Greece's ‘Worst-Worst-Case-Scenario’

testosteronepit's picture

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nahshal's picture

what is Germany says "NO"

"That's it man, bold over man, bold over! What the f**k are we gonna do now? What are we gonna do?"

jogos de meninas

boiltherich's picture

But Greece's debt is in euros and will have to be serviced and paid back in euros, impossible with a devalued drachma. Hard currency would dry up. International capital markets would close their doors to Greece. Greek banks and companies, whose debt is in euros, would go bankrupt.

This is sort of the crux of the problem isn't it?  We all know that when Greece leaves the EMU and goes back to a devaluing drachma they will simply not honor those euro denominated debts, neither the public or private sector, even if that means being kicked out of the EU itself, not only do we (more importantly the MARKETS) know it but the Troika knows it, that is why they have been kicking the can all these years.  They also know when Greece goes so goes Cyprus, and soon after the rest of the PIIGS.  Within two to four business days of the first euro exit which ever nation does go first will have triggered a cascading default across all Europe.

The tangle of who owes what to whom and how it can or even could be repaid, or the exchange values of 27 nations and their ForEx with the rest of the nations of the world mean a global catastrophe of universal competing fiat devaluations to the point where fiat itself would very quickly not be accepted by anyone.  That is, global hyperinflation that would last hours before trade would simply end.  At that point holders of PM's would be rewarded for their foresight and patience, but confiscation of all the gold and silver on the planet would simply not be enough to back either local currencies or even a universal currency like a jazzed up SDR scheme.  The global economy is simply too large to be backed by such a relatively small resource as PM's.  Unless gold were valued to the point where actual atoms of gold had currency value.  I mean, if you need a gallon of gas for your lawn mower how do you pay for that in gold when gold is worth the equivalent of $100,000 an ounce or more? 

They kicked the can because what we face, what has to eventually happen is that all human economic activity has got to be repriced and all social structures have to reform.  The debt world we live in now is at it's natural end.  But be careful, a new way of doing things is upon us but it will not be a return to a glorious old past, that ended because it no longer worked also.  TPTB are cooking up something and sure as I sit in the dark typing this none of us will like it.  Whatever it is TPTB will have their dynastic hyperwealth safe and sound with more power than ever, but it is fair to say none of them post or read here at ZH. 

kaiserhoff's picture

Worst, Worser, Worsest.  -  Damn, Reggie Middleton is contagious.

 

Troy Ounce's picture

 

Worst, worser, USDollar...

chubbar's picture

I'd say the idea that the Irish got scared because of the financial crisis and re voted FOR the compromise treaty is revisionist history at best.

The revote was announced (or at least implied) within hours of the initial DOWN vote of the treaty. In what parallel universe  does a NO vote mean we initiate a "do over" vote?

This treaty was deemed too important to leave to the voters and the vote was manipulated in whatever manner needed to ensure an UP vote. I obviously don't have any details on specific manipulation but I think the facts speak for themselves.

The same thing happened on the CAFTA vote if anyone dares to go back and look at the parlimentary manuevering and outright fraud during that vote.

AbelCatalyst's picture

Worse, worse, worse case scenario is social unrest, and major disruptions that spill over into other countries...  Greece may not be large, but I guarantee those people will be beyond pissed when their "cush" jobs they were promised go away.  They will blame the govt and take to the streets.  How will the military restore peace in full melt down?  Do other countries get involved (invade?), or is Greece left on their own to degenerate into the dark ages?  

This is not a good scenario, and I'm not sure how it can be avoided.  Printing is the only thing that will keep the peace (short term!), but even this road will lead to the same point - total melt down, social unrest, etc., etc....  

Ugh... 

aleph0's picture

Christmas Bonuses ?
That's normal in most "Social" EU countries.

Most Germans get a 13th. Salary - half paid out in summer, the rest at Xmas.
Very common in Germany is a 13th. and even 14th. Salary

BTW, IIRC ... Germany has  600+ "State" Krankenkassen, and over 1,000 in total.
One of the biggest KK employs some 60,000+ people.

My guess is that there are probably 1 million  jobs in this segment , and all they do is Count Money coming "In" , and hand the money "Out

BTW, they get lots of perks as well, like cheap insurance ( all branches ), travel-money called "KIlometergeld" etc. etc.

Isn't Socialism Great  ! ... for the "Insiders"

 

disabledvet's picture

I'm not sure the euro can be devalued anymore. Basically now that the debt markets are the "risk currencies" the only thing Europe has anymore is the euro--similar to the yen but with the exact opposite of the zero percent financing. Obviously Wall Street is "chomping at the bit" for the "cash our re-fi" for say "the entire nation of Italy." The collateral doesn't come any better. Obviously you don't want to be a holder of the debt however! That crap is TOTALLY WORTHLESS. Now for the interesting question: "can i buy an entire Continent for just a few ounces of gold?" cuz there's no way The Fed's gonna allow that euro to depreciate. "They got TRILLIONS in debt to unload" baby!

Bruin4's picture

Come on.... Its the " WURST, WURST CASE SZENARIO" !!!

DaBernank's picture

Almost....

WURST, WURST, KÄSE SZENARIO

FinalCollapse's picture

"Worszt Case Szenario" Bitchesz.

Peter Pan's picture

It is said, but I am still seeking confirmation, that with the exception of the IMF etc loans given to Greece recently, the rest of the bonds are issued subject to Greek law. This means that if Greece reverts to the drachma, it will be able to repay in drachmas. The problem for Greece appears to be an unconfirmed rumour that as part of the banks taking a 50% haircut, they required Greece to submit to Englsih law for the new bonds which would require them to pay back in Euro. Greece has been well and truly stuffed and now simply awaits to be baked by her European overlords.

bigkahuna's picture

I believe the Greek government suckered someone into lending them some more money. Who gives a darn who's law it is when they clearly cannot repay. This is all a big show and the theatrics may enhance the banking cartel's position, but the Greek people will be the ones who get shafted.

They will repay with a thank you/now go pound sand.

catch edge ghost's picture

Analysis, history, forecasts, auto-erotic humor.  It's a one-stop-shop when you visit the pit.

LookingWithAmazement's picture

If the ECB just buys up anything, like Bernanke, the "crisis" will soon be over. So it will go. Merry Christmas and a happy New Year. Boring world we live in.

navy62802's picture

Take the acknowledged "worst case scenario" and then imagine something considerably worse. Because that's what will probably happen, as these official worst case scenarios typically revolve around alot of wishful thinking and willful ignorance.

akak's picture

Indeed, as witnessed by the so-called "stress tests" for the TBTF banks.

akak's picture

The worst-worst-worst-case scenario:

Leo takes the helm as manager of Greek state pension plans.

"What do you mean, we're bankrupt?  We're the government --- we CAN'T go bankrupt!  Don't you know that the government is the source of all wealth in society?  Now shut up and fire up those drachma printing presses!"

 

(But if you first take him out to lunch, he may throw you a bone or two.)

goldfish1's picture

Former German chancellor silent on Fed memo linking him to gold suppression

Nod to zerohedge in article...

http://news.goldseek.com/GATA/1321254600.php

testosteronepit's picture

Just want to add here: for an excellent discussion on the whole debacle of the ECB, the EFSF, and market reactions, check out this post and Rik’s long comment: http://blankfiendsew.blogspot.com/2011/11/ecb-headlong-into-rabbit-hole....