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Firewalls In Place, Markets ready: Greece Can Go To Heck
Wolf Richter www.testosteronepit.com
Luxembourg Finance Minister Luc Frieden said it out loud: "If the Greek people or the Greek political elite do not apply all of these conditions ... they exclude themselves from the Eurozone." All of these conditions. And there are a lot of them. Then he added the crucial words: "The impact on other countries now will be less important than a year ago."
Playing for time had been the strategy all along. Governments established bailout funds. Markets, banks, and multinationals adjusted. The ECB figured out how to circumnavigate its treaty-based restrictions on monetizing sovereign debt of member states. And the national central banks that own the ECB, particularly the Bundesbank, got used to these circumnavigations. The fear of financial contagion has subsided. A kind of calm has set in. And politicians like Friedan see in this calm a sign that markets have accepted Greece’s exit from the Eurozone.
Greece might want to decide that it would be better to exit the Eurozone, rather than actually implementing the budget cuts, Friedan said. Returning to the drachma and devaluing it might create a more competitive economy. "It might be something which would allow Greece to get a new start," he said.
With all the pieces in place, it is now politically correct to admit that Greece is a hopeless case, that its political elite and institutions are such a mess that they simply don’t belong in the Eurozone. This too is part of the procedure of.... Kicking Greece out of the Eurozone.
Northern Europe hasn’t forgotten that the Greek political elite misrepresented deficits and debt for years in order to meet the requirements for acceding to the Eurozone—and to cheap euro loans. It came out after a hair-raising spiral of budget-deficit recalculations: in 2009, the deficit wasn’t 6% of GDP, but suddenly 12.7%. In 2010, as bailout funds were slushing into the political system, sunlight hit the shenanigans—and shocked governments up north. The deficit jumped to 13.6%. In late 2010, EU's statistical agency Eurostat audited Greece’s books. And the actual deficit was 15.4%. Life in the Eurozone was over.
But the markets weren’t ready. They swooned every time Greece blinked. To pacify them, near-monthly summits were instituted, each with a Merkozy dog-and-pony show that offered promises of ever greater bailouts and ever higher firewalls. And it gave everyone time to prepare for the inevitable.
The Greek political elite that have tricked their way into the Eurozone have done nothing since then to show that they can be trusted. Time and again, they promised reforms, but after they got their hands on the bailout billions, they didn’t follow through, or did so insufficiently. And Sunday, while protests were raging in front of parliament, Greek politicians inside, who were supposedly debating the very measures the people outside were so enraged about, were in the lounge ... watching a basketball game on TV.
Even German business leaders have lost patience with Greece, though it is an export market for them: 57% want it to exit the Eurozone and reintroduce the drachma, according to a poll by Manager Magazin. The push to get Greece to leave the Eurozone is almost complete, but now a new theme is coagulating into words.
"The state with its phantom retirees and rich tax dodgers, a state without functioning administration," has no business being in the European Union, said Franz Fehrenbach, CEO of Robert Bosch GmbH, the largest automotive component maker in the world. The Greek system is "ramshackle” and “an unbearable burden." The EU should encourage Greece to leave both the EU and the Eurozone, but if it doesn’t leave voluntarily, the EU must change its laws so that Greece can be forced out, he said. And there were other countries on his list, but he didn’t say which. Would Portugal be next?
At the core of his concerns: “We must not overburden Germany.” And he isn't the only one. Potential costs of the vertigo-inducing bailout commitments made to other countries already amount to a whopping 26% of Germany’s GDP! Read.... Germany Frets As Bailout Risks Balloon.
Meanwhile, resentment against the German dictate is growing in Greece. "The European Union is suffering under Germany,” said Georgios Karatzaferis, president of the right-wing LAOS party. He accused Merkel of trying to "impose her will on Southern Europeans" and called the Netherlands, Austria, Finland, and Luxembourg "satellite states" of Germany. And then he pushed Greece a step closer to bankruptcy. Read.... Greece at the Point of no Return.
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you know...these "meaningless Greeks" that you speak of just built a Yogurt plant in a town called "New Berlin" right up here in Upstate NY. I don't know of these mystical "Norther Europeans" you speak of "taking it to the Greeks" but I will say this: this is DAMN fine yoghurt they make! I can't wait for Turkey to try and one up 'em in by building a plant, hiring a couple hundred more folks up here...in "the town of Poland" perhaps.
http://www.youtube.com/watch?feature=player_detailpage&v=ebJ-4hjNZRM
A greek plant in the US built with German money. HAHA.
How the hell do they contain credit default swaps? Greece defaults, that money has to be paid. How? Print it! I smell another bailout.
CDS on Greece are overrated. I'm sure that by now the ECB knows where the problems all are.
The big problems for the EU are going to be things that are not anticipated. Greece isn't one of them.
The laws written right now makes it impossibly to just say get out and stay out Greece, so what they have done is continue to make it so inhospitable for them that they will willingly leave. I made comment that this two years was to protect certain banks and institutions from Greece and they had time to do that (maybe). Also in regard tothe CDS's, I'm with you. Once Greece defaults all those CDS's come due, but who issued over 95% of these CDS's, it was the US banks and financial institutions that did it. They way Europe is talking is that the US will have no choice to bailout the CDS's written, because if they don't the whole game comes apart.
They threw the ball back into the US side of the net.
Where is Heck?
now we get to see greece refusing to LEA
VE the EU and germany et al trying to kick them out!
What a FARCE
How many times has Greece defaulted in history? 50? Why is this time different? Surely nothing to do with the NWO trying to build a block and not wanting it to break up? I don't buy that this is all planned. The plan was build blocks, like the US/Canada/shitland Amero project. It's all backfired, now the elites are skipping steps 6-9 trying to still get to the endgame and it's just not happening. And of course we're all going to get fkd in the process.
If CAD and USD lock in at 1:1 ratio in perpetuity, its really a stealth Amero, as far as I can see. Canada sold all its gold and put all its reserves into USD. The Bank of Canada is a primary dealer for the Federal Reserve. The currencies have been floating pretty close together, other than right after September 2008.
Mexico is too much of a basketcase to be absorbed into the Union at this point. But the dream is alive and kicking.
This is different because Greece is going to default under the Euro and that Euro debt is insured by our banks. That's why the banks and politicians have to do whatever they can to keep the debt game going.
A Military Coup in Greece = Win-Win-Win Solution!
The best of a bad bunch of 'resolution' possibilities and frees up the next 'several' unborn generations of Greeks from the follies of their forefathers!
Depends, what if the military are a bunch of deuchbags?
Are you 'avin a larf' ? How much worse a 'bunch of deuchbags' can there possibly be??? the Greeks have their noses firmly ground in the dirt by the present controlling banksters et al...
There will be singing in the streets!!
They WANT more than they can PAY FOR. Do you understand? Even if all of Greece's debt was forgiven right now, they still WANT to spend more than they can take in taxes. No body is willing to take any kind of cut.
The biggest two holders of the Greek debt is the Greek public pensions, and the Greek Banks. Whose money is in the Greek banks? Do you think it is all the banks money? It is the Greek saver's money. So if they wipe out the debt, they wipe out savers and retirees.
Even then, none of the unions or public employees will stand for a cut to their pension benefits. They also won't take to any cuts in government spending. Since they are in the currency union, they cannot print their own money. It's really quite a predicament.
The Greeks are fighters ... They fought their way into the Euro, they fought their way up to the trough, and they are fighting every step of the way to con the union out of the money they need to repay the debts they fought to incur from the saps who thought vendor financing to a broke society was a good idea before they fight their way out of the Euro.
They are the New Churchillians.
Bullshittish
"Greece won't default"
"We have firewalls"
Ben Bernanke: "I will protect the US from the EU".
3 strikes you're out.
seems to me the Greeks beat the banksters in their own game......
The game of destroying the Greeks?
nop...the game where Goldman and Deuchbank get to pay for once
I'll believe it when I see it, and maybe not even then.
it's all going pear-shaped
...like some yoghurt with that?
Alright then, Irish spuds? Port? Belgium chocolate? Sangria? Goulash?
Italy got Hungary and fried Turkey in Greece.
Sorry.
Mr Bosch and Mr Siemens and Mr Tankmaker love Greece. And so does the
Minister of Employment.
Merkel tells Greece to buy arms on debt, that Greece doesn't need, and then give Greek
bonds to the German banks who fund the purchase, so that Germany can have a bouyant
economy and full employment.
So, Mr Bosch is full of shit.
If I was suspicious, I'd think that Richter was repeating bullshit in the interest of stirring
things up.
How are the German and French banks going to deal with the bad bets on their books?
Where's the LTRO that everybody's talking about?
It's against the German constitution, so show me the money!
Greece fooled the EU into thinking that it was not overloaded with debt and not a basketcase of a country?
Really, and I thought they were lazy. I guess they're not stupid though.
Who was stupid enough to believe them?
'Northern Europe', according to Richter.
You mean Goldman Sachs fooled Greece and the EU.
Then, they collected their fraudulent profits, bought new castles and gold, and waited for the shit to hit the fan.
Whence, they bought some CDS, beat the bond markets down a bit, and installed Draghi, Monti & Papademos.
Once in place, they levered up on garbage sovereign debt, knowing they could swap their garbage out with the ECB.
Silly Corzine, he misread the dates on his memo and jumped the gun early. Oh well, at least he was able to fleece $1.2B from customer accounts to help himself out.
Can't believe the fuhcher is walking around free.
Anyway, don't go attributing smarts to the Greeks. The smarts are in the sociopathic skulls of the banker criminals that advised them.
- Gallows
"Greece fooled the EU into thinking that it was not overloaded with debt.."
Let's not forget either that to the extent Greece fooled anyone, it did so aided and abetted by the very bankers who are now screaming like the stuck pigs they are.
Gold Man-sacks, Im looking your direction...
Wasn't Greece rescued back in 2010?
I highly doubt it. They think it will be containable, but it won't be. Just look at how much the markets shift based on each idiotic rumor. The whole system is going to have a fecal event when the truth that we've all known about Greece is formally announced.
heres an antidote to the global virtual money matrix breakdown
http://vimeo.com/34400428
I figured that they might not let the March bond default just to buy a little more time and it would be cheaper then giving the whole nut (which they are not going to get).
The smart Greeks have already drained the country of their taxable assets.
Look at the amount of "bailout" money that flows back to the bankers and one can tell this "bailout" is designed for their benefit only.
It's a confusing array - but in the end, the money spends very little time in your pocket - paycheck, bank account, food, grocery store, back to bank account, gas station, credit card (interest accruing), default, bank repossession, bailout, back to the bank.... all roads lead to the Bank. You enjoy your money for a second, and then it's back in their possession
Maybe Greece can rehypothecate the satellites orbiting above them. The gold foil and unspent hydrazine has got to be worth something...
JP Morgans been there, done that
in fact the Morgue is now working on future claims for Gold mineral rights (subject to survey not yet conducted or assigned) on Mars in year 2204 as a basis for their GLD ETF whose only current metal backing is a Gold lama dress worn by Shirley Bassey for Bond Film Goldfinger back in 1964
There's more (potential) Gold in a packet of Kelloggs Cornflakes than Morgues $Billion Dollar GLD ETF but don't let that worry any teachers pension funds
Everyone keeps stating the obvious......except the technocrat ex-bankers.......whose loyalty to their former bosses is still evident.
*Sigh*.....let's get on with this already, I'm getting bored.
Firewalls but supposedly no fire.
Ring-fencing for Portugal and Spain and Italy but no admission of barbarians at the gate.
The entire Euro and Euro-zone is a farce; an ill-conceived utopian notion that WILL FAIL.
What if the euro makes it until the dollar starts having trouble? That would make IT the candidate for reserve currency (and all the nice perks that go with that title.)
In a coincedental way, that is a good point. unlikely, but a light bulb flashed on in my head for a second.
I think that's the plan actually, or at least the interim plan while the international financial system is prepared for SDR's or something similar. Central banks are woefully under-exposed to gold, and will continue to accumulate it for reserves, but the BSD's surely know that the U.S. is pursuing its dollar devaluation strategy with religious fervor and they will need to find another fiat to plow their money into.
The ability to act as a reserve currency is largely predicated on the depth of a country's bond markets. Companies and countries must have something to do with their reserves.
This would explain the rhetoric coming out of China and Russia about "supporting" the euro...at the margin, they will continue to increase their purchases, as they gradually shift their reserves out of treasuries.
I knew they were stalling for time all along. They are playing for time with gold too. Wait till they give up trying to manage it.
"The state with its phantom retirees and rich tax dodgers, a state without functioning administration,"
Hello U.S.A.?
The USA Admin knows the problem, it's tax receipts (or lack thereof) from the multinationals unwilling to repatriate profits.
Not without a hefty tax break, heh heh.
Or a heavy penalty.
Bull. The problem is 1.5 trillion of debt-financed, group-entitlement vote-buying/per year. Give the govt more money, it will overspend yet again. Essence of democracy.
This year the Fed will finance the election of the POTUS.
With approx 55% of the US population on the dole of SOME kind,(to be fair, some deserve it)but the 99 weekers x's 2-3 times,the welfare recips, the fake disability genre, will be enough to get the Barrrrrrrrrrrrrrrrrhackster back into the Throne Room.That plus Wall street is going to throw cash at him(taxpayer bail out $$$), for the misguided idea he will not crucify them in a second term..................that lasts for a lifetime.
Ricki Sanatorium and or Milt Rumney will be the Nominee of the corrupt GOP estab.
AND if we where BLESSED to be graced w/ Mr.Paul as the nominee, we would still likely lose.(Heartbreaker)
As they have him painted as a fruitcake (still), and the hawks, and Top Echelon Mil Ind Cmplx,along w/the 55%er's, will never allow him in............even though he IS the REAL soldiers choice.
Give the govt more money, it will overspend yet again. Essence of democracy.
Not for the first 180 years. Then socialism started creeping in. Now the seesaw has tipped and the USA's system is closer to socialism than capitalism. She didn't awake to the change in time, and now the piper will be paid.
Ron Paul has warned of this for years. This is what he's right about. I don't support him due to his suicidal foreign policy ideas, but on fiscal policy he's got it mostly right.
Really? no deficit spending for 180 years? Try maybe two, 1836 and 1837 maybe. Except they switched back to the gold standard too fast and collapsed the economy.
If you count going on and off the gold standard, closing the gold window, bretton woods, etc, how many currencies has the United States gone through?
Please don't forget the two ten year old wars financed by the China/Bush Charge Card.
I have always been amazed how stupid most Americans are when it comes to this.
How the hell do you go to war and give tax breaks and extra medicare benefits. You charge it and don't count it against the deficit.
Sort of what the banks do. Off the books balance sheet. But the shame is "Most" Americans still do not understand how we borrowed from China.
And why is it only important now. Didn't someone once say, "Deficits Don't Matter". So why now?
Two great investments, Precious Metals and Ron Paul. Eh.
Well did Frederic Bastiat call that very facet of democracy "socialism."