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| GGG managers are SunkenCiv, StayAt HomeMother & Ernest_at_the_Beach | |
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Thanks Cronos. Missed this the first time through, found it via a Google search for something entirely different. |
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Posted on 09/30/2011 2:11:57 AM PDT by Cronos
...The year was around 400 B.C.; Plato was an up-and-coming young philosopher; and Dionysius of Syracuse*, a noted tyrant, had a problem: He’d borrowed too much money from his subjects.
.., Dionysius ordered all money handed over to the government upon pain of death. He then reminted every coin, turning each one-drachma coin into a two-drachmae coin. The tyrant was then able to pay all his debts in full; maybe no one noticed that the real value of the coinage had been halved.
...It should be noted that Dionysius enjoyed several advantages over the contemporary Greek state. First, he was a tyrant and could largely do what he liked. Second, all his debts were domestically held. He hadn’t borrowed money from barbarian tribes in the northern wilderness, for example. The Greek government, on the other hand, has creditors scattered across the euro zone.
You might object that this isn’t an example of default but rather of inflation through currency devaluation. Maybe so (take it up with Winkler and Healy, who are dead). But it’s interesting that even a tyrant like Dionysius thought it preferable to devalue the currency by half rather than repay only half the nominal value of his debts.
That speaks to the ease of dealing with over-indebtedness through inflation rather than nominal haircuts. Perhaps Dionysius would have faced a popular revolt had he refused to repay the face value of the notes.
Instead, the inflation strategy allowed him to continue his reign of terror on the peoples of the Mediterranean until the ripe old age of 65, when he was either poisoned by his son or drank himself to death in ecstasy after hearing that a play he wrote, “The Ransom of Hector,” won a competition at the Lanaean festival in Athens.
(Excerpt) Read more at blogs.wsj.com ...
also note that the author does point out that though Syracuse is on Sicily it was a Greek city-state at that time
Either way, he was a thief as well as a tyrant.
he was a politican... wait, perhaps we're both correct :)
2600 years later and politicians haven’t changed a bit. :-(
Other than that, Dionysius of Syracuse, how did you enjoy the play?
*Yes, Syracuse is in present-day Sicily, but it was a Greek city at the time.Guess that makes Dionysius the first wise guy too. Always did think that politicians and their crony Banksters were like the mob with legal protection...
Not being a financial expert (by any stretch of any imagination) could interpret only a question regarding the article (and may not be relevant). Noticed Italy, and Spain are not listed in the third sentence (above). Does this mean Italy and Spain are out of danger (doubtful) or did the mention of the euro zone stated (by the author) the author believes the euro zone members are (all) headed for default and each will eventually be forced to go the way of Greece (in the author's opinion)?
Sorry Cronos for a question comment. The first paragraph placed a question in my thoughts. Wishing I was more literate on the matters regarding the euro zone. Thanks for the ping.
3 words only: Asset versus Risk.
and didn’t mean “asset” as in cia type. Meant it strictly in a financial context.
But it’s interesting that even a tyrant like Dionysius thought it preferable to devalue the currency by half rather than repay only half the nominal value of his debts.That speaks to the ease of dealing with over-indebtedness through inflation rather than nominal haircuts. Perhaps Dionysius would have faced a popular revolt had he refused to repay the face value of the notes.
Stamping
He then reminted every coin, turning each one-drachma coin into a two-drachmae coin.'Twas ever thus - what politician would prefer to default when he can simply lie?Even tho the lie be right in front of the people in black and white - everyone knew that the "new two-drachmae coin" was nothing other than an old one-drachma coin with a "2" marked on it.
The Portuguese produce a little, but again they mostly can't grow themselves out of trouble, BUT their doo-doo isn't as deep as the Greeks, nowhere near as deep. They are getting battered by association
The Irish CAN grow themselves out of trouble and while their doo-doo depth (ddd) is worse than the Portuguese and much less than the Greeks, they still made a mistake of taking on their bank's debt -- unlike say Iceland which allowed its banks to go under and is much better for that. Arguably the Icelanders could do it as they were not part of the eurozone while the Irish were and had to follow the rules
Spain and Italy have problems, but they are much larger and have more depth in terms of varying industries that they can conceivably grow themselves out of problems.
The Greek case is hopeless in my opinion. The Irish is hopeful, if they can somehow wipe out their debt (also the real economy in Ireland is booming and since the salaries are lower and taxes are lower many companies are setting up shop or expanding there). The Portuguese situation is one of confidence. I believe that they can muddle along nicely if the speculators leave their bonds alone -- they've not done a lot of wrong with the cards they have been dealt
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| GGG managers are SunkenCiv, StayAt HomeMother & Ernest_at_the_Beach | |
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Thanks Cronos. Missed this the first time through, found it via a Google search for something entirely different. |
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Well, human nature hasn't changed, so why are you surprised?
Give him an Ipad and he’d be Obama. Technology hasn’t ever changed the basic human condition or basic human need.
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