the post, and my conversation with bill had nothing to do with Greece. So, why does the presumptuous ass talk continue to flow from you. Typically, I move on when I have seen that a person is unable to write a reasonably well constructed sentence. I’m not all that demanding but you are clearly not worth reading when the blogosphere is rife with good writing. Have you ever actually tried to read your foolishness: “If you do not like or do not understand something you read and does not concern you or you are ignorant about as for Greece or my published work in Economics and other topics, I suggest you move on or leave your comments in Texas!”

      If you ‘are’ a published writer you must have your mother for an editor. And evidently, she is too protective to tell you that grown-up writers don’t rely heavily on stereotyping, context distortions, generalizing, hypocrisy, and presumption; all expressed in one solecism after another. And, they do not change pseudonyms to hide their shame: zanon, Takis, Panayotis, etc.

  22. Panayotis

    Dear Vinny,

    I agree with you about Greece but it seems that the Papandreou government has no guts to follow through with what you propose. If there is a credibility problem that the government faces is with the Greek people that voted for another program that the government is implementing. Credibility and lack of integrity.

  23. rothmanp

    Soros is a brilliant player in financial markets and Stiglitz’s is one of the finest analytical minds in his generation of economists, such that time spent listening to their thoughts would likely prove to be worthwhile. But why would anyone want to hear what Jamie Galbraith has to say? Has he achieved/done anything besides being JKG’s son?

  24. stefalb

    Even if all the euro states were to be bailed out it would not even reach 2 years of US budget deficits! I would change the Maastricht treaty to allow the ECB to buy (monetize or quantitative ease)over time all Euro zone government debt down to a level of 60% of individual GDP. The levels of purchases could be determined immediately. The markets and the states would know the exact amounts immediately. On the other hand, going forward states would not be allowed debts of more than 70% of GDP and would face automatic expulsion out of the Euro zone if this level were to be violated. Additionally the ECB would monetize government debt of 3% of GDP of every member state every year. This would reflect productivity gains and would provide “debt free” money. The possibility of debt profligacy would be greatly reduced! These changes would solve the Euro zone problems immediately and it would be greatly beneficial for the Euro region!!!

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