Hungary Tries To Calm Talk Over Default

[CountAllVotes]

Source: NPR

Hungary's government on Saturday tried to calm investors and distanced itself from earlier comments by officials claiming that the country was close to defaulting on its debts.

State Secretary Mihaly Varga, a former finance minister, described talk of a default "exaggerated ... and unfortunate," adding that the new, center-right government of the Fidesz party was committed to the 2010 budget deficit of 3.8 percent of GDP set by the previous administration even if "immediate and urgent" steps were needed to achieve it.

"The situation is consolidated and the planned budget deficit can be met," Varga said, adding that declarations putting Hungary in the same group as Greece or other countries struggling with huge deficits "do not give a credible view of Hungary's status."

Statements Thursday and Friday from several Fidesz and government officials, which compared Hungary's situation with that of Greece and raised the possibility of a budget gap twice as big as planned, shocked financial markets and were seen as one of the reasons the euro fell to four-year lows, while the Hungarian forint fell around 5 percent and the Budapest Stock Exchange ended Friday 3.3 percent lower on the day.



Read more: http://www.npr.org/templates/story/story.php?storyId=127498257&f=1001&sc=tw&utm_source=twitterfeed&utm_medium=twitter

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Who is next dare I ask?

[TomCADem]

1. I Think This Might Be A Bigger Cause of The Drop In The DOW

Europe's economy seems like a house of cards at the momemnt with several nations on the bring of insolvency, which create unrest in Europe and devastate U.S. experts. Already the Euro is plunging to parity with the U.S. Dollar.

[CountAllVotes]

2. Europe in 2005

The dollar v. the Euro was where it is now (approx. 1 Euro = ~.85 cents). Prosperity was right around the corner at that time. Everyone was so damn rich is stunk to high heavens.

The prosperity was accompanied with a hatred towards Americans after Bush*t had been re-elected (well we know the story on that ...). I was glad to come home, believe me.

Now they are crying because they borrowed more than they could ever possibly repay and they knew it. They didn't care because they were now the EU!

Americans visiting at the time were being Americans. Many were there on a tight budget (as was I) and they weren't buying sweaters for EU 500 each.

So goes the Euro.

Now it travels to Hungary.

Like I said, who is next dare I ask?

:dem:

[abelenkpe]

3. Traveled around Europe in the 90s

and our experience was very different. I think the attitude in the 2000s wasn't very different here. Everyone was doing well, the market was up, homes were appreciating insane amounts and the result was the same. People and businesses took on a lot of easy cheap debt.

Those that didn't were told they were crazy not too.

(edited to add 'nt)

[CountAllVotes]

4. Relatives in Ireland did not go for it

Everyone was borrowing money. One of my relatives was getting married and the friendly banker told him that he needed EU 10,000 being he was getting married.

He went home and had the sense to ask his father about this great idea. :think:

His father told him that this was a stupid idea and that he'd better not borrow EU 10,000. He didn't do it but he went into debt on that wedding anyway deciding to have it in Sri Lanka of all places.

I received an invitation to said wedding and did not go needless to say nor did anyone else it seems.

:dem:

[dipsydoodle]

5. the Hungarian forint .

Check out the demise of the pengo some time and cringe .

The Hungarian economy could only be stabilized by the introduction of a new currency, and therefore, on 1 August 1946, the forint was introduced at a rate of 400 000 000 000 000 000 000 000 000 000 = 4 × 10 to the 29th power pengő, therefore the total amount of circulating pengő notes had a value of less than 0.1 fillér. The exchange rate to adópengő was set at 200 000 000 = 2 × 108 (hence the 2 × 1021 ratio, mentioned above).<4> The exchange rate for the US dollar was set at 11.74 forints.

http://en.wikipedia.org/wiki/Hungarian_peng%C5%91

It follows that prior to the intro of the forint the exchang rate would have been :

US$1.00 = 11.4 x 400 000 000 000 000 000 000 000 000 000 pengos.

[Prometheus Bound]

6. And that was part of a stabilization program, according to your link!

[dipsydoodle]

7. Well that was 64 years ago.

The actual problem , not sure if its mentioned in that article , had been caused by Hungary being stripped of both its capital goods and its ability to create them as reparation for war damage. That also helped pushed Hungary into becoming a communist state. I knew about this subject 40 years ago and pengo is such a funny word its always stuck in my mind.

Out of interest the hyperinflation reduced them to barter as their sole means of survival.

[Kringle]

8. coming soon...devaluations .nt