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Collapse, Part 1: Greece
Submitted by Charles Hugh-Smith of OfTwoMinds blog,
When systems are broke and broken, collapse is the only way forward.
The theme this week is collapse. It's a big, complex topic because there are as many types of collapse as there are systems. Some systems appear stable on the surface but collapse suddenly; others visibly decay for decades before finally slipping beneath the waves of history, and some go through stages of collapse.
The taxonomy of collapse is broad, and each unsustainable system (i.e. a system that will fail despite claims to the contrary) has its unique characteristics.
Which brings us to Greece.
I have written extensively about Greece and the doomed financial arrangement known as the euro for many years--for example: Greece, Please Do The Right Thing: Default Now (June 1, 2011).
When Debt is More Important Than People, The System Is Evil (February 18, 2012)
Greece at the Crossroads: the Oligarchs Blew It (January 27, 2015)
Greece and the Endgame of the Neocolonial Model of Exploitation(February 19, 2015)
When Europe Gets Greece's Jingle Mail: Dealing with Default (May 15, 2015)
With the bankruptcy of Greece now undeniable, we've finally reached the endgame of the Neocolonial-Financialization Model. There are no more markets in Greece to exploit with financialization, and the fact that the mountains of debt are unpayable can no longer be masked.
Europe's financial Aristocracy has an unsolvable dilemma: writing off defaulted debt also writes off assets and income streams, for every debt is somebody else's asset and income stream. When all those phantom assets are recognized as worthless, collateral vanishes and the system implodes.
The peripheral nations of the EU are effectively neocolonial debtors of the core, and the taxpayers of the core nations are now feudal serfs whose labor is devoted to making good on any loans to the periphery that go bad. (see chart of Greece's debtors below)
Greece's financial/political Elites milked the entry into the EU for all it was worth, effectively destroying the Greek economy in their limitless looting: Misrule of the Few: How the Oligarchs Ruined Greece.
What has already collapsed is the faith that institutions within Greece and the European Union can effectively manage the inevitable Greek default. As noted in the essay linked above, Greece's power structure is designed to do one thing: protect vested interests and dissipate accountability.
The same can be said of the European Central Bank (ECB) and the European Union (EU). Both were sold as abstract financial magic: the Elitist power structures of every nation in the union--the ultimate source of the rot that is now emitting the foul stench of collapse--would be left intact while the economies of all member nations would magically produce more goods and services based on ever-expanding debt and leverage.
This leads to the critical question of the hour: who's saving whom? Are last-ditch bailouts saving the Greek people and the integrity of their nation, or are they simply saving the political/financial Elites who benefited from EU membership and the systemic expansion of debt?
Here's another key question: who's being punished by the Troika's "nobody defaults and gets away with it" policy? Clearly, the Greek people are being punished--but to what end? What about punishing the political/financial Elites who benefited from Greece's entry into the EU and the banking Elites who profited from the irresponsible expansion of loans to Greece?
If Greece had defaulted four years ago when default was already visibly inevitable, the Greek citizenry would already have worked through the painful crisis of adjusting to a dearth of external credit and perhaps a new currency, and maybe they would have jettisoned their corrupt and self-serving Elites, clearing the way for sustainable growth and governance.
Instead, the Greek people have suffered for nothing. Default is still inevitable, as is the resulting EU-wide currency-political crises.
When systems are broke and broken, collapse is the only way forward. Only collapse breaks the grip of vested interests and opens the political process to non-Elite participation. By pushing default/collapse forward for four long years, the Greek Elites have punished their citizens for absolutely no yield on their immense suffering. Greece can no more escape the black hole of default than it could four years ago.
Central and private banking magic has failed. The idea that corrupt, self-serving Elites would magically create widespread prosperity by borrowing money that could never be paid back has collapsed, though the Power Elites of the Troika cling to this foolish fantasy because they have no other choice if they want to retain power.
The only faith remaining in the EU Elite is belief in the goddess TINA--there is no alternative. But there is always another alternative: collapse of the status quo and the assembly of an alternative arrangement that doesn't concentrate power in the hands of a few at the expense of the many.
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Collapse affords the hopelessly underwater a chance to resurface while punishing reckless lenders who feel their default backs are covered. Neither a borrower nor a lender be.
Throw those pathetic Greek deadbeats out of Europe already.
french analysis :
For now, everything goes as planned, or more precisely as it was predictable that it happens. Imagine you are an indebted European countries to the neck and hopeless, despite all the efforts you can make, to achieve repay if only half of your debts. What do you do? First, you save time with the complicity of your partner and your creditors because ultimately, it suits everybody well not having to find bankruptcy and force everyone to take losses.Win time! To save time, you obviously believe that we will do something useful. So for years, we have witnessed the thorough destruction of the Greek people and the transfer of all the incredible debt of Greece from the private banking sector to the public sector and European states. Obviously this hold-up to almost EUR 400 billion was dressed in seductive trappings of "bailout" of "European stability mechanism" and another white lie. The reality is that ultimately, we will pay. We, the peoples of Europe, the "con-taxpayers," and we will pay either by taxes or by the decline in our currency if we print a lot. We will pay course knowing that the Greeks themselves, already pay for 7-year ordeal and suffering. Only ideologues and "manipulated" want to believe that the Greeks are guilty. Do you feel guilty about the debt of France? Me no. But this does not prevent the system I knew it accountable. To paraphrase the famous "responsible but not guilty" Fabius during the tainted blood, we could say the debt that we are "owed but not guilty." In short, in this Greek tragedy obviously, everybody loses, everyone except ... banks, especially German banks.
The economic crisis is a political crisis Then there comes a stage of suffering endured by the peoples leads to the point of no return, or more exactly to the breaking point linked to the "no-fear". This can be summarized as "we have nothing to lose." Always wait until this point before seeing the lines move significantly. More or less as the majority of people and a people think they "have yet to lose," social stability is generally assured. When you bankrupt them, humiliate them and when you starve them, the temptation of impossible acts previously appears.
Getting closer to Russia, to default, remain in the euro ... So let us instead of the Greek government. It has not so many options, and the most elegant and most obvious is to go for help from Moscow and China to "diversify" its partners and donors. For Russia, this is pretty easy. In crisis with Europe and the United States, under embargo, Russia needs to loosen the stranglehold of sanctions. Managing to disunite Europe is a much better idea than to get into an apocalyptic nuclear war. Logically, Russia is naturally benevolent towards Athens perfectly able to cause a serious crisis in Europe and particularly in the eurozone, or block certain decision making in Brussels. Finally, it all falls even better because Russia, opened in crisis with Ukraine, seeking a new way to supply Europe with gas pipelines. Why not go through Greece a fee ... This is obviously the agreement that was reached this weekend, at the economic summit in Russia and allows Tsipras team to increase bids for new "the last chance for negotiations." We must not forget that now, Greece is in primary surplus. This means that if Greece does not repay its debts, well just imagine that it is in surplus and it spends every day a little less than it comes to taxes ... Yes ... the villains Greeks do not pay anything now enough pay for their state spends less than he earns. The opposite of France, you'll understand. This means that Greece did not need to borrow (besides the fact to pay its debts). The making of default would be certainly much less annoying that many will say ... From the moment the Greek says "I will not pay" is not Greece that has a problem but its creditors, c ' is to say we, the other French, and with 68 billion Greek debt moldy that Sarkozy and Hollande rushed to buy our banks to get rid of this sword of Damocles (still a Greek that one without doubt), it is Bercy that will have to recognize a loss of 68 billion ... And not to see 68 billion losses (and thus increase all taxes), it will be much more likely to accept an agreement where erases half of the Greek debt, gender € 34 billion, but ... over 10 years, kind 3.8 billion debt forgiveness every year ... so Bercy should find "AS" under 4 billion per year, which is not at all the same thing as 68 billion right now, right away ... And finally, if there is an agreement on Greek debt, then there is no default ... and as there has never really been a failure but "negotiations", while Greece can remain in the euro ... . By staying in the euro, Greece avoids reintroducing its own currency and seeing it devalue sharply. Yes, that would like to sell a product to Greece being paid in future new "drachma"? Person. So the Greek currency would collapse and social crisis could worsen. At first, the euro would remain as in the bankruptcy of Cypriot banks to save part of the money of the people (even if they have been largely ruined). Then, secondly, Greece could leave the euro after a broad agreement reached with creditors on debt relief to make it sustainable and refundable. What I have just explained, this is the strategy that I would apply if I were the Greek Government, that I was not corrupted by Europe and by the banks ... and so obviously I was not scared to assassinate me ...
From a purely economic issue is geopolitical Greek! For now, it is in every respect the strategy applied by Tsipras. The question is how far will he go? Because by the time I write this, Tsipras and Varoufakis, it is fashionable to take to morons and idiots, managed to transform the Greek case was purely economic issue into a fully geopolitical tucking the Russia and China in the near future the equation. Greek diplomacy has not remained inactive and the team Tsipras, failing to opt for a strategy that will necessarily winning, has managed for the moment to redirect the future of Greece. Can the Europe going to clash with Greece? Europe she prefers to take his losses? One problem is the exit of Greece from the eurozone. Indeed, if Greece came out, it would be proof that the euro is not irreversible and that would be the official start of the single currency. So finally, in all this, I wonder if beyond the postures, Greece as its European partners do not share a key point of agreement namely, paradoxically, saving the euro.
dt
The truth is Europe would not know what to do without those so called pathetic Greek deadbeats as you call them. Lending them money to pay your interest seems like their preferred option regardless of what they say.
"Europe would not know what to do without those so called pathetic Greek deadbeats"
You seem to slightly overestimate Greece's role in the EU. Can 't really blame you with the disproportionate media attention though.
Costly medicine for one sick patient is far less expensive than having all the other patients die. Europe will be on its knees begging Greece not to leave for quite a while yet. There is more than money involved here.
Yes, the usual scaremongering. There seems to be no second Greece in Europe.
You write there is more involved than money. What is that according to you ?
"You seem to slightly overestimate Greece's role in the EU."
Is contagion risk from default/collapse being overstated? Perhaps understated? Aint gunna be pretty.
Time for the Greeks to get it up the ass one more time. it is starting to feel good.
What about punishing the political/financial Elites who benefited from Greece's entry into the EU and the banking Elites who profited from the irresponsible expansion of loans to Greece?
Issue the arrest warrants for Blankfein and Dimon now.
Arrest warrants? They own the fucking DOJ...It'd be like the Dean walking into a Frat party.
I hear Dean Wormer's wife walked into a frat party...and got fucked!
I heard it was that slimeball Otter that seduced Marion Wormer.
We are patiently waiting for a total collapse.
but when it happens, will you recognize it?
The developed world is and has been in a state of collapse for the past 15 years. How many recognize it?
On an instinctive level, I would say the strong majority recognize it. They just have to overcome the daily bombardment of mind-control they are subjected to in order to access the truth they have known all along. It takes work, insight, and self-confidence to resist the kind of propaganda we are attacked with constantly in today's world. Some do and have more of these than others. But most of us know, at least at some level.
You will know the collapse is here when no one cares if you have paid your motgage.
No good way out left and nobody cares......
No good way out left and nobody cares......
Tsk....
Bullish.....https://www.youtube.com/watch?v=HIEzTKO03do&feature=youtube_gdata_player
As my friends in Japan would say:
CORRAPSE ARREADY!
Globalization has managed to do one thing very effectively, put everyone's skin in the same game. The chart of who is owed the money by Greece is the first step, but only the first. The contagion knock-offs add layers upon layers to the initial losses. I don't think anyone truly believes a Greek collapse can be contained to Greece. That is the core motivation for the desperation shown in trying to kick this mountain-sized can. Once all these "credits" represented by all the debts come into doubt, the trust which holds it all together dies, and then it collapses. But no one wants that to happen. They all have skin in the game. That's why it's gone on this long.
I think debt has been the near universal condition of mankind since the first cultivator had to "purchase" a plot of land from the local chieftan.
The difference this time around is the centralization of the creditor. Subsidary organizations; banks, family, whole countries - are debtors to giant unelected 3rd parties; with whom the debtor has only the slightest connection; and no control. Over there its the EU, over here its the Fed, and for our purposes its Tweedle-dum and Tweedle-dee.
Instead of a "jubilee", bankruptcy, a vanishing of the debt and accomodation by the creditor; we have the worlds accumulated nonsense and poor decisions pushed upstairs.
I agree. This is a question of scale. It is the same problem in business and government both. Nobody can accurately assimilate the views of more than 10,000 people. We are now working in units where small groups are supposed to act for the benefit of 10s of millions. It's impossible. Those small groups end up acting for the benefit of the people they know, because that is their experience. Some of them are not sophisticated enough to realize that the interests of their friends are not the same as those of the "other classes"; these people honestly believe they are helping everyone with what they do. The others of the ruling elite simply don't care. As long as they and their friends are doing okay, they are perfectly happy that everyone else rot; for this kind of person, that's what "competition" is all about: sociopathic competition.
This centralization has gone far beyond anything productive and has now become the funnel to the top so often discussed on these pages.
Been fascinated that there hasn't been a much more vocal and notable uprising in Greece because when you get down to it the Greeks have suffered for 4 years and got nothing to show for if they are rank-and-file. Only reason I don't thnk there has been has been the huge amount of people (especially younger highly educated people) who have left in huge numbers for several countries since '08. Largely goes unreported but Greece has had a huge talent and brain drain since then.
Greeks are such pussies. Just overthrow those worms you have as politicians.
We know who is inside the clown.
If you want to see an actual collapse, imagine there's no food at the grocery store.
Dollars, Euros, Yen, Gold, Silver... I'm hungry.
Eat yourself.
Why should I, when I can eat you?
sewer flavour
Another chain yank? No way.
Fiat games. Winners have unlimitted credit. The losers get all the debt.
Why trade your labor for something with no real value?
0x100=?
Using real math or Common Core math?
Due to the limited number of fingers and toes Common Core will take a while to give you an answer. Even when the multiplier is zero.
Common core math= fiat values.
Strong post, zero, this aligns with my findings that all socialist countries are fiscal fraud schemes, they are fully away of the creation of a rip off both at the bottom and the top of the influence chain, as shown in this article I compiled:
The data shows the more a nation socialized, the more debt it accrues - the opposite of what was promised.
http://www.teapartytribune.com/2015/06/11/socialism-increases-debts-as-t...
It used to be if you made a mistake..you paid for it..and if it was bad enough you failed.....we do not allow failure anymore...at least in the banking sector...and that my friends is bad....these Greek bonds are junk...worthless...and many other countries too..so if you bought them ..you deserve to lose your money on them...that is business...but its not how it works today....you bribe the money printers to cover your backside...and it seems to work....Greece will get their 7.5 billion this week..and another 100 billion in a year or two..just to keep the casino going
Capitalism is a reward system for building something right the first time.
Socialism is a reward system for building something wrong the first time, and then fixing it the second….or the third….or the fourth time.
http://www.teapartytribune.com/2015/06/22/socialists-reward-system-promo...
True capitalism cannot realy exsist in a fiat world. Simply because we are trading something for a nothing.
Goddess TINA...
I like that.
This article misses the fact that it were greeks who voted this financial elits into power for decades.
And greeks continue to demonstrate poor judgment in choosing govws by voting far-left marxists and shit rainbow bunnies
The Greeks have been given the voting choice of bad or worse for decades, just like in the US. Their only hope is the guillotines and a fresh start, just like in the US.
The entire problem is $120B. The EU is printing $65B a month to buy crap EU bonds. They could fix this problem in 5 minutes by just printing and buying all the debt. And thats what they will do. They will first exhaust every means possible to transfer wealth from Greek citizens to the eliteist and bankers. They will make it a show, like they have done, to make it look like they are negotiating. When the show runs its course, they will print and fix the problem. The resultant will be inflation but that will continue to be covered up so everyone will say "problem fixed, that was easy". The collapse many are predicting is a long way off, they have learned they can print and get away with it. It will work until it doesn't and no one on the planet can say when that is.
A global stall is just the ticket.