€100,000,000,000

Lynton

Lynton

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Lynton (yes really!)
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Just, exactly, where does it come from?

I also notice it's a loan, not a bail-out.
 
Lynton said:
Just, exactly, where does it come from?

I also notice it's a loan, not a bail-out.
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Us!
 
No it doesn't. It is a loan of up to 100 bn, exact amount pending a number of audits, from two Eurozone funds - which we do not contribute to as we're not members of the Eurozone.
 
2blue4u said:
No it doesn't. It is a loan of up to 100 bn, exact amount pending a number of audits, from two Eurozone funds - which we do not contribute to as we're not members of the Eurozone.
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Errm! Us as in the people.
 
From The Independent:-
Less than 24 hours after securing €100bn of European money, the Spanish Prime Minister painted a grim picture of his country's economic future, warning that despite the financial lifeline, more jobs would be lost and Spain would be unable to pull itself out of a double-dip recession.

"This year is going to be a bad one, growth is going to be negative by 1.7 per cent and unemployment will increase," Mariano Rajoy said yesterday, laying the blame for Spain's current economic difficulties squarely on the previous government. "Last year, the country's public administration spent more than €90bn than it received," he said. "You can't go on like that."

That principle applies to every country and every person. If you are dishing out money faster than you are raking it in then a bad outcome will follow.

The UK is not liable to bail out the Eu, BUT we have been giving increased amounts (not over £10bn at a time since that would trigger the need for parliamentary approval).
The gov say that our money to the IMF will not go to the Eu ....... Believe that if you like.
 
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I think part of the problem nowadays is the economic system.

Our money doesn't actually exist anymore. If all account holders of, Barclays for example, wanted to change their account balance for cash, Barclays couldn't do it because they don't actually have the physical money. It's about electronic transaction and pieces of paper nowadays and not real money. The banks lend this "money" (that doesn't exist) to people, businesses, nations who then credit their accounts with this not existent "money" and so the problem continues.

It's no wonder the UK government had to bail out so many banks a few years back, that countries like Greece, Portugal, Spain et al could borrow so much of this "money" (in reality numbers on a screen) and spend it so wantonly. It's not as if the respective Minister of Finance were seeing piles of cash or gold getting small.

Currently the problems in Europe are grabbing the attention, but the ticking timebomb is America's debt which makes Spain's problems seem miniscule. We are talking a debt of tens of TRILLIONS of dollars here.

The whole economic system is FUBAR!
 
Ricardodaforce wrote in #7 :-

The whole economic system is FUBAR!

Probably sums it up as simply as possible. The whole world and domestic finance system is an immensely complex maze that almost none of us can begin to understand. Gov. ministers, bankers etc. appear on the box and spout volumes. We don't know whether they are talking sense or drivel (although it is usually fair to assume there will be generous helping of untruths).
 
The other problem here of course is the "black money"

I honestly never thought to see such corruption in an EU country :nono:

If all the money that is currently "stuffed under the mattresses" was released there would be a lot more cash floating about.

10 to 15 years ago banks were handing out 100+% mortgages to any old Tom, Dick or Jose. Estate agents were assuring buyers that they would be able to rent out their holiday homes for 50 weeks of the year - it was a disaster waiting to happen.

The Comunidad of Valencia has debts of €20+ billion alone. The most severe government cuts so far have been made in Health and in Education.
 
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Sonriendo said:
10 to 15 years ago banks were handing out 100+% mortgages to any old Tom, Dick or Jose.
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Same in the UK and seems almost everywhere else, self-declared mortgages which were unchecked for creditworthiness ... so although it is convenient for the majority to shout "It was the banks wot did it", in reality those who received all of the inappropriate credit are equally to blame. In essence many in society lived totally and utterly beyond their means and the chickens have well and truly come home to roost ... the answer ... more credit :bang:
 
It's the nature of the fiat money system. None of it really exists. If you keep it moving fast enough everyone thinks they have the money. Once the circulation slows down then you're buggered.

There's nothing new about the current debt crisis though. I'm sure I heard Egypt did the same in the time of the Pharaohs. They just cancelled all the debts and started again. It was quite common just to cancel the lot and start from scratch.
 
I find it the whole thing fascinating.

It seems that no-one understands it yet the bigwigs claim to know what's neccessary to resolve the problem because if people lose faith, the system will fail.

Doesn't it sound a lot like religion?

Ian Hislop summed it up nicely the other week on HIGNFY. As a politician (I forget which one) was waxing lyrical about how governments should be "given the room to take action to resolve the economic situation... yadda yadda", he interrupted her by asking "...by doing what exactly? Does anybody really know?". Cue the blank, embarrassed look. :LOL:
 
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ZoneV said:
I find it the whole thing fascinating.

It seems that no-one understands it yet the bigwigs claim to know what's neccessary to resolve the problem, because if people lose faith, the system will fail.

Doesn't it sound a lot like religion?
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It is fascinating. Part of the problem too, is that those that know and operate the system are part of the tiny percentage that own the vast majority of the wealth. Very self serving.
 
I know it is said that Santander UK is safe but do you worry about it? I know money is protected up to certain levels.
 
samems said:
I know it is said that Santander UK is safe but do you worry about it? I know money is protected up to certain levels.
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Santander and BBVA are less exposed to the collapse of the property market than other banks here. Also Santander UK is a different company whose practices are governed by the Bank of England. From what I've read, and I'm sure someone will correct me if I'm wrong, there is no need to worry.
 
Ricardodaforce said:
Santander and BBVA are less exposed to the collapse of the property market than other banks here. Also Santander UK is a different company whose practices are governed by the Bank of England. From what I've read, and I'm sure someone will correct me if I'm wrong, there is no need to worry.
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I really hope you are not a politician. When one of these types says there is no need to worry we all instinctively know that there is a big need to worry.:LOL:
 
Thats what get me as they say not to worry and all is ok but they would never set panic buttons on high alert now would they? It would be mayhem if they did
 
If Spain has to borrow money to pay it's debts, who does it owe the money to? And if all the Euro countries are having to pay into a fund to lend to Spain, why don't those countries simply write off the monies they are owed by Spain up to the value they are paying into the fund? The money that has been lost has to be somewhere. So who has it? ................ signed : Confused of Surrey.
 
Writing off as much as possible would be much more sensible. I think the actual problem is they can't work out who owes what and to whom because of all the trade in CDOs and such like. They've chopped and sliced all the debts up and swapped them around so there's all sorts muddled in there.
 
Forbiddenbiker said:
:D yep, It is in fact the same debt, just the last of the ripples, again, from 2008.

Its not the peoples fault in any manner, anyone who thinks that has fallen hook line and sinker for the BS.
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I'd have to disagree there, whilst it's not everyone's fault, some blame must lie at the feet of those who took on 100% mortgages etc without any contingency plans for paying should the worst happen.

No-one forced these unaffordable debts on the borrowers.
 
Flash In The Pan said:
I'd have to disagree there, whilst it's not everyone's fault, some blame must lie at the feet of those who took on 100% mortgages etc without any contingency plans for paying should the worst happen.

No-one forced these unaffordable debts on the borrowers.
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Yes, but that level of prudence pre-2007 was unheard of and I would argue that the general public is mostly unaware of the risks of taking highly leveraged mortgages. Banks, brokers and estate agents were ramming these down the throats of joe public that you'd have to hold a very shrewd view to not get caught up in it.
 
hsuffyan said:
Yes, but that level of prudence pre-2007 was unheard of and I would argue that the general public is mostly unaware of the risks of taking highly leveraged mortgages. Banks, brokers and estate agents were ramming these down the throats of joe public that you'd have to hold a very shrewd view to not get caught up in it.
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Isn't that just another case of "it's not my fault"? It's the same scenario as people who keep applying for credit cards and then say it's the cc companies that are to blame for them being in debt.

One doesn't need to be shrewd, one simply needs to realise that if you can't afford something then you either save up for it or do without.
 
hsuffyan said:
Yes, but that level of prudence pre-2007 was unheard of and I would argue that the general public is mostly unaware of the risks of taking highly leveraged mortgages. Banks, brokers and estate agents were ramming these down the throats of joe public that you'd have to hold a very shrewd view to not get caught up in it.
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Greed can be very blinkered, as can ignorance - I would suggest that a very high percentage of people took the view that getting the mortgage (or re-mortgage/2nd mortgage) was far more important than thinking how they would pay it back ... let alone 'what if'!
 
I agree with you both and greed did get the better of people, but having seen it happen to family members, I genuinely feel that was such a mainsteam view that it drew everyone in. The older generation who've seen crashes before got suckered in too.
 
hsuffyan said:
Anyone interested in financial markets should have a regular read of http://www.zerohedge.com and forget about mainstream media!
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That is an interesting website and, indeed, the mainstream media are not exactly paragons of truth. However, as one who does not know who to believe in all this finance business, what is it that makes the information on that website credible.
This is not a criticism of yourself. I would just like to be able to verify what that website has to say.:)
 
arclight said:
That is an interesting website and, indeed, the mainstream media are not exactly paragons of truth. However, as one who does not know who to believe in all this finance business, what is it that makes the information on that website credible.
This is not a criticism of yourself. I would just like to be able to verify what that website has to say.:)
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Very good post :)

I guess credibility can only be determined by the reader and by following their views for a while and comparing against one's own inclinations. I've followed it for over two years and it's helped me quickly assess the situation and I've benefitted from it.
 
Ricardodaforce said:
Currently the problems in Europe are grabbing the attention, but the ticking timebomb is America's debt
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I've been thinking this for a while now and how it seems to be ignored by the media, perhaps because they are so big it's a slow burn?

The first real sign of problems in America that I saw was an article about a town in California considering plans to remove all public services including the police and to be replaced with private firms. A very worrying sign indeed.
 
hsuffyan said:
Very good post :)

I guess credibility can only be determined by the reader and by following their views for a while and comparing against one's own inclinations. I've followed it for over two years and it's helped me quickly assess the situation and I've benefitted from it.
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Thanks - I will keep a watch on it.(y)
 
Flash In The Pan said:
I'd have to disagree there, whilst it's not everyone's fault, some blame must lie at the feet of those who took on 100% mortgages etc without any contingency plans for paying should the worst happen.

No-one forced these unaffordable debts on the borrowers.
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Brainwashed might be a better word than forced, but yes sure, what with the price of housing, what choice did they have?!
 
so you mean there's not a convoy of articulated lorries heading to Madrid with €100Bn in them? Damn! That plan is scuppered.
 
Forbiddenbiker said:
Brainwashed might be a better word than forced, but yes sure, what with the price of housing, what choice did they have?!
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Nobody was "brainwashed", greed took over, pure and simple, both on the part of the buyers and the banks.
 
Lynton said:
so you mean there's not a convoy of articulated lorries heading to Madrid with €100Bn in them? Damn! That plan is scuppered.
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With any luck the Spanish will commission a €20billion toilet from Armitage Shanks for them to flush the remaining €80billion down...
 
I can't make sense of the argument that the lenders are entirely to blame. What's happened to personal accountability? It doesn't take a genius to realise if you're going to commit to 30 years of debt you better be damn sure you have the means of meeting the payments. That's not to excuse irresponsible to lending, but how people can say the borrowers weren't at fault is beyond me.
 
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