Erolz66:
‘Woolly thinking’
....... I like that phrase and I assume you mean that those who fit the description are not fully in possession of the facts?
This is the first interview Yanis Varoufakis gave after he resigned and in it he describes his dealings with the IMF/ECB/EU. It was also made before the ‘agreement’ ..... that agreement YV said wouldn’t work and now even the IMF agrees it just does not work as it stands.
http://www.globalresearch.ca/yanis-varoufakis-full-transcript-our-battle-to-save-greece/5462328At one point he is asked by Harry Lambert and replies to the following:
HL: What are you referring to? ( YV had said that……..the situation was worse than you imagined!)
YV: The complete lack of any democratic scruples, on behalf of the supposed defenders of Europe’s democracy. The quite clear understanding on the other side that we are on the same page analytically – of course it will never come out at present. [And yet] To have very powerful figures look at you in the eye and say “You’re right in what you’re saying, but we’re going to crunch you anyway.”
HL: You’ve said creditors objected to you because “I try and talk economics in the Eurogroup, which nobody does.” What happened when you did?
YV: It’s not that it didn’t go down well – it’s that there was point blank refusal to engage in economic arguments. Point blank. … You put forward an argument that you’ve really worked on – to make sure it’s logically coherent – and you’re just faced with blank stares. It is as if you haven’t spoken. What you say is independent of what they say. You might as well have sung the Swedish national anthem – you’d have got the same reply. And that’s startling, for somebody who’s used to academic debate. … The other side always engages. Well there was no engagement at all. It was not even annoyance, it was as if one had not spoken.
Now I have great empathy for YV in that situation because trying to explain economics to people who think they know everything about politics, finance, banking and accountancy and really believe they have the full picture is frustrating in the extreme! The problem is that none of those is based on the principals of economics.
Let me explain using your €200k ‘loan’ as an example? Your argument is reasonable until you introduce economics and then that exposes your 'woolly thinking'. You believe that if you have a debt to the bank you must owe them money. A reasonable enough belief but WHY? Because that is what they told you! In reality they were not telling you the truth!
The only time your €200k would be a loan is if you walked out of the bank with the €200k in notes! If you walked out with a promise or assurance that you had a loan, without them giving you the cash, then you have been conned …… the bank did not lend you a cent. All they did when you walked out of the office was to set up a line of credit. That is …. an account with nothing in it, simply a figure to represent to maximum credit level that had been agreed. They didn’t put money into your account ………. so they lied ……..… they did not loan you anything.
When you pass your cheque to the receiving party they pay it into their account and at that point it becomes real money (
i.e. exchangeable for note and coin). When your cheque returns to your bank for clearance they pay it into your new credit account and the balance immediately drops to
-€200k. So the bank now starts charging you interest on €200K ……. that did not exist until you passed a dud cheque!!! It is an accounting/book-keeping/ledger transaction ….. no money changed hands.
I have no doubt that YV was left in the position of explaining to these bureaucrats what this loan was in economic terms. Greece may well have a debt but where did this €350bn come from in the first place?
This explanation is 100% kosher and can be verified beyond a shadow of doubt ….. this
IS exactly what happens when banks say they ‘lend’ money. This happens every time a commercial bank gives credit ……… they create a debt ……… they do not loan money …..…… the banking system creates it!!!!
Greece's debt is not quite so cut and dried as we are made to believe ...... and the same goes for the other EZ countries in debt.
I though I had found Luxemburg but it turn out to be a bit of dust on my monitor 
I'm sorry for hijacking this forum for my own interests, every time I open my mouth they ask me what I know 
