This page has been archived and commenting is disabled.

Greece Effectively Defaults To IMF Using SDR Reserves To "Repay" Fund; 1 Month Countdown Begins

Tyler Durden's picture




 

When Monday’s Eurogroup meeting concluded without an agreement between Greece and its creditors, it should have been game over for Athens. With pensioners at their breaking point and with local governments reluctant to comply with a decree mandating a sweep of excess cash reserves, the idea that Greece would somehow be able to scrape together €750 million euros to make a scheduled payment to the IMF today seemed far-fetched at best which is why we asked the following question Monday afternoon:

Where, if not from local governments who have been extremely reluctant to comply with Athens' cash sweep decree, and if not from the IMF which will apparently not be paying itself tomorrow after all, is Greece going to get three quarters of a billion euros in the next 12 hours?

We now know the answer to that question. As Bloomberg reports, citing Kathimerini, Greece tapped IMF reserves to pay .. well, to pay the IMF:

Greece used up ~EU650m reserves from its SDR IMF holdings account to meet loan payment of ~EU750m due to Fund today, Kathimerini newspaper reports, without citing anyone.

 

Reserves kept in IMF holdings account need to be replenished within one month

 

IMF agreed over weekend for their use, given Greece’s liquidity situation; without use of those reserves, payment due today wouldn’t be possible.

Reuters has a bit more color:

Greece tapped emergency reserves in its holding account at the International Monetary Fund to make a crucial 750 million euro (539 million pounds) debt payment to the Fund on Monday, two government officials said on Tuesday.

 

With Athens close to running out of cash and a deal with its international creditors still elusive, there had been doubts whether the leftist-led government would pay the IMF or opt to save cash to pay salaries and pensions later this month.

 

Member countries of the IMF have two accounts at the fund - one where their annual quotas are deposited and a holding account which may be used for emergencies.

 

One official told Reuters that Athens used about 650 million euros from the holding account to make the payment.

 

"We made use of money in our holding account in the fund," the official said, declining to be named. "The government also used about 100 million of its cash reserves."

This explains why Yanis Varoufakis was so confident that the payment would be made and also why the language around the payment confirmation was so bizarre (recall that the heading was "Greece said to have given order for IMF repayment"). It also underscores the degree to which this entire ordeal has now careened into sheer absurdity because disbursing bailout funds that you know will immediately be sent right back where they came from in the form of an interest payment is one thing, but literally paying yourself is another, and the IMF seems to have done the latter on Monday. 

Given this, it’s certainly not surprising that Christine Lagarde and company are not thrilled about the prospect of participating further in what has become an outright farce and as El Mundo reports, the fund has now told the ECB and the European Commission that it does not wish to be a part of a new program for Greece.

Via El Mundo (Google translated):

The International Monetary Fund (IMF) has shown the Eurogroup their desire not to be part of a possible third bailout of Greece, which would amount to 50,000 million and would be vital for the survival of the Hellenic country. The absence of really emotional action by the executive with whom Tsipras contain spending and tackle the deficit, as well as the challenges it has done in recent weeks, as the readmission of public employees has caused the agency wants let all the weight of aid to Greece in the hands of the Eurozone and the ECB.

 

The fact that the IMF wants to stop being part of the bailout of a country is particularly serious, not in vain this institution is always the last resort of economies whose situation is more complicated. Therefore, the IMF has priority over other creditors in the order for recovery and, in all history, only Zimbabwe, Somalia and Sudan have failed to fulfill their obligations to it. However, given the difficulties to unlock a new rescue aid tranche that matures on June 30, the Washington-based organization fears that Greece will become the first economy in a developed nation it incurs a default, as They have confirmed to THE WORLD sources familiar with the process.

For Germany (where lawmakers are already pressuring Angela Merkel to cut the Greeks loose) this may be the final straw.

  • SCHAEUBLE SAYS IMF MUST STAY INVOLVED IN GREECE AID PROGRAM

Greece is now reliant on a similarly ridiculous circular funding scheme to pay public sector employees whereby pensioners will only receive payments if the government is successful at tapping pension funds for cash.

Via Bloomberg:

Greece may be able to meet end-May salaries and pensions payments, if pension funds, municipalities commit more of their cash reserves.

And because all of the above isn't preposterous enough, Greece will depend on the disbursment of the €7.2 billion left in its current program (about half of which is set to come from the IMF) to replenish the funds it raided from its SDR holdings:

Greece assumes that an agreement will be reached by end-May for disbursement of bailout funds, so that it can replenish holdings account reserves.

In sum: the IMF paid itself on behalf of Greece and will now be forced to pay itself back for paying itself later this month. Or, put differently, Greece has prepaid the IMF with IMF money it doesnt have.

Meanwhile, Greek pensioners are set to adopt a similarly ridiculous self-payment scheme in a matter of weeks even if they don't entirely appreciate the sheer insanity that's taken hold in Athens. 

And just to prove how dire the situation now is, Market News just reported the following shocker:

  • GREECE CASH RESERVES STAND AT APPROXIMATELY EUR 90 MILLION - EUROSYSTEM SOURCES

The Greek endgame is now upon us.

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Tue, 05/12/2015 - 07:24 | 6084190 NoDebt
NoDebt's picture

But I can't be out of money, I still have checks!

 

Tue, 05/12/2015 - 07:33 | 6084215 junction
junction's picture

Greece is nearly there, a cashless society, the goal of the Obama administration.  Peasants should not have cash.

Tue, 05/12/2015 - 07:42 | 6084233 new game
new game's picture

so the mattress has 650m euro deeply hidden, what a fucking joke. next up suspended payment, like the check is in the mail. lol...

Tue, 05/12/2015 - 07:45 | 6084241 Aaaarghh
Aaaarghh's picture

o/t Outside our pharmacy there is a bus stop. The council recently decided to put speed bumps on the road. the bumps are now in place and preceding either side of the bump is about 20 yards of zig-zag markings to indicate hazard. Zig zag markings which now overlap said bus stop, requiring the repositioning of the bus shelter some 5 yards further away from the road bumps, wasting valuable tax-payer fiat. My point is, the world is run by the corrupt at EVERY level, starts at the top and works its way down. We need a reset, but we won't get one if tptb have a say.

Tue, 05/12/2015 - 07:49 | 6084260 SickDollar
SickDollar's picture

HERE COMES PUTIN TO THE RESCUE BITCHEZ

BRING ON THE PIPES BITCHEZ

Tue, 05/12/2015 - 08:00 | 6084294 Haus-Targaryen
Haus-Targaryen's picture

So the IMF is paying itself?  

Operation Kick the Can is now complete until next month.  

Tue, 05/12/2015 - 08:06 | 6084308 VinceFostersGhost
VinceFostersGhost's picture

 

 

Vote for me, and you can retire at 45.

 

Living the dream, we'll just get the Germans to pay for it.

Tue, 05/12/2015 - 08:32 | 6084394 Stackers
Stackers's picture

Desperate people do desperate things

Tue, 05/12/2015 - 09:23 | 6084588 knukles
knukles's picture

Kudos, Tyler.
Most excellent job of reporting .... calling it right on the mark ... as always
Keep up the beautiful invaluable work.
                      Thank you
                          K

Tue, 05/12/2015 - 09:33 | 6084647 Killer the Buzzard
Killer the Buzzard's picture

Let's start a Kickstarter to send Mr. Panos to Brussels and give them a talking to.

Tue, 05/12/2015 - 09:59 | 6084773 Oh regional Indian
Oh regional Indian's picture

Perhaps this is THE perfect example if a circle-jerk AND a circle of Jerks...

Tue, 05/12/2015 - 11:11 | 6084995 Keyser
Keyser's picture

The fat lady is warming up in the wings and the derivatives chain is rattling in the closet... It's going to be an interesting summer...

Tue, 05/12/2015 - 11:30 | 6085060 Wolferl
Wolferl's picture

Throw those pathetic Greek GFs out of Europe. Do it already, they are just worthless parasites since decades.

Tue, 05/12/2015 - 12:40 | 6085309 Fish Gone Bad
Fish Gone Bad's picture

Grown adults making shit up. 

Tue, 05/12/2015 - 14:47 | 6085888 DutchR
DutchR's picture

So Santa is not real.........

 

Paper value

Tue, 05/12/2015 - 10:15 | 6084827 Darkman17
Darkman17's picture

And by retire, we mean that you can stop working at your uncles ice cream shop for 15 hrs a week during summer season.

Tue, 05/12/2015 - 10:31 | 6084884 max2205
max2205's picture

And who funds the IMF....you guessed it. ..

Tue, 05/12/2015 - 08:07 | 6084312 new game
new game's picture

next act, ecb buying imf bonds created to bail the bailer. all good, this game will never end.

think the word is hypothicated, like eating puke twice...

Tue, 05/12/2015 - 10:21 | 6084844 agroulx
agroulx's picture

Or Greece issuing bonds so they can pay the IMF, and then issuing more bonds so they can pay those who purchased their intitial bonds....

Tue, 05/12/2015 - 11:35 | 6085084 Kirk2NCC1701
Kirk2NCC1701's picture

Is that you, Janet?  

Don't forget, copying is the sincerest form of flattery.  LOL.

Mon, 05/18/2015 - 10:19 | 6105435 agroulx
agroulx's picture

I never thought I'd be recognizable under this paper bag

Tue, 05/12/2015 - 11:25 | 6085035 Augustus
Augustus's picture

Puutie has his own cash problems with the imploding Russian economy.  He is on the same cash hunt that ViralFukus is on.  Must be a big cash drain sending support to keep the Crimean people happy with becomming serfs again.

 

Putin’s Next Takeover Target Is Oil Giant's $34 Billion Cash Pile

http://www.bloomberg.com/news/articles/2015-05-11/putin-s-34-billion-siberian-hoard-hunted-by-cash-starved-allies

Tue, 05/12/2015 - 09:13 | 6084548 Michigander
Michigander's picture

.

Tue, 05/12/2015 - 09:12 | 6084549 Michigander
Michigander's picture

Exactly! We finally got our road completely ground and resurfaced after 15 years of extreme potholes. 2 months after the raod was done they ripped up 30 feet to put in a new culvert and then patched the road. You couldnt think far enough ahead to put in the culvert first?

Tue, 05/12/2015 - 09:27 | 6084605 StychoKiller
StychoKiller's picture

In all likelihood, the highway/roads dept doesn't know the water/sewer dept's schedule.

Tue, 05/12/2015 - 10:11 | 6084818 Transformer
Transformer's picture

Or they do know each other's schedule.  Years ago in Fargo, those two departments were at war with each other, and the water/sewage dept would promptly show up to tear up new roads.  That is... until one day when a bunch of citizens with guns showed up at the same time and put a stop to the madness.

Tue, 05/12/2015 - 13:56 | 6085673 hibou-Owl
hibou-Owl's picture

I live in France, an awesome medical system. I went to the pharmacy for my wife script, no charge.
But tomorrow night there's a council meeting regarding inspecting everyone's septic system., to ensure sanitation levels.
I should stand up and say that I take my daily dump in the paddock because it adds nutrients to the soil.

Just another layer of dumb fucks thinking they are important.
BRING ON A TOTAL ECONOMIC COLLAPSE SO PEOPLE CAN ACTUALLY LIVE.

Tue, 05/12/2015 - 10:22 | 6084850 willwork4food
willwork4food's picture

You must live in Chicago. That kind of shit happened ALL the time when I was there. Fucking crooks.

Tue, 05/12/2015 - 10:16 | 6084831 dizzyfingers
dizzyfingers's picture

Sounds like union job programs here, every street torn up all the time, then fixed, then torn up again... and so on.

Tue, 05/12/2015 - 07:50 | 6084244 COSMOS
COSMOS's picture

I dont understand the mentality of stripping your accounts bare before they default.  It will make it just that much more painful.  Had they defaulted a year or two ago they would of had cash reserves to pay pensions etc and ease the transition back to the drachma.  FOOLS and CROOKS.

Time for some pitchforks to take to the streets and skewer some of these traitors.

Tue, 05/12/2015 - 07:55 | 6084279 new game
new game's picture

thinking the same. if i was fucked and new it, id be stashing cash and planning the midnight move well in advance. it's called self preservation. are the greeks that fucking stupid OR all part of the plan. strip minning of a country, by the tptb, beholden by slimmy banksters...

Tue, 05/12/2015 - 08:27 | 6084379 NoDebt
NoDebt's picture

That's exactly why the pensioners and municipal governments don't want to send their money to the Greek central bank.  They know it's going to be needed later.

Tue, 05/12/2015 - 10:56 | 6084966 Luckhasit
Luckhasit's picture

The whole idea NoDebt is to drain Greece completly dry (banks, personal savings, everything) making their monthly payments, then have them default.  So, when they are forced out of the EU, well they won't have any kind of bargaining power.  I can see Greece getting sliced up creditors.  

Or in steps Russia, China, Iran whoever wants to give the EU the middle finger.

Tue, 05/12/2015 - 08:34 | 6084400 PhilB
PhilB's picture

So maybe this is just a show. If Syriza was serious about leaving then they would never allow the Banks to be drained of tens of Billions of Euros since January, they would not be paying loans back all this while, would not be depleting all sources of funds and paying pensions in Euros. Maybe, where are the conspiracy guys when you need them, maybe this is a way to make sure the population has no choice but to stay the course and allow a back down from the situation while showing Syriza went to the last dollar, err Euro, to try and change course, and when it is least favorable to actually change course, was forced to stay the course. 

This all seems like a show, a poorly devised Greek drama, for the populations of Greece and Europe with no real intention to do anything else but reach a deal and save face for both sides.

Tue, 05/12/2015 - 08:58 | 6084495 Motasaurus
Motasaurus's picture

I tried to avoid this. I didn't want to be involved in your world any longer. I was honestly fed up with you people and your rotting rubbish heap of a world.

So I haven't involved myself in this little farce of yours since the incident occured. Even though I know everything.

In a word, I was exhausted from my fruitless exertions, unfortunately.

But I've changed my mind because, well, this show you put on today is pitiful. a farce should be funny, but this one hasn't made me laugh even once.

Tue, 05/12/2015 - 16:53 | 6086491 Motasaurus
Motasaurus's picture

wow.

Such little love for Shirow Masamune on here.  

Tue, 05/12/2015 - 09:03 | 6084517 Morbid
Morbid's picture

i tend to believe that this new greek government is just part of the project. otherwise noone would allow them to take the steering wheel. eu threw a bone towards greek public to buy some time. unless people revolt they would continue their descent.

Tue, 05/12/2015 - 07:58 | 6084291 XAU XAG
XAU XAG's picture

Those reserves would have been FROZEN to pay any debt 

 

Personally I would pulled the funds purchased gold then default and issue new currency

Tue, 05/12/2015 - 11:34 | 6085078 QQQBall
QQQBall's picture

Pulled the funds - woudl never have been allowed. Idjit

Tue, 05/12/2015 - 08:05 | 6084306 post turtle saver
post turtle saver's picture

I agree completely... that which can't be paid back, won't be paid back... so, why pretend... defaulting was the best path for Greece... they should have shipped in some consultants from Iceland to kick off the process four years ago... instead we see this constant daily drama and pathetic mewling over spilt milk that will never ever find its way back into the bottle...

Greece should never have been admitted to the EU, ultimately... terrible mistake

Tue, 05/12/2015 - 09:10 | 6084377 Ghordius
Ghordius's picture

welcome in the Age Of Pretensions. who does not pretend and extend... has to pay. now

Tue, 05/12/2015 - 09:11 | 6084390 Ghordius
Ghordius's picture

it's not the membership in the EU that is an issue. nor that in NATO. nor that in OSCE. nor that to the UN. nor that to any other club of sovereign except the EuroSystem, i.e. the ECB (19 members)

if you are not keeping track of what club is what... I have bad news for you. the future might look more complicated. see AIIB, where some countries will be members of both IMF and AIIB, and some only of one, and some of none

multipolarity will mean more competing and cooperating clubs of sovereigns

Tue, 05/12/2015 - 08:24 | 6084361 Ghordius
Ghordius's picture

cosmos, if you ever had a running business with let's say three or more co-owners you might understand this "mentality" better, I'd say

in the case of the Hellenic Republic, it's... democracy. this current Greek government has not received a mandate or permission to default as such, from Parliament, nor was that in any way on the syriza electoral platform as point

the IMF is, for good or bad, a kind of bank for sovereigns, and their lender of last resort

as in the case of a bank, you might have a loan from them and at the same time a checking account, and perhaps even a portfolio with stocks of that bank. Greece has "stocks" of the IMF, as all members, and also this "emergency account" from which it can draw, though, as in the case of a bank vs. private party, different conditions depending from the account

in all this, note one thing: Greece's gov does not want to leave the IMF... while Putin's Russia has offered a place in the new brics' AIIB, the new competition to the IFM, the "anti-IMF"

meanwhile, Germany is insisting on the IMF's involvement as a kind of "hey, if you want to play geopolitics on this, then take out your wallet, too"

all this talk about "why have they not defaulted a year or two ago" is neither here nor there. one or two years ago there was a different government that did a lot of hurtful adjustments steering towards balanced budgets - which is the "golden standard" the other eurozone countries agreed on as "what it takes" in order to get help. a government based on parties that are now at the opposition, in parliament

and even if the Tsipras Cabinet sucks the IMF accounts dry to then leave for AIIB... well, a Chinese-led "anti-IMF" will nevertheless not subscribe to the full neo-keynesian dogma of some western countries. even the IMF never really subscribed to that. so somehow balancing that budget would return to be an issue

which is the problem with unbridled neo-keynesianism in general, sovereign or private: spending does help. throwing money at problems... works. until you are in financial problems, that is

"the markets" aren't lending to Greece anymore. balancing that budget would make Greece creditworthy again... despite a leftist government, for all, be them markets or other sovereigns or sov-banks like the IMF or soon the AIIB

please spare me, though, this tired talk about pitchforks. it sounds so... impotent and "keyboard-warrior"-like. no revolution has ever happened because bystanders cheered for it

Tue, 05/12/2015 - 08:30 | 6084388 NoDebt
NoDebt's picture

"this current Greek government has not received a mandate or permission to default as such, from Parliament, nor was that in any way on the syriza electoral platform as point"

Guaranteed, when the defaut happens it won't be voted on.  If you were in their parliament would you want to publicly be seen for voting to default?  Or, for that matter, for voting NOT to default?  No way.  And that's just one, minor, reason why there won't be a vote.

Tue, 05/12/2015 - 08:38 | 6084423 Ghordius
Ghordius's picture

excellent point, but there is a little "tradition", if you want, that any government not doing what it's parliament wants can be indicted with criminal charges, besides being thrown out

sure, if Parliament is looking away on purpose... it might help. but I would not want to be a minister in a cabinet that has to notify parliament "sorry, we grounded the ship of state". charges of treasonous misneglect or similar things come to mind. it's a high-stakes "game"

Tue, 05/12/2015 - 09:34 | 6084654 NoDebt
NoDebt's picture

Surely, at this late date, you can't believe that the elites would let themselves be put in jail.

Tue, 05/12/2015 - 09:47 | 6084729 Ghordius
Ghordius's picture

I could point out that revolutions are often based on elites saying: you won't put me to court because of that. One of the best examples for that would be Caesar crossing the Rubicon

interestingly, one of the charges he feared most was that one from Cato Minor: of going against the Jus Gentium, when he accepted the surrender of an army and butchered it afterwards

(the equivalent of it would have been Bush The Younger landing on that aircraft carrier, claiming "Mission Accomplished"... while fretting about a Senate asking him very pointed questions about WMDs, reasons for war and torture)

Tue, 05/12/2015 - 10:31 | 6084885 GMadScientist
GMadScientist's picture

Caesar paid for his mistakes. Bush: not so much, yet.

Tue, 05/12/2015 - 08:31 | 6084391 Grumbleduke
Grumbleduke's picture

I know, you won't approve, but I'll say it anyway:

FUCK YOU AND YOUR DEBT BASED MONEY LOGIC.

Fuck all of you, pretending there's no difference between currency, money - and trust.

Tue, 05/12/2015 - 09:19 | 6084433 Ghordius
Ghordius's picture

do I pretend there is no difference between currency, "hard" money (i.e. based on commodities, for example gold or silver) or debt, or... trust?

have a look everytime a country had similar problems while owing gold. Baron Rothschild used to call in the British Navy gunboats for collection

Tue, 05/12/2015 - 10:32 | 6084887 GMadScientist
GMadScientist's picture

In a very real sense, money is little more than the most pervasive mental disease ever to affect humankind.

Tue, 05/12/2015 - 10:38 | 6084904 Ghordius
Ghordius's picture

it's a human invention. it's base is on the IOU, another human invention. modern fiat currencies are just government's IOUs... under protection of the law. except if they are private IOUs. like some we have in the eurozone (where we have a multi-government currency), or BitCoin, for example

Tue, 05/12/2015 - 10:42 | 6084917 GMadScientist
GMadScientist's picture

True, but somewhere along the line we forgot that it's a tool for accomplishing economic ends and made it the purpose for existence itself; it's all fun and games until you lose touch with the fact that it's a construct of our minds and not a real thing (like clean air, water, and other actual resources).

Tue, 05/12/2015 - 11:41 | 6085105 Kirk2NCC1701
Kirk2NCC1701's picture

Grumbleduke, don't hold back, tell us how you really feel.

Tue, 05/12/2015 - 08:34 | 6084402 Haus-Targaryen
Haus-Targaryen's picture

I upvoted you. 

I couldn't really see anything I disagreed with.  

Tue, 05/12/2015 - 08:45 | 6084447 Ghordius
Ghordius's picture

this means only one thing: I forgot the one point on which we differ (most)

I still maintain that default is not necessarily a given. my most important evidence: how much interest Greek debt pays until 2022. but we'll see

Tue, 05/12/2015 - 08:48 | 6084462 Haus-Targaryen
Haus-Targaryen's picture

Our difference is our outlook on the common man.  

You see everyone as either equally valuable, whereas I don't.  

I think that is the head of all our differences.  

Tue, 05/12/2015 - 09:30 | 6084529 Ghordius
Ghordius's picture

no, it has little to do with value, and a lot to do with responsibility. just lately I had here a discussion about Latvia. their police is very hard with anti-EU protesters, they are immediately suspected of going against the constitution

why? well, mainly because those who protest against certain Latvian laws (which is ok) also protest against the Latvian Constitution (which is... ok if done through the proper channels, depending from the constitutional setup) and also protest against NATO (ok) and for a secession of territories to Russia (debatable) and for Russia (ok) and the minority rights of Russian descent people in Latvia (very ok) and against the EU (ok) and the EUR (very ok)

problem there... all those groups overlap. strongly. and so the police is quick in treating an anti-EU protest the same way as things against their constitution. and this is not ok

is it my responsibility? well, no. nevertheless, this puts me in a moral quandary. Latvia is a sovereign, and I am not a citizen of Latvia. so it's not my business. nevertheless it's not the intent of a confederation like the EU to see people being harassed by a national police just because they are promoting the exit of that confederation

do I want a... federal police or office to go after those cases? hell, no way. one of the good things of the EU is that it isn't a federation, and has no federal authorities of this kind (outside the strictly defined common regulatory stuff which are nevertheless to be seen after by national authorities)

so what am I to do? I want Latvians to be able to publicly protest about whatever they want (though I do understand if the constitution puts some restrictions on how to protest against constitutional matters). Nevertheless, it's a Latvian national matter, and it's their police. Sovereignty implies a modicum of respect for the sovereignty of others

and this is not only a matter for Latvia and Estonia. Hungary comes to mind, for a whole different set of reasons

our difference might be that you mistake me for a "full throttle equalist", instead of a citizen

Tue, 05/12/2015 - 11:44 | 6085117 GMadScientist
GMadScientist's picture

The problem is that your sovereignty should never be exercised at the sole discretion of any government (federated or otherwise) and if that injustice is tolerated in one country there's no telling what the half life of sovereignty in the next might be. Your sovereignty, those borders, ...all conditional.

There is no jus gentium in this electroplated age of armies for hire. ;)

Tue, 05/12/2015 - 11:59 | 6085144 Kirk2NCC1701
Kirk2NCC1701's picture

Ghordius, note that: IMF = US = GS & Friends 

And GS are the scum who got them into this mess in the first place.

Saying that "they don't to leave the IMF" is quite funny, given the fact that they used their IMF Reserves (in SDR, of all units!), to pay the IMF.  How poetic and ironic, if not even perhaps iconic (I con IC... IC, the International Criminals, International Cabalists).

Tue, 05/12/2015 - 13:07 | 6085433 NeoRandian
NeoRandian's picture

"no revolution has ever happened because bystanders cheered for it"

 

Because old Mr. Marx was an active participant in every workers' struggle.

Tue, 05/12/2015 - 16:39 | 6086419 Ghordius
Ghordius's picture

+1 ...though I'd say he did more then just stand and cheer, or call for pitchforks

Marx wrote a very deep critique of capitalism, the bourgeois society, the effects of financial centers and their concentration of capital/finance and a often criticised (and imho falsifiably wrong) complete economic theory with historical underpinnings on top of it

It costed him most of his life, all financed by Engels, his co-author

Tue, 05/12/2015 - 08:21 | 6084363 Shaten
Shaten's picture

The part you forget is the Greek citizens know if the country goes to the Drachma they will get screwed.

Right now there savings are worth something, and those with jobs have a currency that works, If there forced to the Drachma history has shown the Greek goverment will fail with hyper inflation. So which trap is worse hyper inflation or a bankrupt goverment? If your a citizen the inflation, if your the goverment the bankruptcy.

Tue, 05/12/2015 - 08:28 | 6084385 Muddy1
Muddy1's picture

@COSMOS,

NO, time to skewer the IMF, the "Central" bankers, and the FED, and.......

Tue, 05/12/2015 - 08:46 | 6084452 Ghordius
Ghordius's picture

... AIIB? though in defense of it, it has not started, yet

Tue, 05/12/2015 - 08:36 | 6084412 williambanzai7
williambanzai7's picture

Tue, 05/12/2015 - 08:47 | 6084460 Ghordius
Ghordius's picture

that pussy does not look soooo dangerous. a tiger in disguise?

Tue, 05/12/2015 - 09:29 | 6084619 zerocash
zerocash's picture

Beware of outward appearances, things are not always as they seem. http://youtu.be/XcxKIJTb3Hg

Tue, 05/12/2015 - 12:11 | 6085201 Kirk2NCC1701
Kirk2NCC1701's picture

Varoufakis: "Are we mice or men?"

Greek chorus: "Neither.  We are pussies."

Tue, 05/12/2015 - 07:46 | 6084246 XAU XAG
XAU XAG's picture

 'The problem with socialism is that you eventually run out of other people's money.'

 

"Eventually" is fast approaching

Tue, 05/12/2015 - 08:19 | 6084355 VinceFostersGhost
VinceFostersGhost's picture

 

 

Are we there yet?

Tue, 05/12/2015 - 09:14 | 6084553 rwe2late
rwe2late's picture

One problem with Thatcher's mantra is that it pretends everyone has the 'money',
 and then it is purportedly taken away by the 'socialists',
when in reality , by controlling the money supply and monopolizing  resources,
a few eventually monopolize and hoard the world's wealth and money
against everyone else.

It is much more accurate to say that:

the problem with capitalism is that it eventually destroys everything of worth.

Tue, 05/12/2015 - 09:18 | 6084564 Ghordius
Ghordius's picture

there was a saying, once, about successful capitalists being often the worst enemies of capitalism in general

Tue, 05/12/2015 - 09:32 | 6084642 ParkAveFlasher
ParkAveFlasher's picture

The term "capitalism" is chronically overapplied in modern communication. 

Tue, 05/12/2015 - 09:39 | 6084679 Ghordius
Ghordius's picture

ParkAveFlasher, I fully agree. Interestingly, "Capitalism" is a word that was coined by... Marx, the founder of "Socialism" and "Communism"

and the very best definition of Capitalism I've seen is by a Marxist that nevertheless wrote an excellent book: David Graeber, "Debt: the first 5'000 years"

the short of his definition: credit and debt is the essence of Capitalism. no IOUs, no capitalism

taking out the "market structure" part of it as a completely different matter is very refreshing, and to the point. Capitalism is indeed first and most about credit and debt, and how it is seen, judged and allowed

Tue, 05/12/2015 - 09:56 | 6084756 ParkAveFlasher
ParkAveFlasher's picture

Thank you.  I would agree that you can't build without a plan, that seminal thought defined by a promise to pay.  The implication of relieving the world of an uncomfortable stasis is that debt must be issued as a pledge.  A promise is simply a plan to deliver.  If you lend me an axe, and feed me for a week from your fields, I will build you a house so that you may be sheltered.  But you must lend me the axe.  Debt is a means to impart a natural motion, akin to digging a trough to channel the waters or founding a house.   This all seems like semantics until you make a concrete analogy or metaphor that is completely appropriate.  Then you have illumination, and then all of these games suddenly appear precisely like the stunted and severely malformed child's play that they are.

Tue, 05/12/2015 - 09:59 | 6084770 Ghordius
Ghordius's picture

again, I fully agree. though the moment a creditor of yours insists in taking one of your daughters and sell it as a slave on the market because he won't wait for your late payments... that's the moment I stop caring about capitalism in it's purest form, and start pleading for "limited capitalism". which was once a reason for leaving the Old World for the New, btw

Tue, 05/12/2015 - 10:07 | 6084801 ParkAveFlasher
ParkAveFlasher's picture

Now, there, the problem is in your own definition of "capital", which seems a cognitive slurry bucket into which you dump your descendants.  Show me the one who defines "capitalism" on such terms, and I will then show you the one who has no place in the culture of the civilized, who births great darkness from his own mind, and the one who misappropriates words in a Humpty Dumpty fashion. 

I don't know about anyone else, but I define "capital" strictly in terms of the physical tools that enhance the quality of all human life. 

 

Tue, 05/12/2015 - 10:28 | 6084871 Ghordius
Ghordius's picture

in short, you'll show me a weasel, I guess. but how about a patent? a piece of art? or a bridge? or a dam? I guess all that can't be recreated on a whim without cost can be seen as capital in it's "wealth" form. the definition of Graeber is handy for a simple reason: capital you just have or "do it yourself" is usually not contested (except by the Left, of course)

but as soon as you lent it, and might want back... there contestations are possible. and there you have different points of view of what is just

Tue, 05/12/2015 - 11:02 | 6084978 Real Estate Geek
Real Estate Geek's picture

Thank you for a very interesting discussion. I learned a lot and added to my reading list. Finding gems such as this is the reason why I read the comments as assiduously as many of the articles.

Tue, 05/12/2015 - 11:48 | 6085134 GMadScientist
GMadScientist's picture

The problem is trying to band-aid debt onto the structure of real bills doctrine as if either weren't a con game.

Tue, 05/12/2015 - 11:47 | 6085130 GMadScientist
GMadScientist's picture

"We've already established, what you are, my dear, now we're just haggling for price." 

Tue, 05/12/2015 - 07:47 | 6084252 Fukushima Fricassee
Fukushima Fricassee's picture

But how will that stupid as shit president pay for male hookers?

Tue, 05/12/2015 - 08:34 | 6084405 Grumbleduke
Grumbleduke's picture

With Michelle's credit card, of course.

Silly boy.

Tue, 05/12/2015 - 10:09 | 6084811 knukles
knukles's picture

Using her/his credit card by him to pay for guy hookers is kinda hard to get a mental grasp upon...

Tue, 05/12/2015 - 08:51 | 6084477 Uchtdorf
Uchtdorf's picture

Had to downvote you. This plan of controlling all nations started way before Obama was even born.

Tue, 05/12/2015 - 09:00 | 6084491 tony wilson and...
tony wilson and saturn zion devils's picture

whats your beef goy loser
bonio the singer from u2 is cash less
he ice cool
the cool kids
down my way cannot wait
for iwatch scan
cash is for dopes
and terror folks
who envy us
are against are
freedumbs
values
rfid chips cashless barclays say it here.
cashless for coolio rap stars
yes sir.
iwatch scan checking your blood
while tracking you keeping you in new order
paying off your debts slow
keeping you updated on your next vaccine dates
and all.
letting you know bleep bleep
when its time to die
what could be better
than big brother monsanto futures.
give me id chips for oozo and olives any day
come on greek
get with the cool goldman crazy rabbi kats
cash is cooler in electrical than on paper

Tue, 05/12/2015 - 09:54 | 6084757 HungryPorkChop
HungryPorkChop's picture

These Greeks and Euro nations are professional can kickers.  They make Argentina and Brazil look like they need schooling.  Greece has already defaulted two or three times in the past few years just they keep changing the definition of a default. 

Maybe Greece eventually leaves the Euro but it will never ever in a million years be called a default.  Its my guess we'll still be reading about Greece teetering on default for at least a couple more years. 

Tue, 05/12/2015 - 09:03 | 6084516 indygo55
indygo55's picture

Greece can print their own Euros. Hey, who cares? As an imfamous presidential candidate once said, "At this point, what does it matter?"

http://www.polycapitalist.com/2012/05/greece-can-physically-print-its-ow...

 

 

Tue, 05/12/2015 - 09:19 | 6084574 thetruthhurts
thetruthhurts's picture

What happens when a country stops printing its own money backed by something and gives that authority to a banker......

 

Slavery.

Tue, 05/12/2015 - 10:51 | 6084944 rubiconsolutions
rubiconsolutions's picture

Ah, the "J. Wellingtom Wimpy from Popeye" method of debt management.

Tue, 05/12/2015 - 07:25 | 6084195 max2205
max2205's picture

Pick a shell any shell.

Tue, 05/12/2015 - 07:27 | 6084196 shovelhead
shovelhead's picture

Shook the very last quarter out of the couch, I see.

Nicely done.

Tue, 05/12/2015 - 07:33 | 6084216 Its_the_economy...
Its_the_economy_stupid's picture

Fuck the Banksters.

Tue, 05/12/2015 - 07:28 | 6084199 Seize Mars
Seize Mars's picture

Um, "...using SDR reserves to repay fund..."

Ah, I see. (Slaps forehead.) I should have seen this bullshit coming.

Of course.

Tue, 05/12/2015 - 07:45 | 6084237 stocktivity
stocktivity's picture

...and a month from now, more bullshit.

Tue, 05/12/2015 - 07:48 | 6084253 COSMOS
COSMOS's picture

This shows you the Greek govt does not serve the people but the EUcrauts.  They must of been bought for a looong time ago.  TRAITORS.

Tue, 05/12/2015 - 08:09 | 6084319 VinceFostersGhost
VinceFostersGhost's picture

 

 

Hence the statement, if it sounds to good to be true...

 

It probably is.

Tue, 05/12/2015 - 08:53 | 6084485 Ghordius
Ghordius's picture

technically, your sentence makes no sense. the "EuroCrats", aka "EUcrats" is a nickname for the EU Council members

so the Greek Prime Minister Tsipras is an "EuroCrat", as much as PM Cameron or Chancellor Merkel and so on

the "sub-committees" of that council too. so the Greek Finance Minister Varoufakis is an "EuroCrat" too, as his dear collegue the German FinMin Schaeuble

the judge of how the Greek Government is serving the Greek People, btw, is not you, but the elected Greek Parliament (and of course the Greek Courts of Justice)

Tue, 05/12/2015 - 07:53 | 6084267 Eirik Magnus Larssen
Eirik Magnus Larssen's picture

In India, there exists a phrase for this: "Ganga Jal Se Ganga Puja". 

It roughly translates to: "To use the sacred water of the (river) Ganges to worship the Ganges."

Tue, 05/12/2015 - 07:28 | 6084201 B2u
B2u's picture

ah...another Ouroboros...

Tue, 05/12/2015 - 07:28 | 6084202 Seasmoke
Seasmoke's picture

Petro paid Hans. 

Tue, 05/12/2015 - 07:30 | 6084207 Perseus son of Zeus
Perseus son of Zeus's picture

It doesn't really matter. It's all posturing. You owe me $20 Billion whatevers of confetti. Who give a shit just print some or host a bris party for your masters.

Tue, 05/12/2015 - 09:39 | 6084678 zerocash
zerocash's picture

Judenfetzen

Tue, 05/12/2015 - 07:30 | 6084209 MathWins
MathWins's picture

Reality can be a bitch.

Tue, 05/12/2015 - 07:31 | 6084210 FrankieGoesToHo...
FrankieGoesToHollywood's picture

50,000 million

This is so F*ed up, even the reporters are using accounting words.  Thats 50 Billion to you and I.

Tue, 05/12/2015 - 07:46 | 6084243 jose.six.pack
jose.six.pack's picture

Translated from El Mundo.
The spanish word "billón" means trillion.

Tue, 05/12/2015 - 11:53 | 6085147 Calmyourself
Calmyourself's picture

Thats not an accounting word, it is the European billion

Tue, 05/12/2015 - 07:31 | 6084211 doggis
doggis's picture

ok zerohedge - I think the greeks are exposing the TRUE insanity of the central bank planned world. PEAK DEBT IS PEAK INSOLVENCY, AND YET THE MARKETS CONTINUES FLOATING UPWARD ON QE!!! IT IS ALL INSANE.

In sum: the IMF paid itself on behalf of Greece and will now be forced to pay itself back for paying itself later this month.

 Meanwhile, Greek pensioners are set to adopt a similarly ridiculous self-payment scheme in a matter of weeks even if they don't entirely appreciate the sheer insanity that's taken hold in Athens.

 


Tue, 05/12/2015 - 07:47 | 6084247 new game
new game's picture

yup, just called my mortgage banker and said pay my mortgage with the banks reserves. he said no problem, we have money set aside just for deadbeats like you. what a fucking joke...

Tue, 05/12/2015 - 08:08 | 6084317 Oldwood
Oldwood's picture

The challenge is to watch as the absurdity becomes more obvious, more undeniable, every day, while still remaining in denial.

Its kind of like trying to see how drunk you can get while still remaining conscious. The hangover is going to be a bitch.

Regardless, if Greece was leaving the EU for ANY economic reasons, they would have been gone years ago...but we know better.

We are watching not only Greece, but the entirety of Europe, the US, South and central America, China, Japan and all the rest undeniably bankrupt, yet not. The thing is that there are many people profiting from this and many more simply hoping to hold onto what they have, and they will do whatever they can to keep the dream alive.

For the rest of us, we can only watch in amazement, like watching the waves receding from the shore, knowing and trying to tell everyone that it is the precursor to a killer wave returning far more quickly than anyone could anticipate or react to.

In a strange way I think many of us will still fall victim to it if for no other reason than we are attracted to the spectacle of the horror...

Tue, 05/12/2015 - 08:15 | 6084343 new game
new game's picture

when the wheels finally come off the wagon, well, we all will be impacted some way or another.

mainly, a dolla won't be worth a dolla. strip minning our labor and acumulated wealth...

Tue, 05/12/2015 - 08:32 | 6084395 Oldwood
Oldwood's picture

Agreed, we will all be affected. I was think more directly affected as in still being in the markets. I have been out since 2010 and have no intention of returning, but I have no illusions that this high stakes casino action will not take us all down with it.

Tue, 05/12/2015 - 07:39 | 6084223 DutchBoy2015
DutchBoy2015's picture

Any problem can be solved with a good keyboard with a number pad.

 

Govt official to terminal operator ''How much money we got ,George''?  

Add a few more zeroes, ,George,  problem solved.

Tue, 05/12/2015 - 07:38 | 6084225 Its_the_economy...
Its_the_economy_stupid's picture

All this time I thought Greece was leading on the Banksters, but in reality the Banksters were leading Greece on while the strip mining continued.

Tue, 05/12/2015 - 07:40 | 6084229 shovelhead
shovelhead's picture

SCHAEUBLE SAYS IMF MUST STAY INVOLVED IN GREECE AID PROGRAM

ROFL.

Nothing else to say.

 

Tue, 05/12/2015 - 07:49 | 6084259 new game
new game's picture

yup, they are very much involve; it is called backstoped by future write downs and taxpayer under writing. payor of last resort. disengenous bastard...

Tue, 05/12/2015 - 07:42 | 6084231 gwar5
gwar5's picture

Hey, if QE is so great why can't the IMF just keep printing SDRs?  It's not real money either.

Tue, 05/12/2015 - 08:40 | 6084425 Imagery
Imagery's picture

DING......DING.......DING.......

We have a winner!  The Black Swan in plain sight that none of the proles can see.  The World Govts have and do fool their citizens with fiats - every country.  But they promise not to fool each other you see becuase that ultimately ends in WAR.

So, they created this SDR taht was supposed to be the DOUBLE DOG DARE of "protected fiat".  The last line of promises if you will.  The local (national) fiats can each crater and the only persons who suffer are the local (national) plebs.  BUT when the SDR is pilfered, well, that's when the world financial oligarchs start taking a hit and that is what brings upon the World Wars.  It's not a big deal as Leona said "when the plebs lose or pay taxes" but when the Oligs Class are stolen from with their own BS Fiat SDRs, well then there will be hell to pay.

FU<k them all and Roll the Guillotines.

I find it amusing here on this thread and elsewhere on ZH when even here, by far the most "aware" group of the financial crimes permeating the entire world today, no one seems to be aware of what occurs in the US where all the Banks have incorporated in South Dakota and then SD passed laws protecting "Usury" perps.  The US Supreme Court then held a little "hearing" whereby they ruled the states rights of SD prevailed over the US Fed rights (where all the "Usury" Laws reside as Consumer Protection Laws) and thereby ruled in favour of protecting all TBTF WS Banks that are incorporated in South Dakota under the US Constitution as States' Rights supercede Federal rights.  Everything hunky dori to this point but the 900 lb gorilla in the room that the US Supreme Court did flips to conceal and not have to rule upon in the very same case is taht the case  being heard was about "Usury" actions by the TBTF WS Banks and that only occurs against CItizens - who in fact are Superior to BOTH States' RIghts (and even the miserable fucking state of SD) and Federal Govt.

So why are we not hanging some USSC Justices along with the TBTF WS Bankers?

Tue, 05/12/2015 - 07:45 | 6084238 Usurious
Usurious's picture

 

 

Somebody should give Greece some debt free money so that they can pay their debt based fiat Rothschild script USURY (interest) payment

Tue, 05/12/2015 - 07:45 | 6084240 Farmer Joe in B...
Farmer Joe in Brooklyn's picture

Plenty of time for some fireworks before June 19 options expiry.

However, I suspect there is a can waiting to be kicked here...

Tue, 05/12/2015 - 07:48 | 6084254 localizer
localizer's picture

"IMF is now paying itself" - solution to all problems, lol

Tue, 05/12/2015 - 09:37 | 6084667 semperfi
semperfi's picture

Christy is yankin herself off

Tue, 05/12/2015 - 07:48 | 6084256 RSDallas
RSDallas's picture

The fat lady is beginning to hum baby!

Tue, 05/12/2015 - 07:50 | 6084262 saltoafronteira
saltoafronteira's picture

Concerted action? Too soon to go east, so we must keep pretending ? Keeping the yank analists in the dark ? I'm beginning to think we are in a mirror's game. The Germans and the Greeks could be in more collusion than meets the eye to fool the anglo-orcs.

Tue, 05/12/2015 - 07:54 | 6084275 Global Observer
Global Observer's picture

They used an overdraft to make a mortgage payment. Cool!

Tue, 05/12/2015 - 08:12 | 6084330 Oldwood
Oldwood's picture

No such thing as not being able to pay your debts. It is simply a lack of credit, and given that debt is the ONLY source of income, there will ALWAYS be someone willing to loan.

Its not like its real money after all.

Tue, 05/12/2015 - 07:56 | 6084282 Catullus
Catullus's picture

So their gold at the IMF?

Tue, 05/12/2015 - 08:14 | 6084335 VinceFostersGhost
VinceFostersGhost's picture

 

 

Only Nixon can go to China, but he can't get gold from the IMF.

Tue, 05/12/2015 - 07:57 | 6084283 BadDog
BadDog's picture

Wimpy the moocher.  I'll gladly pay you on thursday for a hamburger today.

Tue, 05/12/2015 - 08:01 | 6084298 Monetas
Monetas's picture

I "effectively" shit my pants .... good thing I was wearing .... my incontinence briefs !

Tue, 05/12/2015 - 08:04 | 6084299 Monetas
Monetas's picture

"Don't ask for whom the bell trolls .... it trolls for thee !" .... Anonymous Russian Troll

Tue, 05/12/2015 - 08:01 | 6084300 Panic Mode
Panic Mode's picture

Can't pay, won't pay & shouldn't pay. Blow me.

Tue, 05/12/2015 - 08:11 | 6084326 VinceFostersGhost
VinceFostersGhost's picture

 

 

The dude abides....

Tue, 05/12/2015 - 08:09 | 6084320 falak pema
falak pema's picture

haha, what a slap in the face for Lady Lagarde who keeps slapping the Greeks !

We stole our SDRs to pay Lady Lagarde.

Hoisted on her own petard! haha! 

Tue, 05/12/2015 - 08:10 | 6084322 agstacks
agstacks's picture

I'm sure they'll be in a much better spot in 30 days and able to repay Christine, lol. 

Tue, 05/12/2015 - 08:10 | 6084324 post turtle saver
post turtle saver's picture

... and people wondered why China backed off from being in the IMF's XDR currency basket

like that had anything to do with their supposed gold reserves lol... get real... this is the real reason

Tue, 05/12/2015 - 08:14 | 6084337 1stepcloser
1stepcloser's picture

750 Million euro, do you know how many molly maids you could fund with that kind of money!

Tue, 05/12/2015 - 09:36 | 6084662 semperfi
semperfi's picture

or *uck buddies

Tue, 05/12/2015 - 08:17 | 6084344 BiteMeBO
BiteMeBO's picture

M U S T   E X T E N D 

Tue, 05/12/2015 - 08:20 | 6084359 agstacks
agstacks's picture

Are we sure the IMF is really done?  Won't they offer them another 30 days next month in exchange for a a few small islands or mineral rights? 

Tue, 05/12/2015 - 09:22 | 6084585 youngman
youngman's picture

Now Greece probably qualifies to get a new IMF loan to pay off its emergency account....round and round and round we go...you gotta love it..they have some great ideas.....

Tue, 05/12/2015 - 08:26 | 6084369 yogibear
yogibear's picture

More monopoly money. Just shuffle paper around and say everything is fixed.

It's Greek groundhog day series II.

The Eurocrats and central banksters at play.

Christine Lagarde and the other useless Euro leeches have to say they have a purpose when all they do is fly around, make appearances, eat  the finest foods and collect big paychecks.

Tue, 05/12/2015 - 08:32 | 6084396 css1971
css1971's picture

Greece is quite a small nation. Just think how long they can kick the can for Spain and Italy.

Tue, 05/12/2015 - 08:35 | 6084409 Bill of Rights
Bill of Rights's picture

And gold sits there saying " I know nothin "

Tue, 05/12/2015 - 08:38 | 6084422 luckylongshot
luckylongshot's picture

The comment at the end of this article about the sheer insanity that has taken hold in Athens, is problematic. This is because history strongly indicates that the Greek position is the realistic one and the insanity exists on the EU side of this debate. This is because the situation of too much debt has occurred more the 600 times in history and has only ever been fixed by default and a debt write off. The EU position is that despite there being no historical evidence of either QE or Austerity ever successfully treating the problem of too much debt they want to keep trying this approach in this context is cleaarly insane.....insanity may be too weak a word to describe what the EU is doing as Einstein said the definition of insanity was doing the same experiment twice and expecting a different result...what would he call doing it 600 times and still expecting a different result?...moronic??

Tue, 05/12/2015 - 08:41 | 6084430 SpanishGoop
SpanishGoop's picture

Tsiparis and Varouvakis are doing a hell of a good job.

I mean by plundering Greece.

Almost better than any bankster could.

 

Tue, 05/12/2015 - 08:42 | 6084435 JPMorgan
JPMorgan's picture

They will allow / do anything to keep this debt ridden freak show going.

It's ultimately all about who control's the country going forward and getting paid in full of coarse.

Tue, 05/12/2015 - 08:43 | 6084439 cnmcdee
cnmcdee's picture

Europe you are next then America. If I was an illuminati I would flood these countries with immigrants and silence everybody from speaking for being raccist. Simultaneously I would run the public debt until the people were hopelessly unable to pay before enacting a dystopian society of cold metallic slavery...

You say this is already almost done? wait wut?...

Tue, 05/12/2015 - 09:00 | 6084502 MKD
MKD's picture

Isnt that already happening in europe. 500 000 boat people from africa and middle east in 2014 and more expected in 2015.

dilute the white people

Do NOT follow this link or you will be banned from the site!