Germans to loan greece money, with conditions of course

[fskimospy]

If you don't mind, I'd like to know more about this and how it works. Feel like writing a few more paragraphs?

Sure! The easiest way to look at it is that exchange rates represent supply and demand for currencies on the international markets.

If people in the US buy something made in China, we are in effect sending dollars to China (and the international exchange market). This increases the supply of dollars that are available internationally. Supply and demand (broadly) says that the greater the supply relative to demand, the lower the price.

Now imagine two countries that have a 1:1 exchange rate at the start. To buy a widget built in country A costs $1 as does buying a widget built in country B. Say country A has a big trade deficit with country B. That means there are a lot of CountryABucks floating around the world and they lose value. Now the exchange rate is 2:1. That means that although the cost of building a widget internally in each country has stayed the same in terms of labor, materials, etc, if country A's citizens were to buy an imported widget from country B it now suddenly costs them $2 instead of the $1 if they bought a domestic widget. That price differential depresses demand for country B's widgets and (all other things being equal) works to eventually balance trade back out.

This is one of the big reasons why China is buying a lot of things in the US, to attempt to counteract that effect. Japan did the same thing in the 80's. In this case Germany didn't have to do that however, as they are part of a monetary union with the Euro. That means that no matter how bad the balance of trade gets there isn't a possibility for currency value changes to even it out.

 

[fskimospy]

Wow. Nonsense. Yes, they do appreciate but Germany fixed its rigid labor market when the rest of the world was booming. They got their house in order while Greece and everyone else partied. As the world economy started to slow they were ready. It was called Agenda 2010, I believe. Add the fact that they were benefitting from, and not competing with, China helps a lot. Greece, Italy, and other peripheral countries were still making shoes and other items that they should not have been making, thereby competing directly with emerging markets. Also, tax evasion was rampant in those countries.

I applaud Germany for what they did and put Greece's problems 100% on Greece.

Germany exploited the Euro to artificially jack up their exports, allowing them to make those structural changes. As I hope logic would clearly dictate, everyone cannot solve their problems through increasing exports unless you plan on having Martians buy all our stuff.

Greece bears a heavy responsibility for their problems (unlike Spain, for example). That doesn't make Germany's behavior any better, however.

 

[ElFenix]

the only way the euro with germany's central bank at the helm, pursuing the traditional german central bank goals, could work is if everyone in europe becomes germany. there is no way that can happen, the math just won't work.

I am not the one bashing Jews,...

Not surprised this kind of behavior is acceptable on these forums though.

i don't see his post as bashing jews.

title: germany to give money to greece
incorruptible: why are they giving money to those idiots

idiots being greece as a whole.

 

[soulcougher73]

Germans and Greeks don't need some American living in Canada telling them how to run their countries.

Wasn't that your argument about Piers Morgan?

LOL :thumbsup:

 

[Abwx]

My understanding is Greece lied about their financial situation to get into the EU.

Yes, they even paid 200-300m$ to Goldman Sachs to perform
the necessary financial make up that testified their compliance
to euro zone standards...

 

[Greenman]

Sure! The easiest way to look at it is that exchange rates represent supply and demand for currencies on the international markets.

If people in the US buy something made in China, we are in effect sending dollars to China (and the international exchange market). This increases the supply of dollars that are available internationally. Supply and demand (broadly) says that the greater the supply relative to demand, the lower the price.

Now imagine two countries that have a 1:1 exchange rate at the start. To buy a widget built in country A costs $1 as does buying a widget built in country B. Say country A has a big trade deficit with country B. That means there are a lot of CountryABucks floating around the world and they lose value. Now the exchange rate is 2:1. That means that although the cost of building a widget internally in each country has stayed the same in terms of labor, materials, etc, if country A's citizens were to buy an imported widget from country B it now suddenly costs them $2 instead of the $1 if they bought a domestic widget. That price differential depresses demand for country B's widgets and (all other things being equal) works to eventually balance trade back out.

This is one of the big reasons why China is buying a lot of things in the US, to attempt to counteract that effect. Japan did the same thing in the 80's. In this case Germany didn't have to do that however, as they are part of a monetary union with the Euro. That means that no matter how bad the balance of trade gets there isn't a possibility for currency value changes to even it out.

Thank you.
I've discovered that my views on economics are broad but simplistic. I understand that I'm looking at a forest, I just can't see the damn trees.

 

[Dari]

Germany exploited the Euro to artificially jack up their exports, allowing them to make those structural changes. As I hope logic would clearly dictate, everyone cannot solve their problems through increasing exports unless you plan on having Martians buy all our stuff.

Greece bears a heavy responsibility for their problems (unlike Spain, for example). That doesn't make Germany's behavior any better, however.

Please explain how they "exploited the Euro". What you're saying is nonsense and is far from the truth. In the late 1990s and 2000s Germany was still dealing with the integration of East and West Germany. The economies of both regions were not compatible and it was a serious problem at the time. You don't hear about it today because the Germans swallowed the tough pills to get their house in order. You are looking at things from today's perspective where a thriving Germany is exporting a huge amount of goods while the periphery is suffering. This was not the case 14-20 years ago when a very poor East Germany was now a part of a greater Germany. There was no exploitation going on at the time. The Germans had a serious problem and sought to deal with it head on.

 

[norseamd]

this is a continueing lesson about a single currency zone and market without unified soveirgnty. this is a very complex issue and there will be a lot to learn if it is to work if at all. for the most part not sure if anything on this scale has ever been attempted before. africa and south america do have similar plane although. how would this have worked out if they had kept their individual currencies and adopted the euro as europe wide currency wide different exchange rates for each national currency?

 

[davmat787]

You are scum, not surprised. I was against a bailout since Germany and the others have given Greece bailouts before and it was clearly obvious I was attacking the big government principles.

Why did you assume I was talking about reparations? Take your anti-semitism somewhere else you scumbag.

How can you expect someone to take you seriously when you start out by calling them scum?

 

[Stewox]

Why are they giving money to those idiots? Greece is responsible for what happened because they spent too much money and had too much government. No bailouts for Greece.

What is your meaning of the term "Greece" ?

 

[brycejones]

What is your meaning of the term "Greece" ?

He's watched the movie to many times........

 

[Incorruptible]

How can you expect someone to take you seriously when you start out by calling them scum?

I stopped taking him seriously when he falsely accused me of being anti-semitic. He wants to throw out crap like that and I will respond.

What is your meaning of the term "Greece" ?

Greece the country.

 

[norseamd]

Sure! The easiest way to look at it is that exchange rates represent supply and demand for currencies on the international markets. If people in the US buy something made in China, we are in effect sending dollars to China (and the international exchange market). This increases the supply of dollars that are available internationally. Supply and demand (broadly) says that the greater the supply relative to demand, the lower the price. Now imagine two countries that have a 1:1 exchange rate at the start. To buy a widget built in country A costs $1 as does buying a widget built in country B. Say country A has a big trade deficit with country B. That means there are a lot of CountryABucks floating around the world and they lose value. Now the exchange rate is 2:1. That means that although the cost of building a widget internally in each country has stayed the same in terms of labor, materials, etc, if country A's citizens were to buy an imported widget from country B it now suddenly costs them $2 instead of the $1 if they bought a domestic widget. That price differential depresses demand for country B's widgets and (all other things being equal) works to eventually balance trade back out. This is one of the big reasons why China is buying a lot of things in the US, to attempt to counteract that effect. Japan did the same thing in the 80's. In this case Germany didn't have to do that however, as they are part of a monetary union with the Euro. That means that no matter how bad the balance of trade gets there isn't a possibility for currency value changes to even it out.

how would this go if we still used valuable minerals and items for trade and currency. gold talents are valuable everywhere

 

[Stewox]

Greece the country.

Who represented, in your context of "Greece" the country prior to collapse ?