34 replies to this topic

[gadgetman]

Seems a number of the usual speculators are hinting that there is a push for a debt writeoff within the Eurozone as the only way to stablise the world economy.

Isnt that essentially what QE is?  Given so much of the money is electronic and doesnt really exist, why not do away with it all together?

In the Star Trek Universe about now is the time of a global financial meltdown which started the end of money and wealth.

[Babs]

Possibly. Could just go back to having 20 or so separate economies. That seemed to be a good idea...

[moley]

It's a can of worms, but don't worry Lol will be along with his can opener soon.

[Lazy Daisy]

moley, on 07 June 2012 - 20:33, said:

It's a can of worms, but don't worry Lol will be along with his can opener soon.

Now I do believe if VAT is cut and at source taxation which is a more efficient method of collection............

Sorry just let me turn the record over..

[Babs]

I hope the B-side is good...

[moley]

Lazy Daisy, on 07 June 2012 - 20:39, said:

Now I do believe if VAT is cut and at source taxation which is a more efficient method of collection............

Don't forget the con/dem coalition, RBS, HBOS etc etc

[gadgetman]

moley, on 07 June 2012 - 20:46, said:

Don't forget the con/dem coalition, RBS, HBOS etc etc

Or paying less than 22% PAYE through some clever accounting....

The big stickler for a writeoff will be the US and China.  But if Europe is going under it may save their own shirts surely?

[Lazy Daisy]

In all seriousness the best thing for the Greek economy is to default, at some point the government has to realise that 3-4yrs of extreme hardship is better in the long run than 25 plus years just to stand still, trouble is they know it's politically impossible,

[Lazy Daisy]

but 10% of something is better than 100% of nothing, it's the eternal creditors dilemma

[gadgetman]

Good for them yes.  But bad for Italy and Portugal.  Could send them over as well if Spain doesnt.

Our banks have between 10 and 30% exposure to Spain alone they said on the news yesterday.  Barclays to the tune of £16bn+

[Lazy Daisy]

But exposure is just that, a potential loss, if a debtor is unable to pay whether it's £1 or £100Bn is neither here nor there,

[sausage roll]

Greece, itself, has defaulted or restructured its debt five different times since the country declared its independence in 1821. Over those 193 years, the country has spent about half of its time in default or restructuring. And yet, Greece still managed to scrape together enough cash along the way to build a few train lines, repair a few roads and host the 2004 Olympic Games.

So why change tactics now? Why not let an insolvent debtor default and invite capitalism to do its work?

That’s the process an Austro-Hungarian economist by the name of Joseph Schumpeter used to call “creative destruction”…and it has worked pretty well over the years, believe it or not. When nations let failing ventures fail, viable ventures usually rise up to take their place. Over the long term, this process nurtures economic growth.

[cheezemonkhai]

Sell some islands to Germany/Turkey.

Let the failing companies go (because even if you support them, they will go eventually).

Stop spending every penny you've got providing services, cut it back to the bare bones fo what's really needed and let people provide the extra's they want themselves. (Not suggesting basic healthcare here FWIW, but you don't need half as much as people think)

Edited by cheezemonkhai, 07 June 2012 - 22:26.

[Lazy Daisy]

sausage roll, on 07 June 2012 - 22:14, said:

Greece, itself, has defaulted or restructured its debt five different times since the country declared its independence in 1821. Over those 193 years, the country has spent about half of its time in default or restructuring. And yet, Greece still managed to scrape together enough cash along the way to build a few train lines, repair a few roads and host the 2004 Olympic Games.

So why change tactics now? Why not let an insolvent debtor default and invite capitalism to do its work?

That’s the process an Austro-Hungarian economist by the name of Joseph Schumpeter used to call “creative destruction”…and it has worked pretty well over the years, believe it or not. When nations let failing ventures fail, viable ventures usually rise up to take their place. Over the long term, this process nurtures economic growth.

I prefer it when you just talk about boobs and willys

[jlwah]

Lazy Daisy, on 07 June 2012 - 21:33, said:

. . .  whether it's £1 or £100Bn is neither here nor there,

I'm loving the logic! SWMBO uses a similar line when she's been out shopping with our credit card










I'll get my coat . . . .

[Aspman]

The debt is owed to someone, probably you and me via other banks. Writing it off suits the debtor because they no longer have to pay for it. The creditor makes a loss on whatever is written off.

Now we own most of the big UK banks via our own financial messes so if we then have to write off £20B from our banks then that immediately puts them at big risk of similar problems. That's the contagion that gets talked about.

All the banks are in hoc to each other and none can afford to have the others debt written off.
Over here we printed money to fill the hole a bit, this devalued the currency and devalued the debts (inflations goes up). A sleeket way of moving that debt on to Everyman.

Historically Greece (and other countries) will have gotten out of previous default / debt situations by devaluing but this time Germany isn't letting anyone turn on the presses for the €. DE doesn't want inflation, but that doesn't help the PIGS. So everyone is stuck in a political ****pile an no one seems to gave the slightest idea what to do.

[Clunkclick]

Night of the provocative resurrected zombie threads. Yawnnnnnnn !

N

[Babs]

Clunkclick, on 08 June 2012 - 20:01, said:

Night of the provocative resurrected zombie threads. Yawnnnnnnn !

N

Much like the "old man struggling with the modern world" threads?

[Clunkclick]

Beeatch !

I reserve the right to be as boring and tedious as me  !


Nick.

[sausage roll]

Can anyone lend me 100,000,000,000 euros? I know a couple of Spanish blokes that need some help.

[Babs]

sausage roll, on 09 June 2012 - 21:04, said:

Can anyone lend me 100,000,000,000 euros? I know a couple of Spanish blokes that need some help.

Seat?

[gadgetman]

So 3 out of the five in a worrying state have now got bailouts.  The final 2 wil be on a knife edge now.

A debt writeoff surely is now looking more likely given the size of bailouts given and needed if Italy and Portugal also fold?

[RapidRonnie]

Kind of like the sentiment of the original post. Maybe we do need some big reset? But only if there was some agreement and big changes going forward so we don't get in the same mess again.

They need to look at stuff like rich individuals and big companies avoiding tax and trying to encourage the purchase of goods made closer to home. There's a story in today's Sunday Times - Vodafone UK profits last year: £402 million, UK corporation tax: £0. Amazon operate a similar scam.

At least the government finally closed the VAT loophole allowing Amazon/Tesco e.t.c. to avoid UK vat on small items by supplying them from Jersey.

[cheezemonkhai]

OctaviaT81, on 10 June 2012 - 13:48, said:

Kind of like the sentiment of the original post. Maybe we do need some big reset? But only if there was some agreement and big changes going forward so we don't get in the same mess again.

They need to look at stuff like rich individuals and big companies avoiding tax and trying to encourage the purchase of goods made closer to home. There's a story in today's Sunday Times - Vodafone UK profits last year: £402 million, UK corporation tax: £0. Amazon operate a similar scam.

At least the government finally closed the VAT loophole allowing Amazon/Tesco e.t.c. to avoid UK vat on small items by supplying them from Jersey.

How the eff can vodaphone do that, except through a mega loan from a company in a tax haven, that has to be paid back.
They ought to shut that one down, PDQ.

[RapidRonnie]

cheezemonkhai, on 10 June 2012 - 14:43, said:

How the eff can vodaphone do that, except through a mega loan from a company in a tax haven, that has to be paid back.

That is exactly how they do it. These companies set up offshoots in tax havens, make big loans to their parent companies, the interest payments on the loans reduce the tax bill in the originating country and the profit generated on the loan is taxed at a minimal rate in the tax haven.

Also, another subsidiary of Vodafone, Vodafone Investments Luxembourg recorded a profit of £3.5billion to end of March 2011 and paid corporation tax of £1400. Vodafone Investments employ around 12 people... So I guess they are used as a channel for all their profits worldwide. Not just the UK government getting screwed over!

[gadgetman]

Which is one reason tax deductable items need reducing and capping how much can be reclaimed anyway.

If set as a percentage of turn over big corps will have to pay their way.

[Lazy Daisy]

You can question the morality of companies conducting business in such a way, but it's not illegal, and a company like Vodafone's responsibility is to maximise returns to shareholders, not the UK government.

[RapidRonnie]

Lazy Daisy, on 10 June 2012 - 18:21, said:

You can question the morality of companies conducting business in such a way, but it's not illegal, and a company like Vodafone's responsibility is to maximise returns to shareholders, not the UK government.

True. But that's why governments worldwide must do something to clamp down on this sort of practice. Perhaps as Gadgetman suggests a cap on tax reliefs?

It's not just the corporation tax take that this kind of practice hits but when we are talking about retail, companies like Amazon are also doing damage to British based retailers who pay their fare share of tax and also employ people in the UK.

[Babs]

And once all these loopholes are closed, and all these companies are paying the "correct" tax... who do you think will be getting the bill for all this tax?

[Lazy Daisy]

Close one loophole and another will be found, UK plc needs companies like Vodafone more than Vodafone needs UK plc.