Tag Archives: Greece

Greek`s productivity was higher than China`s

Greece is considered the cradle of Western civilization, being the birthplace of democracy, Western philosophy, the Olympic Games and mathematical principles to name a few. They were annexed by Rome in the second century BC, becoming an integral part of the Roman Empire and its successor, the Byzantine Empire.

The Greek Orthodox Church also shaped modern Greek identity and transmitted Greek traditions to the wider Orthodox World. Falling under Ottoman dominion in the mid-15th century, the modern nation-state of Greece emerged in 1830 following a war of independence.

 

 

Most of mainland Greece and the Aegean islands was under Ottoman control by the end of the 15th century. The only part of the Greek-speaking world that escaped long-term Ottoman rule was the Ionian islands, which Venetian until their capture by the First French Republic in 1797, then passed to the United Kingdom in 1809 until their unification with Greece in 1864.

While some Greeks in the Ionian islands and Constantinople lived in prosperity, and Greeks of Constantinople achieved positions of power within the Ottoman administration, much of the population of mainland Greece suffered the economic consequences of the Ottoman conquest.

Heavy taxes were enforced, and in later years the Ottoman Empire enacted a policy of creation of hereditary estates, effectively turning the rural Greek population into serfs (status of many peasants under feudalism).

The decline of serfdom in Western Europe has sometimes been attributed to the Black death, which reached Europe in 1347. Tibet is described by Melvyn Goldstein to have had serfdom until 1959, and the United Nations 1956 supplementary Convention on the Abolition of Slavery also prohibits serfdom as a form of slavery.

The Nazis destroyed Greece during the World War II. There were 80 000 jews in Greece at that time and nearly everyone was killed. Now it is about 5 000 left. The Nazis burned Greeks houses and about 1 000 000 were homeless. The U.S Marshall plan gave Greece a boost after WWII and the economy started to grow again.

Its strange because most Western philosophical traditions began in Ancient Greece in the 6th century BC. So, how could the Greeks democracy fail, and why are they in trouble right now?

Their productivity was sky-high only a few years ago. In 2003, the GDP was higher than China`s GDP right now. Greece GDP in 2003 was at an all-time high of 6,80 which is impressive. Now, the picture is very different. GDP is down -1,1 percent.

Greece is the anti-austerity country with a lot of problems after six years of deep recession. Household consumption is the main component of GDP and accounts for 72 percent of its total use. Exports of goods and services account for 33 percent, while imports account for 35 percent.

Many of the Greek citizens claim that they got problems after joining the European Union in 2001. In 2007, right before the financial crisis, GDP per capita reached an all-time high of 30056,68, but now it has declined to 22573,42 US dollars.

The Anti-Austerity country is also seeing their own wages falling. Wages in Greece decreased to 1092,01 EUR per month in April last year. The good news is that the Unemployment rate is down to 23,1 in December last year, which is much better than their all-time high of 27,90 in July of 2013.

Data shows growth for the year proves the economy is performing better than expected and that no more austerity measures are needed. A Greek spokesman said the government won`t pass one more euro of extra austerity measure.

The European Commission expect the Greek economy to expand 2,7 percent this year and 3,1 percent in 2018. Uncertainty over completion of the current bailout review poses a downside risk to those forecasts, the Commission said.

In a big picture, what we face in Greece now is just a part of an evolution.

 

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

 

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The Greek bailout drama intensifies

Greece is in trouble, and tomorrow is the day were many things can happen. The media has talked about the debt in Greece for a long time now, and the media tells you that Greece has a $339 million payment due to the IMF tomorrow.

But what if they don`t have money?

The Finance Minister in Greece, Yanis Varoufakis has pointed out that they will not pay if a restructured deal can`t be reached with their creditors. What is this Greek debt drama compared to a San Andreas earthquake disaster movie? Have a look at the film below. It is the European Debt crisis visualized.

 

 

The Greek civilization is considered by historians as the first one in the history of mankind. It was a highly developed community, and their lifestyle and inventions indicated a high sense of order and aesthetics.

The ancient Greeks were very keen on sports. The great athletic contest called the Olympic games (OL) began in 776 BC, which marked the beginning of the rise of the Greek civilization. The government was usually unstable due to the tyranny of the aristocrats.

I have been in Greece once and it is a beautiful country. The ancient age of Greek civilization saw the birth of great philosophers like Pluto, Socrates, and the great emperor, Alexander. War with other civilizations began in 490 BC, and now they are in trouble again. Money trouble. They have a huge debt, and need to pay their lenders.

If they pay, they will not be in heaven for a long time, because this will be followed by another 1,2 billion euro debt payment over the next two weeks. In addition; Greek finance ministers have already said that they will not pay these payment without restructuring its debt either.

But it will not stop here. The final Greek drama will probably play out until July, so don`t open your champagne yet. More drama is yet to come.

Greece`s Prime Minister Alexis Tsipras said early this morning after late-night talks with senior EU Official that they were close to a deal with their creditors and that Athens would make a payment due to IMF tomorrow.

Some have said creditors and left-wing Greek government had drafted their own, different, version of a possible accord. Facing bankruptcy, Tsipras` government has been resisting creditors` demand for bigger cuts in pension payments and bigger sales tax increases to generate higher budget surpluses before interest payments that would let it to pay off debts.

I`m not so worried about IMF, because missing a payment is not a big deal in global financial circles. Many creditors have waited with their payments to IMF like Cuba, Honduras and Sudan to name a few.

But if they don`t pay to the ECB later on this summer, then you have to wake up! Central bankers can be very unfriendly if they don`t pay their 3,5 billion euro debt payment it owes the European Central Bank. Watch out for that.

In addition; ECB will stop its emergency lending to Greek banks, and that is a $88 billion dollar lifeline that is keeping them alive right now. People know all that, and that`s why they pulled 800 million euro out of Greek banks a few days ago.

Government debt as a percent of GDP is used by investors to measure a country’s ability to make future payments on its debt, thus affecting the country borrowing costs and government bond yields. Greece recorded a Government Debt to GDP of 177,10 percent in 2014, and that`s all time high.

To put this in perspective: Japan`s debt to GDP is 227,20. USA; 101,53. Euro Area; 91,90. Spain; 97,7. Italy; 132,10. UK; 89,4. Cyprus; 107,5. Ireland; 109,7. Portugal; 130,2. Singapore; 105,5. Lebanon; 145,9.

Libya; 6,10!

I`m not worried about Greece in the short term because they have a lot of values in their balance sheet, which means it will take some time before the real big test is coming. The debt is sustainable, because their debt cost is estimated to 2,6% of GDP, so what is the justification for writing down Greece`s debt? The problem is not the debt, but the Eurozone`s bailout condition. Money is almost free and the (nominal) interest rates are low, and no principal is due until 2022.

EU`s fiscal compact, which requires governments with debts of more than 60% of GDP to reduce the excess by one twentieth a year makes it more difficult, and that`s a tall order with Greece`s debt wich is 177,10% of GDP. What they need is less restrictive bailout conditions and relaxation of the fiscal compact rules.

Prime Minister Alexis Tsipras wrote an open letter to the German people, published in Handelsblatt on January 13, 2015;

 
In 2010, the Greek state ceased to be able to service its debt. Unfortunately, European officials decided to pretend that this problem could be overcome by means of the largest loan in history on condition of fiscal austerity that would, with mathematical precision, shrink the national income from which both new and old loans must be paid. An insolvency problem was thus dealt with as if it were a case of illiquidity.
In other words, Europe adopted the tactics of the least reputable bankers who refuse to acknowledge bad loans, preferring to grant new ones to the insolvent entity so as to pretend that the original loan is performing while extending the bankruptcy into the future. Nothing more than common sense was required to see that the application of the ‘extend and pretend’ tactic would lead my country to a tragic state. That instead of Greece’s stabilization, Europe was creating the circumstances for a self-reinforcing crisis that undermines the foundations of Europe itself.
My party, and I personally, disagreed fiercely with the May 2010 loan agreement not because you, the citizens of Germany, did not give us enough money but because you gave us much, much more than you should have and our government accepted far, far more than it had a right to. Money that would, in any case, neither help the people of Greece (as it was being thrown into the black hole of an unsustainable debt) nor prevent the ballooning of Greek government debt, at great expense to the Greek and German taxpayer.

 

You can wrap $1 bills around the earth 1,471 times with Greece`s debt amount. The unempoyment rate is still high at 25,6%, and the depression will continue.

 


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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication. UA-63539824-1.

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Anti-Bail out party Syriza wins

The Anti-bail out party Syriza wins in Greece, and people call the left-wing party Syriza leader Alexis Tsipras a liar or Harry Potter, because they don`t know where he is going to get the money from. Tsipras says austerity era is over for Greece.

Syriza`s pledges is to rise the minimum wage by 29 percent and abolish property tax. In addition they will renegotiate write down on Greece`s debt. The coming weeks will be hectic for Syriza and the European Central Bank I think. The period of time between now and the end of february will be a key pivot point.

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The growth so far in the U.S has not been what people expected. The growth is very slow. In Japan they say that QE doesn`t help. In the U.S they say that the economy is looking good now, but a record number of people are still on food stamps. What about the Eurozone?

Greece remains saddled with €240 billion in debt and it is not possible for them to pay. They have tried many different things to get back on track but without luck. They tried to rise the tax and do some cuts, but that was not enough to save them from a deep recession.

The new government will face a big problem from day one, as the creditor states have frozen $8,8 billion in loan disbursements. The present government has reached a $17,4 billion ceiling for bond sales. Eurozone finance minister will extend negotiations until September. Germany has warned the new government that it must live up to its commitments to its creditors.

The Athens stock exchange (ASE Index) is down 3,2% with big losses fro Piraeus Bank (OTC: BPIRY) which is down -14,61%. Large Cap Index is down -5,6%. Alpha Bank (OTC: ALBKY) is down -4,41%. Eurobank Ergasias SA (OTC: EGFEY) fell -4,19%. National Bank of Greece SA (NYSE: NBG) is down -7,74%.

Greece`s government bonds also fell after concern eased that a Syriza victory would trigger a euro exit. Weak economic indicators combined with Syriza can put more pressure on Greek stocks. Euro rebounds and all the global stocks are trading up today. The Stoxx Europe 600 rose 2,02% today and ended at 372,39 points.

Many people in Greece said they voted on Syriza because they want a change. They think that Syriza will change Greece and the rest of the world. The economy has collapsed, so there has to be a change. Big change.

Deflation and a collapsed economy is not only the problem in Europe today. Another problem is that people in Europe have hated each other for thousands of years. How can you succeed in a country with so much hate?

Tomorrow it is 70 years since Holocaust.

A big shame in Europe!

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

 

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