GReeCe 2015...

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Comments

[Al Tinfoil]

The story of Greece is a tragicomedy of farcical proportions:

1. The EU political dirigistes installed the Euro "common currency" as their next step in the political unification of Europe.  This was a development for political reasons, as a means of uniting the people of the various nations in thinking as Europeans first and not as citizens of their own countries.  Economists and financial experts were hardly consulted.

2.  Bankers looked upon the unified Euro zone as a tacit guarantee that the European Central Bank would guarantee all debts by all Euro zone governments, and started lending at the same rate to all Euro nations at basically the same rate they would charge to the most credit-worthy.

3. Politicians in the PIIGS gloried in promising social benefits and economic development funded by borrowed money.  Their voters lapped it up like hungry cats.  This all amounted to a credit-fueled political and economic drunken binge.  Greece even splurged on the Athens Olympics on borrowed money.  The bankers of Germany and France were only too happy to supply the money like booze sellers sell champagne for a party.

4. France and (especially) Germany liked the Euro system because it made it easy to sell their wares to the PIIGS who now could buy with the money they could borrow at low interest rates.  German and French industries made piles of money from sales to the PIIGS- mostly recycled money lent to the PIIGS by French and German banks.

5.  In the USA, the Federal Reserve accelerated monetary expansion via low interest rates, from about 1990 on, to the point that central bank interest rates are now near Zero (ZIRP), to keep the great financial house of cards/Ponzi Scheme going.  The Clinton Administration in the US completed Financial Deregulation (begun under Reagan) by cancelling Glass-Steagall, legalizing Citibank and sending Wall Street on its financialization binge that ended with the collapse of 2008.  Central banks then doubled down on monetary expansion to plaster over the financial collapse by pushing down interest rates and printing more money.

6. In 2009-2010, Europe caught the contagion from the US meltdown and it became all too clear that the PIIGS could never pay off the money they had borrowed as Euro members. Bankers in France and Germany panicked and called on Merkel, the EC commissioners Barsot and Von Rumpot ("the Honchos") to save the banks.  The Honchos forced the Greeks to accept a "bailout" of their debt by the "Troika" - the International Monetary Fund, the European Central Bank, and the European Union (IMF, ECB and EU).  The "bailout" money went to the French and German banks in exchange for the Greek bonds they were holding.  The bonds went to the Troika.  Some have been passed off to sucker "investors".  The Greek people still owed the money and were expected to pay off the bonds, with interest.  Ditto in the rest of the PIIGS but Iceland rejected the idea of a "bailout", and the Iceland government said to the bankers: "You created the mess, you own it." 

7.  Austerity was imposed on the Greeks to prevent the government from spending money on social programs, medical care, etc., and thus to ensure that more of the Greek government budget would be applied to paying off the bonds.  Ditto in Spain, Portugal, and Ireland.

8.  The people do not like austerity.  They don't like sleeping on the streets and having no jobs or medical care.  Good thing they are so undernourished or they would be more effective in rioting. But they tend to vote for politicians that promise to repudiate austerity and debt repayment. 

9. In the attempt to sell the idea that the EU economy has been "recovering" from the 2009-2010 meltdown, the ECB and EU nation central banks adopted ZIRP (and even NIRP - negative interest rates on bank deposits), and bond buyers bought into the financial fairy tales by bidding up new bond issues in the Club Med countries and pushing down interest rates on their sovereign bond issues to ridiculously low rates (as if there were absolutely no chance of default or haircuts).  The ECB's Saint Draghi encouraged the bond buyers by saying the ECB would do "Whatever it takes" to re-inflate the EU economy, implicitly stating that the debt-fueled binge would continue.  "Whatever it takes" has now been enacted at ECB QE in which the ECB allows each EU nation's central bank to buy sovereign and corporate bonds - in effect handing each of them a Euro printing press.  This does not cure any of the EU's ills, but allows the governments to continue to fund budget over-runs, social programs, subsidies, and expense account binges, while the stock markets and elite feast on the QE.  

10.  When the risk of "Grexit" reappeared the Germans said there was now no risk to German banks from a Greek default.  Why?  Because the German banks have sold off their Greek bonds to the Troika.

11. Auntie Merkel is dead set against any further help for Greece.  This is rich since Germany reaped huge rewards selling manufactured goods to Greece, paid for with money borrowed from German and French banks.  Now that the German banks are safe from their reckless lending practices, she can refuse further aid to Greece. 

12.  The EU has not recovered from the 2009-2010 recession, and is sliding further into depression.  A Grexit or bond default may still shake the European financial world and New York and London's City may catch the contagion this time, so everyone is trying to whistle past the graveyard. 

13.  The sanctions/counter-sanctions game between the US/EU and Russia is a very risky game for the EU since it cuts the EU off from (what was) its fastest-growing export market, and Russian firms still owe many $Billions to Western financial institutions.  Russia is also the supplier of about 30% of the oil and natural gas used by the EU, and those supplies might suffer major disruptions if the Ukraine pipelines were disrupted or if Russia cut off supplies in response to an escalation of the financial war against Russia.  The EU has no quick way to replace natural gas supplies from Russia.  If Russia feigns a "hiccup" (a hint that it will default on payments on debts to Western financial institutions and cut off gas and oil exports to the EU), expect Wall Street, London City, Juncker, and the ECB to have nervous breakdowns. 

14. Russia and Gazprom have shaken the EC by redirecting South Stream to Turkey and announcing that the gas now going through Ukraine will be shut off and redirected to Turkey once Turk Stream is built.  If the EU wants the gas, it will have to connect to the new gas hub at the turk/Greek border.  Russia has now mischievously informed Greece that Russia will cancel its sanctions against Greek food exports if Greece leaves the EU.  The supercilious Masters of the Universe (in their own minds) in Brussels continue to drink their own bathwater and sniff their own farts, insisting that THEY will dictate to Russia, Greece, Turkey and everyone else how the future will unfold according to THEIR plans and directions.

15. The idea of a gas hub at the Turk/Greek border and the cutoff of all the gas pipelines through Ukraine is an invitation to Greece to tell the EU that if it wants access to the gas from Russia, it will have to write off the bailout debt and pay hefty transit fees for the gas.  Turkey must have the same idea about profiting from gas price surcharges and transit fees.  

16.  Syriza's policy of cancelling austerity and increasing government spending is a dreamy left fantasy - unworkable unless it can find some new source of sugar-daddy funding. The first thing the Troika will do is cut off funding and credit to all the ATMs in Greece.  Maybe Greece will print new Drachmas, backed by kalamari.  Perhaps China and Russia could be persuaded to ante up cash in return for some islands or military bases.

17. If Syriza succeeds in getting Greece's debts written off, and austerity lifted, that will encourage those who want the same in Spain, Portugal, Ireland, and Italy.  This means that the Troika must frustrate Syriza at all costs. 

18. What strategy should the EU leaders adopt?  Depends?

[RaceToTheBottom]

Deutsche bank derivatives are too much to be purchased willi-nilli

[StychoKiller]

Hmm, sometimes a good tinfoil beanie can lead to clear thinking!  (Who knew?)

[Ghordius]

an excellent recap, but I disagree with many of the finer points

it's interesting how this myth is reaching mythical proportions: "1. The EU political dirigistes installed the Euro "common currency" as their next step in the political unification of Europe.  This was a development for political reasons, as a means of uniting the people of the various nations in thinking as Europeans first and not as citizens of their own countries.  Economists and financial experts were hardly consulted. "

the "EU political dirigistes" would not be able to set up such a plan. the EUR was set up for external reasons: the impending currency war between West and East

what happened is that the "EU federalists" thought it would making political unification easier. and they are among the biggest critics of the EUR, now

this is about as strange as true about the neo-corporativists that are seen as the promoters of the EUR. look around, megabankers looking for fresh victims in the FX arena aren't fond of the EUR

no european takes this "thinking as European first and as citizen of their own country second" seriously. except some (mostly British) socialists, I guess

and "Economists and financial experts were hardly consulted" smacks me of butthurtness of the financialists that would prefer to have all the FX crosses to play with

"2.  Bankers looked upon the unified Euro zone as a tacit guarantee that the European Central Bank would guarantee all debts by all Euro zone governments, and started lending at the same rate to all Euro nations at basically the same rate they would charge to the most credit-worthy. "

and here you have it: bankers lent freely, expecting politicians to pay with taxpayer money later whatever mess they would create. isn't that a tune you heard before? note that lending standards weren't part of any EU or EUR based "thing". here the fundamentalist pro-free-market crowd should be just ashamed and admit that markets did not care or even think, they just wanted to make a fast megabuck, and they did, also thanks to the help of The Vampire Squid Firmly Attached To The Face Of Humanity and the corruption in the Greek government

one item that is constantly forgotten: three quarters of the Greek debt - through the bailouts - is now in the hands of a handful of EU countries, which do not ask for any interest until 2023

"16.  Syriza's policy of cancelling austerity and increasing government spending is a dreamy left fantasy - unworkable unless it can find some new source of sugar-daddy funding. The first thing the Troika will do is cut off funding and credit to all the ATMs in Greece.  Maybe Greece will print new Drachmas, backed by kalamari.  Perhaps China and Russia could be persuaded to ante up cash in return for some islands or military bases."

that's the point, isn't it? if you want to spend more then what you make, you have to find a creditor, because it means you are getting in debt. But Tsipras is talking about re-shifting Greek budget focus away from the IMF's targets to a more social-focused spending, not about new debt. and a restructuring of the old debt

"17. If Syriza succeeds in getting Greece's debts written off, and austerity lifted, that will encourage those who want the same in Spain, Portugal, Ireland, and Italy.  This means that the Troika must frustrate Syriza at all costs. "

apples and oranges. Tsipras can meet in one room some 5 Prime Minister collegues - his main creditors - and make a deal about three quarters of the old debt. in fact, Tsipras is now soon one of the "EuroCrats" himself, and his vote in the EU Council counts. He represents Greece, one of the EU countries that wants to stay in the EU and in the eurozone

Spain, Portugal, Ireland and Italy have their debt on the markets. a completely different situation versus creditors. "contagion" is a word banksters are fond of. the same ones that hate the EUR and aren't that fond of the EU, too, particularly if based in London and facing such things as how to get around the EU Banker Bonus Cap or the EU drive on reducing banking to a facility

[Joe A]

Nice one. Copy pasted it.

[williambanzai7]

Nice round up.

Before resorting to the search for a new sugar-daddy, there is very much to be said for the notion of destroying the corrupt oligarchy that is bloodsucking the economic vitality of the patient.

Moreover, it will be very unpleasant for the the EUROscum in Brussels to actually be called to the carpet by the elected representatives of a member state. The Spanish will be well served to watch and listen.

Perhaps we will now see what happens when a debtor walks into a negotiation with real default card in his back pocket. What we witnessed since 2009 was all muppet theater and empty bluff.

[me again]

Oh, excuse me; is verry nice poster. thinking about getting one for my wall.

[williambanzai7]

That one will look gorgeous printed up...and signed ;-)

[e-mail]

[me again]

Did you know, William that the Germans sold the Greeks, ie; the politicians, SUBMARINES. U-BOOTS. and MAIN BATTLE TANKS. Both. Yes. That's some big spending; of course the politicians took a cut on the deal; but as you can see, the much ballyhooed early retirement was relatively insignificant compared to the graft by the Greek Government Politicians. Nice, eh ? Submarines. WTF is Greece going to do with Submarines, ?? And German Submarines; are veeerry expensive. Diese Gut Gchurman Steil; you know.

[williambanzai7]

Yes I became aware of the tanks and submarines in the very beginning of the whole fiasco.

[hangemhigh77]

That's all well and good and I agree. But I want them to hang bankers. These guys never pay any consequences for destroying MILLIONS of lives and murdering MILLIONS of people. Would it really be SO outrageous to hang at least a FEW of these parasites? Please submit a hanging Greek bankster work. I hope it is unparalleled. You ARE the Man.

[Savyindallas]

psychopathic pedophile banksters. They deserve horrible and painful deaths. Then they deserve the torment of hell. Their day will come  -hopefully in this life before the next. 

[VWAndy]

That depends on whos side they are on?

[JRobby]

the bankster side

[disabledvet]

"Ratings Agencies slapped a Trile A on all that Poopie Paper."

Yee-haw!

Wall Street baby!

Who needs money to be a billionaire?!!!

[Son of Captain Nemo]

So this where the "middle digit" patent comes from?...

B you done good!

[flyonmywall]

Thanks a lot WilliamBanzai, I just fucking snorted my drink all over the keyboard.

"This is Drachma!" - Fucking priceless.

One can hope that the Greeks dont' fuck this up, or get even more fucked over by the EU.

[dexter_morgan]

https://www.youtube.com/watch?v=rtHshBWFRyg

New Boss. Same as the old Boss.

[Reaper]

Athena, Areas, and Artemis all say spit upon the EU.

[ebworthen]

LOL!  Good stuff WB7.

Yes, "This is Drachma!".

[KnuckleDragger-X]

Be interesting to know if he has a Spartan gene in his pool....

[kaiserhoff]

I can see Dog the Bounty Hunter and Mrs. Dog, going into the repo business.

This should be fun.  Party on Dudes.

[Nobody For President]

PERFECT (Again...) WB!

Both are just pitch perfect ON.

[williambanzai7]

Please stand by...

[old naughty]

Thanks, WB.

And we're only in January...

“Your frequency is what you frequently see. Pay attention to synchronicity as there are valuable lessons to be learned in the repetition of your reality.” - Jennifer Sodini