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The Biggest Winner From The Greek Tragedy

Tyler Durden's picture




 

Long after Greece has left the Eurozone and Germany is using the Deutsche Mark as its currency, the people of the two nations, antagonized to a level unseen since World War II, will be accusing each other of benefiting more from the brief but tumultuous period of the common currency.

In reality, nobody had put a gun to Greece's head and told it to lever up, enriching local oligarchs and corrupt politicians, taking advantage of credit that was artificially cheap only due to the common currency and an implicit monetary, if not fiscal, union.

Germany, whose exports account for nearly 50% of GDP, on the other hand experienced an unprecedented exporting golden age, made possible only due to an artificial currency, the Euro, that was by definition created to be weaker than the Deutsche Mark and benefitted from any bout of weakness in Europe's periphery, such as the past 5 years.

The truth is, when things were good nobody second-guessed any decisions for a second, and since the rising economic tide lifted all boats, nobody cared.

And then the tide rolled out, displaced by trillions in bad loans and gargantuan mountains of sovereign and financial debt, which ultimately would lead to the first, then second, then third and then an all-out cascade of sovereign defaults.

Sadly, the losers - regardless of the propaganda and jingoist rhetoric - are the ordinary, common, taxpaying people of Germany and Greece (and every other European nation), who enjoyed a few brief years of artificial prosperity, which in retrospect was entirely due to debt, masked well by the "currency swaps" and other financial engineering concocted by banks such as Goldman Sachs, in clear violation of the Maastricht treaty which is now a long-forgotten memory of the founding ideals behind the Eurozone.

For every loser there is a winner, and in the case of Greece and its tragedy, just as millions are about to lose everything, a few not only made billions but quietly, under the guise of "sovereign bailouts" transferred their entire risk onto the taxpaying public.

They are shown in the chart below.

 

It is that transfer of private-to-public risk, which is also the main reason why the public debt of so many European countries, not only Greece, whose debt is record high despite a default to its private creditors in 2012 and where only 10% of bailout proceeds ever made it to the actual economy...

 

... but the entire periphery has soared in the last few years.

 

Inevitably, there will be many angry people, because what is about to come to Europe will be hardship unlike anything seen in generations. Our suggestion: before neighbor takes it out on neighbor, study the following map closely because just like Libor was an impossible conspiracy theory until it was a proven fact, what is happening in Europe was propagated and effectuated by one bank more than any other.

This one:

 

Or, one can ignore this as merely yet another conspiracy theory. And that's fine.

But there is one critical, factual loose end that has to be investigated.

Back in June 2012, the ECB, whose head was the recently crowned Mario Draghi who had less than a decade ago worked at none other than Goldman Sachs, was sued by Bloomberg's legendary Mark Pittman under Freedom of Information rules demanding access to two internal papers drafted for the central bank’s six-member Executive Board. They show how Greece used swaps to hide its borrowings, according to a March 3, 2010, note attached to the papers and obtained by Bloomberg News. The first document is entitled “The impact on government deficit and debt from off-market swaps: the Greek case.” The second reviews Titlos Plc, a securitization that allowed National Bank of Greece SA, the country’s biggest lender, to exchange swaps on Greek government debt for funding from the ECB, the Executive Board said in the cover note. From Bloomberg:

In the largest derivative transaction disclosed so far, Greece borrowed 2.8 billion euros from Goldman Sachs Group Inc. in 2001 through a derivative that swapped dollar- and yen-denominated debt issued by the nation for euros using a historical exchange rate, a move that generated an implied reduction in total borrowings.

 

“The Greek authorities had never informed Eurostat about this complex issue, and no opinion on the accounting treatment had been requested,” Eurostat, the Luxembourg-based statistics agency, said in a statement. The watchdog had only “general” discussions with financial institutions over its debt and deficit guidelines when the swap was executed in 2001.

 

It is possible that Goldman Sachs asked us for general clarifications,” Eurostat said, declining to elaborate further.

The ECB's response: "the European Central Bank said it can’t release files showing how Greece may have used derivatives to hide its borrowings because disclosure could still inflame the crisis threatening the future of the single currency."

Considering the crisis of the (not so) single currency is very much "inflamed" right now as it is about to be proven it was never "irreversible", perhaps it is time for at least one aspiring, true journalist, unafraid of disturbing the status quo of wealthy oligarchs and central planners, to at least bring some closure to the Greek people as they are swept out of the Eurozone which has so greatly benefited the very same Goldman Sachs whose former lackey is currently deciding the immediate fate of over €100 billion in Greek savings.

Because something tells us the reason why Mario Draghi personally blocked Bloomberg's FOIA into the circumstances surrounding Goldman's structuring, and hiding, of Greek debt that allowed not only Goldman to receive a substantial fee on the transaction, but permitted Greece to enter the Eurozone when it should never have been allowed there in the first place, is that the person who oversaw and personally endorsed the perpetuation of the Greek lie is none other than Goldman's Vice Chairman and Managing Director at Goldman Sachs International from 2002 to 2005. The man who is also now in charge of the ECB.

Mario Draghi.

 

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Tue, 07/07/2015 - 11:45 | 6280517 besnook
besnook's picture

you don't undertand a loan transaction with a bank. you and i could never leverage the way greece did because the bank would find you could not pay the loan back with  coupla essy background checks. if you are a country, the bank only looks at gdp growth and tax collection. since .gov has unlimited power to tax the people it is easy to decide a country can afford to borrow. the sovereign loans are usually the most credit worthy because of that calculation. it does not change the fact that the lender holds the risk, not the borrower. if you can't make your car payments your car is repossessed. if you default on your credit cards, you are stupid to pay them off as they are unsecured. the bank has no recourse except to scare you into paying. there is no moral issue. it is just a risk miscalculation, just business. the bank loses some money. that risk should have already been factored in(borrowers' loan interest rate). sovereign debt is the same as credit card debt. in most cases it is unsecured. the only thing that can be repossessed are the peoples' wages and savings. greece just said they will not cooperate with htis payback scheme. the banks are faced with collecting something or nothing. with a new competing financial system, the banks will have no leverage to lend or collect on bad debt so they will be more vigilant because they no longer enjoy monopoly pricing.

the borrower is never to blame. the bank is always to blame. fuck the new nazi bankers of the west.

Wed, 07/08/2015 - 02:56 | 6283851 GoldIsMoney
GoldIsMoney's picture

"the borrower is never to blame. the bank is always to blame. fuck the new nazi bankers of the west."

Really? ok the murderer is never the offender.

It takes two to make a credit contract, and it's reasonable to expect for the creditor to get one' money back. That may or may not happen, but of you take the money you promise to pay back. Everything else is defraud.

Tue, 07/07/2015 - 02:24 | 6279198 TheRicker
TheRicker's picture

"Keep your friends close and your enemies closer." Right guys. There is a day of reckoning for those who put their own ass above the general welfare of humanity.

Tue, 07/07/2015 - 02:27 | 6279203 Gyges
Gyges's picture

Like a bizarre, badly acted freakshow.

Simitis, the Prime Minister that had the "honor" of introducing Greece to the Eurozone, and one of his lackey's Lucas Papademos.

 

They're only the tip of the iceberg.

Tue, 07/07/2015 - 02:49 | 6279227 Baronneke
Baronneke's picture

The following program was broadcasted some time ago on Dutch Tv.  Some little Dutch commentary but mostly English spoken.

It's a must see !!

 

https://www.youtube.com/watch?v=QWDKK0mpDSo
Tue, 07/07/2015 - 04:12 | 6279282 Old_European
Old_European's picture

Why is Karel Van Miert still on that picture? He's been dead for over 6 years now. Died of a heart attack when pruning apple trees in his garden...

Rather odd for someone who was 67 years old and always seemed healthy (I had him as a teacher at university).

In late 2002 he was interviewed on Belgian radio about the Iraq invasion where he stated that if the US really wanted to hurt the ones who did 9/11, they should go and look for the Saudis.

Come to think of it : how come he didn't die earlier.... from a heart attack...of course...

Tue, 07/07/2015 - 05:05 | 6279315 BritBob
BritBob's picture

Interesting to note that the President of Argentina (another default nation) congratulated the Greek PM on the 'no' vote. Countries that borrow must face up to their financial liabilities otherwise they become financial pariahs like Argentina. Crazy of Cristina Fernandez de Kirchner to think that nations can get away with walking away from their financial liabilities. Just as crazy as Argentina's Malvinas cliams ---https://www.academia.edu/10490336/Argentinas_Illegitimate_Sovereignty_Cl...

Tue, 07/07/2015 - 10:23 | 6280074 NoBillsOfCredit
NoBillsOfCredit's picture

How do you hold the people responsible for crimes committed by the corrupt government? The people did not break the law. The BS claim about borrowing and being held responsible would only be true in a real money system. The debt is unpayable in the current fiat system. How many times to people on ZH have to tell the other people that the system is a Ponzi scheme? The normal standards of debtor and creditor cannot apply.

Tue, 07/07/2015 - 06:02 | 6279354 Die Weiße Rose
Die Weiße Rose's picture

so -

where exactly did the NO Vote on a hypothetical Referendum get the greek sheeple ?

ah yes...

nationalistic pride and dignity !

- if you can call lining up for 3 hours in front of bankrupt greek banks for 60 Euros per day -

DIGNITY !

take it !

take your Tsipras and Varoufakis lies,deceit and idiotic game theories

and shove it up your collective national-socialistic "dignified" greek arseholes.

(with kind regards from Europe)

WR;)


 

Tue, 07/07/2015 - 07:21 | 6279453 smacker
smacker's picture

Too bad you dismiss a person's right to "self determintion".

 

Do you harbour sympathies for the German Nazi Party?

Tue, 07/07/2015 - 06:15 | 6279365 RaceToTheBottom
RaceToTheBottom's picture

Financialization

Tue, 07/07/2015 - 06:18 | 6279366 Czar of Defenes...
Czar of Defenestration's picture

Impressive article!  Simultaneously level-headed and damning.  Thanks for your research.

 

"...but permitted Greece to enter the Eurozone when it should never have been allowed there in the first place...".

Ouch.  When emotions (we're ALL part of Europe! la la la) dominate thought.

Tue, 07/07/2015 - 06:34 | 6279396 smacker
smacker's picture
A view of what's gonna happen in Greece from another side:

 

"US Preparing Coup to Prevent Greece from Falling Under Russian Influence"

 

"The United States and Germany are prepared to engineer a coup in Greece to keep the country operating as a strategic asset on NATO’s vulnerable southeast European flank.

“A putsch in Athens to save allied Greece from enemy Russia is in preparation by the US and Germany, with backing from the non-taxpayers of Greece – the Greek oligarchs, Anglo-Greek shipowners, and the Greek Church,” writes John Helmer, the longest continuously serving foreign correspondent in Russia not connected to the corporate media.

The primary tip-off something is brewing can be detected by the presence of Victoria Nuland, assistant secretary of state for European and Eurasian affairs, in Athens in March.

Nuland, The Guardian reported on March 17, “flew into the capital amid mounting US concerns that the great euro debt crisis has begun to pose a geopolitical threat. Allowed to veer out of control, Greece could end up in the ambit of Russia, financially bereft and without the EU links that keep it bounded to the west. Nato’s south-eastern flank would be immeasurably weakened at a time of mounting global security worries over Islamic fundamentalists in the Middle East.”

Nuland and the United States may be working closely with Greek military to foment a coup following the historic “No” vote in a referendum of the demands of the banksters.

She is notorious for her role in the overthrow of the democratically elected government of Ukraine and it now appears she has been assigned for a repeat in Greece. Helmer writes that when Nuland

visited Athens to issue an ultimatum against breaking the anti-Russian sanctions regime, and the Anglo-American think-tanks followed with warnings the Russian Navy is about to sail into Piraeus, the object of the game [became] clear. The line for Operation Nemesis has been that Greece must be saved, not from itself or from its creditors, but from the enemy in Moscow.

Russia to Rescue Greece from Bankers

Russia is reportedly prepared to help Greece as it battles the banksters on Wall Street and Brussels. It is believed a Greek exit from the eurozone will move the country closer to Russia and deepen divisions within NATO.

Greek Prime Minister Alexis Tsipras of the socialist Syriza party said in mid-June an alignment with Russia is possible and hinted Greece was “ready to go to new seas to reach new safe ports.”

Kremlin spokesman Dmitry Peskov and Deputy Prime Minister Arkady Dvorkovich said during the St. Petersburg International Economic Forum Russia would consider providing loans to Greece if requested.

Greek Military Sends Strong Message

On Friday a number of Greek military officers publicly called for a “yes” vote.

“Retired General Fragkoulis Fragkos, a former defense minister and one-time head of the Greek army general staff, called for a ‘loud yes on Sunday.’ In 2011, Fragkos was cashiered by then-Prime Minister George Papandreou amid rumors of a coup,” writes Alex Lantier.

Clearly referring to Tsipras, Fragkos said that “the moral values and principles that have always defined us Greeks are not under negotiation with any clueless and historically ignorant politicianwho is advancing his own party interest.”

A group of 65 retired high-ranking officers issued a statement citing their “oath to the Fatherland and the Flag” and warning, “By choosing isolation, we place the Fatherland and its future in danger.”

Tsipras and Syriza prepared for a possible coup in January by shuffling military staff.

“The leadership (of the military and intelligence services) was changed,” sources told Heller, “but not radically. The defense minister (Panos Kammenos) is rightist so there are no ‘radicals’ in command.”

Greek Military is an Operation Gladio Asset

US intervention in Greece is nothing new. Between 1987 and 1989 the US made a concerted effort to overthrow the elected Greek government of Prime Minister Andreas Papandreou.

Prior to this in 1967 the Greek military installed the Regime of the Colonels following a coup d’état .

The Greek military was under the control of the CIA following Greece’s entrance into NATO in 1952. Elements of the Greek military were part of the CIA’s “stay behind” network under Operation Gladio and these elements (specifically LOK, or Lochoi Orein?n Katadrom?n, i.e. “Mountain Raiding Companies”) were directly involved in the 1967 coup."

http://www.redflagnews.com/headlines-2015/us-preparing-coup-to-prevent-g...

Tue, 07/07/2015 - 08:21 | 6279565 Lostinfortwalton
Lostinfortwalton's picture

She should have never been allowed to leave the airport, but put on the same plane returning to the US. She shames us all.

Tue, 07/07/2015 - 10:34 | 6280141 J Jason Djfmam
J Jason Djfmam's picture

They misspelled armpit.

Tue, 07/07/2015 - 06:41 | 6279405 Apostate2
Apostate2's picture

As I see it there are no 'winners'.

Tue, 07/07/2015 - 09:30 | 6279807 Fed-up with bei...
Fed-up with being Sick and Tired's picture

SCARY, ain't it?

Tue, 07/07/2015 - 06:43 | 6279408 FreeNewEnergy
FreeNewEnergy's picture

A little early in the AM for deep thinking, but ZHers should have known the content of this article long ago.

The chart of GS "players" was from 2-3 years ago, AFAIK.

Anyhow, thinking out loud, I'm happy to be hurtling headlong into age 62 (December 2015), when I can collect on SS (not much as I never trusted the system and beat the tax man mercilessly for years by running my own business). Anyhow, I will apply and collect (maybe), but fortunately have a pretty good cash flow and income regardless due to "prepping" the last seven years. Got some land (5.7 acres) with a pasture, wood lot and stream and the code enforcement office in my town is a pretty decent guy. Plus, the locals don't give a shit if I live in a tent.

Got one rental house, a GF with a paid for home with 4 acres, online biz, silver, cash, plus ebay and craigslist. And, everywhere I look in my rural enclave, there's work available, so there's a fallback position available if needed.

My point is that I'd rather be 60 than 30 right now. When I was 30 (1983) there was no internet, no 9/11, no Obamacare, and you could still make decent money doing plenty of things (I actually was a newspaper publisher). Now, if I had a family to feed, mortgage to pay and other debt along with daily expenses, I'd be closing in on a heart attack.

At 61+, I feel lucky to have good health and knowledge that the world is full of shit. Those in their 20s, 30s, 40s have nothing to look forward to but a furtherance of the global elite shitshow for at least the next 5-7 years.

No pity for anybody with eyes wide shut. I always say, "I'm a boy scout." Be Prepared.

Tue, 07/07/2015 - 09:29 | 6279804 Fed-up with bei...
Fed-up with being Sick and Tired's picture

I am 62 now, and we sold it all. HOUSE< CRAP<GUITARS....etc.  I am an expert trader, and am stuck with cash.    I make money using Measured Moves, and have been shorting Crude all year.  It has been a cake walk.  I teach others in a Facebook room closed to the public.   I do think that maybe the way to do it is in your post here:  get the fuck off the grid somehow.  I am actually quite nervous about what is happening.  I do hear many folks seemingly pissed off at us Boomers and blame "us" for this mess - - Guys, I have felt POWERLESS to stop these fuckers.   Voting is a ridiculous waste.  I realize now that my Generation is full of shameful dicks who steal, lie.  We had a guy with a dog in an RV next to us this week whose dog crapped all over the Water line side of my rig and then told my wife to her face that it was NOT HIS DOG that shit all over everything.  A small crappy example but this is what the bankers are doing. THEY ARE SHITTING ON TOP OF US, we can SEE THEIR ASSHOLES, and yet, they tell us they are not.  It is down to morality.

Tue, 07/07/2015 - 06:47 | 6279413 overmedicatedun...
overmedicatedundersexed's picture

No controlling Legal Authority..that is all. Corrupt Legal systems can be tolerated by the masses until the corruption becomes obvious as it is now in USA. our last AG holder has a new job worth millions on wall st, how much more in your face can it be???

Tue, 07/07/2015 - 06:54 | 6279418 juicy_bananas
juicy_bananas's picture

You have meddled with the primal forces of nature, Mr Beale.

Tue, 07/07/2015 - 07:26 | 6279461 ramgold2206
ramgold2206's picture

simple solution for the individual...own some physical gold in small weights, outside of the banking system, so when the TBTF fail and drag the fiat with them.. you might actualy have something to trade....

 

 

www.teamramgold.com

Tue, 07/07/2015 - 07:38 | 6279480 Coldfire
Coldfire's picture

Dupe.

Tue, 07/07/2015 - 07:55 | 6279506 CHC
CHC's picture

Greece needs to stand tall and walk right out the front door of the European Union - not looking back - lest they be turned to pillars of salt.

Tue, 07/07/2015 - 08:02 | 6279523 williambanzai7
williambanzai7's picture

Squid Bingo!

Tue, 07/07/2015 - 08:08 | 6279525 Lea
Lea's picture

"perhaps it is time for at least one aspiring, true journalist, unafraid of disturbing the status quo of wealthy oligarchs and central planners."

The organized Mafia you're talking about has nothing to do with central planners, who are the very opposite of that neoliberal deregulating and privatizing scum.

No wonder 'Murikans can never solve a problem other than by scheming, pillaging or bombing, as they don't even have the definitions of the words they use straight. How could they exchange with others under these conditions?

If you want to understand anything about anything instead of resorting to violence because you can't get what's happening, FIRST LEARN THE PROPER DEFINITIONS OF THE WORDS.

Tue, 07/07/2015 - 12:00 | 6280602 Comte d'herblay
Comte d&#039;herblay's picture

"The organized Mafia you're talking about has nothing to do with central planners, who are the very opposite of that neoliberal deregulating and privatizing scum."

B 4 I thumb this, please amplify.

U r not using any words at all to 'splain yourself.

Tue, 07/07/2015 - 08:21 | 6279568 brushhog
brushhog's picture

The bankers aren't so much the problem as government. Nobody held a gun to any government's head and forced them to accept loans.

Tue, 07/07/2015 - 10:11 | 6280015 NoBillsOfCredit
NoBillsOfCredit's picture

This is partly true. Bribery is a crime committed by two parties. Both are criminals.

Tue, 07/07/2015 - 11:55 | 6280572 Comte d'herblay
Comte d&#039;herblay's picture

No?? You apparently don't understand the problem at all.  It's the Lord Blankfeins, Jamie Dimons, Dick Fulds, Jimmy Cayne, and others in the banking, investment banking (Goldman Sucks managed to force the Federal Government to make them a bank for FDIC coverage, AFTER they saw that the dike had broken against them and they would be wiped out!) sectors OWN tne government which is so corrupt it makes Tammany Hall look like a penny ante poker game.

Bankers ARE SO Much the Problem it is safe to say that had they been assasinated in 2000 we would all be so much better off today in so many ways it makes one want to be a vigilante and just wipe them out anyway for kicks.  

Tue, 07/07/2015 - 10:09 | 6279587 NoBillsOfCredit
NoBillsOfCredit's picture

Usury is interest the rate is irrelevant.

Tue, 07/07/2015 - 08:43 | 6279612 kiwidor
kiwidor's picture

The real enemy, said Pound, was international capitalism. All people everywhere were victims: “They’re working day and night, picking your pockets,” he said. “Every day and all day and all night picking your pockets and picking the Russian working man’s pockets.” Capital, however, he said, was “not international, it is not hyper-national. It is sub-national. A quicksand under the nations, destroying all nations, destroying all law and government, destroying the nations, one at a time, Russian empire and Austria, 20 years past, France yesterday, England today.”

“This war did not begin in 1939. It is not a unique result of the infamous Versailles Treaty. It is impossible to understand it without knowing at least a few precedent historic events, which mark the cycle of combat. No man can understand it without knowing at least a few facts and their chronological sequence. This war is part of the age-old struggle between the usurer and the rest of mankind: between the usurer and peasant, the usurer and producer, and finally between the usurer and the merchant, between usurocracy and the mercantilist system . . .

It really is time to start cutting out the cancer. Excise the usurers ..to nine degrees of sanguinity

Tue, 07/07/2015 - 11:50 | 6280544 Comte d'herblay
Comte d&#039;herblay's picture

U said that all without mentioning the Jews. Usury seems like the least problem in a period from 1986 and counting that saw interest rates going down, down, down.  The advertisement on the litup in neon highway sign on my stretch of the golden mile says they are offering CDs at a spectacular!!! .75 %, and 3% mortgages.

wow...

I'm afraid the problem is much more serious than interest rates.  It's global oligarchy of mainly Jews who have managed to corral every major financial nexus of any importance in the world, including and mainly the FED and U.S. Treasury, along with the CFTC, all run by Jews for the last 20 -30 years. 

 

If they were all sicilians, irish, german  or Indian the outcry of Monopoly!! would be all over the MSM. 

 

Tue, 07/07/2015 - 12:06 | 6280630 The Delicate Genius
The Delicate Genius's picture

http://www.culturewars.com/2003/RevolutionaryJew.html

'A short summary of Jewish demographics gives some indication of how successful the Jews were in living under Polish rule. Between 1340 and 1772, when Poland was partitioned for the first time, the Jewish population of Poland increased 75-fold while, during the same period of time the Christian population only quintupled. The disparity in population increase is explainable in simple terms. Persecution in the west, largely during the period from the 11th to the 16th century, caused massive immigration. Jews moved to Polish territory during that period of time in unprecedented numbers. By the time Poland was partitioned for the third and final time in 1795, 80 percent of the world’s Jews lived there.

This phenomenal expansion of the Jewish population in Poland was matched by a correspondingly rapid increase in wealth, and that, in turn, corresponded to a dramatic expansion of the territorial limits of Poland. The Golden Age of Polish Jews, according to Pogonowski, lasted from 1500 to 1648. By 1634, which is to say toward the closing years of this age, Poland had become the largest country in Europe. Its territory extended from the Baltic almost to the Black Sea and from Silesia in the west to what is now the heart of the Ukraine, two hundred kilometers east of the Dnieper River. As a result, by the middle of the 17th century, as much as 60 percent of Poland’s population was not ethnically Polish, a situation which was bound to cause friction sooner or later, depending on how wisely the Polish rulers treated their alloethnic subjects.

Instead of wisdom, what followed was a classical case of cultural drift in which imperial expansion covered over internal decay until finally the contradictions and injustices which had become an integral part of the system became so insupportable that the bubble burst, and an orgy of violence followed, eventually dragging the Polish state into extinction. The story of Poland was in many ways the story of Imperial Rome writ small. Imperial expansion to the east into what is now the Ukraine, the Crimea and Belorus resulted in the creation of huge estates, some the size of western European countries like Holland and Switzerland. The estates were called Latifundia, an ironic comment on the blindness of the Polish nobility, who failed to see the mischief which the Latifundia system had wrought in ancient Rome. The Polish Noble’s republic was a classic oligarchy, as Plato defined the term in his Republic. As in ancient Greece, so in Poland; wealth concentrated in fewer and fewer hands, led to rebellion among the lower classes. As in ancient Rome, wealth concentrated in fewer and fewer hands fueled a system of imperialism in which the chief losers were the overwhelming majority of the Polish people, in particular, as in Rome, the citizen soldiers, who were driven to the wall by the monopoly conditions the Latifundia fostered. When the rebellion finally came, all Poles would be held responsible for the excesses of the magnates who created the system which had dispossessed the average Polish citizen in the first place.

As in ancient Rome, the citizen soldiers who had been the backbone of the republic’s legions became the disenfranchised rural proletariat once wealth became concentrated in the hands of the magnates. "The citizen-soldiers who owned small and medium estates," according to Pogonowski, "suffered numerous bankruptcies and were becoming landless while still retaining their full civil rights and privileges." As a result, "many of them had to seek employment in the huge estates called latifundia." This, of course, meant that more political power migrated to the land magnates, who were now the employers of the enfranchised. As a result, "the political machines of the owners of the latifundia enabled them to attain an oligarchic control of the politics of Poland. Their control of the national parliament was based on their grip on the provincial legislatures."

In 1633, the Sejm passed a law forbidding Poland’s nobility from selling liquor or engaging in commercial activities. The Polish noble citizens—both the wealthy and the impoverished—, in other words, retained political control of the country, but lost economic control because they were forbidden to engage in commercial activity. Because the Polish magnates owned the land but were unable to engage in commerce, they were forced to hand over the job of income extraction to the nation’s Jews, who would pay a set fee for a lease to raise the money the nobles needed. The system of pre-paid, short-term leases was known in Poland as "arenda." The connection between the arenda system of tax-farming and the Jews was so intimate that it eventually found expression in the Polish language. In legal contracts in the 17th and 18th century, the Polish word "arendarz" or tax-farmer and "Jew" are synonymous. According to Pogonowski, "15 percent of urban and 80 percent of rural Jewish heads of households were occupied within the arenda system."

The Jewish legal system, or kahal, brokered these licenses to well-to-do Jews, who in turn often subleased them to less well-to-do relatives. In Polish private law, arenda was defined as "the leasing of immovable property or rights. The subject of the lease might be a whole territory, held either in ownership or in pledge [or] the subject might be a tavern, mill or the right to collect various payments such as a bridge toll or a payment connected with a jurisdiction." A Jew, for example, might take out a short-term lease on a church, in defiance of church law. This meant that he was in sole possession of the key to the church door, which could only be opened for the performance of weddings or baptisms after payment of a fee, a practice which naturally led to resentment among Christians. Since the lease was of necessity a short-term lease, it was in the Jew’s interest to charge as much money as he could to make back his investment and some profit, since the lease might not be renewed. Or, if it were, someone else might outbid him for it. There was, in other words, no financial incentive to create good will among the local population from which the arendator earned his living. The Jewish tax-farmers had the support of the state—Pogonowski estimates that 20 to 70 percent of the income of the large estates was generated by tax-farming leases held by Jews— but lacked the good will of the community which was the source of that livelihood. Since the Jew was not a part of that community, and in fact had developed, as Graetz indicates, a whole culture of treating the goyim with contempt, he could exploit the situation well beyond what would have been considered tolerable had Catholic Poles been running the system:

Arenda-type short -term leases resulted in intensive exploitation of the leased estates, as the lessees tended to overwork the land, peasants and equipment without worrying about long-term effects. The peasants experienced additional hardships when Jewish arrendators obtained the right to collect and even impose taxes and fees for church services. The peasants and Cossacks in Kresy [the newly colonized lands of the east] bitterly resented having to pay Jews for the use of Eastern Orthodox and Greek-catholic churches for funerals, baptism, weddings and other similar occasions (Iwo Cyprian Pogonowski, Jews in Poland: A Documentary History The Rise of Jews as a Nation from Congressus Judaicus in Poland to the Knesset in Israel [New York: Hippocrene Books, Inc.1993], p. 68).

Because of the arenda system and the prohibition against distilling spirits which became legally binding in 1633, the Jews assumed total control of the liquor business, which meant that, on the one hand, they could manipulate the price of grain by diverting it to more profitable use as distilled spirits and that, on the other hand, it was in their interest to engage in the intense promotion of alcohol consumption, to maximize profits during the short-term of the lease. This led to chronic drunkenness, decreased productivity, and, of course, increased resentment against Jews, as a group which was perceived as constantly seeking to exploit the weaknesses of the majority population as a way of enhancing their own wealth and power.

Graetz talks about the Jew experienced in financial matters as a salutary counterbalance to the impetuous, headstrong, and ultimately child-like Polish nobleman:

"The high nobility continued to be dependent on Jews, who in a measure counterbalanced the national defects. Polish flightiness, levity, unsteadiness, extravagance and recklessness were compensated for by Jewish prudence, sagacity, economy and cautiousness. The Jew was more than a financier to the Polish nobleman; he was his help in embarrassment, his prudent adviser, his all in all."

There are other ways of viewing the "unique utilitarian alliance [that] was formed between the huge landowners and the Jewish financial elite." Looked at one way, Jewish migration to Poland brought with it Jewish capital, and Jewish capital was soon put at the disposal of the Polish crown and the large landowning magnates, whose estates expanded dramatically in size. The Polish magnates proceeded to use both the Jews and their money to expand the Polish empire into the fertile steppes of the Ukraine, Belorus and the northern shore of the Black Sea. Looked at in another way, this alliance concentrated the wealth into fewer and fewer hands, especially during the period of intense Jewish colonization in the Ukraine during the 80 year period between 1569 and 1648.

Since the leases involved monopoly rights, the Jewish tax-farmers could increase the political power of their wealthy patrons, and their own wealth and influence as well, by driving the smaller independent landowners to the wall. Increasing their power in the short term, however, only increased the magnitude and violence of the reaction when it eventually came. It was during this Drang nach Osten, this expansion to the East, that troubles began to appear in the Jewish paradise. The success of the new system contained within in it the seeds of its own destruction.'

Tue, 07/07/2015 - 09:51 | 6279874 withglee
withglee's picture

Germany, whose exports account for nearly 50% of GDP, on the other hand experienced an unprecedented exporting golden age, made possible only due to an artificial currency, the Euro, that was by definition created to be weaker than the Deutsche Mark and benefitted from any bout of weakness in Europe's periphery, such as the past 5 years.

What subterfuge. Governments everywhere are too big and getting bigger at an exponential rate. It doesn't matter what interest rates are or relative strengths of money when you never deliver on your trading promises.

All money (currency is just one form) is a "certified promise to complete a trade". It is created by traders making promises to deliver over time and space. It is destroyed by traders when they deliver. To the extent they don't deliver (i.e. DEFAULT) it is immediately reclaimed and destroyed through INTEREST collections. This guarantees zero INFLATION all the time everywhere by the relation: INFLATION = DEFAULT - INTEREST =zero.

When government irresponsibility perpetuates in trade (as it has for all time with all governments), counterfeit currency (money) is created by these governments to pay their bills. This can only lead to higher INTEREST rates or INFLATION as those counterfeits compete (obviously unfairly) with "real" trading promises in the marketplace.

When you come across a deadbeat trader and get stiffed, you stop trading with them ... post haste.

All governments are deadbeat traders. They never deliver on their trading promises ... they just roll them over, and that is DEFAULT.

I am 363 pages into my reading of Maclay's Journal. Maclay was a Senator from Pennsylvania in the first Congress. His journal is the only documentation (yet splendidly vivid day by day documentation) of what went down with the formation of the new USA government. Of particular interest is the shenanigans pulled by Hamilton in buying off Senators and Congressmen to get debts from the revolutionary war covered by the new government.

Hamilton and his boys bought the distressed notes for pennies on the dollar. They then got the new government to make the notes whole to the new owners (ever hear of QE?). They also got the interest rate set at 6% retroactively on the whole amount, not just the pennies they payed for the notes.

At first, the bargaining chip was the location of the new seat of government. Later, it just became open corruption of the legislators. All votes in the Senate were of the order of 12 to 14 or 13 to 13 with John Adams VP casting tie breaking votes in favor of Hamilton and his boys. When you're deciding issues by a flip of a coin like this (as they also do in our Supreme Court), you are not deciding.

This is all vividly documented by Maclay and the corrupt players are laid bare before you. Maclay was not reelected. Go figure.

Next time you see people wrapping themselves in the flag, praising the Constitution, the founding fathers and George Washington, refer them to Maclay's journal.

http://memory.loc.gov/ammem/amlaw/lwmj.html

 

 

Tue, 07/07/2015 - 10:06 | 6279983 NoBillsOfCredit
NoBillsOfCredit's picture

Thanks for the info! However I disagree with your definition of money..

Tue, 07/07/2015 - 19:22 | 6282337 withglee
withglee's picture

However I disagree with your definition of money..

I'm sorry to hear that. It is not "my" definition of money. It is obviously what money is, always has been, and always will be.

Money is "a certified promise to complete a trade". This is obvious from examining the three phases of trading: (1) Negotiation; (2) Promise to deliver; (3) Delivery.

In simple barter, (2) and (3) happen simultaneously on the spot. Money allows (2) and (3) to happen over time and space and greatly enhances simple barter trade. And just as obviously, since trading promises are debts, certification and the resulting certificates of those promises is also obviously debt.

In-process trading certificates circulate as the most desired object in all simple barter trades. Why? Because (in a properly managed MOE) they are guaranteed (1) to be freely created by traders; (2) to "never" lose their value; and are thus (3) universally accepted all the time everywhere by all traders.

And when delivery is made, the certificates are returned and destroyed ... and what's bad about that?  Maybe Ellen Brown can tell you in her "Web of Debt" nonsense.

Now ... how can you possibly be in disagreement? It must come from misunderstanding? What don't you understand? Where is the conflict?

I have implored people to show me the disconnect for several years now. It always ends up with some accusation that I'm a utopian. Yet proper management of any MOE is a trivial exercise. The only reason I can see that it isn't done is that failure to do it allows such a rich playing field for the money changers.

Want to scare the hell out of a money changer?

  • Tell them you are instituting MOE management that "guarantees" zero INFLATION of the MOE itself.
  • Tell them you are instituting a system that allows all traders to freely create money any time and any place.
  • Tell them you are instituting a system that rewards responsible traders with zero INTEREST load in their trades.
  • Tell them you are instituting a system where only deadbeat traders pay INTEREST exactly equal to their DEFAULTs.
  • Tell them you are instituting a system that treats governments like the 100% deadbeat traders they are and ostracizes them with 100% INTEREST load on their trading promises.

And tell the money changers they are free to operate their current flawed, corrupt, self-serving and unfair system in competition with the one you are instituting. Watch them wilt on the vine.

Like Rothschild (that greatest of all money changers) said, "give me control of the money and I care not who makes the laws". And what did the idiots do? They gave him control of the money. Go figure.

Tue, 07/07/2015 - 10:16 | 6280012 MagicMoney
MagicMoney's picture

Government debt is revenues from taxes and debt is future revenues spent in the present. Government debt shackles all the heads of the citizenry. People also forget that not paying taxes lands you in prison. So there you go, as it goes government debt is really not that interminable. You pay for it with purchasing power either way, which goes to the government and unproductive activities. This is Greece in a nutshell and so is for lot of other countries. Living on debt is only a matter of time before you run out of future revenue. This is what bureacrats count on when they are running for election, they kick the can down the road, and pass on the debts for future generations and politicians to pay it back.

 

Why do governments need debt when they have power to tax everything? Well they want to get elected by promising something for nothing. In a market, people give up something for something else. Politicians use debt to give something for nothing, just passing on the bill to future suckers.

Tue, 07/07/2015 - 10:22 | 6280056 sidney sloth
sidney sloth's picture

meh

Tue, 07/07/2015 - 10:21 | 6280057 sidney sloth
sidney sloth's picture

I don't understand the excitment about the current default. Let's take a cold, dissappointed look at the uncontentious facts.

In 2008, Greece defaulted on loans to the private sector. So the EFSF was created, the treaty rules were broken, German politicans broke their consitutional so called "laws", and the private exposure to the default was carried by the politicians.

A bail out. So, one of the current parties to the new default (the same default kicked down the road by more desperate loans) is therefore the party that bought the WORTHLESS debt since 2008: the governments of the Eurozone.

The other party is Greece, which defaulted on that debt in 2008, and hasn't been close to paying it since without more loans.

So, here is the thing: both these parties have known, since 2008, that all this debt is a busted flush. Indeed, that is the only fucking reason the current owner of that debt is the owner of that debt. The entire point of buying it was because it was toxic and worth nothing.

This isn't politics, it is just what happened according to what these parties said at the time. The banks weren't bailed out becasue Greece bonds were a sure thing whose time had not yet come. Everyone knew it was a gift of money from the gubment printer to the bank shareholders.

But now, in 2015, Greece is supposed to pretend that these debts were purchased by a party that fully intended to be repaid their capital, as if no risk was contemplated?

Please. It is so incredibly full of shit. It doesn't even get close to a meeting of the minds. These loans being worth something was never the deal, and yet that is what the ECB and the "Eurogroup" are trying to pull on everyone.

If the EU is all about using funny money to bail out bankers, but then forcing greek kids and pensioners to the wall in order to repay laons written off with funny money, then Europe really is as bad as we all think it is.

Germany, most of all, is the scumbag nation of Europe. What's mein is mein, and what's yours is ours. Sausage eating cocksuckers, I hope they end up in a union with rump Ukraine.

Tue, 07/07/2015 - 10:40 | 6280175 J Jason Djfmam
J Jason Djfmam's picture

I am remotely viewing a Ukraine style loading of Greek gold onto a plane bound for who knows where.

Tue, 07/07/2015 - 11:06 | 6280313 RiverRoad
RiverRoad's picture

Goldman?

Tue, 07/07/2015 - 11:43 | 6280501 Comte d'herblay
Comte d&#039;herblay's picture

What's wrong with eating sausage??    I'm grinding the pork butt right now for some breakfast sausages I am making from scratch.  

U had a good diatribe goin' there till the last sentence.  Had to thumb you down for being in the anti-sausage camp.  

Pork fat is an essential food group. 

 

Tue, 07/07/2015 - 10:39 | 6280168 Counterpunch
Counterpunch's picture

The biggest winners?

 

Large banks.  The corps and oligarchs who buy for pennies on the dollar.

 

Otherwise, in another sense, we can be sure Jewish men are very heavily over-represented amongst the top individual beneficiaries.   For hundreds of years this has been the case, going back to the times of Cicero.

 

 

 

Such a system is best thought of as a wealth-stealing machine.

Tue, 07/07/2015 - 12:42 | 6280786 Bopper09
Bopper09's picture

Draggy benefits from all this?  No fucking way.  Here I thought he was just a volunteer since he wasn't elected, such a genuine interest in the euopean people.  And footballs should be replaced with balloons, with players wearing bras, and hug instead of tackling.....

Tue, 07/07/2015 - 12:53 | 6280861 tumblemore
tumblemore's picture

Awesome post 11/10.

The whole thing is a game to the criminals of the banking mafia but they destroy millions of lives with every throw of their dice.

 

Tue, 07/07/2015 - 15:13 | 6281497 asfffasfff
asfffasfff's picture

 

 

 

from wikipedia:

"Draghi is a member of the Group of Thirty founded by the Rockefeller Foundation. The Group of Thirty is a private group of lobbyists in the finance sector."

 

"Then he earned a PhD in economics from the Massachusetts Institute of Technology in 1976 with his thesis titled Essays on economic theory and applications, under the supervision of Franco Modigliani and Robert Solow."

google them up

Franco Modigliani  - jew

Robert Solow        - jew

"Draghi was then vice chairman and managing director of Goldman Sachs"

goldman sachs jew-owned

"it was reported that President Nicolas Sarkozy saw Draghi as a full-fledged and an adequate candidate for the job"

google up sarkozy

sarkozy - of jewish decent (btw you know about the "interbreeding"-presentation of sarkozy?)

 

draghi took part on lactures of P. A. Samuelson and Stanley Fischer

google up

samuelson  - jew

fisher         - jew

 

draghi is printing endless money    take it from the poor give to the rich jews

 

 

"Goldstein concluded, Draghi would leave more moves to national leaders Sarkozy and German Chancellor Angela Merkel and central banks"

google up

merkel   -  from poland  -  poland before 1939 urban areas 20% jews

merkel of jewish decent?

 

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