(Mike Larson is out this afternoon. Mike Burnick, editor of Ultimate Stock Options and associated editor of Martin’s Ultimate Portfolio, is filling in.)
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In true dramatic fashion, the Greek government submitted an 11th-hour proposal late yesterday that meets most creditor demands, in exchange for a new 53.5 billion euro bailout … Greece’s third since 2011.
In fact, details of the proposal, including spending cuts, pension reform and tax hikes, are nearly identical to the offer made by European creditors way back on June 26, which was summarily rejected by the Greek government, and then by voters in a July 5 referendum.
Hmm … the more things change, the more they stay the same.
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Greece appears to be on the verge of accepting conditions that Prime Minister Alexis Tsipras campaigned against. |
Next steps: The Greek Parliament votes today on the proposal, then EU finance ministers hold an emergency meeting in Brussels on Saturday to discuss the plan. The final yea or nay will come at a summit of EU leaders Sunday.
By the time markets open Monday, the never-ending Greek debt drama may get another extension – moving into its third act!
In a letter to EU leaders delivered with the proposal, the new Greek finance minister stated: “This [proposal] is a vision which serves our commitment to remain an integral member of the eurozone and respect the evolving rules of our monetary union …”
So the Greeks may keep the euro for the time being, but extending debt maturities and pretending Greece will be able to pay them off someday isn’t a viable solution.
The magnitude of Greece’s private and public sector debts are crushing its economy and without meaningful debt reduction, default seems inevitable. Half the country’s bank loans are non-performing, taxes aren’t being paid and Athens is financing the government by not paying its bills.
That’s why it’s likely the Grexit scenario will play out all over again at some point. So what can we expect when that day comes? The events of the past few weeks offer a glimpse into the future.
“Pretending Greece will be able to pay them off someday isn’t a viable solution.” |
On some future Friday, bank deposits will be denominated in euro, and presto, converted to drachma the following Monday. This has all happened before in Argentina, Mexico and Peru in the 1980s, and as recently as 2002 for Argentina.
In all cases, the currency conversion was accompanied by massive capital flight from these countries, as citizens correctly anticipated a forced currency conversion and loss of purchasing power.
Capital continued to flow out, often at a faster clip after the currency conversion and in spite of capital controls designed to stop it, according to research by economist Carmen Reinhart. When Mexico devalued its currency in 1982 for example, bank deposits were 26% of GDP the year before, but plunged to just 5.8% by 1988. This is a lesson the Greek central bank should keep in mind for the weeks and months ahead.
Do you see this as the end game? Or are we just another step on the way to an eventual Grexit? Would you invest in Greece now? Click here to add your comments.
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Mike Larson’s column yesterday on cyber-security attracted several insightful comments from readers. Mike is away this afternoon, but he will return Monday and will review those comments, as well as any further you might have on today’s above column by Mike Burnick. Click here to add your viewpoints.
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As negotiations in Greece appear to be – finally – coming to an end, those in another part of the world continue to drag on. Iran nuclear talks, amid further wrangling, have been extended for the third time. Investors are watching developments for the impact they might have on oil prices should Iranian production re-enter the world market, although many analysts now are saying it would take a long time before any output from that country would be sufficient enough to drive prices down significantly. What’s your view? Should the U.S. continue to participate in the talks, or should we walk out and continue the sanctions regime?
Amid cheers, the Confederate battle flag was taken down from the South Caroline State House. It was lowered for the last time by an honor guard of seven South Carolina Highway Patrol officers. It was then taken to the Confederate Relic Room and Military Museum, where it will go on display. The flag is still being flown over other public places in the South, but opponents are moving to have those taken down as well. How successful do you think those moves will be?
Keeping to the theme of non-business-related events, famed Oscar-winning actor Omar Sharif, who starred in “Doctor Zhivago” and “Lawrence of Arabia,” died in Cairo at age 83. He had been living with Alzheimer’s disease, which was diagnosed earlier this year.
Want to make more eye contact with fellow passengers on your airline flight? Well, you might have to. A new seating plan being developed will make better use of cabin space, but it would force passengers to face one another during a flight. It would give passengers less privacy while eating or attempting to sleep. On the positive side, the new configuration might eliminate elbow wars. Still, maybe it will be better to take a train or bus in the future.
Do you have views on Greece, Iran or the Confederate battle flag? How about potential new closeness on your future airline flights? Click here to go to the website and add your comments. Mike Larson will be back Monday to respond to your comments.
Best wishes,
The Money and Markets team
{ 61 comments }
Greece Problems are a very small part of the world GDP and will not ultimately affect the market. There is a lot of emotion going on now.
brilliant doc.
You’re never going to help a drunk by giving him another beer. Many countries have unpayable debt levels because of non functioning economies. It looks like they are going to kick the can yet again. It’s not just Greece, but what happens to them will be the blueprint on how to protect your wealth.
Greece Problems are a very small part of the world GDP and will not ultimately affect the market. There is a lot of emotion going on now. This needs to be repeated.
Greece: Run for your lives. Take a note from the Iceland playbook. Debt will not cover debt. It will be painful in the beginning but if you get off the beach and into your jobs…if you innovate and create you will overcome. Euro is going to be torn apart….China will be torn apart…then the good old USA will be torn apart. Only then will we all get to see who really runs the economies of the world.
Iran: I don’t know what to think about these guys. Seems like they have not started a war in like 200 years. From what I have read they have a policy to only react…not attack.
Confederate Flag: There isn’t one social issue that will be solved when this flag is gone. A flag that no more than 10% of the country even knew anything about until now. If my eyes haven’t deceived me I believe that a Budweiser picture was in the background in the picture of our alleged shooter while holding the Confederate Flag. I guess good old Bud will be the next to go. The flag debate is ridiculous. I mean in Chicago alone (very progressive on gun control) there were no less than 40 to 50 shootings during the 4th of July weekend alone. Must be their State Flag. We need to get fid of that thing so all the shootings will stop!!! Did that sound ridiculous? I hope so. Just wrapping my mind around what is important to people these days seem to be lowering my IQ.
there isn’t one social issue that will be solved when this flag is gone. thank you so much for what you said . all 3 paragraphs. last sentence-brilliant. so few left with common sense but many too enamored of their own intelligence.
Right on cap. Rob
Very few know this but…….the Confederate Army included 50,000 to 100,000 African Americans that served of free will, virtually ALL American Indians that fought in the war, and 2,500 Mexican Americans (virtually all also). You can destroy and coverup history…..but you cannot change it. Those veterans would have been proud of that flag. And the citizens of the North? Most of them profited from the factories that milled all of that cotton. Men in NYC got rich on Wall Street from the cotton and tobacco grown in the South. Do NOT point your righteous finger at the South if your ancestors are from the North. Your hands are not clean.
No one has clean hands. I saw some guy from Mexico on TV last night talking about how whites should be ashamed of their heritage. Strange, but he never said anything about how the Mexicans treated the American Indians in Mexico and South America. And the American Indians? They never talk about how their ancestors treated other tribes. Same with Africans and how they treated other tribes. Or how about how the Japanese treated the Chinese and the Koreans? And how about how the Chinese treated the Vietnamese? And it is estimated that more than 1/4 of the Roman world was a slave. If YOU think your ancestors were mistreated…..join the human race. ALL peoples in history……..somewhere……….at some time………. were mistreated.
The number one slave owning state was New York. The Confederate flag flew for four years over a slave owning nation. The Stars and Stripes flew over a slave owning nation for 76 years.
Intentions are also important in the flag debate. Anyone who says the flag was displayed to promote fond memories of slavery is full of it. The Stars and Bars have always been flown to honor the 600,000 young men who died fighting under it. They were brave volunteers that believed in what they were doing and gave their lives defending their homes and families. Nothing more. There are an awful lot of things going on in this country right now that offend me greatly but, unlike so many others, I have the good grace to keep my opinions to myself ( most of the time). I’m keeping my Dukes of Hazzard car.
Concerning the Confederate Battle Flag: Thousands of brave men died or were maimed following that scrap of cloth for the cause of the right of States to follow their own path. I, myself, am only three generations away from a man who lost an arm at Shiloh, for that doomed cause. As such, it deserves to be honored. The right of States to vote to enter the Union certainly implied the right of those States to vote to leave it as well, but that right was denied them and resulted in civil war.
After that war was lost, the Ku Klux Klan and others dishonored the Battle Flag by making it a symbol of repression to those who won a freedom that should never have been denied in the first place. The original authors of The Constitution played politics with that document, for the purpose of bringing the southern states into the Union, and that is their shame, Of course the Union might not have survived without those states, but the chance should have been taken. Slavery should have been ended when this nation was established.
The proper place for all Confederate flags now, is in museums, or reenactments, or perhaps in private collections. Those who display any of them to support oppression do so to their own public shame, and deserve that shame to the fullest degree.
@Rob: You certainly said a mouth full, and I agree with everything you said.
The US should suspend its participation in negotiations with Iran, strengthen the sanctions while admitting it was wrong to have released some hard cash to the Iranians to get them to the bargaining table in the first place. This approach will actually enhance Obama’s legacy by not having him known as the one who facilitated the Iranian nuclear bomb capability unlike Jimmy Carter’s legacy of facilitating the current Iranian Caliphate that is opposing US interests politically and by force.
Not from the South, but could care less about the whole Confederate flag crap. I get the not flying the flag at state buildings, totally makes sense. Taking it off the General Lee, not selling stuff, not showing shows that show it, is just ridiculous. People need to get over the past, stop making excuses and move on. Whatever people feel it directs toward rebels, slavery, etc, is long ago. Cool with not flying it on government property. Truthfully, thought it stopped long ago. But, people in our great land have the right to do most things, no matter how stupid, and that should be respected. Sad part is, it’s happening now because some whacked out white boy killed a bunch of seemingly lovely, accomplished, welcoming and innocent people. That is truly a shame.
How many Yankees? 10,000!!!!
How many Rebels? 3!!!!
What the hell are we gonna do? CHARGE!!!!
About my money
the FED stole it.
The Greek government plan, also basically being ask for by the creditors, is really smart. We are going to raise corporate taxes, yes on those greedy corporations. Here is how that works, the corporations try to maintain their profit margins, so the additional taxes will be figured into their costs, This in turn will raise prices to the consumer. The consumer to whom we are also going to raise their taxes. We are also going to raise luxury taxes, even on smaller boats. Great tax those rich people. Now the guy that was considering buying a boat, decides, well not at that new price. So he does without, but wait is there any ripple there, maybe, the boat builder starts loosing orders without orders he has to cut back on employees, marginal manufacturers will close, out the window go jobs of those who were not boat buyers, but builders, and material suppliers. I doubt luxury taxes will only be levied on boat mfg. and yes some of these boat mfgs. are corporations Unemployment is not a problem in Greece is it.? With the bailout that appears to be coming it will give Greece more time to join the coming debt implosion which will take in Italy, Spain, Portugal, and a few more in the future, I would submit. Bottom line the everyday schmo is going to pay, and through the nose..
The fed. is talking interest rate increases, they have no choice, the free market is bringing that on now, note rise in 10 and 30 year bond rates. .Is this due to inflation, return on investment needs, or a growing concern for risk in return of principal. Why are yields so high on Greek bonds? Not a risk concern right?
Mike, no doubt their debt problems will come to a head one of these days, and I believe you hit their nail directly on its head. I only hope that some other Confederate Flag doesn’t rise up and kill more poor, innocent people. I will not board a plane unless it is completely unavoidable, and I know that most of us share that feeling.
Productivity in Greece is a joke. 20-30 hr. work weeks? Retire at 50 yrs. old? The government has a payroll of 35% of non-necessary employees on the payroll?
Good model for other countries to do just the opposite of what Greece does!
Tex …you hit the nail on the head ….how can anybody or any country be so naïve and lend more euro’s to Greece . Where would we all be if we operate like these guys have gotten away with.
The entire farce & all the delays & threats were designed with one objective only ….to a void paying the 240 billion euro’s the creditors !
I agree with your explanation completely…if the EU gives a third bailout to these guys the EU preparing for their own demise ….we all know this is just another Greek gift deal to gain time , but as you said a prelude for the inevitable funeral for the Greek economy!! If the EU accepts this ” Greek Gift ” what is preventing Italy, France and some of the other
financial over spenders from doing the same thing !
The best scenario is that Greece starts a completely new chapter , solidify their trust & credit rating world wide in order to rebuilt their economy as any respected country has to in order to function in our fragile world Economy!
Three strikes and you are out !!! If the EU gives in to their demand , the rest of the EU members will rot like a bad apple in the not too distant future and Europe can kiss the ” United ” plans good bye.
Thank you.
First what the Greeks do after ‘they’ will eventually be opening banks is to go and emtpy bank deposits and accounts, and probably they will stop paying their individual depths. This will finish the banks and they probably know that. Because they will be debating this case in the coming weekend. Any talks and agreements aro only a kind of cover of this fact.
The only what might be stopping this scenario would be opening the banks in Monday and flooding them with new printed euro to satisfy the demand and show the people, that theres no problem angd the banks are reliable. And of course to make any agreement to mask the situation.
Closing the banks was the most stupid thing, because it has waked up the ordinary people, because the most clever have mowed their money long ago. And they could crush the banks which will not gain a trust for long years.
I would be an idiot to invest in Greece. I believe it would be better and providing more satisfaction giving to a charity where it would at least do some good. Greece in my opinion will never get out from under it’s debt.
They will write it down the debt just as they did for Germany after WW 1. The German “Economic Miracle” ensued. There will be a time in the not too distant future when Greece will be an excellent investment.
The Iran Dog and Pony Show goes on and on and on and well you get the point. The Greece Debt Circus goes on and on and get the point. Nothing is solved or fixed any more, the soap opera never ends. Uncle Valdy is shipping advanced anti-aircraft missiles to Iran in spite or is to spite the sanctions. And when the missiles are operational Iran will sulk away from the talks and tell everybody where to go. The EU is getting deeper and deeper into the Greek Swamp. And when the Greek economy tanks Greece will likewise take a hike. There seems to be no common sense let’s get this thing handled solutions any more. Iran is going to have to get serious at the talks or the bombers are going to have to fly. The IMF and European Central Banks are going to have to write off some of the debt and the Greeks will have to make serious monetary reforms, or go out of business. Or we will have to learn to live with a rogue nuclear armed Iran and Greece sitting on the corner with the tin cup.
Lol u a funny guy ted
So let me get this straight. Tsipras schedules a referendum in which he urges the Greeks to vote “No” to the austerity conditions demanded for a European bailout, although he reportedly hopes and expects them to vote “Yes” in order to provide political cover. The Greek people overwhelmingly reject the austerity demands, but soon thereafter Tsipras goes hat in hand to the European creditors offering to accept all the conditions that the Greek voters had just rejected. And the Europeans, who know full well that Greece will never be able to pay off even its current debt, are on the verge of lending them tens of billions more euros. Is this insanity, or what?
Cyber security is the new biotech.
South Carolina finally realized that while the Confederate battle flag represented it past, it does not represent its future.
Of course not! The next time we revolt we will get a new flag!
The comment on unpaid taxes in Greece says it all. It is estimated that tax avoidance is at least 30%. The country would be better off finding a means of collecting these taxes rather than raising rates which would put it out of balance with the rest of the EU and encourage even more tax avoidance. Not a perfect solution but it would also demonstrate a seriousness about the situation which so far seems to have been lacking in the government.
The Greeks are, and have always been, masters at separating others from their money (given to them in good faith). As well, they are, and remain, notoriously unreliable when it comes to honoring commitments they have made in order to secure such financial outlays.
Exit from the EU is the only viable option to stop the shameless bloodletting which will only
as long as Greece remains the dysfunctional and duplicitous nation state it has consistently
chosen to make of itself. In my opinion, the wisest choice the EU can make would be to cut
its losses by getting rid of Greece, own their mistakes, somehow repair the damage done, and move on. What other reasonable choice is left?
The can will be kick down the road the cracks r gething bigger and when it brakes we won’t know in time so tree carefully r u will be sucker up.
The only way I would ever consider investing in Greece would be if I could deduct the certain loss from my taxes. Not bloody likely to occur, so forget any involvement with Greece. My heart cries for the children who will certainly become monsters simply in order
to survive in a situation not of their creation.
Political Correctness now goes so far as to destroy history and demonize the general public. It really has to stop or we will be wishing it were 1984. Airlines have taken a marvelous experience in speedy travel and with some graciousness into a traumatic and very unpleasant, but necessary experience.
The Greeks should a page from the Icelanders. Jail the banker and tell the IMF and ECB to take a hike. Iceland did in 2008.
While we must never forget the past, the Confederate flag belongs in the past. It is a constant reminder of attitudes and actions (intolerance & slavery), the legitimacy of which,
regrettably, had to be decided by bloodshed and destruction for all parties involved. We
have moved on as a nation, but some among us still need to hang on to something or anything which will allow them to consider themselves superior to others. It is a sad commentary on the lives they must be living which requires them, in their opinion, to feel
as they do. My advice to them would be to let it go. It becomes a cancer of the soul if you
can’t/don’t/won’t. Just saying the truth.
Was taking up arms to defend themselves against an out of control Federal Government in Washington really that bad an idea? Slavery was an abomination. So is tyranny. Jim
Mike: We should walk away from these nuclear negotiations. History has taught us that authoritarians and totalitarians have always used negotiations to stall for time. Their nuclear program is still in progress! The Iranians will never agree to unannounced on site inspections! Furthermore there is a statute on the books that says that any executive agreement that involves US national security must be designated as a treaty. Under the constitution, 67 Senators must vote in the affirmative to ratify a treaty! Once again our government is sidestepping the Constitution that they swore to uphold! Regards, Robert Calabro.
What concerns me about the Rebel Flag issue is the progressions that are sure to follow.
After the all the Rebel Flags disappear, whats next?
Statues of Robert E. Lee? Will Lee County FL become Leeless County FL? Will Lee highway in Chattanooga TN be named Leegone Hwy? The Stone Mt GA park turned into gravel?
When the Rancher In Chief cuts off the EBT funds, the current SLAVES WILL BE PUT AWAY IN A BOX, FEMA CAMP,(for their protection)JUST LIKE THE REBEL FLAG. Only then will they recognize flag deception enslaved them ,
This is classic Stalinist Revisionist History at work. First the flag, then the Rebels themselves. They won’t be happy until all that don’t agree with them on every detail are busy working shoulder to shoulder with their comrades in the fields, spending their nights in the FEMA camp, and weekends in the reeducation seminars. Sound extreme? Just who do you think is running this country?
Re: Airline seating
Having flown both domestically and internationally, I feel the new arrangement is wholly
Inappropriate. Here’s why: a) you’ve exchanged an “elbow fight” for a “legroom/foot fight”, and these can escalate to violence extremely quickly. b) Now, I am forced to sit across from people (be they 1st, 2nd or 3rd world) who refuse to cover their mouths whenever they cough, sneeze, or whatever, c) Being forced to sit this way, enhances the possibility that
I may unwittingly/inadvertently violate some behavioral/cultural norm held by another
passenger(s) which may be considered intolerable (or at the least make them feel uncomfortable), and d) I don’t like being forced to avert my eyes constantly because I’m
somewhat “in their face” and not thinking whatever they may believe I’m thinking. I’d prefer
looking at the back of the seat ahead of me than to endure the social pressure of remaining
PC for whatever time it takes to reach my destination. Some people are more comfortable
around others, and some are not. I prefer the old style seating arrangement, but I will try to
adjust amicably to whatever new reality presents itself in the future.
Hi Mike,
To drown a Nation in debt is the surest way to put (or keep) them under servitude. “The lender is the master of the borrower” has without fail been proven to be true! It is a sure way to strip sovereignty away from being a free people! There is however one severe downside to this law. “Every act rewards itself” – Emerson. The shackles (of debt) will be on the legs of both master and slave in equal parts. Neither the lender nor the borrower can truly claim freedom. Debt forgiveness is the only long term solution for both lender and borrower alike! In the end, the inherent desire to be free will always prevail.
You said,,, What’s your view? Should the U.S. continue to participate in the talks, or should we walk out and continue the sanctions regime?
The US is a poor negotiator, trusting and blind. Start with recognizing Israel. Stop being so trusting,,,
as for Greece
Only in God we trust
All others pay CASH
Greek will not stand or fall depending on it’s debt – Greeks financial future depends on adopting a long term rescue financial plan and with a kind of support from the European Zone – it’s a part of their economic policy + a political issue, I believe they will remain with the current currency meeting very soon a better economy.
DEAR!CAN WORK YOU IN MY IDEAS WITH DONALD TRUMP OR BILL GATES? IM HAVE STORY FOR CLINIK ”APPLY”.IT MORE PEOPLE WILL BE HAVE FRUICT LIFE.HE WILL BE SEEK GOD! THANKS! GOD BLESS YOU! SERGEJ LEVCENKO
There will never be a GREXIT!! It is not “only” a financial but far more a political problem.
Look at the map of Europe and “eliminate” Greece, You see the disaster and threat?
Russia, Iran, Irak, Syria and all the others are on the doorstep!!!!
Yes, my opinion is that it is very clever of the Greek Minister to try to get the best terms for a new loan. By struggling this way he is showing the electorate that imposing any
Further increments, such income tax, and other increases, and lowering any decreases,
Have been blamed on the Creditors, to reduce somewhat the existing loans, and not implemented on the people by the elected Government. The electorate would not accept
The new terms to enable Greece to reduce its commitments. This is only my opinion.
just sick n tired of this game…Greece out! Greece in!…Greece there! Greece overthere!…an A-bomb,plz!
Fundamentally the Greeks don’t want to adapt to capitalism as we know it. With retirement at 50 and a 32 hour work week Europe is basically giving an allowance to a stepchild. To make their goods attractive for export they need return to the drachma, a devalued drachma.
WHAT GREECE NEEDS , NEW BUSINESS FROM EALTHY COUNTRIES ,TO BUST
THE ECONOMY AND PEOPLE HAVE JOBS !
THERE RE MANY APPORTUNITIES , NEW GEOPOLITICAL AND NAVIGATIONS TO INVEST , EVEN ORYKTON PLOUTO ( METALS FROM EARTH )!
THANK YOU FOR APPORTUNITY TO EXPRESS,MY OPINION .
HELENE KARA KARAGEORGOS : SYGRAFEYS :
The US should walk away from nuclear negotiations with Iran. The mullahs governing that unfortunate nation have clearly moved the goal posts and show no intention of negotiating in good faith. They plan to develop nuclear weapons and no amount of talking will deter them. Any treaty wouldn’t be worth the paper it is written upon. The Obama administration cannot even get Cuba to reform, let alone Iran.
just saw an item where a man ordered a Confederate flag cake from a Walmart, and they refused, but he then ordered an ISIS flag cake, and they were happy to take the order. Another reason for some people to avoid that company, I guess.
Would I buy a Geek bond?
Yeah, right along with a US Treasury Bill; they are both worthless promises from thieving politicians !!
New airline plans for higher density seating: I’ve had it with air travel! I’ll drive or stay home! I am sure it is only a matter of (a short) time until they figure out that stacking passengers horizontally, like cordwood, will be the best way to maximize their profits! The FAA should put a stop to this nonsense (no way to safely evacuate all passengers in an emergency) but I am sure they know who butters their bread, and it’s not passengers.
I have read about the first ten comments below; they address two of the issues considered:
1. the greek payment of their debt; 2, the significance of the confederate flag’s being removed from the south carolina statehouse grounds with a lot of comments changing history to clarify history or to suit their view of how things really were in the conduct and policies of the south in the civil war.
With regard to 1., I think that creditors of the greek government should decide which is better, to get paid a part of what is owed them or none at all and greece should decide if, permitted to reduce its debt by, say, 25 %, it will allow the creditors to effectively and actively monitor how the government gets the money to pay them. If neither of these two things happens in a positive way, then both sides should call it quits. The creditors get what they can, and Greece gives up the euro and faces extreme loss of credit and all of its consequences.
With regard to 2., unless the claims of these commenters can be proven to the satisfaction of the majority of persons living today, they should accept the fact that they will not be allowed to rewrite American history and should let the matter rest.
aaron horowitz, male, 84 years old, served in the US Marine Corps during the Korean “police action.”
For the government of Greece to pay its debts, it must generate revenue–from taxes on various kinds of economic activity. To generate MORE REVENUE, the Greek government must somehow generate MORE ECONOMIC ACTIVITY in Greece. In a more or less free enterprise economy, economic activity is largely a function of somebody’s SPENDING. (Thank you J M Keynes for this not very profound observation, which is still disputed by “economists” who get paid for propagandizing a political-economic ideology instead of telling us something useful about the real world.) Therefore, if the Greek government cuts back on spending (via “austerity”), the effect will be to REDUCE economic activity (especially with the multiplier effect), AND tax revenues AND the ability to service debt.
WHY then would anyone be stupid enough to recommend austerity as a pathway to repayment? The politicians of Germany and France are not stupid. But they ARE in bed with their bankers–just like our own pols in Washington DC. And like all bankers, European bankers “insist” on being paid IN FULL even when this is not realistic, because THEY FEAR (rightly) that default by Greece will lead to MORE DEFAULTS by other “sovereign” debtors.
Cascading defaults are inevitable. They are the only real world solution for excess indebtedness which otherwise will bring down the global economy.
European banks unwisely loaned too much money to the PIIGS (in this case to Greece) and now they are facing huge losses on “bad paper” that they acquired with their own very bad judgment. If German-French-Belgian (etc.) governments want to bail out their banks (as the U.S. did in 2008-09) let them do it. But LET’S NOT PRETEND that Greek government bonds will be repaid in full, and then destroy Greece (and the eurosystem?) in order to maintain the pretense.
European banks and/or their governments WILL eventually bear the loss of these semi-worthless government IOUs. Bad paper is bad paper and a loss is a loss, regardless of the “causes” or who’s “at fault” The real question is not ‘who has sinned’ but WHO will bear the loss–the BANKS or their GOVERNMENTS? Nothing is gained by grinding up the Greek nation–or by “Grexit” from the eurozone–on the way to answering this simple question.
So, Ms. Merkel, let your banks take their losses on bad sovereign bonds–AND/OR bail out your banks by purchasing the bonds, then writing off about 50% of the bonds’ nominal value. But DO NOT LOAN ANY MORE MONEY DIRECTLY TO THE GREEK GOVERNMENT. Once freed of half of its debt load, the Greek government must be allowed to succeed or fail on its own–like an American state government or municipality–without exiting its continental system. (Did anyone suggested that bankrupt Detroit, Michigan, must or should leave the Union in order to survive?)
The can continues to get kicked down the road because when it stops, the Euro zone is exposed as a BANKRUPT! The majority of loans to Greece went straight to the Euro Banks, and Germany as a country has had many times more debt forgiven in the past than Greece has currently required. Who do these Banksters think they’re kidding? It sickens me to be in the USA, aligned with the Euro Banksters. Its unfortunate for Greece that Tsipras never grew a pair to turn this fiasco around. I think he would have been wise to tell them where to put it and align himself with Russia and China and finally get his economy off the ground working oil deals with the East. Of course, that may have put the USA into WW3 because once the Euro charade is exposed, so is the $USD. This will all end badly… eventually!
RE: Greece
As a World War II veteran, I find it ironic that although the Nazis could not fully conquer Europe militarily, now, about 70 years later, the Germans have conquered Europe economically.
Without a doubt, for whatever reason, many see the Confederate Flag as a symbol of hate and oppression, and some, undoubtedly, see it as a rallying point for their racist views. But the greater majority, with no racial motivations whatsoever, see the Confederate Flag, whatever its historical origins and uses, as a symbol of independent thought and resistance to Federal oppression of Rights and Powers Constitutionally reserved to the States or to the People.