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Greece Vote
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<blockquote data-quote="GTNavyNuke" data-source="post: 160208" data-attributes="member: 322"><p>For Greece 8 years ago, they were forced to have austerity while others were not. The Greeks got themselves into that situation by borrowing too much. I agree entirely with this quote "There are two ways to conquer and enslave a nation. One is by the sword. The other is by debt." - John Adams (1735-1826)” </p><p></p><p>But I think you are right that stimulus for the Greeks would have been far far better in both the short run and long run than the 25% GDP contraction they have seen. </p><p></p><p>I think monetary easing and stimulus are appropriate when you are in a low point of the economic cycle. My problem with Krugman (and the Fed in the last decade) is that there is always a reason to continue the easing and stimulus. That's why the Fed hasn't raised rates for 10 years and has bought over $3T in various bonds (which they keep rolling over thus effectively having printed money). There was a study done which concluded that world wide rates are the lowest in history (actually 5000 years), whether that is accurate or not, the point is they are very low on any historical basis. We'll see if the Fed raises rates in the fall and stops buying back maturing bonds. My best guess is that some other excuse will come along and they won't. And that many of our bonds will be incrementally defaulted upon via inflation.</p></blockquote><p></p>
[QUOTE="GTNavyNuke, post: 160208, member: 322"] For Greece 8 years ago, they were forced to have austerity while others were not. The Greeks got themselves into that situation by borrowing too much. I agree entirely with this quote "There are two ways to conquer and enslave a nation. One is by the sword. The other is by debt." - John Adams (1735-1826)” But I think you are right that stimulus for the Greeks would have been far far better in both the short run and long run than the 25% GDP contraction they have seen. I think monetary easing and stimulus are appropriate when you are in a low point of the economic cycle. My problem with Krugman (and the Fed in the last decade) is that there is always a reason to continue the easing and stimulus. That's why the Fed hasn't raised rates for 10 years and has bought over $3T in various bonds (which they keep rolling over thus effectively having printed money). There was a study done which concluded that world wide rates are the lowest in history (actually 5000 years), whether that is accurate or not, the point is they are very low on any historical basis. We'll see if the Fed raises rates in the fall and stops buying back maturing bonds. My best guess is that some other excuse will come along and they won't. And that many of our bonds will be incrementally defaulted upon via inflation. [/QUOTE]
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