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Greece Isn't The Problem; It's A Symptom Of The Problem
Submitted by Simon Black via SovereignMan.com,
By plane, Asia and Europe are 12 hours apart. But on the ground the gap feels like decades.
It’s always a shock to leave a place like Vietnam (where I was last week) and fly to Europe.
Vietnam is one of the fastest growing countries in the fastest growing region of the world. It’s exciting.
Whereas here in Europe, sometimes it feels as if nothing’s changed in the last five centuries.
It’s a night and day difference.
All eyes may be on Greece right now, but in reality, the economic malaise is widespread across the continent.
Italy is gasping to exit from its longest recession in history, while unemployment figures across Southern Europe remain at appalling levels.
In France, the unemployment rate is near record highs.
Finland, once a darling of the Eurozone, is posting its worst unemployment figures in 13-years.
Even in Austria growth is flat and sluggish.
It’s clear that Greece is not the problem. It’s a symptom of the problem.
The real problem is that every one of these nations has violated the universal law of prosperity: produce more than you consume.
This is the way it works in nature, and for individuals.
If you spend your entire life going in to debt, making idiotic financial decisions, and rarely holding down a stable job, you’re not going to prosper.
Yet governments feel entitled to continuously run huge deficits, rack up historic debts, and make absurd promises that they cannot possibly keep.
This is a complete and total violation of the universal law of prosperity. And as their financial reckoning days approach, history shows there are generally two options.
The first outcome is that a country is forced to become more competitive– to rapidly change course and start producing more than it consumes.
It’s like a bankrupt company bringing in a turnaround expert: Apple summoning Steve Jobs in its darkest hour.
But here’s the thing: if a nation wants to produce, it needs producers. That means talented employees, professionals, investors, and entrepreneurs.
So any bankrupt nation that wants to survive is going to have to roll out bold incentive programs to attract talented people, growing businesses, and capital.
This includes cutting taxes, reducing red tape, establishing easy residency programs for talented foreigners, etc.
And it’s already happening.
Even the UK has been working to slash its corporate tax burden and attract more multinationals to its shores.
Portugal has been offering residency in exchange for real estate investment, which has helped stabilize its troubled property market.
Malta offers economic citizenship, providing public finances with vital capital.
And I expect Greece to launch similar programs; we might even see the Greek government selling off passports bundled together with an island. No joke.
They’d be well advised to do so; because the second option for bankrupt nations is to slide deeper into chaos.
Rather than changing their course and trying to produce more than they consume, struggling governments instead often choose to seize and confiscate everything they possibly can.
They impose capital controls, confiscatory tax rates, and inflation– further destroying productivity and wiping out people’s savings.
This only makes them decline faster, dragging down anyone whose assets are within the government’s reach.
This is why it makes so much sense to have a Plan B.
If your home country fails to produce more than it consumes, it’s not safe to hold 100% of your assets there.
This is really a very simple concept: don’t keep everything you’ve worked to build for your entire life in a bankrupt country.
It’s hard to imagine you’ll be worse off for doing something so sensible.
Even if everything seems fine at the moment… even if it feels like your government has the situation under control… it still makes sense to develop a Plan B.
In fact, now is the best time to do so– when it’s calm.
After all, the absolute worst time to start thinking about where to move your assets is after the metaphor hits the fan.
Any sense of tranquility in the markets, or strength in your currency, is NOT a reason to be complacent. It’s an opportunity to make sensible decisions to diversify, including steps like:
- – Moving some emergency savings abroad to a well-capitalized bank outside of your home government’s control.
- – Take a hard look at your investments and consider reducing your exposure to any absurdly overpriced paper asset bubble. Strive to purchase high quality assets on the cheap.
- – Own something real as a hedge against the system– precious metals, cash-producing (and food-producing) farmland, etc., all ideally held outside of your home country.
- – Reduce debt and invest in your family’s financial education.
- – Consider a second passport (it’s the ultimate insurance policy) or at least a second residency abroad to ensure that, no matter what happens in the world, you and your family will always have a place to go.
Take advantage of the time you have now to take simple, common-sense steps and ensure that everything you’ve worked to achieve won’t vanish in an instant.
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Or in pictures...
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Karma is a bitch and the entire world needs a hard reset and a cold boot, so just pull the plug and walk away.......
Thru all that concrete and rubble?
What a complete bs! It is impossible that everybody produces more than he consumes. And what would be the benfit anyway? A stockpile of goods rotting in some plcae because nobody can consume them. LOL
The sum total of all exports and imports in the wordl must by definition be exactly equal. If everybody were to become like Germany the german economy would collapse! BGecause without exporting their surplus to everywhere, German companies would soon discover collapsing revenues and profits and go bust in short order. german current accoubnt surplus is only possible because of spanish and greek and French (and US) ca deficits.
excuse my french but this is %^&&*$@**
Ce qui est français? Ressemble plus à ordures pour moi. Ou peut-être le grec?
mais si, vraiment francais
US debt and unfunded liabilities are $1,720,000 per taxpayer and they increase at least $70,000 per taxpayer per year versus Greek debt of $65,000 per taxpayer.
America is Greece on steroids but the free and fair financial press in the land of the free has chosen to ignore this minor story
http://usawatchdog.com/financial-system-will-collapse-just-a-matter-of-when-laurence-kotlikoff/ … http://www.brookings.edu/research/opinions/2015/04/08-federal-debt-worse-than-you-think-haskins …
One day the bottom will drop out. And oh, it's gonna hurt something awful.
I seriously heard someone say "at least we're not greece the other day"....I walked out of that place laughing...
OUTSTANDING POST - BULLSEYE ON TARGET - HIGHLY RECOMMENDED.
SOCIALISM IS CANCER - IT KILLS SLOWLY, BUT ALWAYS KILLS EVENTUALLY.
THE ONLY SOLUTION IS TO PURGE *ALL* SOCIALISTS.
Socialism is the disease that kills the healthy and the unhealthy with equal assurance.
national socialism?
Oligarchy scam socialism?
Royalist socialism?
Whats good for Exxon is good for USA type socialism?
Maggie's farm of Pinochet "shoot on sight in Santiago Soccer stadium" type socialism?
Wall street for the TBTF type socialism?
Ashley MAdison"share your wife" type socialism?
Wow! There are as many ways to blame socialism as to blame capitalism.
But the best type is from "good morning VIetnam" days : "You are the best example of a white male who needs a blow job" type socialism. Can't beat that!
I'll get right on that Simon...
Now he gets it...some of these libertarians have large ears but small grey matter in-between.
Or so it seems. Before you run off the cliff, remember Nam's past...As for the future remember one other thing :
Capitalism is a state of permanent crisis of overproduction where the marginal producer tries to squeeze out the last one ALL for the benefit of the financially bolstered Oligarchs, who thrive over pauperising the "overproduction" by squeezing out the last producer until the next producer does it again....
SO seriously when will you learn Black of black hearted cirlce jerk?
Greece is the fall guy today and their blood will be sucked to feed the German banks etc. But you are right on one thing : In this model of slave labour arbitrage à gogo, the european continent like the USA, is too bloated on past riches to interest the international global oligarch. More money to be made from the lean and hungry.
Yonder Cassius...
The hands of time are black and white.
Most ZHers wouldn't disagree with "Greece is the fall guy today..." ...
More to follow (and who) or was it just a case of the ideal fall guy with prime property to plunder?
What would be that safe country for savings, a second home, farmland? Which bank in the world is well-capitalized??
North Korea?
Iran?
Russia?
It's hard to find a place that hasn't passed through the squid's beak.
There will always be a parasitic class. They either run for office or they vote for the officeholders as card-carrying members of the FSA. Leaving the rest of us that actually produce to suck it.
I heard that KING LEONIDAS
has just risen from his grave, pulled down his statue, packed up his ghostly belongings, and has MOVED outside of Greece! Apparently, he is disgusted that there is not a single Greek still standing who is willing to defend the Mother Country.
Molon Labe? .... NOT !!!!
As a farmer, I'm in one of the few industries where we do actually produce things. I could produce so much more, but boy this government makes it so much harder. The regulations, the taxes, the liability, the licensing, its all a giant chain around my shoulders and millions more like me. I heard a statistic recently that the US lost 30% more of its manufacturing in the past 15 years. Manufacturing, as a share of GDP is just 12%...down from 25% in 1970.
When I look at the jobs that most people have, I see no production. Everyone is proividing a "service" to an ever-shrinking percentage of people who can afford it. Whats worse, nobody knows how to do anything anymore. I hire people and find that they have absolutely no real functional skills, things that were considered very common 25 years ago are now 'specialties'. If you want to hire somebody with basic skills they want a high wage, lots of cushy days off, benefits, etc,etc. I was listening to Jim Rogers do an interview the other day, talking about doing business in China. He said he hires workers, common working men, and once he had this crew they need to build the factory that they were going to work in!...The factory workers BUILT the factory. Then the machinery came in in pieces and needed assembling, which the workers also did. So these common working men built a facility, assembled the equipment, and then go on to work in the factory for 20 years with no complaining. These were not licensed "specialists", they were common working men who wanted a job, built a factory, assembled the machines and went to work producing real goods day in and day out. Could you imagine trying to do that here in the US? The liability, the licensing, the laws, and regulations would make it impossible enough but even if you somehow managed around all that...do you think you could find a group of Americans that had the know how or desire to do any of that??
Well if we look back in history it used to be that way, thats how we became a great nation. The know-how is gone and the spirit is gone, and even if it weren't the government wont let you. Who needs factories anyway? They can just print money and suppress interest rates to inflate the next asset bubble. All you need is the inside scoop, which I'm sure can be had if you know the right people and pay the right price.
Why is everyone surprised the socialists in Europe are fiscally sodomizing the Greeks with debt?
Socialists TEACH that debt shuffling to less influential citizens is ok, we see this in practice now: What do you think the national debt represents? It is the handing of the bills for socialism to future citizens with less power - the unborn can't vote against this debt being handed to them. And US colleges are teaching kids not to question this Crime of the Century - billing the unborn for current expenses.
It seems like the liberals have it out for the unborn, doesn't it? Why don't they call these patterns of behavior a hate crime?
In the abundance of water, the fool is thirsty.. - Bob
Simon makes some great points and they also tie in with what I've laid out. When the Politicians start squabbling over the outcome of people's lives because they've failed to take the right steps towards financial security and stability what happens?
You actually have 3 choices. Simon lists 2.
1 Plan A - current path of the Bankrupt World heading towards chaos. (current path)
2 Plan B - Individual or groups of nations realizing they should diversify assets (ie. Buy Gold) to protect themselves.
3 Plan C - Implement a Universal solution that has a positive outcome for all. Exactly what I've been recommending.
And the other day all this political infighting over self-interest while the world prepares to burn reminded me of 2 children (2 Countries) fighting over 1 toy (1 Bailout Country). But it appears my attempt at making a child like story relate directed towards the Politicians and show that even 2 children can get along better than them failed the other day.
So in the future I'll use more pointed analogies that have far less room for misinterpretation. After a while though it gets difficult listening to the endless back and forth that is going nowhere but Plan A or at best Plan B.
And Simon is right in saying plan accordingly for the worst.
The old saying goes: Plan for the worst and hope for the best.
My new saying is: Plan for the worst but I'm in it to win it.
Not just for me but for everyone. Now we just need enough to contribute to the success of Plan C.
https://youtu.be/rxzwgPjxn0w
I'd agree with most of what he is talking about, but he conveniently ignores the fact that he visits ethnically homogenous nations and then prescribes multiculturalism back home.
It doesnt work like that, in the UK we spend ever more billions on diversity initiatives and other bribes to keep a lid on trouble, money that is sucked out of the productive economy. If we want to get our mojo back on the economy then we can do no better than look back to what we were legislating back in 1900 and roll the state back to that point, no bail outs, and a minimal safety net.