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The Bar For non Automotive Related Chat |
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#1 | ||
Rob
Join Date: Sep 2006
Location: Woodcroft S.A.
Posts: 21,508
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Hi guys, i don't get involved in politics and what not, and don't want this thread to get political. obviously greece is in financial trouble again, and without being specific toward greece, i was wondering what happens if a country goes bankrupt? can someone put it into laymans terms for a simple fellow?
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#2 | ||
Virtuous Bogan (TM)
![]() Join Date: Jan 2005
Location: TAS
Posts: 27,559
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Well I think usually their currency becomes worthless (hence why other euro's are annoyed) and then they struggle to get funding for investment because they cant pay back the debt..much like someone going bankrupt personally but on a massive scale.
Investment drops, employment goes up..then riots. debts get written off and then the people (countries) that borrowed them the money also get hurt. Im sure its alot more complicated than that but in a nutshell perhaps? |
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#3 | ||
Rob
Join Date: Sep 2006
Location: Woodcroft S.A.
Posts: 21,508
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when a business goes bankrupt, they can just close the doors and stop trading and that business is gone. can't exaclty do that if you are a country.
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#4 | ||
SZII in Silhouette
Join Date: Jul 2005
Location: Darwin NT
Posts: 600
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Exactly.
But if they couldn't do that, they would have to fund everything out of turnover because they wouldn't be able to borrow money. So they would reduce spending first up. Same with a country. Taxes will have to go up because the government will be unable to borrow money for infrastructure (or i suppose they could just put in a heap of speed cameras). Government spending will have to decrease so you are looking at reductions in social security, health, road funding, police etc etc..... Unemployment increases as the Government cuts jobs and decreases spending in the private sector. Not a nice scenario. Luckily, we have a fiscally responsible government here.............oh ![]()
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. . Strangers have the best candy....... |
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#5 | ||
Call me Spud
Join Date: May 2008
Posts: 1,995
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I am not sure what happens if a country goes belly up, but I can't imagine it is going to be good for anyone. Greece, should be a lesson to the Euro zone, don't put all your eggs in one basket, if it wasn't for the Euro, most likely they would have been left to fail.
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#6 | ||
FF.Com.Au Hardcore
Join Date: Feb 2010
Location: Sun City, North Australis
Posts: 4,274
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What happens is that the world bank gives them huge loans and the country then belongs to the bank..... assets are sold off, gov employees sacked, money worthless....
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#7 | ||
Whipper Snappa
Join Date: Feb 2007
Location: SA
Posts: 1,192
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Breakdown and balkanization.
The government can't maintain it's obligations, keep order or defend the country. It's prime time when coups or revolutions happen and people are most willing to sacrifice their freedom for the promise of rations. Think of the Soviet Union or what was formerly known as Rhodesia for recent examples.
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*insert witty quote* |
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#8 | ||
Regular Member
Join Date: Jul 2006
Location: Perth
Posts: 164
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I have had the pleasure of spending some time in Greece just recently and you would not know of any kind of crisis that may be happening there. Everyone I dealt with was very positive in regards to the future.
I did notice there is a massive difference in the news medias reports in Greece and what is reported in Australia, seems to be at opposites
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66 Mustang pb 10.13 70 Capri V8 pb 11.07 70 Mustang pb 8.34 all SBF naturally aspirated |
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#9 | ||
Awesome
Join Date: Oct 2007
Location: In my own little world..Everyone here knows me :)
Posts: 9,401
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Can't wait for all the financial experts to jump on this thread and kill it....
It is a good question and one that many people do not understand but polyal's post generally sums it up! Your countries currency generally tends to lose value and that countries stock market goes into chaos! Unemployment goes up...and things become really hard for the people who live in those countries. Their government then gets a loan from another country (gets charged interest and penalty rates) is given a certain amount of time to pay it back. If they can't pay it back within the time frame, then more interest penalties are imposed and then someone higher up the economic food chain ( I believe it is the Monopoly man or Scrooge McDuck), steps in and values that countries money and works out a rescue package. However, if no-one comes to the rescue of that country - it is put on Ebay with a starting bid of 0.99c ![]()
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#10 | |||
Virtuous Bogan (TM)
![]() Join Date: Jan 2005
Location: TAS
Posts: 27,559
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Quote:
"Greece going cheap - may interest buyers of spain/france/russia/germany" |
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#11 | ||
Awesome
Join Date: Oct 2007
Location: In my own little world..Everyone here knows me :)
Posts: 9,401
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They wouldn't put it on like that polyal...
I am sure it would be listed as Idealic Meditteranean Country, slightly used. Comes with 400,000 goats - No Reserve. ![]()
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Last edited by Geez Louise; 04-10-2011 at 03:32 PM. Reason: I should learn me gooderer Unglush! |
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#12 | |||
FG XR6T trayback
Join Date: Jan 2007
Location: N-W NSW
Posts: 1,308
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Quote:
They still have that nice warm happy feeling. But it is going to boil soon. |
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#13 | ||
Banned
Join Date: Apr 2009
Posts: 598
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What generally happens is that services are cut, health, education,transport,police etc.
Then they print money and inflation equalizes everything. People dont accept pay cuts, but by stealth inflation slowly allows them to buy less, and thats how it works.....BUT Greece cant just print money, it's a part of the Euro system, and thats the problem....they can't be allowed to fail. The single biggest problem is their banks...they dont have enough money to pay out all the people that have put money in as deposits. It causes a domino effect if one bank slides under...they all borrow and interact with each other. A government will do anything to prevent a run on the banks. |
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#14 | ||
Back where I belong
Join Date: Jan 2005
Location: Mexico - Victoria
Posts: 947
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Greece the new Nigeria.....
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Regards Craig |
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#15 | ||
Marko
Join Date: Sep 2007
Location: Perth W.A
Posts: 430
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One option is war, either internal (civil) or external. But simply put the masses rise against the government (lots of examples) or the government rises against its neighbours (germany circa 1939) or both. Everyone will blame everyone else. That is a given!
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Mark |
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#16 | ||
Banned
Join Date: Dec 2007
Posts: 3,290
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what will really happen is germany and france or as there known the euro lets be honest there the main two will continue to bail out greece and forgive there debts till there solvent again greece has relied to long on civil servants paying tax then getting government money and around and around it goes now its crashed all there really doing is bringing it back to a normal level that was unsustainable in the first place not to mention the amount of greeks who dont pay tax or avoid it at all costs then complain there all going broke
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#17 | ||
Mot Adv-NSW
Join Date: Jun 2005
Location: Lake Macquarie, NSW
Posts: 2,153
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France isn't that healthy, but 'better off' than say Spain, Portugal, Ireland, Italy. Should one of these fail, the Euro Central Bank will unable bail em, let alone IMF. Some EU banks are vulnerable.
Euro derivatives= eek. Was watching Richo on SkyN tonight, I feel he and his guest are a little over confident re China and growth (as saviour of the west). Reckoned we were doing well at paying off our personal debt, say on credit cards. At the GFC 2008 AUS folk owed 46billion to CC's, dropped to 43billion as folk paid em off, but has risen to 49billion now. That tells me many folk are paying mortgages with their CC's. But AUS is the place to be nonetheless. Mean no offense. |
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#18 | ||
FF.Com.Au Hardcore
Join Date: Jun 2010
Posts: 586
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Argentina went bankrupt 20 or so years ago, theres info on Wikipedia about it.
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