Double Dip Recession and Greece
Sometimes I feel that we are talking ourselves into a double dip recession! This morning on breakfast T.V. they were making a big deal out of the turmoil (wouldn’t normally mention finances) and then at lunch time I put SKY news on and they had a FTSE and % change & figure under the SKY logo – never seen that before on there!
I dunno why we ever lend to the Greeks…according to one article I read they have spent 50 of the last 200 years not repaying their debt. A poor credit risk if ever there was one.
It is like giving the local gambler, £100 whenever he asks, they have a history of poor money management, people retiring at 53 on 95% of their salary, billionaires paying less tax than a cleaner, strikes me the reason they are moaning is not that they are facing austerity measures more a reality check !
I suppose what Greek people have to accept are the effects of default and exit – lower wages cuts in this and that – but remaining in euro with support of big countries. but they are still going to be expected to pay back money, which they simply haven’t got, and will not have. So yo no comprendo…
The problem is that the Euro countries are simply throwing good money after bad imo, you keep bailing banks countries out,it will come to a point, where nobody will be able to pay anybody back and we will see a crash that will make 08 look like a blip,this is pencilled in to happen in 2013, can’t remember where I read the 2013 quote now but i suppose it is possible…
Having said that it was only 13 years ago that Russia defaulted and went bust. Look where they are now. Same for Argentina and Iceland. Countries soon recover. The issue for us is what happens to the debt and what effect it has such as bank bail outs. In other words the debt gets passed to tax payers in other countries and bank shareholders.
The consequences inside those three countries shortly after default was food shortages, very high unemployment, high inflation and very reduced social benefits. Beware companies that trade inside Greece such as GBO?
What would have happened if the UK banks (RBS, Northern Rock,etc), hadn’t been given any bailout?
Thousands of businesses would have gone bust, it would have infected other banks causing thousands more businesses to go bust. There would have been an inability of some remaining businesses to pay wages to staff or to pay their suppliers causing food shortages in shops & fuel shortages – in general a deep depression or worse.
Is Italy the next Greece?
Last week over lunch a friend who is an analyst for temporary staff consultants said that the trends in Italy indicate that the industrial and commercial economy has been growing by 7% year-on-year for at least 5 years. This is a marker for growth. It may be that other older industries are slipping and shedding staff. The optimism is that there is some growth in Italy that is absorbing some unemployment. His conclusion FWIW is that Italy is not the problem country. If he is right, then IMHO Italy will benefit from losing Berlusconi and if it can collect taxes, get tougher with public sector and the corruption in the south etc they can fix it.