fact we were told repeatedly that the Greece situation was solved just 12
months ago, the country is once again at the forefront of the ongoing crisis in
already thrown billions at this problem last year, this time around European
officials are actually considering REAL solutions, i.e. Greece leaving the
Euro-zone. Of course, as soon as these rumors surfaced, several Greek officials
(who never seem to be named) quickly responded to say the rumors are unfounded.
point it is clear that the Euro-zone will be restructured in the near future.
Whether or not it will change with Greece alone leaving the EU, or if we see
multiple players drop out, one thing is clear: the EU in its current form is
How we get
to this outcome remains to be seen. But the “Greece issue” serves as a perfect
illustration of the central issues plaguing the world financial system today.
that Greece’s entire GDP is less than $330 billion (about the same size as the
state of Massachusetts). The country also has a debt to GDP levels of over 100%
and deficit of around 12%.
words, it’s clear, plain as day that the country is broke. So why does Greece
matter so much to the EU?
is quite simple: derivatives and the interconnectedness of the global banking
well documented that Greece should never have been allowed to join the EU. The
only way it met the fiscal requirements was by using off balance sheet
derivatives (crafted by Goldman Sachs and pals naturally) to hide the true
state of its financial health.
once Greece entered the EU, its bonds quickly entered the toxic debt game of
“hot potato” amongst the EU banks. By the time the European crisis erupted last
year, German and French banks were on the hook for $65 billion and $82 billion
of Greece’s debt, respectively.
then that these more fiscally sound countries pushed to bail Greece out.
Failure to do so would mean a banking crisis in either country.
So banks got
the EU into this mess in the first place (Wall Street helped hide Greece’s true
debt loads to get Greece into the EU) and now banks are making sure that
European taxpayers pony up the cash for this dishonesty (German and French
banks are leaning on politicians to not allow Greece to collapse).
And so here
we are, with austerity measures and higher taxes occurring in Europe because of
bankers’ greed and dishonesty. Having realized that their politicians aren’t going
to do the right thing, the people are now openly expressing their disgust at
the ballot box (Angela Merkel’s party is getting slammed in Germany for
supporting the bailouts) and the streets (protests are occurring across
just a taste of what’s coming to the US.
everything happening in Europe right now (civil unrest, political turmoil,
currency crisis) is coming to the US’s shores in the future. We are running
similar debt-to-GDP ratios, deficits and our banking system is similarly laden
with worthless derivative garbage.
same upheaval happening in Europe will come to these shores. It’s only a matter
of time. Which is why the wise thing to do is prepare in advance of this. This
means getting some food, water, and bullion on hand. It also means considering
what one would do if the stock market came undone again.
When the REAL Crisis hits, it will be too late.
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