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Greek Bonds Slump As Austerity Backfires, Country Enters "Death Spiral", And The Violent End Game Approaches
Those patiently following the Greek Bond-Bund spread to its inevitable conclusion have been fully aware that the plan that Europe is betting its entire future on, is patently flawed: namely that austerity, by its definition does not, and will not work. In fact, instead of bringing stability, austerity will slowly but surely eat away at the economy of whatever country it is instituted in - in some cases slowly, in others, like Greece, very rapidly. Indeed, the Greek spread has now risen to levels last seen during the early May near-revolution in Athens, at well over 800 bps. And for the specific consequences of austerity, Germany's Spiegel has done a terrific summary of what it defines as a "death spiral" for the Mediterranean country: "Stores are closing, tax revenues are falling and unemployment has hit an unbelievable 70 percent in some places. Frustrated workers are threatening to strike back. A mixture of fear, hopelessness and anger is brewing in Greek society." Spiegel quotes a atypical Greek: ""If you take away my family's bread, I'll take you down -- the government needs to know that. And don't call us anarchists if that happens! We're heads of our families and we're desperate." All those who think violent strikes in the PIIGS are a thing of the past, we have news for you. The (pseudo) vacation season is over, and millions of workers are coming back. They may not have money, but they have lots of free time, lots of unemployment, and even more pent up anger. Things are about to get very heated once again, first in Greece, and soon after, everywhere else.
Spiegel summarizes the big picture for those who still don't get it:
The feast of the Assumption of Mary on Aug. 15 is the high point of summer in the Greek Orthodox world. Here in one of the country's many churches, believers pray to the Virgin for mercy, with many of them falling to their knees.
The newspaper Ta Nea has recommended that the Greek government adopt the very same approach -- the country's leaders have to hope that Mary comes up with a miracle to save Greece from a serious crisis, the paper writes. Without divine intervention, the newspaper suggested, it will be a difficult autumn for the Mediterranean state.
This dire prognosis comes even despite Athens' massive efforts to sort out the country's finances. The government's draconian austerity measures have managed to reduce the country's budget deficit by an almost unbelievable 39.7 percent, after previous governments had squandered tax money and falsified statistics for years. The measures have reduced government spending by a total of 10 percent, 4.5 percent more than the EU and International Monetary Fund (IMF) had required.
The problem is that the austerity measures have in the meantime affected every aspect of the country's economy. Purchasing power is dropping, consumption is taking a nosedive and the number of bankruptcies and unemployed are on the rise. The country's gross domestic product shrank by 1.5 percent in the second quarter of this year. Tax revenue, desperately needed in order to consolidate the national finances, has dropped off. A mixture of fear, hopelessness and anger is brewing in Greek society.
The specifics on how the economy is getting skewered:
Unemployment Rates of up to 70 Percent:
There's hardly a worker in the shipbuilding district of Perama who could still manage that. Unemployment in the city hovers between 60 and 70 percent, according to a study conducted by the University of Piraeus. While 77 percent of Greek shipping companies indicate they are satisfied with the quality of work done in Perama, nearly 50 percent still send their ships to be repaired in Turkey, Korea or China. Costs are too high in Greece, they say. The country, they argue, has too much bureaucracy and too many strikes, with labor disputes often delaying delivery times.
Perama is certainly an unusually extreme case. But the shipyards' decline provides a telling example of the Greek economy's increasing inability to compete. Barely any of the country's industries can keep up with international competition in terms of productivity, and experts expect the country's gross domestic product to fall by 4 percent over the course of the entire year. Germany, by way of comparison, is hoping for growth of up to 3 percent.
Sales Figures Dropping Everywhere:
A short jaunt through Athens' shopping streets reveals the scale of the decline. Fully a quarter of the store windows on Stadiou Street bear red signs reading "Enoikiazetai" -- for rent. The National Confederation of Hellenic Commerce (ESEE) calculates that 17 percent of all shops in Athens have had to file for bankruptcy.
Things aren't any better in the smaller towns. Chalkidona was, until just a few years ago, a hub for trucking traffic in the area around Thessaloniki. Two main streets, lined with fast food restaurants and stores catering to truckers, intersect in the small, dismal town. Maria Lialiambidou's house sits directly on the main trucking route. Rent from a pastry shop on the ground floor of the building used to provide her with €350 per month, an amount that helped considerably in supplementing her widow's pension of €320.
A sign on the other side of the street advertises "Sakis' Restaurant." The owner, Sakis, is still hanging on, with customers filling one or two of the restaurant's tables now and then. "There's really no work for me here anymore," says one Albanian employee, who goes by the name Eleni in Greece. "Many others have already gone back to Albania, where it's not any worse than here. We'll see when I have to go too."
A pervasive depression with no way out:
The entire country is in the grip of a depression. Everything seems to be going downhill. The spiral is continuing unabated, and there is no clear way out. The worse part, however, is the fact that hardly anyone still hopes that things will improve one day.
The country's unemployment rate makes this trend particularly clear. In 2009, it was 9.5 percent. This year it may rise to 12.1 percent and economists expect it to reach 14.3 percent in 2011. Those, though, are only the official numbers, which were provided by Angel Gurría, secretary general of the Organisation for Economic Co-operation and Development (OECD). The Greek trade union association GSEE considers those numbers far too optimistic. It considers 20 percent to be a more likely figure for 2011. This would put the unemployment rate as high as it was in 1960, when hundreds of thousands of Greeks were forced to emigrate. Meanwhile, purchasing power has fallen to its 1984 level, according to the GSEE.
And most dangerously, 'Things Are Starting to Simmer'
Menelaos Givalos, a professor of political science at Athens University, has appeared on television, warning viewers that the worst times are still to come. He predicts a large wave of layoffs starting in September, with "extreme social consequences."
"Everything is getting more expensive, I'm hardly earning any money, and then I'm supposed to pay more taxes to help save the country? How is that supposed to work?" asks Nikos Meletis, the shipbuilder. His friends, gathered in a small cafeteria on the pier in Perama, are gradually growing more vocal. They are all unemployed, desperate and angry at the politicians who got them into this mess. There is no sympathy here for any of the political parties and no longer any for the unions either.
"They only organize strikes to serve their own interests!" shouts one man, whose name is Panayiotis Peretridis. "The only thing that interests me anymore is my daily wage. A loaf of bread is my political party. I want to help my country -- give me work and I'll pay taxes! But our honor as first-class skilled workers, as heads of families, as Greeks, is being dragged through the dirt!"
"If you take away my family's bread, I'll take you down -- the government needs to know that," Meletis says. "And don't call us anarchists if that happens! We're heads of our families and we're desperate."
He predicts the situation will only become more heated. "Things are starting to simmer here," he says. "And at some point they're going to explode."
The experiment in saving Europe is coming to a close. Germany had its miracle run as exports surged courtesy of a sub 1.20 Euro, and are now contracting, with the Fed stepping back on the printer gas. And with the imminent resumption of the contraction, the revulsion at having bailed out Greece will return, and with it all the unpleasant xenophobic side effects. Europe needed to buy 3-6 months of breathing room to get its house in order. It got it, but the house is in ever worse place than before. And now it is time for the aftermath of the expiration of the sugar high. European CDS spreads are looking way too cheap all over again.
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...and Tough Guy will bring the chips!
So how many Greek tragedies does this make so far??
Do not consider painful what is good for you. - Euripides
Pain is good. Extreme pain is extremely good. - USMC
Pain is weakness leaving your body. - US Special Forces
I would like to see everyone who comments on the ZH forum in a room together. I would actually attend that convention.
We'd all have bags on our heads with cut out eyes. Or we would try to dress up like our avatars...I'd go. I am trying to meet one ZHer in the next week or so.
No pain, no gain - my f*^%ing high school football coach
"This is going to hurt me more than it will you" A typical quote just before the spanking.
This has already been priced into the markets...now we can proceed to Altucher's S&P 1,500 target and beyond.
Lived in Russia during the hyperinflation in the post soviet space - it was much much worse that anything these pips are complaining about. It might be all doom and gloom for now, but if they stay the course and fix their stinking socialistic economy then the new and improved Greece/Europe will be stronger than ever. Just give it a few years.
And Russia is a good example to follow?
Russia have some Oligachs to generate income by exporting some assets they acquired. Plus what was left of the USSR had fiscal union.
Greece has no easy export option and its being strangled by a currency that's making it uncompetitive.
They will default, their situation will ease and others will follow suit. Once Greece is a slum, they'll leave the Euro and begin to rebuild. Others will follow.
Germany will try to maintain the union with weak countries for as long as it can: would you spend $70k on an entry level 3 series BMW?
some Oligachs
Now that sounds to me like a Boston accent.
Not quite.
To play on a stereotype, the 'some' was an intentional, inoffensive, understatement.
Greece has *some* assets. Beautiful beaches and weather to draw the tourists (and their filthy lucre). Olive growing? Um... historical structures/places... more tourists. Maybe some fishing with all that coastline?
But yeah, they're not exactly blessed with a crapton of oil like those silly Arabs.
russia is loaded with natural resources
greece is loaded with goats
Goats are natural resources too. Renewable even.
And the men who love them!
Well, time to really tax that bourgeois 30% that's working !
Good to see you finally agree with us..
http://shareholdersunite.com/2010/07/04/keynesianism-zerohedge/
http://shareholdersunite.com/2010/08/12/zero-hedge-keynesian-diagnosis/
Now, what do you think is worse for public finances, austerity which brings negative growth and the serious risk of deflation (increasing the REAL value of public (and private) debt, or, well, just read Krugman: ["So how much we spend on supporting the economy in 2010 and 2011 is almost irrelevant to the fundamental budget picture."]
http://krugman.blogs.nytimes.com/2010/06/07/madmen-in-authority/
Neither? Default and start anew.
Default is inevitable anyway. Might as well do it and get it done with.
You do realize that stimulus has fiscal and monetary forms, right? Check on the growth of total "assets" at the ECB and get back to us.
;-)
yes, what would have happened without the ECB buying Greek bonds, tough question that..
What would have happened would have been the only right thing. Greece out of the failed Euro project with others quickly following. As Bass said yesterday "how often have you solved a problem by kicking it down the road."
"Tyler, have you seen BP drop over the last couple of days?"
Matt Simmons (RIP) knew what he was talking about. BP, and I don't give two shits about how much cash they are holding) has been toast since April 20, 2010. Buyers thought BP was comparable cheap (looking at only revenue) and believed these stories. IMHO, there is one major play that is certain: short BP. Major storms are brewing when taxpayers begin suing for loss of equity, then medical claims, environmental claims, criminally liability claims, etc. The people of the Gulf ARE NOT going to leave them alone. They were only deer headlighted for a brief time before regrouping. All of NOAA's people should be held criminally liable to, especially the "oil does not bio-accumulate bitch." I'm with Matt, short BP to f'ken zero, and I'm sending my 15% to the animal refuges in the area.
Oil is going to hit that canyon, kill the phytoplankton, finish the Gulf for 30-40 years, and wipe out the panhandles's chance of econmic life for a long, long time. Already, nice beach-front rental houses are worth 50% of what they were in March. With no revenue and higher county tax rates, do you really think these people are going to take it lying down? HELL NO they aren't. We are ready to fight back, TOGA style if need be.
Be careful swimming, especially if you have a heart condition.
:)
Mafia hitman?
Not me. Just an observation of the incidence of accidental death among people who've made statements that dismay certain PTB.
TOGA! TOGA!
Reboot time. Revolution required. There will be lynchings.
A man may learn wisdom even from a foe. - Aristophanes
A light pole for EVERY traitor !!
For those that may want to think about this, a traitor is a person that betrays the PEOPLE of this country not the Government.. Or other governments... Or other... people..
They need some more of Dr Ben's Helicopter Sauce
http://williambanzai7.blogspot.com/2010/08/dr-bens-helicopter-sauce.html
I would love to see artist's impression of Dr. Ben in grocery store. Better yet, his refrigerator.
man I hate this bubble shit
+
What people don't understand about Perama is that it is dominated by unions that exhibit deplorable behavior. They work one hour and then do nothing the rest of the day and expect to be paid. They shut down the ports for weeks at a time and strike at the drop of hat. All they look to do is line their own pockets (essentially stealing). The communist unions in Greece are in large part responsible for the current situation.
Why doesn't the Greek government reign them in?
Time to string up a few dozen union bosses.
+1. People are essentially greedy, lazy and selfish. One should not for one moment forget that people join such things as unions for their own, personal, interest... And that brings me to greed, this word that has been so misinterpreted through the ages. Greed is not characterized by someone who works for profit, greed is something else. Greed is wanting more when giving less in return - like the people you describe in Perama, like the people who join the unions for their own self interest. I miss capitalism. R.I.P.
"people join such things as unions for their own, personal, greed"
It can't possible be that unions serve a purpose, and that not all people want to be exploited.
Ah but there is the rub. I personally have no problem with unions, it does give a voice to workers. However unions tend to force their membership on all employees, which is morally wrong. Also the unions tend to over step their bounds and in effect drive away wages. Unions in principal are fine, in practice it usually results in the union workers being uncompetitive in the global market and soon to be unemployed. So lets not blame the unions, but let us also not blame the corps who take their business away from them.
Unions once had their proper place. But now are over-done militants just like feminism and political correctness. Of course you cannot outlaw them, corporations would just go back to slave-type labor.
+1 on the corporate slave concept.
BTDT
living it again.
Bleed the taxpayer dry and in the US, elect Democrats.
That may well be, but exploited they are. Big time.
It depends on your viewpoint. Let's not kid ourselves, maybe the large multinational corporations "exploit" their workers - and definately so in a lot of developing countries, but when it comes to the thousands of small to medium sized businesses in the western world, there is no doubt who has the power, the unions. I'm not saying they are useless, far from it, I'm just saying their large influence in the western world let's their members get greedier by my definition. Is it wrong to say that at least, healthy human beings have to work longer and harder in poor economic times - I do not think so. But why listen to me, we are moving toward socialism aren't we, I'll be shot in the coming years for expressing such opinions anyways. So fuck it.
Socialism always collapses when the money runs out. Guess what? We are out of money.
Killed by comfort and the debt on the tenth credit card. Will we finally figure out that we can't spend money we don't have... I'll believe it when Bernanke and Geithner get hanged by their balls.
Ouch!
"Bernanke and Geithner get hanged by their balls."
The ones held in trust by their puppet masters? When the banksters squeeze, you can see the discomfort on their faces.
Don't worry, they'll make more...
I total agree. My parents are from Greece and I've been telling my relatives there for years that all this is going to come back and bite them in the ass. Although I didn't think this soon.
Until the riot dog appears it can't be too serious.
Well, how about this. Everbody here refuses to pay their property taxes and let the tax liens foreclose out the mortgage liens. Most of the mortgages here are from RF, BXS, TRMK, etc. and that will be the final straw to break them. We form a "tax sale' buying club that bids on the tax sales, and returns the property back to its rightful owners.
I like the concept. Most first mortgage lenders escrow for taxes and insurance.
Well, how about this. Everbody here refuses to pay their property taxes and let the tax liens foreclose out the mortgage liens. Most of the mortgages here are from RF, BXS, TRMK, etc. and that will be the final straw to break them. We form a "tax sale' buying club that bids on the tax sales, and returns the property back to its rightful owners.
Riot Dog rocks. he'll be along shortly.
We may have to send the Greeks a boat load of corn and beans.
by design to centralise fiscal powers ... Bildergerger Merkel et al will insist upon ECB fiscal control in exchange for printing more debt.
It aint just the US middle class the elites are attacking.
"Everything is getting more expensive, I'm hardly earning any money, and then I'm supposed to pay more taxes to help save the country? How is that supposed to work?" asks Nikos M
Essence of The Double Whammy where what you're worth deflates at the same time as what you need inflates.
Greece is only the first because it was on the extreme end of a gradient of economic risk which encompasses most of the developed world, particularly in the Western Hemisphere. Take note, yes you CAN have a deflationary depression at the same time as inflation in the cost of living and doing business. UK CPI today can serve yet another illustration. Of course the implication is that Central Bank policy is rendered not only helpless but potentially toxic to the economy as they have no tools in the arsenal to deal with this predicament.
This puts Greece and all countries near it on the risk spectrum in danger of devastating political instability and not just for a day or a week.
Don't tell douchinger and the precious FRN crowd that.
A Greek Christmas or a Greek October Surprise?
look what happens when the socialist debt society runs out of other people's money. nonetheless, i hope the greek workers rise up to destroy their bankster enslavers and that the few who survive mend their bankster ways meaning no more socialism and no more debt driven government.
debt is inherently unstable. owe no man nothing.
Only the dead have seen the end of war. - Plato
Well at least the European bankers are sleeping all nice an' cosy thanks to the IMF bailout. And you know there is nothing worse for a country's economy than a banker in distress (not even ALL the rest of the citizens out of work)!
No it's the bankers, debt merchants, public employees and Greek politicians who are sleeping on pins and needles tonight, not knowing if those income streams, taxes, and debt service from the deadbeat masses will be coming in tomorrow. It is just so difficult sitting around all day, wondering, if the payments will continue, or if tomorrow they might have to sell one of the Bentleys to a traveling American banker. <sigh>
Get back to work you deadbeats.. the debt must be serviced!
I think those of us in the U.S. should take this story, change the dateline to 2012, exchange the word "Greek" for "American", and you may have a pretty accurate story of what's coming our way shortly.
I completely agree.
Wonder what gold and silver is going for on the streets of Greece?
I detect some intellectual dishonesty in this post. ZH and many posters here have ridiculed the Keynesian spending spree previously engaged in by the EU and ECB and which currently is still in vogue in the US arguing the correct solution is to cut spending to balance the budget and pay down debt. Yet here, the EU in general, and Greece in particular, have embraced austerity to bring their budget in line but are castigated for the economic crisis which will ensue as full blown deflation hits.
So which is it? Deficit spend until the crisis is over or invoke austerity measures to curb government debt?
Or does ZH not really have an opinion but prefer to just criticize?
+ one printing press! I was about to pose the same question myself. If neither austerity nor stimulus work, what are we left with, anarchy?
The other option is default and deflation. Debtors walk away and start over. Creditors get wiped out but they have any assets they were wise enough to get as collateral on their loans.
What is this austerity or anarchy shit ? This is the same scare tactic used by Paulson and Bernanke when they extorted $700 Billion from the Congress and taxpayer.. they will be tanks in the streets !
No, there will be creditors who get wiped out, but the world doesn't end. The world might end if the sovereign blows up though, which is the direction the bankers have led us in.
++
Ummm.. Your bad for business.. :)
Heh, not as bad as the business when the US Government sends the military home because it can't pay their wages. State and local police going home to protect their families.. same thing.
Yes.. that's the business i'm talking about.
My sarcasm just doesn't work sometimes.
Exactly. Just like all those GM bondholders. They didn't riot so why should anyone else.
If you stop kneejerk cheerleading, you would realize there are other options. It's like politics: pick a vetted candidate from team A, or another vetted candidate from team B. There are other options than austerity or deficits. Don't fall for the false dichotomy. Another option is to default, and start again on a sound foundation, without debt or internal money printing.
Isn't the U.S. just defaulting via the printing press?
I fail to see how either option is less painful, or a more prudent path. Why not "kick the can" as long as we can? Will deflation be any more attractive than hyperinflation and default? I suppose deflation is the preferred route for the rich, but the middle and lower class are screwed either way.
I don't want to answer for anyone but myself. The essence of the argument for me is that we have passed the point of no return - where neither stimulus nor austerity work. We are painted into a corner. Stimulus merely prolongs the structural inefficiencies of an economy, and in fact makes them worse. Austerity lowers economic output in the short term and therefore makes debt service impossible.
Like the movie WarGames, there is no way to win. Well, the only way is to not play. Once governments have spent more then they should have, for decades, blown asset bubbles, encouraged structural inefficiencies, allowed unproductive industries like FIRE to take over an economy, etc. - then there is no easy way out. Engaged in useless foreign wars, not produced energy independence, etc. Created vast swaths of citizens that are no longer self-sufficient in order to win votes and keep people down. Created entrenched politicians that answer only to their wealthiest corporations, etc.
We don't have capitalism, and therefore the system will have to sadly reset in order to hopefully gain some honesty. I don't think people here welcome the pain, but believe it will happen irregardless. Austerity v. stimulus is choice of how it will end. At least austerity can argue that it is starting down the intellectually honest path, where stimulus tries to create another false dawn.
And lastly, the Greek bailout was intellectually dishonest. The EU countries were protecting their own banks, not the Greek citizens. Greek will default eventually, so this current round of austerity is merely a distraction offered by the IMF/EU/ECB.
Intellectual dishonesty .... I am not so sure though sound bite prejudice is common here.
Keynes was about saving up reserves in the good times to cover some deficit spending in the bad times.
The Greeks did a massive deficit spend in the GOOD times so this is less the influence of Keynes and more the influence of Gordon Brown and others.
The Greeks have embraced austerity but it is little and late. IMHO their momentum was going to carry them over the edge anyway!
The answer is simple - the problem can not be fixed. Although to your point, Keynesian fiscal stimulus will only dig a bigger (and certainly unrepayable) debt hole, while monetary stimulus will only bring the hyperinflationary tipping point closer. Either option is irrelevant. We leave the long-essay form posturing and policymandering to the other websites.
Now that... is just un-American.
And to your point, austerity first and default later are the only options left to Greece - or perhaps I should say they are the only wise options. We should applaud them as we may be doing the same thing (if our leaders wise up or circumstances force their hand) in a few years. The difference is we are digging the hole deeper rather than embracing the inevitable "Mr. Smith." We will never embrace the inevitable because there is no political will to allow deflation to rebalance the structural imbalances.
The road they are traveling is a hard one, but the first ones on it will be the first ones to get through it. It will not look pretty to us (or to them) sitting here in our Keynesian dens, smoking our Krugman pipes and watching our Benanke TVs, but it is what they have to do and it is what we will have to do. I applaud them for taking the bitter pill now.
Watch the EU bail them out again and make me eat my words. *&#@*%&*
another day, another rally missed at ZH. lol
Where did you make money today?
Oh, my PCLN and NFLX shorts did quite well thank you.
Well make up your mind, dude. Are you for money printing or responsible fiscal policy?
everything IS negative and spun negative here. that is the ZH AUDIENCE NOW
Then don't bother reading or posting? Troll.
Why? Prefer an echo chamber to a debate?
everything IS negative and spun negative here. that is the ZH AUDIENCE NOW
And northward, there are cracks in the curtain:
Britain has sunk into a pit of debt which is five times deeper than previously feared, with the country now owing the equivalent of £200,000 per household.
Instead of the £1 trillion reading normally presented as the nation's debt, the UK is in the red by closer to £5 trillion, figures from the Office for National Statistics reveal.
The oft-quoted £903bn figure for public sector net debt is a borrowing sum calculated by the ONS according to international standards.
But a broader set of ONS figures taking in Government liabilities show unfunded public service pension obligations could add another £1.2 trillion and liabilities in unfunded state pension schemes a further £1.35 trillion.
The Government's stakes in RBS (LSE: RBS.L - news) and Lloyds account for an extra £1.5 trillion - leaving a debt mountain of £4.953 trillion once public sector net debt is added in.
The sum is almost four times the size of the UK's total gross domestic product in 2009.
Aileen Simkins, director of economic, labour and social analysis at the ONS, told Jeff Randall Live the data represented a "total balance sheet, looking at a wide range of liabilities".
As such they paint a more realistic - and starker - picture of the UK finances.
Mike Warburton, tax partner at accountants Grant Thornton, told Jeff Randall Live: "If I told you you're mortgage had just gone up by £200,000 you'd have a bit of a shock - but for the average household that is essentially what we're looking at in terms of the overall debt once you've taken it all into account."
http://uk.finance.yahoo.com/news/a-lot-worse-uk-mired-in-5-trillion-of-d...
You can write off all that bad debt from the profits, right? Right? Hello, anyone home?
Help, I've fallen and I can't get up.
nobody gives a sh!t about cork the place is a dump. If those dumb indebted scum can't handle the massive amounts of debt they took out tough sh1t. Nobody forced them to take out the debt, it's a pity the banks aren't foreclosing on them and forcing them onto the streets. Bank of Ireland has only foreclosed on 6 properties over the course of this crisis. Would teach them all a valuable lesson. All of this debate about writing off debts and starting afresh avoids one point, greed drove all of the ret@rds to leverage up to the potential upside and writing off the debts will avoid giving the inhabitants of the PIIGS valuable lessons. Let them languish under the debts they have accumulated.
it don't work that way, earl
blame the banks, they actually knew what they were doing
and that makes them at fault
restructuring is the only solution
and it must include the people's debts
or it is just another raping worthy of pitchfork revolt
No. People must take personal responsibility. They are not puppies that need to be coddled. They are adults that need to learn that there are consequences for "irrational exuberance". As Murchadh said, no one forced anyone to buy a house and to take out loans they could not afford. Are banks culpable for giving loans to everyone with a pulse? Certainly. But that doesn't let the homebuyers themselves off the hook.
Reneging on an agreement to pay a debt is akin to stealing. I don't know about you, but that's against my moral code. If you disagree, well then, society cllaps, head esplode.
This is stupid.
the MONEY SYSTEM we operate in represents a mathematically unpayable debt. The system is in default the minute it's created.
Money gets lent into existence. But this loan is ONLY the principal. The interest is not created. Therefore, at any given time, a creditmoney system lacks sufficient money to extinguish all liabilities. The money in existence now in FRNs represents ONLY the principal balance. Interest on that money does not exist and cannot exist without MORE borrowing.
Do you GET IT? Anyone who uses a FRN is participating in the same type of ponzi. The system REQUIRES people to do exactly what the Greeks did and Irish did and Americans did, and that's to GROW DEBT. If they did not, exactly what is happening will happen, a deflationary collapse of the money supply.
Ya know, I don't think it's set in stone that one must spend irresponsibly and put oneself into debt that one cannot possibly repay. This is basically what Greece has done on a macro scale and what we in the US are also doing.
But it *can* change. We could stop spending money we don't have. We could balance the budget. We could be responsible and stop passing on this debt burden to our children and their children. It's just a question of will which, apparently, is lacking at the moment (and has been for some time!).
You need to study what Trav said. It is the key to everything happening right now. It is blatantly obvious you:
1. Did not understand him.
2. Are deliberately ignoring him.
No one can give it to you any clearer than he did in that post.
Murchadh - its not easy being a Fucking Langer , is it ?
Greece isn't the worst place on Earth to be poor.
In fact, I'd much rather prefer to experience austerity in Greece then let's say Atlanta, Georgia or South Central LA, California.
Cheap shots you think?
The Greek are civilized people. There haven't been wide spread lootings, rape and killings which will inevitably hit every major US city with a large AA population base when the harsh reality of 'no mo free money' hits.
I agree, those Armenian-Americans can get awful cross when they don't get their shish kebabs! (not to mention how *I* get when I don't get my shish kebabs!)
Related to the above discussion, Kyle Bass on CNBC today:
http://www.damego.com/kyle-bass-interview-does-recommend-stocks/2
Sorry I don't have a direct link to CNBC... rarely go there.
austerity isn't crushing them
it's the lack of any austerity for years and years that leaves them bankrupt
it is bankruptcy that is killing them
In addition, it is striking that Greek shipowners decry paying high wages to strike-prone fellow Greeks. Even more basic than austerity is competence. It would appear that Greece doesn't have it's sh*t together. Meanwhile Germany does and exports to the world despite much higher wage rates than prevail in Greece.
Competence, bitchez!
"Everybody Love Everybody!"
-Jackie Moon
so here's SOME unexpected good news: Greek national basketball beat the Canadian national basketball team with a score of ... get this ... 123-49!!! Somebody actually commented it's a record score ... go Greece!!!
beware of Greeks bearing pitchforks
Austerity is merely code for NOW IT'S TIME TO PAY US THE INTEREST.
Look, a debtmoney system creates $100 at its outset. It's owed $100 + interest. The interest doesn't exist. Deflation is built into it. Either you pay the principal back and default on the interest, in which case banksterman takes some of your property, or else you roll the loan and end up paying all the principal back as coupon payments and end up defaulting on the whole fucking money supply in which case banksterman takes everything.
All for the privilege to have money provided by banksterman. This is the ESSENCE of the pernicious evil known as banking and Central Banking. This is why the banking clan gets run out of every country they've ever congregated in.
All nations must by fiat eliminate their banks and central banks and go to Real Bills, production-backed currency. Or else they will all suffer this same fate. The money to repay the interest owed at any given point in time does not exist! It is physically impossible to extinguish the debt.
you forgot to add - "Its the debt Bitchez"
Credit Cards are counterfeit money printed by banks.
I'm buying into the GM IPO simply because my Outhouse needs new wallpaper
Keep preachin' it Trav, keep preaching.
This scenario is what is in America's future too! Too many keep saying, "it can't happen here!" It CAN happen here!
We can not defy the laws of sound economics forever!
Of course they are having problems because they cut spending. That's deflation for you, no one said it was going to be pretty but that's what you have to go through in order to reset. Unfortunately the keynesians are using this as an opportunity to rip on the sane people who are in favor of cutting spending.
So Ann Margaret's NOT coming?
Here in Greece the Media propaganda say that everything is ok.
That there is no problem in Greece. Of course there is no mention for the spreads.
We enjoy our PM's holidays.
What a nice Socialist Country Greece is.
There are certainly a lot of details like that to take into consideration.I read and understand the entire article and I really enjoyed it to be honest.
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