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Ben Davies: Greece Is Just A Preview Of What's Coming For The Rest Of Us

Tyler Durden's picture




 

Submitted by Chris Martenson

Greece Is Just A Preview Of What's Coming For The Rest Of Us

All eyes are on Greece these days, with hopes the situation there can soon be resolved and the global recovery kicked into high gear.

Sadly, those hopes are misguided claims Ben Davies, CEO of Hinde Capital. In fact, he says, Greece's pain foreshadows the future awaiting the rest of the world. 

It all comes down to simple math. Greece has increased its debts at a rate far faster than its income has grown. At some point, the debt became so large that the country could no longer service it.

What makes the rest of the PIIGS immune from a similar fate? Or Japan? Or the US? Or the OECD, in general?

Nothing.

Yes, Greece had a smaller, shakier economy and doesn't have a central bank to print its own currency at will like Japan or the US. But even those countries with a printing press learn that, after a certain point, expanding the money supply only complicates the problem of too much debt by inflating key economic input costs and dangerously weakening the currency. 

The cold hard fact Greece is facing is that it's now at the point where extraordinary losses need to be taken. The problem is, no one wants to take them. And all the sturm und drang being exhibited by Brussels, the ECB, sovereign debt holders, and other world leaders is nothing more than a frantic game of hot potato.

The one thing we can be confident of is that at some point, these losses will be taken. The market will eventually force it.

And the second thing we can predict is: we don't know what will happen when they are. There is so much complexity in the counterparty exposure to Greece debt - as well as the much larger derivative exposure tied to this debt - that anything between "not much" and "worldwide financial conflagration" could be possible.

And that's just Greece. As other larger countries begin to sink under the weight of their sovereign debts, the risks to the global financial system increasingly escalates. Which is why Ben Davies has a hard time finding a good home for investment capital other than gold.

Click the play button below to listen to Chris' interview with Ben Davies (runtime 56m:40s):

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Sat, 02/25/2012 - 22:57 | 2196829 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

I think Krugman's been drinking again.

Sat, 02/25/2012 - 23:37 | 2196900 I only kill chi...
I only kill chickens and wheat's picture

Who was it that said they down arrowed to keep track of which comments they had read a while back? Does seem to be a lot junkers around lately.

Sat, 02/25/2012 - 20:39 | 2196559 goforgin
goforgin's picture

With Greeks acting like bunch of pussies and allowing robber barons to pull them by the leash like dogs, US is finished. What is going on in Greece is a TEST case how far the elites can push before the little people revolt. Unfortunately they can push a lot farther. In Latvia they cut wages by 30%--still nothing. Latvia has been in Depression for years.  The same fate awaits Greece. The young men will immigrate like Cubans in inner tubes and the women will turn into whores to be used like East European women.

People like Ben Davis are elites/ banker lackeys that condition the little people to accept austerity and debt repayment.  Like money, DEBT is created out of nothing. Only deceived fools feel that they have a moral obligation to pay it back---a joke on you! And you are being conditioned to accept it by the constant barrage of propaganda about debt.

Many of you are deluded to think that the system will print, and print to bail out the little people. Europe is being plunged into A Depression by design. The Euro is not going to zero.The Fed is not going to print and the dollar is not going to zero. But you are going to the cleaners while listening to all the financial misinformation.

 

Sat, 02/25/2012 - 22:16 | 2196743 slewie the pi-rat
slewie the pi-rat's picture

this is your first post?

you joined up to do this?

L0L!!!

+1

Sat, 02/25/2012 - 22:52 | 2196819 goforgin
goforgin's picture

You got all these 'money junkies' who invest money for the elites whom you see in the media. All you hear is noise that is designed to make one accept false premises. I would rather listen to a truck driver opine on financial derivatives rather than some financial speculator telling me to accept austerity as a given---note in both cases all you are going to hear is bullshit.

Sat, 02/25/2012 - 23:01 | 2196837 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

But instead we should listen to you rant about Chechnyan prostitutes and rave about fiat currency and the elite's super natural powers and ability to defy reality until the end of time?

Sat, 02/25/2012 - 23:50 | 2196936 goforgin
goforgin's picture

1. Chechnya? I am talking about women of Eastern Europe; that's, Latvia, Ukraine, Western Russia, Hungary, Romania, Lithuania, Czech, Slovakia etc

2. The present debt=money system is doomed because it ran out of borrowers. Austerity is a means by which the elites attempt to divert

    benefits that would go to people toward debt repayment. This is the transition from economic growth to leisure class feudalism.

3. And you are what is called a middle class useful idiot who bought into this artificial creation of DEBT.

 

Sun, 02/26/2012 - 16:29 | 2198539 Hobbleknee
Hobbleknee's picture

It seems like you don't know who your audience is here.

Sun, 02/26/2012 - 18:17 | 2198694 slewie the pi-rat
slewie the pi-rat's picture

at least he got fightin', BiCheZ!

and i think he knows summa them girlZ, too!   Yay!!!  tell them i like to cuddle, and welcome to america!


remember, with negative interest rates being "broached by theUsualGeniuses" we may all hafta turn down that 1$Mil at -3% interest to stay free?  at least those of us whose "assets" haven't been formerly "liquidated" into zombie hands; yet

Sat, 02/25/2012 - 23:53 | 2196945 Green Leader
Green Leader's picture

Slewie, come on, it takes a few days to a week to get approved into the forums.

This guy is making some sense.

Nothing makes sense anymore.

Sat, 02/25/2012 - 20:50 | 2196560 goforgin
goforgin's picture

The Eastern European nations thought that joining NATO and EU was a free lunch. In less than a decade they were turned back into feudalism of 19th century.

Sat, 02/25/2012 - 23:02 | 2196840 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

While Spain has high unemployment.  Stop drawing lines in the sand, the tides coming in.

Sun, 02/26/2012 - 01:23 | 2197090 UP Forester
UP Forester's picture

....while all those that aren't quite awake are going out to collect a few fish flopping on the sand....

Sat, 02/25/2012 - 21:00 | 2196604 Hugo Chavez
Hugo Chavez's picture

Wanna be part of the solution?

You dont need anything fancy or any money, just a willingness to learn.

Your grandfathers deer rifle? Clean it up. Replace the firing pin. Learn its range and practice. A hundred dollar scope from shopbarska.com is all you need. Learn how to build a silencer for it. There is no law against learning how to build a silencer.

Buy lots of books on booby traps and IED's. There is no law against learning as much as you can.

Free float the barrel on your old deer rifle wirh sandpaper. A denizen of a local gunshop will gladly show u how and even do it for you if he ia bored.

We would be in real trouble in afghanistan if they had a bunch of old deer rifles with scopes. Distance is ur friend. A cheap ak47 clone is worthless in guerilla warfare

Sat, 02/25/2012 - 21:01 | 2196606 Hugo Chavez
Hugo Chavez's picture

Learn, and wait patiently. You will know when it is time to act.

Sat, 02/25/2012 - 21:25 | 2196653 dolph9
dolph9's picture

So shooting people at the behest of elites is being "part of the solution"?

Hey asshole, in case you haven't noticed, we are already in real trouble in Afghanistan because we don't have a clear strategy, there's no end in sight, and we haven't won the support of the people.

How would you like it if your home was invaded by a foreign power so they could control your resources?

Sat, 02/25/2012 - 22:28 | 2196758 Clay Hill
Clay Hill's picture

Straight up.

That he-man stuff works great for protecting hearth and kin, or putting food on the table, but it isn't the way to achieve System Change.

Some of you don't want system change. Too bad.

ZH member "blu" mentioned one way to bring the reset with as little bloodshed as possible on another Greek thread. Get a significant portion of the populace to stop paying their mortgages, and taxes for a while. Maybe as little as 90 days would be enough. The Greek, or any other government will not default, but you can.

The ball is in your court bitchez.

Sun, 02/26/2012 - 00:14 | 2196984 dwdollar
dwdollar's picture

Peaceful change was given a chance. It failed.

Sun, 02/26/2012 - 02:03 | 2197176 hardcleareye
hardcleareye's picture

Not paying your taxes and mortgages will result in what ever equity/wealth you have accumulated being taken from you!

WE (those not in the 1%) are not players and the ball was never in our "court".

This is going to continue (and more than likely for some time) until to collapses of it's own weight, then you pick up the pieces and go on has best you can.  And at that point it will come down to being able to take care of "you and yours" ..... "Surviving the Economic Collapse" kinda lays it out for you...

http://www.amazon.com/Modern-Survival-Manual-Surviving-Economic/dp/98705...

Sun, 02/26/2012 - 01:50 | 2197157 hardcleareye
hardcleareye's picture

So can you explain just what "resource" the US is trying to control in Afghanistan????

Are you referring to the Internal Pentagon Memo referenced in the NYT?

http://www.nytimes.com/2010/06/14/world/asia/14minerals.html

To date I am unaware of anyone else that has "confirmed" those "pentagon" findings......  please share you insight and sources to support your statement.

 

Sat, 02/25/2012 - 21:00 | 2196605 Westcoastliberal
Westcoastliberal's picture

We are all Icelanders now!

Sat, 02/25/2012 - 23:03 | 2196844 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

We wish!

Sat, 02/25/2012 - 21:17 | 2196630 RobotTrader
RobotTrader's picture

I keep waiting for bonds to top out.

No luck yet.

Especially California Munis

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=72197115

Sat, 02/25/2012 - 22:41 | 2196788 Yen Cross
Yen Cross's picture

 You remind me of a Monkey Chewing on a fly swatter!

Sun, 02/26/2012 - 10:41 | 2197566 krispkritter
krispkritter's picture

Hey, wait just a minute!

Sun, 02/26/2012 - 12:54 | 2197871 Seer
Seer's picture

Hold it right there!  Put down that fly-swatter and back away, SLOWLY!

Sun, 02/26/2012 - 00:38 | 2197024 ebworthen
ebworthen's picture

Robo my friend; bonds are promises, they won't top out until perception meets reality.

The Bernanke and TPTB are a fine band on the deck of the Titanic, and the drinks are good.

We are only 10 minutes past collision with the iceberg.

Patience, patience, patience.

Sat, 02/25/2012 - 21:33 | 2196669 OneEyedJack
OneEyedJack's picture

It all comes down to simple math

 

I know this is copy and paste, but it is what I tell EVERYONE curious enough to ask, Why do you think it will all fail.

Sat, 02/25/2012 - 23:05 | 2196848 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Becuse the dollar and all fiat has no intrinsic value.

Sat, 02/25/2012 - 23:19 | 2196865 Seer
Seer's picture

FINTE != INFINITE

Infinite growth on a finite planet is impossible, math/physics/mother nature say so.

Next.

 

Sat, 02/25/2012 - 23:43 | 2196920 I only kill chi...
I only kill chickens and wheat's picture

Newt, too the moon and beyond. Infinite universe, and it's expanding constantly, so they say.

Sun, 02/26/2012 - 01:21 | 2197085 Seer
Seer's picture

Fucking Newton.  The guy's running around saying that he'll drop the cost of gasoline to $2.50/gal by getting the pipeline in place and doing the Drill-Baby-Drill "solution" in the GOM.  Something about increasing supplies by 2 million barrels or some such; which, if you do that math, just plain doesn't work out: even if that 2 million barrels were FREE it still wouldn't reduced prices by that amount; price reduction would be about 37% while 2 million barrels is but about 10% of current US consumption.  Of course, we here all know that it's BS for the simple reason that markets will/should set the price, and this PRICE FIXING by Newton the "anti-socialist" is no more than political masturbation.

The millions of FAKE conservatives will lap this up... rather than see the obvious errors in the numbers (not to mention that depleting the oil faster just means that you'll run out sooner) the sheep will blame "socialism" and "environmentalists," which, I suspect, is the real reason for supporting the likes of Newt- out of hatred of others, not out of seeking out real "solutions."

Hook 'em all up to lie detectors coupled with electric chairs.  If they're caught lying...  Of course, only Ron Paul will be left answering questions.

Sun, 02/26/2012 - 12:59 | 2197893 Seer
Seer's picture

And one other thing to add to this is that Newton will get people primed to EXPECT a drop in fuel prices.  When that drop doesn't happen (due to the above mentioned reasons) we'll find that he and his neocon buddies will whip out the Iran card.  Yup, it's the Iranians who are responsible for the prices not dropping (of course, the math here, based on Iran's exports to global export numbers, will fail, but, hey! they want a war) and he and the neocons will get their next war, as there's plenty of folks willing to support it (with other people's kids of course): bankers and 'defense' contractors ARE the economy.

Sun, 02/26/2012 - 01:14 | 2197061 FreeNewEnergy
FreeNewEnergy's picture

And what about the shadow inventory of property tax liens held by American Home Funding. (I know, the irony of the name is delicious.)

It boggles the mind to think of a world in which a private corporation (AHF) owns 1/4 of all residential property in the US and the citizens don't have enough income to even pay rent.

Go ahead, foreclose on millions of properties worth 1/3 of their assessed value. Let's see how fast you can rehab them and put renters into them. Not fast enough, probably.

Fuckers are screwed, royally, completely and without being kissed.

Sun, 02/26/2012 - 03:16 | 2197244 chindit13
chindit13's picture

There is a difference, perhaps a subtle one, but a difference nonetheless in the Greek bailout vs. the banking bailouts under Paulson.

Back then, the bailouts made the banks whole or more than whole, and allowed the players to actually benefit---get enriched---from bringing the system to the brink.

Now nobody is getting enriched, but rather the rules are being changed to maintain the Potemkin village.  Bondholders did not lose in the banking bailout;  now bondholders will lose, but generous accounting, BIS capital changes, and LTRO liquidity injections will allow all to pretend things are patched up and on the road to recovery.

2007-2008 was about making money off of mistakes, incompetency and corruption.  2012 is about capital preservation and system preservation, but it now carries a cost that hits the wallets of the banks and other bondholders.  The fact that they aren't being made whole is proof that the system is feeling strains even more severe than what it faced in 2007.

Sun, 02/26/2012 - 09:45 | 2197495 RiverRoad
RiverRoad's picture

Throw in another "difference":  the inexplicable monkeyshines and headfakes  going on this year are all geared to getting everybody past the elections in their respective countries.  Once the elections are over, it's Katy bar the door folks.

Sun, 02/26/2012 - 12:50 | 2197866 chindit13
chindit13's picture

Excellent point.  The machinations required to keep confidence in the system are bad enough, but toss in elections in a host of impacted economies and it gets all crazy.  Guessing the policy moves---when re-election is on the line---is possible, but estimating the impact and unintended consequences is a sight more difficult.

Sun, 02/26/2012 - 13:01 | 2197903 Seer
Seer's picture

"Back then, the bailouts made the banks whole or more than whole, and allowed the players to actually benefit---get enriched---from bringing the system to the brink."

Might it not also be possible that the previous bailouts really didn't clear out anything, that that RISK was just more readily hidden (pushed back into the closet) and that it's still festering, adding to the current eruptions?

Sun, 02/26/2012 - 14:33 | 2198199 chindit13
chindit13's picture

Of course.  Now, however, they either cannot hide it or they cannot get away with a bailout.  Bondholders are now forced to pay.  That is different, and suggests a worsening of conditions and/or a realization that the market will no longer accept endless printing.

It almost makes one begin to believe that they know it is a solvency crisis, and that liquidity is not a cure, only---at best---a stopgap measure.  Hence, the LTRO.

Sun, 02/26/2012 - 05:32 | 2197313 ravmajor
ravmajor's picture

Conventional monetary policy has become ineffective.  We are all going to take the hit one day thats for sure.

Sun, 02/26/2012 - 08:14 | 2197407 Kevlar Akubra
Kevlar Akubra's picture

There once was a time I had rights

Until someone did turn off the lights

I got up to see

But was smashed in the knee

And died without even a fight

Sun, 02/26/2012 - 08:54 | 2197431 Griffin
Griffin's picture

Things are starting to heat up in Iceland, someone nailed a hanged Rat to the front door of the home of a former CEO of one of the 3 failed banks in Iceland, that same banker is also being stalked by someone.

A top figure at the resolution committee of a bankrupted investment bank was beaten up by some one who is being attacked by the bank.

This bank is notorious for agression against those it claims to owe it money, one guy who had a house with a mortage from this bank rented a bulldozer and smashed the house into bits, he was so angry that he buried his car also, even thoug it was fully paid for.

The bankers have been fighting in every court in the country and loosing every case, sometimes without being able to defend themselves due to obvious fraud.

Sun, 02/26/2012 - 12:26 | 2197789 Bam_Man
Bam_Man's picture

A lot of Icelanders are very heavy drinkers. The guy with the bulldozer almost surely.

Sun, 02/26/2012 - 18:25 | 2198800 Griffin
Griffin's picture

Actually, the rat hanging and beating up of the investment banker is something that happended a few days ago, the house demolish happened June 17 2009, the Independence day. That event marked the begining of the end of this bank, not long after it went tits up.

The Frjalsi fjarfestingabankinn (Free investment bank) got a loan from the state on very favorable terms, even though they were not in trouble, they used that money to buy real estate at auctions and did what they cauld to force their own mortage customers into bankruptcy, specally those who had loans in foreign currency.

This guy had his mortage in foreign currency, and when it doubled he could no longer keep up with payments, so he went to the bank and asked them if they would take him off the "death list", meaning letting him avoid bankruptcy, but they refused.

This video shows him destroy the house, the guy you see in the video is a comedian making fun of this in a tv show called Skaup that is shown every year Dec 31.

http://www.youtube.com/watch?v=p58xV4FrCKg

He is not driving a bulldozer, it was a excavator.

Since then all loans in foreign currency have been found to be illegal, and this whole setup was a scam to move foreign currency risk off the banks to the people, small and middle size firms, house holds and individuals.

 

           
Sun, 02/26/2012 - 17:35 | 2198696 RiverRoad
RiverRoad's picture

Re Iceland:  Good for them.  The world could use a few more Vikings right now.  Their economies are doing pretty well too.

Sun, 02/26/2012 - 09:35 | 2197486 RiverRoad
RiverRoad's picture

"we don't know what will happen" when all the parties are finally forced to take their losses.....Well, the word "War" comes to mind especially when governments collapse.  Right now they are all fooling around with this turnip, but when the last drop of blood has been squeezed from it then they may well turn to the time honored tradition throughout human history of physically plundering treasuries.  We'll get there sooner or later.

Sun, 02/26/2012 - 10:08 | 2197529 yogibear
yogibear's picture

So when is an approved world bankster ousting Obama? Just like what occurred in Greece and Italy?

Sun, 02/26/2012 - 11:18 | 2197625 RiverRoad
RiverRoad's picture

Obama will be protected by the Fed as long as he remains their "boy".

Sun, 02/26/2012 - 10:56 | 2197589 rsnoble
rsnoble's picture

I sent texts to all my friends over a year ago "Enjoy the preshow Hillary, you bitch".  Of course I got the usual LOL, you're too funny response.

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