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Sun Setting on Greece and Eurozone?
- American Express
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- Credit Crisis
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- default
- European Union
- Eurozone
- Fail
- General Electric
- George Papandreou
- Greece
- Iceland
- International Monetary Fund
- Investment Grade
- Ireland
- Italy
- Japan
- Meltdown
- Middle East
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- ratings
- Raymond James
- Sovereign Debt
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- SWIFT
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ekathimerini reports, Papandreou optimistic following EU summit:
Prime
Minister George Papandreou on Friday lauded his government’s efforts
to dig the debt-ridden country out of serious economic problems as a
meeting of European Union leaders failed to conclude with the agreement
of a comprehensive solution to the crisis in the eurozone.
Speaking
at the end of a two-day summit in Brussels, Papandreou said that this
week’s gathering and the emergency meeting of eurozone leaders earlier
this month both highlighted that Greece is on the right track in
tackling its mammoth deficit.
“We made big sacrifices,” he said.
“The efforts are today recognized by all European partners. The efforts
have delivered results. We need time, but we are committed to put
Greece on a new path, on a modern path.”
Papandreou said that EU
leaders recognized his government’s efforts by rubber-stamping a deal
to extend the repayment period for Greece’s 110-billion-euro emergency
loan package with the EU and the International Monetary Fund from three
to 7.5 and lower the interest rate to 4.2 from 5.2 percent.
“We
were not done any favors,” he told journalists. “The decision was
reached after solid bargaining. We took some very difficult decisions
so we could make our economy viable again… but now we can look to the
future with greater hope. Our strategy has been vindicated.”
Meanwhile,
European leaders failed to produce the much-anticipated anti-crisis
package and delayed until June a final decision on increasing the
27-member bloc’s temporary bailout facility, the European Financial
Stability Facility.
The Brussels summit was clouded by Portugal’s
financial troubles. Portuguese Prime Minister Jose Socrates quit on
Thursday after the country’s parliament rejected austerity measures
aimed at staving off a bailout.
There were also concerns about the
state of Irish banks, which prompted new Prime Minister Enda Kenny to
put off renegotiating the terms of his country’s 85-billion-euro
bailout.
Greece and Ireland were warned by German Chancellor
Angela Merkel that they both still had a lot of work ahead of them. “The
euro has survived a critical test but there is lots of homework to be
done,” she said.
“Member states face many years of work to atone for past sins,” she said.
I wish I can tell you that Greece is rising from the ashes but it's not.
The Greek economy is being put through the wringer and all these
austerity measures have caused a lot of pain. Austerity measures are
going to fail in Greece, they're going to fail in Ireland and they're
going to fail spectacularly in the UK. Ireland is probably looking at
Iceland and thinking about joining them.
What will additional austerity do? It will create more resentment in the
periphery and pretty much kill these economies. After they collapse,
growth will be easy. But don't worry, they won't collapse. Someone was
asking me if they should buy Greek bonds and the National Bank of
Greece. NBG just closed a difficult 2010 and is preparing for a perilous 2011. If you believe this is the bottom for the Greek economy and that Turkey will continue doing well, buy NBG and hold it.
As for Greek bonds, I read an interesting comment from Steve Schaefer of Forbes, Why Euro Debt Matters More Than Oil Prices Or Chinese Inflation:
Mike Mutti, Raymond James’ senior credit strategist, keeps a screen with five-year credit default swaps
for European sovereign debt open at all times. That’s because more
than any other current crisis facing the world – from the devastating
earthquake in Japan to the turmoil in Libya and the Middle East – a
severe escalation in Europe’s credit crisis has the capacity to cause a
repeat of the 2008 meltdown.
Since the Greek debt crisis erupted
nearly a year ago, new issues have cropped up in other peripheral
countries (commonly, if not politically correctly, referred to as the
PIIGS) every few months. You can almost set your watch to it. Though
the disaster in Japan and spike in oil prices put the European debt
issue on the backburner for a time, it flared up again this week after
Portugal’s Parliament rejected an austerity plan, swiftly followed by downgrades to the country’s sovereign debt ratings.
Mutti
acknowledges the challenges facing Portugal, Ireland and Greece, the
three PIIGS in the most precarious shape, but believes the bailouts of
those nations are essentially priced into the market. Fears crop up
every few months, “then the fire is put out when European leaders put
another hundred billion euros aside,” he says by way of explaining the
ebb and flow in credit markets.
We’ve seen this movie before, he
adds, pointing to previous surges in the price of insuring against
default on European sovereign debt. What’s notable though, is that
while previous spikes in credit default swap prices on Greek,
Portuguese and Irish debt were accompanied by similar increases in
corporate bond yields, thus far in 2011 increases in Greek CDS have not
interrupted tightening in spreads of yields on investment grade
corporate bonds to U.S. Treasuries. Of course, as Mutti is quick to
point out, that all changes in a hurry if the credit plight of Spain or
Italy worsens. (See “Europe’s Debt Crisis: Expect More Flare-Ups, But Breakup Unlikely.”)
(Source: Bloomberg, Citi Indexes, Raymond James)
Mutti
doesn’t put too much stock into the bond yields at European sovereign
debt auctions. For all the talk about this or that threshold that marks
the breaking point for a country like Portugal, the CDS market tells
the real story. “I’m a credit derivatives guy,” says the longtime Bear
Stearns veteran who joined Raymond James in 2009. “It’s a swift market
where people express their opinion on the likelihood of default.” Sure,
you could surmise how risky a sovereign default is by looking at bond
yields, “but CDS actually has ‘default’ right in the name of the
product,” Mutti says.
A chart showing
5-year CDS on European debt clearly shows that while the PIIGS are
grouped together, the investment community has delineated the fivesome
into three distinct leagues. Mutti shared the chart below, which shows
the difference in risk traders see in Greek, Irish and Portuguese debt,
when compared with that of Italy and Spain.
(Source: Bloomberg, Raymond James)
If
Italian or Spanish CDS rise into the 400 basis point neighborhood
currently occupied by Ireland and Portugal, it won’t be easily solved by
tossing another hundred billion euro at the problem.
To USAA
portfolio manager Arnold Espe, who also believes a European sovereign
default is the biggest risk facing the global market, government debt
is not an enticing place to be. Owning
Greek bonds at current yields is “ridiculous,” he says, particularly
when he can buy corporate credits with similar yields and less risk,
such as senior secured bonds of TXU (now called Energy Future Holdings)
at 82 cents on the dollar with a 12% yield. Though the energy
giant is struggling under its heavy debt burden, Espe figures he will
still get around 100 cents on the dollar in a bankruptcy filing.
Another
area he sees opportunity: subordinated debt in financial institutions.
Issued by a wide variety of U.S. banks and insurers, as well as other
finance-related firms like General Electric and American Express, some of the bonds offer junk-like yields of 6-7% in return for being a bit lower in the capital structure.
Of
course, Europe creates a risk there as well. Unlike other situations
unfolding around the world – the aforementioned issues in Japan and the
Middle East, but also inflation concerns in emerging markets –
Europe’s debt crisis could have a profound impact on the banking system
that holds the sovereign bonds.
Just like the crisis of 2008, a
major European default could result in a flight from stocks, bonds and
any other hint of risk , and lead firms to crack down on
counterparties. If things were to escalate to that point, Espe suggests
the only port in the storm could once again be U.S. Treasuries, a
trade that would get crowded awfully quickly.
Are
we heading towards a "major European default"? Are macro funds shorting
the euro? Is owning Greek debt "ridiculous"? Of course not. Europe
isn't going to collapse and if you think it is, you're going to be
waiting forever. Europeans drag their feet but they're not dumb enough
to let eurozone collapse. As for Greek bonds, some pretty big sovereign
wealth funds, like Norway, own Greek bonds and the FT recently reported on EU debt swaps stating that hedge funds have been buyers of Greek debt, rather than CDS, and the widening in spreads was instead attributed to panic protection buying by overexposed banks.
But
I know people prefer jumping on the "Eurozone is doomed" bandwagon
thinking that Greece and other periphery economies will implode. I'm
not buying this drama. Let me end by wishing my fellow Greeks everywhere
a Happy Greek Independence Day.
There's one thing you should know about us Greeks. We're warriors, it's
in our DNA. We simply never give up. So let the speculators bet against
Greece. I know that no matter what happens, Greeks will survive and
get passed it just like we have countless times in the past.
»
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Liam Halligan says it much better than I can in this article,he cuts out the half truths and plain misleading statements surrounding the countrys REAL financial position and says what it actually is, and it ain't pretty:
http://www.telegraph.co.uk/finance/comment/liamhalligan/8408664/Britains-leaders-should-come-clean-on-the-true-depth-of-the-fiscal-crisis.html
Nice article which reframes the debate, or at least putting the debt into a context which can give it meaning that even the 'intelligence' of the Public can comprehend.
Toby Bray, the editor of MoneyWeek sent out solicitation emails last week for magazine subscriptions. Part of Bray's message was a warning to get out of the FTSE100 immediately (may have been a bit premature after the runnup last several days), get out of way overpriced res real estate, get out of the Euro and Gilts.
Bray is unequivocal in the board's view that when the selling comes it will be coming hard and fast.
I guess the $64mm question is how long can the central banks float the boats.
You in the US need to know that no matter how fubarred you think your economy is,it is in so much better shape than the UK's it defy's description.The UK is up shit creek without the proverbial paddle,and what gets my goat is all the misinformed twaddle about austerity in the UK,because I can't see any of it.The government is NOT repeat NOT cutting spending,it is going to go up every year,if the government were to stop supporting the housing market and the welfare state via bailouts to the banks and zero interest rates,the UK economy would completely collapse since the housing market virtually IS the UK economy,so many people rely on it.Read how the government talks tough to the press and media about austerity and cuts and then read the following to see how spending and borrowing are to continue ever upwards,and this is a UK Treasury report,not some garbled ramblings of a paid hack:
http://www.hm-treasury.gov.uk/spend_sr2010_speech.htm
We're warriors in our DNA... Hahahahaha! Grease lied to get into the EU, can't pay its bills, but you haetc.,; the jury is still out on the quality of the DNA. I am sure they will take that into consideration.
They knew full well what Greece and Greeks were about. This was about getting ahold of their money supply to bitch-slap them. Greeks would have never succumbed unless something like this happened. They were making a joke of the banking system.
So far, the only nation to repel the banks was Iceland. I have never heard about them on the news since that time. If you remember, the first thing that happened when the crisis was identified in Iceland was a series of recommendations to join the Euro.
Once Europe is consolidated, look for earth-shattering events in north and south America for some consolidation. How exactly this will happen is above my pay grade but the overall idea and timeline is sound.
"So far, the only nation to repel the banks was Iceland. I have never heard about them on the news since that time."
Really? Iceland seems to be doing just fine:
http://www.icenews.is/index.php/2011/03/27/icelandic-krona-exchange-rates-reflect-recovery-of-national-economy/
As for 'bitch-slapping" Greeks and other periphery economies, this could backfire in a big way. Again, reforms are needed but if you push the limits of austerity too far, all you'll get is social revolutions everywhere.
--"borrowing money from other EU countries has a limit."--- what can't go on forever, doesn't.
The only way Greece doesn't default is that all sovereign debt becomes the responsibility of a collective EU, and assigned on ability to pay. I don't think there is a snowball's chance in hell of the Germans agreeing to this. Greece can't pay the debt it owes, and will soon have to balance a budget one way or another- borrowing money from other EU countries has a limit.
You are a protagonist and a fighter, Leo. Just look at the angst you can draw out. Your posts get my vote.
Leo's like Alexander the Great, except straight.
What ever happened to to the basic formula you reap what you sow?
Greece is now reaping what it sowed, period! So until they confess
and repent for their dismal practices and so callled democratic ways
nothing is going to change. period! sounds a bit like America doesnt it?
UK austerity is going to be a spectacular success compared to the US and others, because they became serious about living within their means prior to SHTF.
Keynesian morons point to declining GDP in the UK and say "look, austerity is killing them!"
Meanwhile, 10% of US GDP is borrowed (ie pulled ahead) to produce growth of 3%.
We only have a moderate, shrinking amount of balance sheet to burn through. Go ahead and chart GDP excluding federal deficit spending, and/or chart our national wealth including the national debt and unfunded liabilities. Clearly, we are fucked, becoming moreso every day.
UK will win this race.
Actually we didn't. Until last year you could regularly still see people running around waving credit cards, with a sense of gleeful ignorance.
The shit didn't really hit until this year and the transformation is drastic. Most in the UK are paid monthly and apart from central London (where affluence just is, always) High Streets and commercial centres are slow until that final weekend of the month when the paycheck hits.
Personal bankruptcies hit a record high from the previous record in 2006 last year and I would entirely unsurprised if that didn't happen again this year. Pubs and restaurants (sure indicators of disposable cash and prosperity) are closing left and right and unlike 4/5 years ago it's not because the land is more valuable as a development of box sized (luxury) apartments with one bedroom and a nominal fee £250,000 or so.
The UK isn't being killed by austerity you're right, it is being killed by a severe contraction in credit, taxation and fuel costs.
We won't win any race as we will quite possibly be the first developed nation in the world to demonstrate how a country can grind to a halt when rising fuel prices become untenable. Fuel in the UK is now safely over $9 a gallon and steadily rising, so what I'm saying is not idle exaggeration.
The evidence I'm providing is anecdotal obviously, but then a statistic is something that can be manipulated or outright fabricated, objective experience is more difficult to fake.
I don't have any opinions on the author of the original piece, but the fact he comes down to slog it out with everyone in the comments is laudable.
I liked your post - good to hear whats really going on there.
But i'd add - your pubs are also shutting down because the recent socialist government doubled the muslim population in the last decade.
And the uk is a rich, stupid country where waste is endemic. Austerity? they could balance the budget in a flash but their holier than thou arrogance still has them handing out welfare to anyone, healthcare for anyone - indians shove their sick grannies on flights to the uk for kidney transplants etc etc.
UK is going down badly, its a shame, i got my ancestors medals from the british army going back to the crimea. makes you feel an attachment for the place but you get the government you deserve and brits have been dumb and dumber.
Maybe inside London itself you could blame a rising population of Muslims (although I'm loathe to), but I live in a moderately affluent part of London where a burka is something you see on the TV and I'm still seeing bars and pubs dropping with alarming regularity.
Our national healthcare is a joke along with our social security policies, but blaming immigrants doesn't work, it's mismanagement and disinterest by those with the power to restructure.
Also we actually we don't get the government we deserve, most don't. In a two party system where both parties are too busy fleecing taxpayers for second homes and nepotism is alive and well, you're fucked either way.
Glad you enjoyed the post though.
i used 2 work in the nhs - its sad but free health care for all is an unaffordable fantasy - within my first few shifts as an intern in manchester royal infirmaryi got the sinking feeling that the nhs wasn't about helping sweet old ladies with broken hips... more patching up junkies and helping pregnant asylum seekers with their 'rights' while they openly laughed in your face telling how they would outbreed the 'kuffar'
i left.
best move i ever made
Quickest way to patch the NHS is place a percentage fee (even a small one) on any GP visits or non-essential surgery. Place a higher fee on any visits to the A&E that aren't really requiring emergency action.
As for the move, I'm with you. I'm out of here in August.
Nice one.
the first 6 months is the toughest - miss the beer, friends erm, the beer....
then you won't look back.
its the way of things .. the uk is a transit lounge although keeping mobile is probably going to be a useful tool in the future.
Friends have all mostly moved themselves already, so I'll be moving on with narry a look back.
Mobile is always good. Right along with credit agreements that can't be enforced internationally :)
The UK's in a better shape in some ways than the US:
The UK borrows £122bn out of a £710bn budget. The US borrows $1.6tn out of a $3.8tn budget.
The average bond maturity in the UK is 12-13 years. The average bond maturity in the US is 4-5 years.
However,
The total debt load (public+private) of the UK is 480% of GDP. The total debt load (public+private) of the US is 360% of GDP.
However^2,
The US GDP is calculated using made up statistics such as imputations and hedonics. If you were to take these away, the US debt/GDP load would surpass that of the UK rather easily.
So, is that the same as get long GBP/USD before the market figures out the real price of the Pound?
Should I dig out my old drachmas?
I find it strange that zero edge has some articles like this one which are so pro big government.
Austerity in Europe means only one thing. decreasing government size.
To do this social welfare has to go down, public servants salaries have to go down and generally all government expenditure has to be cut. What is actually being done wrong is the tax raises.
In Portugal, as an example, every employee pays 35% of their salary in social welfare contributions, and then income tax. On average 50% of the income is killed at birth. Then when you consider consumption taxes and all kinds of indirect taxes people really have nothing left.
Government has to decrease size or it will exterminate the people. Austerity at least contributes somewhat to that goal.
I like the mix of articles I see on Zero Hedge, it has been fun to learn the leanings of different contributors. It is great to see Leo respond to posts, moreso then other contributors do.
Good Luck All...
I agree.
Leo & Bruce Krasting both do a great job of responding to objective criticism (subjective criticism, too, now that I think about it) of their articles and analyses.
it's just Leo the lefty
Leo the Lefty? Not at all! I don't believe in socialism, communism, or Marxism. Far from it. But I don't believe in this bullshit that so many right-wing zealots here believe, namely, that laissez-faire capitalism will cure all social ills and that markets always clear in some fictitious state. Markets don't necessarily need more regulation, but they need smart regulations and smart regulators or else they're always going to be suject to abuse.
You have just insulted every freedom-loving Greek the world over. You have wished them Happy Independence day when anyone with half a brain can realize the very topic you discussed was about transferring power to some distant European capital, further reducing their ability to make choices and shape their futures.
I'll be the first to say that the Greeks literally screwed everything up and are probably the most deserving of their recent reductions in freedom and autonomy.
I would have far more respect for the EU and all others invovled if they just came out and spoke the truth rather than increasing the size of the container so as to hold more debt based on some completely fictitious formulas that are either completely ignored or strictly adhered to based on the various self-serving actions of our money masters.
The sun will rise and set when and where the money masters see fit.
LOL! I love when people write articles and fail to include any relevant facts to support their claims. It would be nice if you backed up your claim by using facts about how much the budget has been cut; or how much the pension costs have been cut; or how much has debt service costs been reduced; or how much has the debt been paid down; or how much has local budgets for cities been cut. I could go on, but I fear the gap between a factual discussion and wishful thinking would only grow wider.
Official stats from Greece:
http://www.statistics.gr/portal/page/portal/ESYE
One problem with the deficit is that while their economy contracts, so do gvt revenues. They have cut pension benefits and need to to cut more in the public sector but no matter how much they cut, if gvt revenues fall, the deficit will widen. That's the problem that Greece and periphery economies face as they struggle to lower their debt.
Well, by posting a general link and not actual numbers that you used to derive your observations, I guess you pulled your "story" out of thin air. It is always interesting when people throw up a general website and say, "see here is my backup." In essence they are saying, "yeah, I didn't bother to actually come up with the numbers; instead, I just pulled it out of my ass."
Oh well, at least I love Gyros. So party on.
"Though the energy giant is struggling under its heavy debt burden, Espe figures he will still get around 100 cents on the dollar in a bankruptcy filing."
Better hope The One doesn't find a reason to rewrite the rules in the middle of the game, or Mr. Espe will learn what the Chrysler bondholders found out. Oh, it's good to be the king!
Leo tells us that austerity will backfire if imposed in Greece and other nations.
By logical extension, Leo is saying do not impose austerity.
And then, Leo claims that Greece will not be allowed to default.
All of this is just tortured logic.
I would argue that simply and consistently applied logic would provide that the chances of a Greek Debt Default soar if austerity fails, and the odds of a Greek Debt Default wane if austerity measures are imposed.
Politically speaking, Germany, which has fast become the EuroZone's "sugar daddy," is tiring of bailouts, and Merkel telegraphed that the limits on further bailouts of debtor Euro nations by creditor Euro nations is drawing near, because it's already become an impossible sell to domestic political constituencies.
Nope, that's not what I'm saying. Greece needed to implement radical reforms but I believe there are limits to austerity. Imposing more austerity on economies that are contracting sharply is simply insane! All of you touting "more austerity" we'll be shocked to see how it's going to destroy the UK economy. Just wait...
So what? We have much more severe austerity in place in Latvia without so much fanfares, and , until you get your private and government debt to manageable levels, You have to suffer through hangover after the fiesta we had in 2004-2007. And You had for 20 years or so while Germans were struggling to incorporate East germany and even did not notice there was a credit boom or housing boom anywhere. They had none. Just worked hard.
Hoping Germans will save us? More likely we will be "saved" by Russia while Greece by Turkey or Persians.
A true austerity takes years to teach the nation how to live within their means and productive capabilities. And , the less debt YOu have, the less dependent on foreign banks and capital You are.
Ancient greeks were smarter. They new good things must change to bad, and in they do not, big disaster is going to happen, so they forced the bad things on themselves beforehand. They had checks and balances in Athens, and the productive farmers were in control all the time over the political and financial elite. Ostrakism is one such nice option- send someone away for 10 years if people decide so, be it the most popular politician. I guess Americans would love to ostracize Lloyd Blankfein, Warren Buffet or Dimon.
So, you are only on the beginning of the road, have no idea how to manage own finances so that others does not have to feed you.And already whining and having no other idea of moving forward as more bailouts from Germans. These will end rather suddenly when Merkels party will loose 2013 elections to nationalist German taxpayers.
Neither do we know what to do , but we accept the lesson and the need to learn. We at least had Germans as colonizing power for 700 years, not muslims.
And Russians for 50 years... that destroyed almost all 700 years legacy...
Paul Krugman is agreeing with you wholeheartedly, and he has a big op/ed piece in the NYT where he's patting himself on the back already, and declaring himself victorious in proclaiming that the loosey goosey purse of The Bernank has saved the U.S., while the clenched fist of the Brits has doomed the U.K.
Aside from the fact that he's not only drinking, but swimming in, that old Keynesian Kool-Aid, which might just be clouding his vision, his take on events is extremely disingenious given the incredibly vast differences between the U.S. and British economies, and the roles they and their currencies play on a global level.
More importantly, he assumes much that has yet to even be baked into the cake, while dismissing any notion that we in the U.S. won't be made worse off in the long run by such policy.
It seems you've at least qualified your view with a "just wait." So, you've at least left yourself an out, albeit not a face-saving one, while Krugman has not done at least this.
I think we can all agree on one thing, if you kill an economy, imposing harsh austerity measures while it's contracting, then growth will be eaiser because you're starting from a much lower level of GDP. :)
The only way the Greeks have a shot if we have 5% inflation in Europe for the next 2 decades and they can keep a lit on their expences.
Phase 1 is already here, the second is still obscure.
But can we keep on having 5% inflation a year for years to come with a total wealth destruction?
But can we keep on having 5% inflation a year for years to come with a total wealth destruction?
Yes, we can!
The euro is finished.
I remember years ago the ECB bigshits went to Chile and offered the chileans Eurozone mempership. Chileans spat on the euroleaders faces and laughed so hard their ribs almost burst.
Unlike europeans, Chileans do have global historical memory.
The euro experiment was meant to collapse BY DESIGN. And the most important consequence of this collapse is another world war in europe.
The Jewish punishment meted out to europe after WW2 will ensure civil wars in europe within 20 years. Its fight or sharia.
http://www.dailymail.co.uk/news/article-1332746/Asian-gang-raped-girls-y...
Leo...of course Europe isn't going to collapse...but the European Union will look vastly different in a few short years than it looks today. So is that a collapse? Perhaps not...but it certainly will not be what it is today...So what do you call that? I guess we can differentiate between "collapse" and "failure"...if that'll make you feel better about your prognostication. But failure is already happening...of that there is little doubt.
Let's call it "Eurozone Restructuring".
If a boxer proclaims "I didn't lose the fight I came in second place"...Is he lying or is he restructuring the results?
"some pretty big sovereign wealth funds, like Norway, own Greek bonds"
We all know they are never wrong (sarc).Besides with taxpayers shouldering the risk why not gamble.
You know what? Everyone is SHORT Greece and the "PIIGS"! And when everyone is on the same side of the trade, they're usually wrong!!!!!
Leo,
It takes a lot of guts to argue your positions here and I appreciate the fact that you take time to personally answer comments. The simple facts are that governments involved in the present monetary system are lying through their teeth. None of them are giving a proper accounting of their actual liabilities and everyone of them is flat broke many times over. Decades of out of control social and military spending have been financed by debt. We have reached a tipping point were it is impossible for any government to raise enough taxes to pay for what they have promised without sending their economies into recession. Interest rates must be kept artificially low to prevent default so central banks and sovereign wealth funds are purchasing sovereign debt to keep the ponzi going. It is not a sign of confidence but a last act of desperation. although it is obvious that the financial system is going to collapse, no one knows where it will start. Europe has been playing this game longer than everyone else so it is a reasonable bet that they will go first. Personally I don't think it matters who is first, because once one goes, the rest will quickly follow, and anything printed on paper will soon be worthless. In 2008 very few people, myself included, were aware of how bad things really are. Now almost everyone I talk to knows our money is worthless. For right now I think our normalcy biases are preventing panic but the seeds have been sown. We are just waiting for the event that will make it play out.
I'm sorry to read that you are ill. Your natural optimisim is your greaest asset in your fight.
Robert,
Thank you and great comment. But I disagree with you on one fundamental point: governments that print their own currency can keep the Ponzi going indefinitely. There are powerful interests behind the global financial system. It's not in their interest to see the system collapse. The policy remains reflate risk assets and introduce inflation in the system and fight debt deflation. Vicious deflation is what bankers and corporations dread the most.
Vicious deflation is what they create when they pop the bubbles by stopping the loans. Then they buy and re-inflate. This is called literally "Bi-winning. I'm winning on both ends!"
Vicious deflation is what bankers and corporations claim they dread the most.
There, fixed it for ya.