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Dawncloack posted:
EU doesn't have economic experts tho In Germany especially, economists have very little influence. I recently talked to Merkels' economic chief advisor LH Röller. Apparently it is very frustrating work, especially compared to countries who actually listen to their economic advisors (aka the USA). So next time you see some idiot German minister overriding the monopoly comission's decision because *votes*, leading to the resignation of the comission's head, or when the German EU-centered economic policy doesn't seem to make sense except in light of *votes*, let me give you a hint. It's not because the economic advisors anywhere. TheDeadlyShoe posted:There is little downside of getting locked out from financial markets if you have to borrow to cover your existing debt obligations. The situation of not being able to import anything when you have to import all essentials is a very different situation. Even with how lovely it is currently, it can get much worse. YF-23 posted:That's like trying to say that any country that has ever taken a loan isn't a functioning nation on its own. The point is that Greece has functioned before 1990 in a sense that it was a poor country, even compared to now. Let's remind ourselves that the Greece GDP, in a crisis, in a lovely situation now, is still MORE THAN TWICE THAT OF 1990 and before. And let us remind ourselves that Greece paid higher interest rate on debt than it does now, debt which at times pre 1990 was also substantial. Of course some is due to technology and bla bla, but the mainstay of a Grexit Greece will not be technology sector or any production that substantially changed post 1990. It will be tourism, and agriculture and depending on the political climate perhaps large scale industry production but conditional to things being lovely enough such that wages are really effing low (aka pre 1990). And then, all the innovative stuff you'll want including essentials will have to be important for impossibly high rates. So if you are considering an alternative to now and it's gonna be "let's go back to pre 1990", then please also consider that you'll probably literally have half of everything you have now in monetary value and a lot less variety and high-tech goods. Haramstufe Rot fucked around with this message at 10:54 on Jul 13, 2016 |
# ? Jul 13, 2016 10:49 |
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# ? May 25, 2024 14:26 |
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Lagotto posted:
http://www.frbsf.org/economic-research/publications/economic-letter/2008/november/long-term-bond-yields-euro/#2 What planet are you living on that EU bond convergence never happened? The promise was implicit, but I will have to go find the source for a political agreement on bonds.
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# ? Jul 13, 2016 13:04 |
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Arglebargle III posted:http://www.frbsf.org/economic-research/publications/economic-letter/2008/november/long-term-bond-yields-euro/#2 Please do, since your link on the convergence criteria does not support your statement at all, more like the other way around, e.g. yields should include the risk differential. quote:What is surprising is how little premium the market seems to have attached to these bonds for differences in liquidity and default risk, and how strong the comovement was even before monetary union was implemented Nobody is disputing that the markets did start to consider them the same risk. That is nowhere near the same as that being a set policy by the EMU. That is not even a policy the EMU can set, and if you know anything about EU politics you would know that Germany would never guarantee the risks on Italian bonds. Edit. Here Ill repost this from the Lisbon treaty. quote:Article 125 Lagotto fucked around with this message at 13:25 on Jul 13, 2016 |
# ? Jul 13, 2016 13:14 |
Reuters reporting on a related study (http://www.reuters.com/article/us-eurozone-debt-banks-ecb-idUSKCN0ZT1EB)quote:Stressed euro zone governments swayed domestic banks to buy their bonds when the debt crisis was at its height, using "moral suasion" to counter surging borrowing costs, a research paper published by the ECB showed on Wednesday.
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# ? Jul 13, 2016 14:08 |
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Boner Slaem posted:In Germany especially, economists have very little influence. I recently talked to Merkels' economic chief advisor LH Röller. Apparently it is very frustrating work, especially compared to countries who actually listen to their economic advisors (aka the USA). Just wanted to chime in and remind everyone that the whole mess started with the US housing market collapsing and setting everything via mortgages/CDOs on fire. Goldman Sachs also played a central role in selling those "financial products" to Greece which in the end made the whole house of cards collapse for them. http://www.spiegel.de/international/europe/greek-debt-crisis-how-goldman-sachs-helped-greece-to-mask-its-true-debt-a-676634.html "Around 2002 in particular, various investment banks offered complex financial products with which governments could push part of their liabilities into the future," one insider recalled, adding that Mediterranean countries had snapped up such products. Greece's debt managers agreed a huge deal with the savvy bankers of US investment bank Goldman Sachs at the start of 2002. This credit disguised as a swap didn't show up in the Greek debt statistics. Eurostat's reporting rules don't comprehensively record transactions involving financial derivatives. "The Maastricht rules can be circumvented quite legally through swaps," says a German derivatives dealer. Yeah great experts there, we definitely need more of those.
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# ? Jul 13, 2016 20:38 |
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dogboy posted:Just wanted to chime in and remind everyone that the whole mess started with the US housing market collapsing and setting everything via mortgages/CDOs on fire. Goldman Sachs also played a central role in selling those "financial products" to Greece which in the end made the whole house of cards collapse for them. The Goldman deal was not responsible for Greece collapsing (also, it didn't involve mortgages or CDOs, and after 2005 the deal was transferred to a Greek bank, so Goldman wasn't even involved anymore) ). It did help Greece gain euro entry, since it helped Greece meet the Maastricht convergence criteria by bringing the Eurostat-defined debt down by 2-3% of GDP in 2001 ( I guess you could argue, IMO with some justification, that the roots of the destruction lay in letting Greece join the euro in the first place, but since it was explicitly the goal of the then Greek government to do so as soon as possible, I don't see why the blame for that should be shifted elsewhere) . However, according to the the details discussed here and here, the size of the Goldman deals was minimal in relation to the total debt - Greece kept some 5 billion euro in debt off the books, Goldman ran away with a cool 600 million euro in profits, but the first bailout in 2010 involved Greece receiving 110 billion euro in loans. In other words, the numbers don't add up. The trouble really began as a result of the worldwide recession that broke out in 2008 as a result of the financial crisis, and picked up speed in 2009 when the new Greek government publicly restated the previous government's deficit projections from 4.5% to 12.7% of GDP, but that was all a result of those earlier projections being built on their own lies and manipulations, not those of Goldman. Whom I really don't want to defend (you can after all fill whole books with Goldman Sachs assholery), but I believe it's important to separate fact from fiction. The fact is Greece was ill-served by joining the euro, because it created a huge economic bubble that papered over structural economic and political weaknesses and probably ended up making them worse. That bubble was punctured by the 2008-9 financial crisis, and everything afterwards has been an attempt to pick up the pieces in the most misguided and destructive possible way by pretty much everyone involved.
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# ? Jul 13, 2016 22:15 |
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Pluskut Tukker posted:The Goldman deal was not responsible for Greece collapsing (also, it didn't involve mortgages or CDOs, and after 2005 the deal was transferred to a Greek bank, so Goldman wasn't even involved anymore) ). It did help Greece gain euro entry, since it helped Greece meet the Maastricht convergence criteria by bringing the Eurostat-defined debt down by 2-3% of GDP in 2001 ( I guess you could argue, IMO with some justification, that the roots of the destruction lay in letting Greece join the euro in the first place, but since it was explicitly the goal of the then Greek government to do so as soon as possible, I don't see why the blame for that should be shifted elsewhere) . However, according to the the details discussed here and here, the size of the Goldman deals was minimal in relation to the total debt - Greece kept some 5 billion euro in debt off the books, Goldman ran away with a cool 600 million euro in profits, but the first bailout in 2010 involved Greece receiving 110 billion euro in loans. In other words, the numbers don't add up. Greece gambled high and hosed up and Goldman played a huge role in it in various functions. In the big picture Greece was just a little speck in the corner though. But all that is not my point. It was just a reminder that, no, neither Greece nor anyone in the EU caused the 2008/2009 crisis but rather quoted US experts that helped creating the Collaterized Debt Obligations & friends and helped spread them around through GS, JPMC, Lehman and so on. Then went on to rake in obscene amounts of cash that somehow vanished and when the whole thing went *poof* the taxpayers had to pay. (I won't deny here either that the big EU banks hopped on that train, too) I think the worst foul play was also sourcing most of them in the US housing market in unbelievable ways which then collapsed and started the crisis. Just for sake of completeness, here the quote again: Boner Slaem posted:EU doesn't have economic experts tho With my point beeing: We need anything BUT more of those kind of US experts. (Or expand that at your leisure to experts working for the financial industry. Also revolving doors etc.)
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# ? Jul 13, 2016 23:22 |
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you seem to be conflating distrust of explicitly self interested finance wizards from the well known Vampire Squid corporation with distrust of anyone with economics expertise whatsoever
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# ? Jul 14, 2016 00:03 |
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dogboy posted:Yeah great experts there, we definitely need more of those. We need more if we want a bigger bonfire.
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# ? Jul 14, 2016 04:39 |
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Finished the austerity book, a great eye-opener, recommend it to anyone. I liked this bit from the end, which is conjecture, but a happy conjecture:quote:The End of Banking
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# ? Jul 14, 2016 04:56 |
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On a vaguely related note, here's a good article on Renzi's woes and the problems of the Italian banking system: http://www.politico.eu/article/europes-and-matteo-renzis-italian-problem/quote:Time is not Renzi’s friend. By July 29, EU banking regulators are widely expected to say that Monte dei Paschi di Siena (MPS), the world’s oldest bank, will need an emergency infusion of capital. That decision will sound the starting gun on a rescue package not just for MPS but for the entire Italian banking sector.
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# ? Jul 20, 2016 07:13 |
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Will this help the Deutsche Bank's derivatives collapse?
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# ? Jul 20, 2016 08:39 |
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I didn't realize these bondholders were comprised by a lot small businesses, is this what Blyth meant when talking about Italians mistrust of the government and having one of the biggest bond markets in Europe?
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# ? Jul 20, 2016 11:34 |
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LemonDrizzle posted:On a vaguely related note, here's a good article on Renzi's woes and the problems of the Italian banking system: http://www.politico.eu/article/europes-and-matteo-renzis-italian-problem/ Who designed a bailout mechanism that penalizes retail investors and what was the reasoning behind it because holy gently caress a lot of people in the middle class are going to be loving burned.
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# ? Jul 20, 2016 15:05 |
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Lamadrid posted:Who designed a bailout mechanism that penalizes retail investors and what was the reasoning behind it because holy gently caress a lot of people in the middle class are going to be loving burned. Someone who wants to insulate all the big money guys from the fallout.
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# ? Jul 20, 2016 15:26 |
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Lamadrid posted:Who designed a bailout mechanism that penalizes retail investors and what was the reasoning behind it because holy gently caress a lot of people in the middle class are going to be loving burned. Riso posted:Someone who wants to insulate all the big money guys from the fallout.
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# ? Jul 20, 2016 15:35 |
I don't think that those people who wanted higher returns on their savings and thereby accepted higher risks should be bailed out just because Renzi's political life depends on it. Just like the people who bought Lehman Brothers papers they were greedy and did not bother to research the products they bought thoroughly enough. If they get bailed out it just provides more incentive for banks to sell high risk products to their retail customers. But I guess it's cool to socialize the losses if the losers are your voters...
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# ? Jul 20, 2016 16:34 |
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I'm sure Renzi could design something where the bail-in procedures spares small bondholders, or gets a floor level below which the investment wouldn't be wiped. For example if you've got €60K in bank bonds, then maybe if the floor is set at €50K then you'd only lose €10K; but someone who had €600K would lose €550K. (Completely arbitrary values, obviously. Finding the right level is a job for Renzi's staff.) You can come up with systems that would allow to diminish the impact on the smallest bondholders without dropping the bail-in rule altogether. Don't tell me Renzi is too dumb to come up with such ideas.
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# ? Jul 20, 2016 17:21 |
Cat Mattress posted:I'm sure Renzi could design something where the bail-in procedures spares small bondholders, or gets a floor level below which the investment wouldn't be wiped. For example if you've got €60K in bank bonds, then maybe if the floor is set at €50K then you'd only lose €10K; but someone who had €600K would lose €550K. (Completely arbitrary values, obviously. Finding the right level is a job for Renzi's staff.) Those ideas are most likely illegal because the bank is not allowed to discriminate between debt of the same seniority held by different creditors, if such rules were not part of the contracts in the first place.
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# ? Jul 20, 2016 17:35 |
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Cat Mattress posted:I'm sure Renzi could design something where the bail-in procedures spares small bondholders, or gets a floor level below which the investment wouldn't be wiped. For example if you've got €60K in bank bonds, then maybe if the floor is set at €50K then you'd only lose €10K; but someone who had €600K would lose €550K. (Completely arbitrary values, obviously. Finding the right level is a job for Renzi's staff.)
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# ? Jul 20, 2016 17:35 |
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They'd be all treated the same way, they'd all get to keep 50K (or whatever value) of their bonds' value and lose the rest. No difference in treatment.
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# ? Jul 20, 2016 18:42 |
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Lamadrid posted:Who designed a bailout mechanism that penalizes retail investors and what was the reasoning behind it because holy gently caress a lot of people in the middle class are going to be loving burned. As others said, the question rather is who decided it was a good idea to sell bonds of this kind to retail investors.
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# ? Jul 20, 2016 20:00 |
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If you have 50k in bank bonds, you're not really the kind of guy that I think of when talking about "Small time investments that need to be protected".
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# ? Jul 20, 2016 20:04 |
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^^^^ British and Italian press are telling me that a significant part of that is Italian middle class people who put their savings in those bonds. doverhog posted:As others said, the question rather is who decided it was a good idea to sell bonds of this kind to retail investors. Happened in Spain before. Lots of banks sold this "ultra safe mega AAAA+++++ " bonds to lots of individuals, without explaining they might lose all, and right before the real state bubble popped to boot. Spanish courts even ruled that a illiterate woman knew enough of what she was getting into to not have her money returned.
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# ? Jul 20, 2016 20:08 |
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Dawncloack posted:^^^^ British and Italian press are telling me that a significant part of that is Italian middle class people who put their savings in those bonds. Wow. So in Spain it's possible to have money and be illiterate. Guess I did something wrong.
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# ? Jul 20, 2016 21:34 |
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You guys seem to be forgetting even people with very low income can be thrifty and save up money over decades. Even a thousand euro a year for 50 years can amount to 50k you know.
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# ? Jul 20, 2016 21:44 |
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Pochoclo posted:You guys seem to be forgetting even people with very low income can be thrifty and save up money over decades. Even a thousand euro a year for 50 years can amount to 50k you know. Yeah, but unless you can show that there's a significant number of those people it could just as easily be thrifty grandma being used as an economic human shield for the super-rich.
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# ? Jul 20, 2016 22:00 |
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Randler posted:If you have 50k in bank bonds, you're not really the kind of guy that I think of when talking about "Small time investments that need to be protected". That could be literally anyone living above the poverty line non-diversified pension after a lifetime of accumulated savings.
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# ? Jul 20, 2016 22:20 |
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Randler posted:If you have 50k in bank bonds, you're not really the kind of guy that I think of when talking about "Small time investments that need to be protected". Cat Mattress posted:They'd be all treated the same way, they'd all get to keep 50K (or whatever value) of their bonds' value and lose the rest. No difference in treatment. also, oh dear: http://www.telegraph.co.uk/business/2016/07/11/banks-predict-italy-will-fudge-a-new-bailout/ quote:Bank of America estimates that 14.6pc of Italian household wealth is tied up in bank bonds – amounting to €235.6bn – and so bailing them in to recapitalise the banks, as EU rules demand, would be very painful.
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# ? Jul 20, 2016 22:28 |
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LemonDrizzle posted:Chances are that the Italians will find a way to fudge it, but that'll make uncle Wolfie very angry. A worthwhile goal.
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# ? Jul 20, 2016 23:21 |
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Why doesn't Italy just liquidate those pensioners, since they're economically unproductive and have shown themselves to be entirely irresponsible? This will save hardworking tax payers a lot of trouble, restore market confidence, and serve as an object lesson for the rest of the EU.
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# ? Jul 21, 2016 06:08 |
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A Buttery Pastry posted:Why doesn't Italy just liquidate those pensioners, since they're economically unproductive and have shown themselves to be entirely irresponsible? This will save hardworking tax payers a lot of trouble, restore market confidence, and serve as an object lesson for the rest of the EU. The only way to get immediately ejected from the EU is re-introducing the death penalty. So even if I take your joke post seriously, it wouldn't work.
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# ? Jul 21, 2016 06:15 |
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Libluini posted:The only way to get immediately ejected from the EU is re-introducing the death penalty.
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# ? Jul 21, 2016 06:21 |
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Libluini posted:The only way to get immediately ejected from the EU is re-introducing the death penalty. What if you just put them into camps, force them to work on a calorie restricted diet, eventually they should die on their own, no death penalty return needed.
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# ? Jul 21, 2016 07:29 |
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His Divine Shadow posted:What if you just put them into camps, force them to work on a calorie restricted diet, eventually they should die on their own, no death penalty return needed. Bad idea, calorie restricted diet has been shown to just increase lifespan of rats. They would just continue to be drain on the state. Real solution is to give senior discount on booze, cigarettes and fattening foods.
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# ? Jul 21, 2016 08:05 |
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Libluini posted:The only way to get immediately ejected from the EU is re-introducing the death penalty. Ah, but the death penalty is a matter of justice. This wouldn't be penalty for a crime, this would be something else. Simple measure to achieve the same result: abrogate healthcare and social security for non-employees, in the name of Holy Austerity. Just let all the seniors die from easily preventable illnesses, and be enthusiastically applauded and called a model to follow for the rest of Europe at the same time, with EU commissioners crying tears of joy before the noble and righteous cuts done in social spending.
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# ? Jul 21, 2016 10:55 |
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Libluini posted:The only way to get immediately ejected from the EU is re-introducing the death penalty. The EU is a bastion of human rights and as such introducing the death penalty would be a crime against humanity. As such, it's much more humane to increase medicine prices by 300% and reap the benefits.
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# ? Jul 21, 2016 23:38 |
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Mans posted:The EU is a bastion of human rights and as such introducing the death penalty would be a crime against humanity. Pharmacy pricing in the EU works something like this: They negotiate a deal in Germany first, because there's no price controls. After that, France swoops in and demands a 40% price cut for their own market.
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# ? Jul 22, 2016 08:09 |
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Cat Mattress posted:Ah, but the death penalty is a matter of justice. This wouldn't be penalty for a crime, this would be something else. I hate to tell this to you but old people are gonna be in the majority very soon. They always vote and they get up earlier then anyone else. If we don't do anything now, we young people will be enslaved by them sooner or later. We have to strike first, while we still can, while there are still enough left of us.
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# ? Jul 22, 2016 09:39 |
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# ? May 25, 2024 14:26 |
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waitwhatno posted:I hate to tell this to you but old people are gonna be in the majority very soon. They always vote and they get up earlier then anyone else. If we don't do anything now, we young people will be enslaved by them sooner or later. We have to strike first, while we still can, while there are still enough left of us. Or wait 20 years till all the olds have died of heart disease and falling down stairs.
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# ? Jul 22, 2016 16:21 |