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Greece is the Canary In the Coal Mine for the $100 TRILLION Bond Bubble
Will Greece Burst the Bond Bubble?
For over 30 years, sovereign nations, particularly in the West have been buying votes by offering social payments in the form of welfare, Medicare, social security, and the like.
When actual bills came due to fund this stuff, Governments quickly discovered that current tax revenues couldn’t cover it (see the image below)… so they issued sovereign debt to make up the difference.
And so the global bond bubble was created.
As far back as 2009, most Western nations were completely bankrupt when you consider unfunded liabilities from their social policies. But Central Banks did everything they could to paper of this fact by soaking up as much bond issuance as possible while simultaneously maintaining zero interest rates.

Throughout history, Central Banks have tried to inflate away debts for as long as possible. They do this right up until:
1) The debt loads are impossible to manage, or…
2) It becomes politically unsavory to print more money.
We have just reached #2 for Greece.
As the above chart shows, Greece has always been the worst offender as far as excessive social programs spending relative to tax revenue. And so it was not surprising that Greece was the first nation to enter a sovereign debt crisis back in 2009/2010.
Since that time Greece has experienced multiple bailouts/ interventions from the ECB and IMF. The only reason it did this rather than default or engaging in a formal debt restructuring was because Greece’s political elites were able to cobble together enough political capital/votes to force it through.
Not anymore.
Greece’s election over the weekend resulted in a new Prime Minister Alexis Tsipras who is decidedly anti-austerity and anti-bailout. And Tsipras has a coalition in parliament (read: enough political capital) to end the bailout storyline and force about a formal debt restructuring.
So we have entered the period at which it is no longer politically palatable to inflate away debts. Which means the debt restructuring/ deleveraging process has begun.
Globally the bond bubble is over $100 trillion in size. The derivatives based on this bubble exceed $555 trillion. So when sovereign debt restructurings begins the real crisis (the one to which 2008 was just the warm up) will begin.
Greece will be first, followed by the rest of the PIIGS in Europe. Japan is also on the block as will be the UK and ultimately the US.
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Best Regards
Phoenix Capital Research
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Zorba says: "when all else fails..... dance"
Eagles: Welcome to the Hotel Europa. You can check out any time (leave the Euro) but you can never leave (the neighbourhood)
Also, don't forget, "Mirrors on the ceiling,pink champagne on ice, we are all just prisoners here,of our own device"
That article above merely repackaged Phoenix Capital's superficial sort of bullshit spouted about who to blame, which I already responded to here:
http://www.zerohedge.com/news/2015-01-19/beginning-end-100-trillion-bond...
Of course, I agree that the Greek situation is one of the leading edges of the overall problem, as Phoenix Capital correctly stated. What I do NOT agree with is the silly, shallow, explanation of how that situation developed, which was actually via ORGANIZED CRIME & ITS CONTROLLED OPPOSITION.
Phoenix Capital likes to lay all the blame on the CONTROLLED OPPOSITION, while deliberately ignoring the ORGANIZED CRIME that dominated the political processes, to enable the sovereign bond bubbles to be blown up and UP ...
Today alone I have seen 3 estimates of US Debt/GDP. On one end we won't hit 100% for 10 years. On the other we are well past 100%. It obviously has many ways of being calculated. The lower estimates seem to eliminate the sum owed to other government parts (as in those treasuries in the Social Security "lock box'). Others calculate it with all GAAP accounting with true NPV of the amount owed. This does not even begin to assess the fact that GDP itself is a puff of smoke in a cloud.
I get the basic message ('we're fucked') but the use of such wishy washy and subjective data doesn't really tell us much more than that.
Official US Debt does not have future unfunded liabilities included (like social security), and the hockey stick trend upward for those debts to come.
I would like to know the REAL reason the EU wants Greece to stay. Obviously Greece is NOT a suitable member, and has problems that cannot be resolved by the EU. It also costs a hell of a lot to keep supporting these folks...so WHY are they doing it?
I have a feeling it has something to do with that money moving THROUGH the Greek banks. The money that DOESN'T stay in Greece, but goes directly to European banks. Smells like some kind of money-laundering operation to me. They are moving the money around in this way for SOME reason, trying to hide or mislead as to its origins and destination.
There's something very hinky going on here, something that makes no sense unless there is some other motivation behind it.
Of course, maybe I'm just paranoid, and the EU is just very concerned about the welfare of the Greek people and really wants to fix their economy...
Yeah right...didn't think so.
Here is my take on it.
Greece may serve as useful territory to position UN Military bases and pipelines. Being in debt means the IMF, World Bank and other Troika monsters can rape and pillage any Natural resources Greece has on land and around its seas, as when in debt everything is for sale, to balance the books.
Indebted Countries like Greece, act as a downward weight on the Euro, without which German exports would be far too expensive i.e German currency would be too strong, and prices of German goods would be too high.
Then there is the TOTAL CONTROL the New World Order wish to establish over the entire planet. Everyone will join their club, under their rules. Countries in debt have to pay the piper and dance to their tune. How else do the Rothschilds, et al earn their wealth.
Banks, Corporations, NGO's are free to move in and buy up Countries seas at minimum cost for oil and gas exploration. They also monopolise manufacturing and/or business and move in their own names like McDonalds, Tesco, et al. They buy-up and take over smaller family business (or put them out of business by making it impossible for them to compete). Their profits are funnelled through private equity companies and offshore Bank Accounts. Very little is given to the host Country and/or the Nations taxes. If these wealthy and powerful families want wars (for money) they make wars and their member Countries will send a Nations citizens to fight for them as instructed. They make money from arms sales from both sides of the Battle.
It is all about establishing a Private Central Bank within a Country and lines of Credit (made from thin air). Having control of a Countries money system is the key as this is real power. Getting Countries and their citizens into debt is highly profitable for the Banks owners. Then follows their International Justice System and their totally controlled Democracy. They buy Governments and their control (and therefore control of citizens). Citizens become slaves to their system.
All Countries are corporations, ultimately controlled through the BIS. All States and Councils within a Country are also run as corporations, i.e a business.
POLITICS translated means MANY LIES!
Greece appears to have woken-up
the original question is: "I would like to know the REAL reason the EU wants Greece to stay. Obviously Greece is NOT a suitable member, and has problems that cannot be resolved by the EU. It also costs a hell of a lot to keep supporting these folks...so WHY are they doing it? "
now you are murkying the answer with that "UN military bases..." talk (is there any such thing as a UN military base?)
Greece is a sovereign nation state
as such, it is member of four different "clubs", aka alliances:
1) the military defence alliance called NATO (headed by the US)
2) the trade alliance (and regulatory environment and trade negotiation bloc) called EU
3) the monetary alliance called EuroSystem, aka eurozone, visible in that bank called ECB
4) the "restructuring debt and lender of last resort" club of cbs & treasuries called IMF
<<<< if you don't keep track of the clubs you won't understand, ever, what happens in Europe >>>>
to come back to your question: Greeks want to stay in the eurozone, aka keep the EUR. the problem is debt, as recently restructured by the "Troika", i.e. the IMF, the ECB and the EU (and this part is a simplification, then three quarters of the money used to bail out Greece from the markets and banks was from european countries like the Netherlands, Finland and Germany)
Greece's newly elected government wants to restructure further the debt incurred during the crisis. which had a lot to do with Goldman Sachs, cooked books and huge streams from money market fund managers looking for yield and disregarding any risk, so creating a lot of malinvestments (and frauds)
now, imho Greece is a suitable member for all those clubs, and no, the "it costs a hell to support" is a bit of a misrepresentation, so far, or yet
fact: three quarters of this debt does not pay interests until 2023
fact: Greece is, or was, on the cusp of having balanced budgets
fact: a lot of the "Troika's" "reccomendations" on the Greek budgets were seen as unnecessary "austerity" by the current Syriza government
fact: the whole thing is intensely political and geo-political. now the Syriza Greek ministers are "EuroCrats" too. Meaning they will vote for Greece, in Brussels. Including on the commercial "embargos" on Russia
laundering billions in dope money?
This "unfunded liability" analysis is political, not a description of nature or of objective reality.
Congress, in setting up the Social Security fund for example, established it as an investment package. Social Security could have been just as easily set up as a simple transfer payment system - except that would require trust in the good intentions of future governments that folks rightly considered unustified. But Congress was not able to guarantee that future Congresses would keep their hands off this fund, or the havoc that a then-unimaginable ZIRP could wreak on it.
A fresh analysis would start with looking at what is being produced in the economy - useful goods and services - by whom, how it is being monetized and how that money, the claims on it, is being distributed. In this context the Social Security payouts would not appear excessive.
The economic crisis, debt crisis and looming derivitaves debacle would still occur as real, albeit social relaities that could be changed with a stroke of a pen, yet real enough. The move to solve them by reneging on Social Security commitments and raiding the SS funds would be seen as theft driven by desperation.
This is the level of analysis the new government of Greece must bring to bear, as the desperate people who elected it turn to them for help with surviving. They must find a way to restart the production of goods and services and a way to distribute enough of the resulting claims on it to those who can't participate to meet their basic needs. And they must find a way to break enough of Greece's economic contracts and restraints to accomplish this without fatally rupturing Greece's relationships to a very capitalist world.
They call themselves socialists, yet to them falls what may be a last great test of whether what is still fundamentally a capitalist society can unite, break out of the straight jacket that the global capitalist oligarchy has bound them in and rise to this challenge.
I wish them success with all my heart.
Just hink about this: what if the federal government never decided to garnish peoples wages in the first place and left them alone to save (or not) in the manner they see fit. Then and only then would "...Social Security payouts...not appear excessive."
"In this context the Social Security payouts would not appear excessive."
Thanks for that. At least I can now confidently state that indeed, today I have HEARD IT ALL.
It is interesting how you characterize "producers" in your comment. As if the players involved in "production" would accept whatever "distribution" you, as the ultimate authority, see fit. That is how Venzuela views "producers".
Greece has a problem now because the "producers" are not accepting the authorities new "distribution". If I were the ultimate authority I would be more worried about a slave uprising of the producers than an uprising of the pensioners.
WhyWait has to be the most well mannered communist/socialist/redistributionist I've every read!
You're using your brain too much. Its much easier to just quit trying and live on the govt dole. The collapse will happen regardless. So you have 2 choices. 1. Work hard, save, try to be a productive member of society. Collapse comes and you lose everything and wind up living under a bridge eating soilent green. 2. Give up and live on the Govt dole (ie Obamastuff), enjoy life and dont work a day in your life. Collapse comes and you wind up living under a bridge eating soilent green.
Unless you are a part of the .001% Fed Govt/Wall St aristocracy, you lose.
I will settle for dying in battle with my trusted friends around me. Anything more is gravy.
Just a thought...we could keep this ponzi going for a couple more decades if we allow all private sector debt to be treated like an 'unfunded liability' and kept off balance sheet.
The debt will be kept going until we figure out what to do with the people who expect pensions and Social Security direct deposits.
As soon as the parents/grand parents stop getting those checks, the children/grand children will no longer need those people and they will be moved into the liability column pretty darn quickly.
Tell me about moral hazard now you fucking politicians and banksters!!!