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View Diary: IMF & Iceland: If this isn't true, I want to know, because if it IS true I want to bathe in it! (147 comments)

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  •  Debt crisis isn't banking crisis. (2+ / 0-)
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    Seneca Doane, JesseCW

    Greece isn't in a debt crisis because it bailed out its banks.  

    Mitt Romney '12: Berlusconi without the sex and alcohol!

    by Rich in PA on Thu Aug 23, 2012 at 08:29:11 AM PDT

    [ Parent ]

    •  Is this a reply to me? (3+ / 0-)
      Recommended by:
      TimmyB, Seneca Doane, wu ming

      I didn't write anything about banks.

      But, surely you have to count banks as the major part of the Greek crisis. Whether the banks were in Greece or not is practically irrelevant since Greece is in a currency that requires bank imbalances be met through systems such as Target2. This literally means that if Greece wants to stay in the eurozone, it has to bail out banks that loaned to it. Furthermore, Greece through ELA has to service its own banks which have experienced massive fund flights to core Europe by borrowing at 6% and loaning to the banks at 1%. This is in effect a bank bailout, but it is being done behind the scenes through ELA.

      There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

      by upstate NY on Thu Aug 23, 2012 at 12:15:49 PM PDT

      [ Parent ]

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