Fábio Nunes

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What do you think about the countries that are being helped by IMF? Do they deserve the money or not?

Hi Ted fellows. I'm portuguese, and my country is currently being (for the 3rd time in 40 years) "helped" by IMF and ECB (european central bank). Many countries, such as Germany and other northern europe countries think that these countries don't deserve the money they receive.

What do you think? Do you think this aid is essential in an organization that is called a UNION (european union) or rich countries shouldn't keep on helping what they say are lazy countries.

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    Aug 31 2012: ..
    Proverbs 22:7 (KJV)
    The rich ruleth over the poor, and the borrower is servant to the lender.

    This is not about unity. This is about bankers seeking to control nations. As individuals we are careful not to borrow more than we can service. Our supposed rulers don't seem to grasp the basics, why not, they should be smarter than us?
    We are being stitched-up folks.

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      Aug 31 2012: Couldn't say it better. Look how Nigel Farage, an european deputy talks about money controling democracy (in a speech that isn't applauded by others in the chamber, but I think he is right).
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    Aug 30 2012: I think rich countries don't want you to get their printed money for nothing... because then you'll realize how little work, they actually do for it.
  • Sep 3 2012: IMO:

    The purpose of the IMF is not to help the countries that receive the loans.

    The purpose of the IMF is increased profits for banks, especially banks that make big bad loans.

    Whether the countries "deserve" the money is never a real consideration (though politicians may talk that way).
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    Sep 3 2012: the IMF should not exist at all. just like the bailouts in the US, bailout of countries help nobody, and cause trouble. failure must be an option, and one must not use other people's money to clean up the mess created by reckless spending and populism.
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    Sep 2 2012: From what news and articles I have access to it appears that the countries are not against helping. They are against giving money to countries that refuse to make changes that have cause them to be in this position. To continue big government, high maintenance social programs, high unemployment, welfare dependent, and decaying facilities and infestructure is to say we want money forever because we are not changing.

    I do not blame a bank for not loaning me money for a dying business if I do not show them a plan for recovery. Without some assurances of getting their money back why should they loan to me.

    Why is it any different for a country. No plan ...... no loan.

    This is not a bank problem .... not a IMF problem ... not a ECB problem ... It is a leadership problem.

    Tough time means you have to make hard decisions. If you cannot make those decisions you take the country down with you. I have heard leaders saying that they will not cut government, welfare, or the social programs because that would not be popular. That type of political decision is cowardice.

    About the European Union ... If a family member will not work, has spent all of his money, mooched from all his friends, moved in with his parents, still parties every night, and wants to barrow money from you (that you know you will never see again) what is your decision.

    Just because you belong to the Union does not mean that you do not have responsibilities.

    Countries that are trying deserve a hand up ... not a hand out.

    Last comment ... It is not the fault of the rich .... try stupid leadership that are blaming the rich. Now the rich are taking their money out of country. There goes investment capital, jobs, and bank money. I think that you should thank you leaders for killing your country.
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      Sep 3 2012: "No plan ...... no loan"

      Funny thing is that Portugal has followed strictly the IMF plan for our country and our recession is now worse than it was before the rescue, which shows that the plan to cut on everything isn't a good plan.

      So, in a way the stupid leadership of the IMF officials has brought this country down a little bit more. They have a plan that doesn't work, but they keep committed to it, as if something could change.
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        Sep 3 2012: Fabio, I can only speak in generalities. It would be my opinion that the IMF made the loan on conditions that would address finicial concerns. The leadership must address the economic side, development of jobs, making tough cuts, and a long rang road to recovery.
        I read somewhere that Spain had the highest unemployment rate in the world. I am sure that that also has a impact on your country.

        In the US we have much of the same problem. Our government is spending by the trillions, taxing capital investors, making the government bigger, and implementing programs that will bankrupt the states. As they do this they blame the last president and the wealthy for all of the problems.

        Around the world the wealthy are being blamed and they are being taxed into poverty. It is understandable that they are taking their money and going to countries that treat them better. That means there is no capital investors, banks are losing depositors and the country is losing the taxes. This follows the socialist plan that Russia used to bring countries down. Economic collaspe is also the tactic used by George Serios in his quest to be the leader of one world government.

        Until the people get involved and aware of the problems and solutions, plus get off of their butts and make things happen nothing will change. We have become a welfare world and the work ethic has greatly suffered.

        There is no easy answer. Each country must resolve their particular problems and needs.
        I wish you all the best. Bob.
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    Sep 2 2012: In Nz we have a multiple party system,i think you will know it, Mmp but there's only really two parties and a few minority ministers that sign up with who they deem is worth it,what i've noticed over the years is that they were reactive rather than proactive,since 2007 both major parties should just merge and make the current idiot dictator for life,their policies are almost the same,Oh something else i have noticed,our tax dept have started sending bills without warning,is Portugal's political system similar?
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      Sep 2 2012: In Portugal it's similar. We have 5 parties in parliament, from which only 3 have a significant number of deputies so that they can form a government, but only 2 are able to form a government by their own, but they never promote a 'dictator for life' as we can only elect a person for 2 terms on a row.

      Our tax department has been sending bills also, but there's a warning, as they only send it to people who have been in debt for a lot of years.
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        Sep 2 2012: "Dictator for life" was a joke but surprisingly people here want him in longer than two terms.

        What i meant by "Bills with no warning" is that what i would usually get in December, i got last week, two days before it was due,no email,no warning of date changes,nothing on the news,it's a tax a year in advance,so we don't actually owe it but it is cunningly designed to make you think you do,after ringing them and complaining and listening to a well rehearsed apology about departmental changes and Ya Da Ya Da Ya Da,i realized this style of ambush tactics will probably be used in the future.
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    Aug 31 2012: How do the wealthy stay wealthy? They convince you to take your money and put it in their pocket. It is a simple ancient method of transaction that is desired over outright stealing from one another.

    If a company has a customer base of 1 million people and they get 1 dollar a day from those people they are racking in 365 X 1M each year. If those customers suddenly quit using that product for one month, they lose (365 X 1M)/12 or 8.3% of their yearly earnings. Two months is a 16% drop. If we all just use half of the product, their sales drop

    It's really simple math when you think about it. You don't have to stop using any prodcut but cut way down on the products you use.

    In other words, Keep your money in your pocket. Take some of your bank savings, say 10% and turn it into some other investment. That will cause the bank to see a drop in their own revenue base.

    Do it to every company you know. They will get the message.
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      Aug 31 2012: Very good point, but allow me to disagree. We just can't do it, at least when it comes to banks, because then the government shows up and helps them by giving them money. I know it is a business, but how can we do anything when banks can borrow money from the government at ridiculous low interest rates, and then deny credit essential to our job creators... and when they create the credit, it has incredibly high interest rates.

      Banks do whatever they want, because they know that if they screw up things, the government will help them and there will not be any repercussion to the bank responsibles.
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    Aug 31 2012: It is the same in the United States. the republicans raise taxes as do the democrats. Protect yours at the expence of others. That is the message.

    Get yourself a message and live on it Fabio. Convince others to do the same. Politicians are insulated from their people. They need to feel your need, your pain, your hurt. They need to know that you are the true power, not the wealthy who tell them what to do.

    Take the wealth away

    All wealthy people get wealthy by convincing you to take the money from your pocket and put it in theirs. It is a simple, ancient, transaction. The only other way is to boldly steal your money. Keep your money in your pocket even if it is a few coins a day.

  • Aug 31 2012: I am from Austria, a rich country.

    While I think we should aid poorer countries in the EU, I don't necessarily think they deserve it (it would be an incentive for bad economics and careless spending) and the EURO (not the EU) as it is now, has failed, it is just not possible for poorer countries like Greece or Portugal to compete with economic superpowers like Germany whitin the same currency, but we, as a union, made this mistake and we, as a union, have to correct it and learn from it.
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      Aug 31 2012: It's hard acting like a Union when Germany is clearly the 'big boss' of this union. I don't know if you have that idea, but there are a lot of conflicts between Durao Barroso, president of EC (european comission) and Merkel because he doens't like Germany's attitude towards the southern countries.

      Euro bonds would be a great way of solving this crisis as a Union, but Germany refuses it. But also, Germany makes a lot of money from this crisis: 60 thousand millions (or billions as americans say) euros have been made by germany from selling money at high interest rates and buying at negative (yes, negative!) interest rates.
      • Sep 3 2012: Can you blame Merkel?

        In all honesty, northern countries have strict rules regarding finance, they built up a lasting infrastructure, great industries and so on.

        Why didn't the southern countries?

        They never bothered.

        Instead, they went looking for the big money, like Spain and the housing bubble. I recently read an article which stated that over 2 million appartments in Spain are uninhabited and empty, hundred thousands more weren't even finished.

        They couldn't be sold because the market was flooded with new appartments, plus, they are high-end appartments, with swimming pools, golf courses, etc.

        And it read furthermore, that Spain, by the end of 2012, willl have built an additional 300.000 appartments.

        Why aren't the politicians putting an end to it?

        Either they don't want to or, which would be worse, they are getting paid not to do so.

        Show the EU you can and will get your stuff sorted out, make rules, enforce them, then you'll get money. The EU won't spend 500billion with no avail. We will have the same problems in 10 years if there aren't any rule and law changes.

        If your kid doesn't eat the vegetables, you don't give him cake and candy and tell him, okay, but tomorrow you are going to eat your vegetables.

        Same with the money.

        And EURO-Bonds would do nothing but drag down good economics.
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          Sep 3 2012: Actually, the houses in Spain are empty, because there isn't money to buy them - there is a 20%+ unemployment rate and banks aren't lending money as they used to. The problem isn't too much houses... the problem is not enough money.
          Euro-bonds would be good as a short term solution, as they could prevent some countries who are paying a lot in interest rates from getting into default, which is definitely worse on the economy.
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    Aug 31 2012: What do you think about your own country? Why did you have to borrow the money?
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      Aug 31 2012: It is a very simple reason. All governments borrow money, mostly from private investors. This money is borrowed at an interest rate that is obviously set by the market.

      Before the crisis, we paid a small interest rate, but in 2011 we where paying more than 7%. Therefore, the market decided that Portugal should fall, and Portugal fell. Other countries such as the US or UK have a bigger debt than Portugal, but get money at small interest rates, because the markets say so.

      In Portugal, we blame in similar parts our last governments that only spend money without any regard for our future and we also blame the rating agencies that are very politicized and give good ratings to whoever they want, without any regard for truth. For example, Standard & Poors gave an AAA rating to Lehman Brothers before the crisis, proving that they just can't properly evaluate assets.
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        Aug 31 2012: It appears Portugal has the same problem we have in the US. officials spending money without regard to if, or, how we will pay it back.

        I think we should ask David Hamilton to look for an answer to this question. I'm not a financial expert by any means.

        Even though the US is a nation, it is split into separate states, each with their own form of state government. There is competition between those states for federal dollars. Some get more some get less.

        We are evolving into global economy.

        I guess the question is, can your country take this money and turn things around and create a better equal for everyone?
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          Aug 31 2012: I honestly do not know. On one hand, all portuguese want to get out of this crisis. But on the other hand, we are tired of being on crisis (3 major crisis in 40 years), and it's only a matter of time before we head up into another. We have a saying about our economic instability: "the world sneezes, Portugal gets a cold".

          Funny thing is, when portuguese are asked about economic prosperity, they only talk about Salazarism (he was a dictator that ruled Portugal for 40 years in the 20th century). This shows complete disregard for our politicians... so I think that a recipe for a better tomorrow is better politicians.

          I watch the news and I can tell that there is a HUGE difference between democrats and republicans in America, so you can have always a debate between doing something this way or that way. In Portugal, our parties, even though they say they are different, they pretty much do the same. There is no goverment alterantive, so we can't ask for a change, because the government might change, but the ideas are the same - and even though we are talking about left and right governments, here in Portugal, they all raise taxes.
  • Aug 30 2012: I don't think that it is laziness, I think that they should not get the money though, I do not know enough about rewards vs costs of the deals to make a very educated argument. I think that having countries 'starve' through bad times is what will make for better leadership for the future. Right now we are working the preserve the status quo
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      Aug 31 2012: I don't think that 'starving' will make a better leadership for the future. The bad thing about this crisis isn't the money fault per se. The bad part is that we know the mistakes we made, and we keep on doing them.

      For example, for almost 4 years we have been talking about an european rating agency that could face the american one's that failed at every prediction, even rating Lehman Brothers at AAA before the crisis. However, 4 years past and not only we don't have this agency, but we keep on listening to these incompetent american agencies.

      Another one: For years we talk about having more tranparency in politics, but we simply don't have it. Politicians spend what they want (many times serving their lobbies) and they are not charged for this damaging gestion of the public money. This is something that is actually missing: being able to charge politicians on court it they screw up.

      So, as you can see, a better leadership for the future isn't made my starving now, but by changing things now once and for all, otherwise in 10-15 years tops we'll have another crisis.