What do you think the US to Euro exchange rate will be in 18 months

[Zoetstofzoetje]

the only solution is if all the rotten apples fall out of the tree (instead of this continuous bandaging which is going on now), and the lazy don't have an income.

[Alexander's Horse]

describing Greece?

[Dinner]

"Lazy bastards"? Are you trying to make people think you're a racist?

First of all, Greeks are white so I'm not sure how race plays in this. Second of all, yes, lazy as in unproductive, not hard workers, and secondarily they're nearly all massive tax cheats so, yes, much of the problem falls on the Greek people themselves.

[Zoetstofzoetje]

The problem is, like with other Mediterranean countries, they have become accustomed to a Northern lifestyle and income, because of money flowing in from Brussels. They have taken this for granted. The idea was that this would lead to becoming more Northern (working hard) too. Instead, that Protestant Work Ethic is still absent.

[Dinner]

A writer for the Seattle Times talks about what will happen when Greece is given the boot. Most of the article deals with how it would effect the US but some of the highlights for Greece would be a 50% devaluation of the currency over night, at least a 35% inflation rate right off the bat, lose of international credit and thus the ability to finance imports including critical needs such as oil, medical equipment, and food stuffs. In short, Greece is going to get it even worse than Argentina.

http://seattletimes.nwsource.com/html/businesstechnology/2018450135_apusmappinggreecesexit.html

[Dinner]

The problem is, like with other Mediterranean countries, they have become accustomed to a Northern lifestyle and income, because of money flowing in from Brussels. They have taken this for granted. The idea was that this would lead to becoming more Northern (working hard) too. Instead, that Protestant Work Ethic is still absent.

I understand that on paper Greeks actually work some pretty long hours but standing in your family's corner shop 12 hours a day selling a handful of items which only net you E30 profit just isn't a productive use of manpower. The productivity for each hour of Greek labor is abysmal while the cost per hour of that labor is almost as high as in Northern Europe. Why would anyone pay German levels of pay to get Greek levels of productivity? Especially when they could pay Germans the same wage and get much more productivity per hour? Sadly, as long as Greece is in the Euro they'll find it almost impossible to lower Greek wages enough so that the cost to productivity ratio becomes competitive but once they're out of the Euro the drachma could be priced low enough to make it attractive to hire Greeks again. There is going to be a whole lot of pain and misery to get to that point though.

[giblets]

How are Greeks getting German wages? I'm not seeing it. Look at "gross $":

http://en.wikipedia.org/wiki/List_of_countries_by_average_wage

[Dinner]

Look at disposable income (income after taxes) between Greece and Germany because they're with in ~$1000 according to your own link. That's why I said German level wages. The problem is Greek productivity is much lower than German productivity so they can't really justify their wages based upon output. If they want to increase employment then they need to get wages more in line with productivity so it is actually competitive with other countries.

[giblets]

Look at disposable income (income after taxes) between Greece and Germany because they're with in ~$1000 according to your own link.

That's after income and payroll taxes so it's not an accurate representation of what employers have to pay. Your question was why people would buy Greek labor when German labor supposedly gave employers more for the same cost.

[Dinner]

Costs are roughly equivalent but productivity (output per worker hour) most certainly is not. If Greece wants to become competitive it either has to lower costs or increase productivity. Returning to the drachma and having it devalued will lower costs so in the long run that will help their economic recovery by making it competitive to hire Greeks but it will also result in the lose of a large part of Greece's national savings (if it hasn't been transferred off shore or put into a different asset like gold or a foreign currency) and the lose of access to international financial markets is going to be very painful in the short run.

[KrazyHorse]

The Chinese have always tried to maintain a peg with the dollar instead of letting their currency float due to supply and demand.

What a meaningless statement.

[dannubis]

What a meaningless statement.

What a useless statement.

[KrazyHorse]

Actually, ****, it was quite useful. Note the choice of word: meaningless as opposed to wrong. What does that tell you?

[Dinner]

Yes, it could have been shortened to "the yuan is pegged to the dollar" and it would have been more succinct but I felt like being clearer for people who were unfamiliar with the term.

[KrazyHorse]

If it had been shortened to that, then it would have been more or less correct, but would not have contained the implication that this was somehow wrong or unfair, which is presumably what you were really interested in expressing.

Please do illuminate what you mean by the statement that the chinese have somehow interfered in the "normal" working of supply and demand for the yuan...