Athens News covers an intelligencesquared debate held in Greece yesterday.
Roubini is one of the most respected economists on the planet but a few quotes raised big question marks of his true understanding.
I understand he had to take one side of the argument in the debate so it is possible he did not believe what he said but let us assume he actually believed in what he was saying.
Roubini argued that Greece needed growth and to regain its competitiveness, which could only come about through a return to the drachma and devaluation.
As I have said many times before, the Euro has nothing to do with Greece’s competitiveness or lack thereof.
Germany has the Euro and it is “competitive”, Greece also has the Euro, so it is not the Euro that is killing the competitiveness of the Greek economy.
If Roubini had taken any time to study the kind of regulation and rules and socialistic government that is at work in Greece he would understand that the Euro is not the problem, the Greek government is.
Again Xafa exposes the incompetence and/or ignorance with regards to how economies work, and she is an ex-director at the IMF.
She states a recession is inevitable. But why?
Is she saying that all of a sudden everybody in Greece suddenly loses their demand for products and services at the same time?
Is she saying the manufacturers and miners in Greece suddenly lost the ability to produce at their previous levels or that their market in Greece and outside of Greece will inevitably decline?
To say that a recession is inevitable is like saying it is inevitable that the roads on Friday will be quiet without giving an explanation.
Sure, I agree, the recession in Greece is sure to continue because of the destructive actions of the Greek government and the banks in Greece refusing to lend to the population.
The recession in Greece is not something to do with the Drachma/Euro.
In fact the whole debate was fundamentally flawed.
It makes no difference to Greece whether the country is in the Euro or out of it. Either way the same people will be controlling the currency ie the Greek central bank and the international banking cartel.
This is the question that should be addressed. Should Greeks continue with the central banking model or should the Greek government take back control of the currency and tie its value to a commodity?
This is the fundamental question that Greeks should be asking.
Do Greeks want to have the value of their labour and property centrally controlled by a omnipotent central authority or would they prefer to have their currency based on something stable like Gold or Silver? This is the real question.
While Greece is under the control of central bankers Greece will never be a truly free country, it will always be dependant or the good will of the banking cartel.
But why do the politicians like the central banking model so much?
Because central bankers get them elected. The central bankers hold the purse strings. If your candidate wants to implement some new socialist measure like housing benefit where is he going to get the money from if he could not turn to central banks?
Would the population want to pay extra taxes to pay for this housing benefit which no one will benefit from in the short or long term?
Of course not. The only way the “populist” measures can be implemented is by the printing of money.
So while the population may not see the cost of these social programs directly through higher taxes, the population will feel the effects of this money printing through inflation. A stealth tax if you wish, that punishes everyone with higher prices and a lower quality of living in the long run.
The people who really benefit from inflation are those people who get the money first, before it loses its value. This means the banks and politicians/government.
The central bank is the politicians ticket to office, until this is changed the political system will always be geared to serving the interests of the banks.
A commodity based currency will take away the control the banks have over the population and the political system.
A commodities based currency also has other negative aspects for career politicians.
Not only would politicians no longer be able to hide tax increases in the “mystery” that is inflation, politicians will have to reduce their control of the economy.
Currently governments can run huge trade deficits and not have to worry. The central bank can simply print more money.
With a commodities based currency, governments will no longer be able to pass on the price of their incompetence and the inflation it causes, to the general public.
No bank will lend the government money if it believes its economic policies make the country uncompetitive.
A commodities based currency will take away the privileges that governments currently abuse, and bring the politicians down to the same level as the people they borrow the money from, the electorate.
A commodities based currency would force government to apply for money on the same basis as businesses. ie Will the money be spent sensibly? Will the money bring a benefit?
As opposed to the current situation where government have a blank cheque to fund their political ambitions with the citizen picking up the tab through taxation and inflation.
Ουκρανία: Ο Λευκός Οίκος εκφράζει φόβο για «πολλούς νεκρούς» από την καταστροφή του φράγματος Καχόβκα
Γερμανία: Αποστολή βοήθειας στην Ουκρανία μετά την καταστροφή στο φράγμα Καχόβκα
Τσιτσιπάς: Αποκλείστηκε από τον Αλκαράθ στο Ρολάν Γκαρός