European Central Bank and the Greek bailout. Utter incompentence?

As of this morning we learn that finally, after several months of struggling the Greeks got their bailout.  However as this Bloomberg story reports, something is quite peculiar about the arrangement.  Specifically, this line:

In October 2008, the ECB cut the minimum rating for all the government debt it accepts as security for lending to BBB-, the lowest investment grade, from A-.

That part is rather clear, the ECB had certain guidelines, as they should, for the quality of debt that a member can issue.  After all, if you plan to have an exclusive club of merchants the least you can demand is that the members do not consist of homeless drunks from the local alley.   Yet they are changing these rules...
It extended the policy change indefinitely on April 8 this year as it became clear a return to the old rules may exclude Greece.
Huh? Suddenly the rules for membership have changed to accommodate the homeless drunk?  Indefinitely?  So instead of sending the drunk packing and maybe even penalizing him for predicting to be a useful member of society, this club changes it's rules? 

Essentially the rule change says that even if your credibility, austerity and ability to pay significantly worsened,  do not worry about it.  How does this possibly inspire confidence in the Euro? 

This is precisely the problem with fiat money.  A bunch of snoots get around the table and decide that they are going to fork over more paper money, paper money that is solely backed by faith and credit of the underlying countries even while this faith and credit is rapidly deteriorating. 

If this is not a pristine argument against fiat money, then I don't know what is.   Furthermore this opens up a nasty Pandora's box of trouble and trouble will be coming.  Portugal, Ireland, Italy and Spain will now be relieved to know that they can also continue to peddle junk because the other homeless drunk lowered the bar for everyone. 

Productive members of the European Union MUST exit and return to their original currency, because the Euro is rapidly turning into a laughing stock.  This laughing stock will be significantly overvalued causing significant inflation in all European countries and throwing off trade balances. 

The ECB has committed a great folly. 


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