Let's discuss the Rogoff solution

[TradCat]

I think it is worth looking at. I don't think this crisis will pass without some fairly dramatic changes so we could at least try to be in control of them.

Of course there would be various views on when the right time to go back would be. Perhaps never, but we would see.

[The Underdog]

Well, again, Argentina is a guide. The interest rates would be higher, but so would employment levels and growth levels.

You might like the current near-zero interest rates, but that comes with a price: below-zero growth rates.

Could high interest rates result in mass defaulting of mortgages, and what effect would this have ?
- Then again speculators have little concern for the effects their financial games have on ordinary people.

[feargach]

Changing currency during a crisis would be operationally very difficult, the economic theorists say it would be nice, none of them have published a transition plan- absent evidence from their side, then the proposition is not credible
The Irish Economy Blog Archive Leaving the Euro

Is the current proposition credible? It consists of draining down the $1trillion fund until it's exhausted at which point there's a massive default destroying the entire EU economy.

While there isn't a detailed transition plan at the moment, there's also zero evidence of the plan being impossible or even very difficult.

Changing currency during a crisis is certainly painful in the short-term, Argentina in 2002 proves this.

But in the medium to long term it works flawlessly: the economy grows and debts get repaid.

It's like any business lender knows: you restructure your debtor's loan in January so that he's back in profit by March. By October he's able to pay back the full amount that he owed before the January restructuring.

[Squire Allworthy]

Changing currency during a crisis would be operationally very difficult, the economic theorists say it would be nice, none of them have published a transition plan- absent evidence from their side, then the proposition is not credible
The Irish Economy Blog Archive Leaving the Euro

cYp

Where there is a will there is always a way. I would be very interested to see someone having a go at this. The problem would probably be the level of debt in Euros assuming the new transition currency to be weaker.

Why not just a parallel currency again they tried that in Argentina, and it wasn't entirely a success but lessons to learn and improvements to make.

[cozzy121]

Feb 21st 2010

Let?s get logical on the euro | David McWilliams

[feargach]

Could high interest rates result in mass defaulting of mortgages, and what effect would this have ?

We have rock-bottom interest rates now, and mortgages are being defaulted on en masse.

Think you've got the cart before the horse here.

The solution to the mortgage mess has little to do with currencies. The only solution is a debt-for equity swap with troubled debtors.

Every mortgage holder who's unable to pay the bills will simply have to hand over equity in the gaff itself until the payments come down far enough for him to afford.

If a mortgage holder can only manage half his payments, he simply has to hand over half the house to the bank. When he dies or moves the bank gets half the value of the house.

That holds true whether we're in the Euro, zloty, Zimbabwean dollar or anything else.

[The Underdog]

We have rock-bottom interest rates now, and mortgages are being defaulted on en masse.

Think you've got the cart before the horse here.

The solution to the mortgage mess has little to do with currencies. The only solution is a debt-for equity swap with troubled debtors.

Every mortgage holder who's unable to pay the bills will simply have to hand over equity in the gaff itself until the payments come down far enough for him to afford.

If a mortgage holder can only manage half his payments, he simply has to hand over half the house to the bank. When he dies or moves the bank gets half the value of the house.

That holds true whether we're in the Euro, zloty, Zimbabwean dollar or anything else.

More mortgage defaulting is hardly in anyone’s interest.

A debt for equity swap is fine as long as taxpayers don’t ultimately have to pay for it to satisfy the national economic strategy preferred by vested interest market speculators.

[feargach]

More mortgage defaulting is hardly in anyone’s interest.

A debt for equity swap is fine as long as taxpayers don’t ultimately have to pay for it to satisfy the national economic strategy preferred by vested interest market speculators.

So, those points made, do you have any other queries on the Rogoff solution?

[The Underdog]

So, those points made, do you have any other queries on the Rogoff solution?

Is it not just another speculators agenda ?

[politicaldonations]

im getting my cash out of this country in case the loony left get some bonkers scheme in to devalue my money or "redistribute " it. Into European property or american? Lots of value out there.