Wednesday, May 5, 2010

Greece ...if you're not interested, don't bother

Some postings serve absolutely no purpose whatsoever when it comes to problems affecting Americans.  This one is no exception.  There's not a voter out there anywhere that can relate to the financial problems of Greece and what the outcome on the world's stage will do to their personal lives. (That line should have included most politicians.)   Greece has always been (at least in my lifetime) a sore spot in American foreign policy.  Whether it was the Truman Doctrine that supposedly saved them from Communism or Bill Clinton's apologising for America's past performance (that's right, Obama is not the first anti-American apologist, only the press kept this one under wraps [I can just see all the pundits rushing over to Google to look that one up]).  Meanwhile we should be paying attention to the goings on in the European Community and Greece in particular.  If Greece goes under (as in default) we should understand what caused the turmoil...and it will get worse before it gets better.  Then once you have full knowledge (then you can say, "I know it all.") all you have to do is put all that gray matter in a mirror in the White House, for Obama's policies are already reflecting shadows of Athens.  Does government jobs sound familiar? Oh, and look at that nifty retirement plan they got over there...and how about working ten months and get paid for fourteen. 
Greece may also be a blessing in disguise.  You already know that the New World Order clan has won their case for one monetary unit (The Euro) and the attempt to ratify a Constitution for a united Europe is the next step.  I don't think that will happen if Greece defaults...and that's a good thing! ~ Norman E. Hooben

ps: I added a nifty video (unrelated to the commentary) at the bottom of this page
The following from:

Greek Financial Debt Crisis Only Part of EU's Woes
William Pfaff
The Greek crisis has precipitated the existing crisis of the European Union. The EU crisis began with the abortive attempt to write a European constitution that could find ratification, and with the expansion of the EU to 27 members. These two events effectively terminated postwar Europe's attempt to establish a political federation.
A monetary union, however, was successfully created, with its common currency, the euro, but the threat to its success, known from the start, was that national economic differences, dictating different policy choices, with consequent national budget discrepancies, would eventually undermine the euro.
The euro, after a period of weakness shortly after the circulation of banknotes and coins in 2002, increased to a high of more than 50 percent over the dollar but is now falling back.
Recent complaints in Europe about the euro's "decline" have simply reflected its move back toward its original dollar parity, in part the result of a deliberate American policy during the Clinton and George W. Bush years to keep the dollar cheap, to the advantage of American exporters.
This policy was financed by the Chinese government's unceasing purchase of dollar Treasury bills, motivated by the uncomfortable position China is in as the major exporter to the United States -- facilitated by its own cheap exports -- and its main debtor. This requires China to prevent the dollar from further decline, diminishing the value of China's reserves.
George Bush's great war against global terror was financed by China (as are Barack Obama's wars in Afghanistan and elsewhere today), for which the U.S. government has displayed no great gratitude, nor much apparent apprehension that all good things eventually come to an end.
Today's European crisis was precipitated by Greece acting with possibly reckless honesty, and Germany behaving badly toward Greece (the latter a case of the pot calling the kettle black; Germany itself is running a deficit of some 3 percent over the EC stability pact limit -- promising, like Greece, to do better in the future).
Germany's haughty refusal to assist Greece in its difficulty ignored the fact that German banks have been large-scale lenders to Greece, and that they, in particular the state Landesbanken, were deeply involved in the U.S. mortgage crisis. Some had to be refinanced and others taken over, contrary to widely held illusions about the German supposed fiscal fortress, and the actual difficulties of the Deutsche Bank and some of the Landesbanken, controlled by the German states. Originally conservative agricultural banks, many in recent years allowed themselves to be seduced into the high-stakes international derivatives market.
The endangered are in states governed by Angela Merkel's Christian Democratic coalition. With regional elections approaching, Chancellor Merkel has preached against the sins of the Greeks while ignoring troubles at home that no one was supposed to know about (except the professional derivative traders). Note that "bailing out" Greece, as the commentators like to say, did not mean literally loaning money; it meant guaranteeing new Greek loan bids so as to attract loans at the same rate as other EU members.
Greece, of course, has only itself to blame for its budget crisis since the governments preceding the return of the Socialists, and George Papandreou's becoming prime minister, enjoyed the assistance of Goldman Sachs and complaisant accountants in rigging the books so as to seem to stay within the rules of the European Central Bank.
Papandreou, newly in office, revealed what had been going on. German bankers and commentators and even Mrs. Merkel have suggested that Germany might abandon the euro and let the Mediterranean EU members who belong to the euro zone and experience debt problems -- Greece, Spain, Portugal -- stew in their own juice.
Germany could then gather the virtuous Netherlands and Finland into their very own currency zone (composed of states that profit from subcontracting to Germany, practicing the German export-at-all-costs trading model, while suppressing consumer buying power).
Greece, despite all, on Monday (March 29) was only able to get new loans at over 6 percent, which would imply decades to come of government, worker and consumer austerity. Simon Johnson, formerly chief economist at the IMF, and the banker Peter Boone, have proposed (in the April issue of the British Prospect magazine) that a better way exists.
Some form of managed Greek default would be less painful and more constructive. Since a large part of the Greek debt is held by German banks, such a managed default might have a certain poetry in it.
Goldman Sachs might take a haircut, too.

Related...  How Greece's Debt Crisis Affects America

See also: Stocks, Euro Slide on Debt Concern; MSCI World Erases 2010 Gain
Quote from above link, "“The primary concern is the contagion risk associated with Greece..."

Video courtesy ABC News


Somewhat related...


Unrelated...but maybe if I advertise enough they'll give me one! (LOL)

1 comment:

PFC said...

People in this country are thinking this can't happen here.

I tell them that they should start thinking in terms of when not if.

Our Constitution is no longer in force...hasn't been for quite sometime now. The left looks at Obama's election as a nullification of the Constitution while the still sleeping Americans think the Constitution will help get our country back and voting the jackals out of office in November will make it all better.

Think again and ya better think long and hard about how you're going to survive when the SHTF here.