On the Glory that is Greece

Ambrose EP:

Needless to say, it really doesn’t make any difference in the long-term whether Greece gets a bail-out or who provides the money. The country is not facing a liquidity crisis, it is facing an insolvency crisis.

Assume he\’s correct (as I think he is).

This makes all the fuss about speculators, CDSs, hedge funds and all the rest entirely irrelevant. We might. just about, if we squinted very hard, be able to see a case whereby such might either create or make worse a liquidity crisis.

But they\’re not going to make the blindest bit of difference to a solvency one.

3 thoughts on “On the Glory that is Greece”

  1. Isn’t there just the teensy-weensy possibility that, er, “speculators, CDSs, hedge funds and all the rest” might be partly to blame for this crisis of insolvency? Never!

    They are not entirely to blame, of course – rampant tax evasion (and, yes, avoidance) are of course key factors in the Greek crisis. How about railing against that?

  2. @Nick: how exactly have the hedge funds/CDS/speculators forced the Greek govt to spend more than their income for years (decades?) and thus build up massive amounts of debt? Which is now threatening to everwhelm them, and the lenders are threatening to stop lending, or demanding a higher risk premium. How is that anyone’s fault but the Greek govt?

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