Tag Archives: debt relief

July 4, 2015 · 23:13

Ruled by cowards

That was my first thought this morning, the Guardian is full of news, on how Greece “needs up to €60bn (£42bn) of extra funds over the next three years and large-scale debt relief to create “a breathing space” and stabilise the economy“. Really? In all this, no move will be made until after the referendum, but the fact that Greece goes a way they do not like, a 60 billion Euro carrot is thrown into the mix. So as we see that the IMF now reveals a deep split with Europe as it warned that Greece’s debts were “unsustainable”, which we already knew, we see absolutely nothing on the accountability of Greece, its choice of politicians and it taken political policies in the last decade.

Consider the rules at creditcard.com ‘Preteens should learn that borrowing money costs money, and that when you borrow, you make a promise to repay‘, now there are two main reasons why things go wrong, the first is because things change, a person loses his job, a town falls into recession, these are usually temporary issues, and a delay tends to solve matters. Yet when the child has a compulsive buying disorder, that person will have all the toys and all the goodies and no usable credit card. Last there is the group of people who are both in denial and rationalising, this applies to Greece and pretty much the political BULK of the EEC.

They are in denial that they overspent and they are rationalising why it was spent in the first place. Greece being the front runner, because Greece is now in the hot water tub. More important, several players are now stepping on the plate stating things like unsustainable and debt relief, which was a given for a long time, yet NO ONE is holding Greece accountable (at present), for the things they did. It will be pushed towards ‘it was the previous people’ and these people are not to blame. We can allow for both to be truths, yet the current administration has done NOTHING to make serious changes, changes to prevent this from happening from now on. This makes them equally guilty. So as the Guardian published yesterday ‘IMF says Greece needs extra €60bn in funds and debt relief‘ (at http://www.theguardian.com/business/2015/jul/02/imf-greece-needs-extra-50bn-euros) and now follows it up with ‘IMF says no third bailout without debt relief‘ (at http://www.theguardian.com/business/live/2015/jul/02/greek-debt-crisis-athens-creditors-referendum-yes-no-live) yesterday, it seems to me that the people behind the screens are slowly releasing information in an urge to keep the status quo going, the fact that this will hit everyone down the track is not their concern, like former Greek politicians, they will leave it for the next person to solve.

What a tangled web we weave!

Now, we see additional hilarious statements as Yanis Varoufakis starts spinning its tail. With messages like “Europe has taken a “Political decision to shut the banks down” as a way to force Greece to accept a non-viable decision” on Bloomberg. Let’s not forget that the ECB had to give Greece 3.3 billion in emergency cash, making the total of cash through the Emergency Liquidity Assistance (ELA) €68.3bn (£50.3bn) (source: BBC), so this means, that whilst people can only get 60 euro’s a day, and as some source stated “Greek banks down to €500m in cash reserves as economy crashes“, we see that 11 million people could take out 660 million euro’s leaving absolutely no money left in the banks (or ATM’s for that matter), so, how about stating that the banks were closed because Greece had no money left? As a professor of Economy, I would hope that Yanis Varoufakis can use an abacus and calculate the dire situation for himself. Giving us the issue that as a politician he is spinning half-truths as I see it (I do accept that as a politician he had very little options to work with).

You see in all this, my massive issue is not the status this parliament is in, they were handed a really bad hand. It is the utter inaction that propelled this situation into the limelight. So why bash Tsipras and Varoufakis? That is the question I ask myself, because I must look at reasoning in all matters!

I have no hatred or ill feelings towards Greece, I always loved Crete! I have nothing against these politicians as persons (never met them), but their actions call into the light certain elements we must inspect and investigate, even within ourselves, because if we do not do that, we become players in the blame game and there has been way too much of that on many sides of the monopoly table.

Now we look at news with more ‘fearing’ upcoming events of utter negativity ‘Greek economy close to collapse as food and medicine run short‘ (at http://www.theguardian.com/world/2015/jul/03/greece-economy-collapse-close-food-medicine-shortage). First the subtitle “Alexis Tsipras urges people to vote no in Sunday’s referendum as capital controls bite and vital tourism industry sees tens of thousands cancel holidays in Greece“, how interesting as politicians and spokespeople were all about on how tourism was great and how the numbers would continue.

For example ‘The record boom in Greek tourism with more to come, says Tourism Minister Elena Kountoura‘ (at http://www.neomagazine.com/2015/04/greece-has-never-been-sexier-the-record-boom-in-greek-tourism-with-more-to-come-says-tourism-minister-elena-kountoura/), where we see  “All entities that deal with tourism including our ministry and the people of Greece have come together and joined hands so that 2015 will be an even better year. The feedback so far is very positive and we feel very optimistic“. Which is an April 2015 article, in my article of April 22nd, we see the Ekathimerini quotes, where the quote a drop of 50% came from, which I thought was overly pessimistic, it had foundations as Global Travel reported a predicted drop of 40% from the Russian shores. Now we see that Ekathimerini might be getting closer to the mark than we thought. Tourism is an important factor, because it is the first and direct influx of funds to the small business owners all over Greece, with a stated 50,000 tourist’s now changing destination, it becomes a very dangerous time for the Greek economy, when the tourists stay away Greek gets a new level of nightmares to deal with.

Then we see the quote “Greece’s economy is on the brink of collapse after the capital controls imposed ahead of Sunday’s referendum left the country with shortages of food and drugs” as well as “The survival of the Syriza coalition, formed just over five months ago to repudiate five years of austerity programmes, was in doubt as Greece started to suffer shortages of basic provisions, including the sale of vital drugs in pharmacies nationwide” You see, the second one is the problem, it hides another matter, the fact that a generic ‘commercial’ side can no longer survive in the Greek environment. I knew it was going to be bad, but this is showing another matter all entirely, a side many papers left in the shadow of the events. You see, if capital controls brought basic shortages to the surface, what else are the people (not just the Greeks) unaware of?

Consider the quote “Greek islands, where thousands of holidaymakers headed this week, have also been hit, with popular Cycladic destinations such as Mykonos and Santorini reporting shortages of basic foodstuffs. More than half of Greece’s food supplies – and the vast majority of pharmaceuticals – are imported, but with bank transfers now banned, companies are unable to pay suppliers“, and contemplate what capital controls allows for limiting the requirement of food and medication, unless it is done on credit, or done under a condition when currency has dwindled to zero. Of course the situation is not that simple, yet when imposed capital controls (as reported) stops food and medication from reaching the people. If it is a governmental ploy to push for a vote (not entirely impossible) than we can truly state that the game is changing for the Greeks and the power players behind the mirror.

This is given added weight when we consider “The ECB will meet on Monday to decide whether to step up its help to Greece under its emergency liquidity assistance scheme. The head of Greece’s banking association, Louka Katseli, told reporters: “Liquidity is assured until Monday, thereafter it will depend on the ECB decision.”“, so is this part of the fact, or is it another level? You see, if the Emergency liquidity opens the influx of medication and food, we have a nation truly out of cash. This is not a story that makes me happy, it is a sad continuation for a nation of people who have ended up with the short end of the stick for too long and in addition their latest government has done almost nothing to quell the issues that truly needed attention. So as we are now a day away from the referendum, we seem to bulk up question after question, most of them all relate to the referendum and more important, what will the consequence be on Monday?

Monday will be a milestone for the Europeans, not just the Greeks. You see, no matter what, the French and the Italians will be all about securing their borders, securing their financial status, because when we see Mark Carney all over the news with “He said the risk to the banking system in the UK has increased but added that the central bank was ready to take whatever action is required to protect Britain“, yet he also warned that Britain’s exposure to the rest of the Eurozone remained ‘considerable’” (at http://www.thisismoney.co.uk/money/news/article-3146443/Greece-deadlock-risks-UK-financial-stability-warns-Mark-Carney-adds-BoE-ready-action-protect-Britain.html). It is the part that is ignored by many people and a many reporters. You see, no matter what, France and Italy will be all about setting their projected and their presented status.

Yet, it is the French RFI that gives me “Elsewhere in Athens, in a backstreet with graffiti-painted walls not far from Omonia Square, is the Alexander the Great restaurant. Its terrace is full. But not full enough to keep the business running. “We have only 10 tables, down from 30, because the overheads were too high,” says Sodia Blacho, a lawyer who helps her father run the eatery in her spare time. “We are a family business. All our family members help around without being paid. We used to have 10 staff members but now we have only three left. We have to borrow individually some money to invest in the business and to keep it going.”“, this shows a different side. We all know that many restaurants are depending on tourism, but beyond that people have to eat, when places like this falter, is it a combination of issues? Not just the tourists, but what happens when business models fall under the changing conditions of an economy to this extent? I feel certain that there are more places, other places that have a similar issue to deal with. The interesting wisdom that people ignore as they bash a word called austerity, words of wisdom come from Dimitri Sotiropoulos, a senior research fellow with the Eliamep think tank, where we hear “Any type of austerity measures you can think of will be necessary in the next two years for Greece to stand again on its own feet and hopefully this will happen within the Eurozone. If it is going to be No, the prospects of Greece remaining in the Eurozone are very bleak”, the heart of Austerity ignored is a nation (actually pretty much all EEC nations) keeping a proper handle on its budget, when Greece falls, France and Italy become the next players that need to realise that the jig is up, no matter how committed and how up to date their payments are, when Greece falls 11 million people will start looking for any answer, anywhere in Europe to keep them alive and no one will be able to blame them. The news is only overshadowed by an article published today in the Economist (at http://www.economist.com/news/finance-and-economics/21656720-legal-reforms-may-help-chip-away-mountain-non-performing), where we see the quotes “the government last week introduced an emergency decree aimed at unblocking a backlog of bad loans. The hope is that this would allow banks to lend to more deserving companies instead and so boost the economy, which after three years of recession grew by 0.3% in the first quarter“, “This has become especially problematic as the financial crisis has caused the number of companies in distress to soar: annual corporate insolvencies rose from around 6,000 in 2007 to more than 14,000 a year in 2013 and 2014. The result is a mass of impaired loans—€325 billion ($360 billion) as of December“, as well as “Italy’s justice ministry has appointed a commission to come up with plans for a comprehensive overhaul“. This is all emphasised by the subtitle ‘Legal reforms may help chip away at the mountain of non-performing loans‘, nice to see an article to phrase what I have been telling for almost a year. Italy might have options as it is making changes now, not in a year from now when it is possibly too late, with almost 30,000 companies going bankrupt in the last 2 years, this year will be a cruncher for Italy, especially with a contracting economy. All this changes with Greece, with 2.6 trillion in debt, Italy is another player altogether, even though the Italian outlook is nowhere near deadly at present, the Greek situation will push Italy (France too) towards the Abyss, now Europe has two direct options, the first is the four nations banding together (UK, Italy, France and Germany), yet the UK referendum is not sitting well with the other three players and France remains an item too. If President Hollande, President Sergio Mattarella and German Chancellor Angela Merkel set up a triad of economy between Italy, Germany and France, there is an option for limited growth, in that vision the UK becomes a pariah as the referendum talks have been voiced, in all that Hollande has time, but once Marine Le Pen gains too much traction with National Front, his options are over. In all this, those players will drop Greece like a bad habit, because Alexis Tsipras overplayed a really bad hand and he played it badly too. No matter how ‘clever’ some see the acts, those with all the coin behind the mirror will not hesitate to take a bruise regarding Greece if it means keeping the total 5 trillion debt issue from both Italy and France safe, when that goes it all stops for everyone.

No matter how it all goes next, the one change that will fill the minds of the policymakers will be legislation and prosecution, the view on how it filed in Greece is something these two nations cannot live with, through all this the French and British referendums will sound and it will have an impact on all changes that insiders and outsiders would want. When these evolutions remain absent, its population will see to what extent they are ruled by cowards, for the mere simplicity of fact that at present no one will get out of this without skin in the game, Greece was not cause of it, it just brought it to the surface a hell of a lot faster.

 

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June 22, 2015 · 20:01

Upping the ante!

It seems that the play, that I feared for is now becoming the play that the power players seem to relish. This is no longer about Greece or the Greeks, you see, as I have shown and stated on several occasions, this is about the status quo, and the fallout that will follow will be one that shows the end of many ways of life in Europe.

This is in part about the article ‘Creditors offer Greece six-month bailout reprieve as Tsipras weighs response‘ (at http://www.theguardian.com/world/2015/jun/21/greece-crisis-creditors-aim-deal-six-month-rescue-extension), we see the photo with the annotation ‘The Greek prime minister, Alexis Tsipras, arrives at this office in Athens on Saturday. His key demand is that the creditors offer debt relief to Greece‘. Here we see the use of media, as we see another theatrical pose by Alexis Tsipras, we see the caption that is now more an annotation. The illustrative explanation that now makes way for a presentational mark-up.

There is a huge difference and many people are in a place where they can no longer see the difference.

You see, it is no longer about the Greek people, the creditors never cared and the politicians involved for the most did not care either. You give me a clear example where adding debt was for the benefit of the people and I will introduce you to a liar, because the bills must be paid! Whatever forecast the Greeks are offered now, it will be almost certainly be downgraded after a respectable time of misrepresentation and managed bad news, you know after a sudden error or overoptimistic forecast could not be met. That is how I clearly see it!

The quote “extending its bailout by six months and supplying up to €18bn (£12.9bn) in rescue funds” is not about rescue, it is presented as rescue, but it is about paying bills that Greece can no longer pay. It takes care of the bills, the outstanding payments due and less than 6 months of interest payments. In 6 months this starts all over again, whilst the total debt goes up by almost 4%. Added to this is the quote “a breakthrough hinged on a positive response from the Greek prime minister, Alexis Tsipras“, so whilst no concession was made in 6 months, one confirmation, whilst no official plans have been agreed upon will allows the involved players to continue, as they reap the rewards, walk away and leave the next person with an even bigger mess to solve, that is, whilst we see that at present payments are no longer a reality.

You see, in the larger scheme of things, there is a massive upside, the American players involved are not too bright as I see it, they think ‘short term’, with their focus often on personal gain (read: bonus) and personal options (read: their next career step) as they leave the legacy to whomever comes next. It is not the same as the 2004 events, but the consequence will be a lot higher.

As I see it, this act is now enabling UKIP and National Front at the centre stage to illuminate how these short term vultures are totally irresponsible and the rest of the EEC will have to pay in six months’ time (if the reprieve goes through). The run to these two parties is likely to grow almost exponentially. If the UK will call the referendum sooner, the call for breaking with the EU might become overwhelming. The push in France will grow a lot stronger at this point too. That part I had illuminated before, now consider the BBC article ‘France polls: A step closer to power for the National Front?‘ from March 21st. “Polls suggest that the party’s leader Marine Le Pen is likely to reach the second round of presidential elections here in two years’ time. She’s not predicted to win, but even so, it is a striking result for a party that currently controls just 11 towns in France“, that danger, makes the involvement of President Hollande from the quote “Negotiations were continuing on Sunday night, hours ahead of crucial gatherings of Eurozone finance ministers and leaders in Brussels, which Angela Merkel, the German chancellor, François Hollande, the French president, and Tsipras are expected to attend“, his support, also means that if Tsipras breaks (or changes) any given word now, whatever ‘change’ is pushed for in 6 months will hit the French unbalanced powerbase even harder.

You see, the pushers for the status quo are outside of these discussion groups, it is clear that someone from the US (likely Jack Law) has voiced concerns in resolving this, the problem is that the US is (as I see it) bankrupt and those behind it will get paid no matter what, especially as these funds will be used to pay those involved, which means an even stronger movement away from regaining balance. In all this, the Greek population will get to live with the consequences, not the power players behind the screens and likely not the political groups involved. So, as we see “The crisis meeting was convened in an attempt to ease Greece’s debt crisis before a critical €1.6bn payment to the International Monetary Fund falls due next Tuesday“, they are now setting to add 10 times that amount, added to the debt, in addition to the added funds pushed, after we saw the bank run fuelling a quicker setting to the Greek nation’s insolvency.

As we look at the subtitle ‘include up to €18bn in rescue funds, and later debt relief‘, yes it is set against concessions, but how are they enforced or monitored? The later debt relief will no doubt be almost twice the initial payment, which gives Greece up to one more year, but that push for status quo whilst there is no true evidence whatsoever that the economy will go strongly positive makes this a rather risky investment and it is not unrealistic that the Greek population will end up paying for it in several ways.

You see, it does not matter what President Hollande thinks now, he will get what he can and retire somewhere else, the problem will be National Front and Marine Le Pen, who can now (if the Greeks go overboard) make a pointed finger to the EEC, to Greece and to Jean-Claude Juncker stating ‘they have spent your money!‘ What do you think will happen next? In addition, this could start a debate in the UK whether the UK referendum ends up getting pushed forward, still likely in 2016, but now a Q2 or even a Q1 date, which is not that unlikely. In this as the Conservatives are contemplating what to do, UKIP can push its visibility, which gives way to the concern that a minor party can now influence a majority leading party. It is not a given, but it is becoming more and more likely. So as we will soon see economic threats from banks and other players stating ‘beware if you leave the EEC‘, they seem to forget that the voters have had enough, many are living on or below the poverty line and they are extremely unhappy to see Greece walk away yet again, not being held accountable for their irresponsible acts, whilst these voters cannot make ends meet. It drives Marine Le Pen forward and it will have an effect in the UK too.

The short term players do not seem to care, as they are focussed on their little needs, but what comes after is not easily stopped, and this 11th hour half-baked Greek solution will come with a terrible second invoice. How likely is all this?

There is a part that remains an unknown to all involved (including me), the fact on how powerful the status quo players are and on how these issues are brought to light. They will influence the game that is going on, but in all this, one part is in clarity, as I see it, none of the players have the welfare of the Greek people in mind, which I consider the most disturbing part of all.

Now we see the new headline ‘Greek debt crisis: Tsipras concessions welcomed as ‘good basis for progress’‘ (at http://www.theguardian.com/world/2015/jun/22/greek-debt-crisis-tsipras-offer-is-welcomed-as-good-basis-for-progress). The question becomes, what exactly are the concessions. The first indicator is “Negotiators are promising debt relief for Greece, which has seen its economy shrink by one quarter since the crisis began, but officials have stressed that a breakthrough will depend on a positive response from the Greek prime minister“, now, I have no issue with debt relief perse, but who gets this write off? In the end, who gets to pay for the loss of debt? You see if Greece does not have to pay it back (which is fine by me), who has to front the money? As long as this is not reflected on the taxation of the people (read the banks pay for these out of their own profits), than it is all fine by me.

The second issue is the one I discussed earlier. “Greece’s international creditors are looking at a deal that would extend the country’s bailout by six months and supply up to €18bn (£12.9bn) in rescue funds“, again, fine by me, but this additional debt is for a large portion about paying debts and interest, whilst the foundation of the debt rises again, how is this ever a solution?

So as we see the quotes: “In Athens itself, more than 7,000 people took to the streets for the second time this week to protest austerity with banners reading “A different Europe with Tsipras” and “You can’t blackmail the people, the country is not for sale”“, the question becomes, why do the Greeks not realise that their own politicians sold Greece from under their feet? The debts had been spend by Greece and arranged by Greek politicians.

And the final quote proves that I was right all along: “Louka Katseli, the chief of the National Bank of Greece, told BBC radio: “To enter into such uncharted waters and take up all the risk both for the Eurozone and for Greece for two or three billion [euros] difference, I think it’s insane.””

You see, they were not playing ball because they knew that the predicament for France and Italy would be almost unbearable, and here we also see, what I would call a clear lie by the National Bank of Greece, Louka Katseli. He states ‘the risk both for the Eurozone and for Greece for two or three billion [euros] difference‘, no Louka! It is not for two or three billion, it will be for the additional thirty billion that Greece needs, the raising of the debt ceiling (again), the €7.2 billion, the €10.9bn, which got classified (and booked) as recapitalisation, and this will not last past December, it could even be harder. You see, Ekathimerini reports (at http://ekathimerini.com/4dcgi/_w_articles_wsite2_1_28/12/2014_545761) states a holiday bookings drop of 50%, which is massive! Now, even I have some debate on how correct those numbers are, so do not just rely on this, yet eturbonews (Global Travel Industry News) reported that Russian tourists could drop by 40%. Now, make sure you notice the word ‘could’, because that makes it a prediction and even though this last article is only a week old, the overall tourism for Greece is a lot larger than just the Russians. A more reliable Dutch source gives us (at http://www.nrcq.nl/2015/06/02/toch-maar-welniet-met-vakantie-naar-kos) gives us that the numbers to Greece are down, but not by a large extend, and so far, the pull to Greek vacations is better than 2013, which would be a good thing for the population. One agent has seen rebooking of Greek vacations, yet these changes were from Kos to Corfu, not to a non-Greek destination, so the Dutch drop is not that large, yet it is there, so this also implies less money into the state coffers than already voiced loudly last week.

I must pause and take notice of facts. Is it just me? I must doubt my own view, when I am the only one having it, that is logical, yet the view of this system of pretending a fake status quo whilst the Greek government is not fixing its flaws and demanding more money is extremely unhealthy. Those enabling all of this seem to remain behind the curtains of the press, which is even more discerning.

So as Louka Katseli states “sanity will prevail”, we should wonder, for who it will prevail, because adding €18bn (£12.9bn) onto a nation that cannot pay its bills is not sanity, especially as the governors of that nation refused to take any action, any move of good faith towards the people who had lend them the previous amounts in the first place. If I would go to the bank tomorrow asking for a loan of 25 million, there would be no way that I would get it, so why did Greece successfully end with close to half a trillion is equally puzzling, especially as the same measurements for me would not hold water, how does it for Greece?

In the end, Greece not acting is the plain reason for Greece possibly facing the ‘Grexit’. I use the word possibly, because as we see in the news today, all the players are all about adding water to the wine, whilst Greece is not drinking at all. So there is no real answer what will happen next. And in the end it is twofold. The first is the deal that needs to be made, the second will be how to tell Europe all this because President Hollande knows very well that Marine Le Pen is waiting to voice his words and let them spike into the heads of frustrated and angered French citizens all over France. over 10% is unemployed and almost 13% lives in poverty, which overall is not that bad compared to other places, in the UK it is now stated to be a third, which is massive (at http://www.theguardian.com/society/2015/may/20/income-poverty-third-uk-population).

This is at the heart of several issues as I have been stating for a long time. Am I correct? Well, most facts came to pass, the fact the Greece has not been exited makes my prediction flawed, yet we must not underestimate the extent of time shifts that have been done just to facilitate these events. That view is only reinforced 10 minutes ago, as new talks start. A theatre routing partially in Greek, partially not, with a mock slap this talk starts. All to feed the press, but the issues are of a deadly serious nature for the Greek population, so as they lighten the mood, we must wonder, where the puppeteers are. So is this a plain Punch and Judy show, or is this a Jeff Dunham spectacle, because the voices behind the screen are those that have been twisted to sound like, this conclusion comes as Christine Lagarde stated 2 days ago that there would be no grace period for Greece, now suddenly there are concessions, yet we are not yet informed on the concessions and certain parties are now willing to open the purse for 6 months of leeway. So if that does happen, no leeway was given (theoretically), it would be classified as a partial agreement, hence the ‘concessions’, which ones? We will know soon enough!

 

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January 29, 2015 · 21:21

Whinging from a desperate left

This is how I felt when both ‘We must stop Angela Merkel’s bullying – or let the forces of austerity win‘ by Owen Jones (at http://www.theguardian.com/commentisfree/2015/jan/28/syriza-merkel-economic-greece-europe) and ‘Bank of England governor attacks eurozone austerity‘ by Larry Elliott (at http://www.theguardian.com/business/2015/jan/28/bank-england-governor-attacks-eurozone-austerity) passed in front of me. It is a unique issue, the political left in league with the banks. It is likely to be a first. The left want the image of cost of living relief, which is a ludicrous fantasy to begin with and that fantasy seems to be all about getting to spend money. We have a similar ‘BS’ joke like this in Australia. That person is called Bill Shorten. You see, as I see it, the banks want ease so that this generation can get a few more millions in commissions before it all collapses.

Let’s take a look at the youthful Mr Oxford (Owen Jones). It starts with the opening premise: ‘Angela Merkel is the most monstrous western European leader of this generation‘. No, she is not! Let’s take a look at the past. Around 2009 Merkel stated that enough is enough. She introduced austerity measures and she sliced back on German spending by a lot. The German people were in pain, they all were. The consequence was that the debt had gone down by a lot, so when harder times came, Germany had shed some of its debt and as such, lower costs on interests and therefor the pain that followed in 2011 and 2012 was suddenly not as painful for the Germans at large. I remember seeing the news. The Dutch did not adhere to such notions, they were all in the mindset like ‘it will get better next year’, at that time the Dutch Finance minister was Wouter Bos. It would not be so good. To be honest, the pain the Dutch felt would not have been that extreme if they had tightened the belt from 2009 onwards as well, but they were all adhering to their ‘good news cycle’, whomever came next had to clean up the mess. It was not just the Dutch, the French, the Italian, the Spanish, as well as the United Kingdom, they all went overboard in spending trillions.

So when I read the deluded word by Owen Jones, it just makes me a little sad. the quote “The Greeks have rebelled against machine men – and women – and they are crying out for others to follow“, that sounds nice as an epitaph for Don Quixote as he marches against the next windmill (possibly a Dutch one), but the Greeks created their own mess. Their inadequacy to deal with corruption, tax collection and a host of other issues got THEMSELVES into the mess they have. Would it not be nice to clearly state that?

Then Own comes with “As Krugman notes, the troika – the IMF, European Central Bank and European commission – promoted “an economic fantasy”, for which the Greeks have paid. They projected that unemployment would peak at 15% in 2012, but it hurtled to over 25% instead“, which is a part I do agree with. There was an economic fantasy, because the austerity measures needed where on lethal levels which cannot be denied, how do the Greeks react? With a series of strikes and vandalism events which only got them into deeper water. A watery grave the Greeks had created for themselves. They now have a debt of well over 325 billion for a population of 11 million, so how wealthy are those 11 million Greeks? If not, where did that money go? The fact that Greek bonds are now at 9.85% should be an indication that Greece is now almost denied existence, it for the most, only has itself to blame, since 2009, how many Greeks actually went to court and to prison for what was done? Of the 2069 Greek accounts in Switzerland (as mentioned in a Greek magazine), who besides the journalist has appeared in court? It seems that making Germany the scapegoat for something the Greeks did themselves is absent of loads of logic.

Then we get another quote that is up for discussion: “Germany ploughed money into countries such as Greece and Spain – that’s the “magic” of deregulated markets – and in doing so “lent more than they could afford”. German banks and their political champions should have known this would end in disaster“, I disagree. Greece was given an option, but was also informed of the intense pressures that this causes. What did they do? Whinge and whine like faulty politicians with the spinal cord of a paperback, not a hardcover amongst them! Instead of going after tax dodgers and those who had made bad calls, to see what they could get back, they went into states of denial, like flaccid applications to a concrete wall, not a scratch was made and when the time was up, they again, whined for more cash, an idea given to them by Charles Dickens in his story Oliver Twist. Then suddenly miraculously, the crisis was over and suddenly they went back to the bond market for more. None of those events are in this article.

Last we get “The future of millions of Europeans – Greek, French, Spanish and British alike – will be bleak indeed. That is why a movement to defend the already ruined nation of Greece is so important. Defeated Germany benefited from debt relief in 1953, and we must demand that for Greece today“, how about the clarity that debt relief came and Greece did nothing, and now, they are whinging and whining (again) for more cash, less debt (through forgiving current debts). However, nobody is making any headway in aligning the justice system and the law to take care of those evading taxation. It will not be anywhere near enough, but it will be a clear signal that Greece is serious about taking a stance for resolving debt and fortifying its annual income. Oh and when the debt is forgiven? Who pays for that money not coming in? The IMF or divide the debt over all the EU nations, who are all beyond their maximum borrowing points? Perhaps option 2? Let the ‘Grexit’ commence and let’s see how the Drachma will leave the Greek people in a state so much worse. At that point the people will dream of those good old austerity times.

Let’s face it, it is not fair to the Greek people, not one bit, but I have seen enough BS in regards to blaming the Germans for what some Greeks did to Greece. If we look at 2013, the quote “The state collected less than half of the revenues it was due to receive last year as it appeared unable to ensure that taxes and fines found their way to its coffers, according to a State Audit Council report submitted in Parliament on Tuesday by its president, Ioannis Karavokyris“, this was an article from November 2013, almost 4 years after the mess they themselves created. (at http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_05/11/2013_526451), so as the Greeks drop the ball over and over again, who do they have to blame but themselves? So as I take my leave from Owen Jones, we look at the second Mr Oxford in this equation. With Owen I am willing to concede that he has his ideological heart in the right place, with Mr Smiley Smiley Canadian Mark Carney, former Governor of the Bank of Canada and the current Governor of the Bank of England, the gloves come off. So let’s introduce Marky Mark to the business end of a two by four in the shape of a keyboard!

It starts quite lovely, immediate of the bat with “Mark Carney says eurozone is caught in a debt trap and should ease hardline budget cuts just days after the Syriza election directly challenged policy“, just under the title. Why should we ease up? If we ease up after an election, the Greeks can forgo debt by having 12 elections over the next three years. It is the cost of doing business and as such, the Greeks themselves have not shown one iota of intent from 2009 onward (the lack of artful tax dodge prosecution could be regarded as evidence piece number one).

The second whopping ‘miss-statement’ might be seen in “Speaking in Dublin, Carney said the eurozone needed to ease its hardline budgetary policies and make rapid progress towards a fiscal union that would transfer resources from rich to poor countries“, when we see parts like ‘transfer resources from rich to poor countries‘, in my view (and in the view of some others), it reads like ‘as big business transfers corporate structures towards economic ailing areas. This was achieved through a subsidy structure that gave way to spreading business opportunity to less fortunate areas’. It also translates in the non-written text part of that statement as less tax liable options for big business, already far beyond normal wealth, move towards areas where labour laws are even less protective, optimising profits for big business.

So when he states as a bank governor the following “Carney made it clear that he thought the failure to complete the process of integration coupled with over-restrictive fiscal policies risked driving the 18-nation single currency area deeper into a debt trap“, which is not untrue, yet the part as a banker, that he does not mention is that he and his buddies profit greatly from spending sprees, if governments suddenly get a hold of their budgets, banks lose out a lot. This can be seen in the simplest way when we consider the Greek bonds. When that market opened up again (which should never have been allowed), the Greeks did not just add to their debt, someone in the banking world ended up with a 65 million euro bonus (in total) for selling these bonds, I am certain that the ‘wealth’ was spread around a little, but some of these financial people just cannot make ends meet on 350K a year, supporting a wife, kids, a Ferrari, a Ducati and two mistresses. You need that bond bonus to feel secure in your way of life as I see it. I wonder if the easing up has anything to do with meetings that places like Loomis Sayles ‘might’ have had with Natixis, perhaps Mr Carney attended a social event in such settings?

I agree with the premise we read in the quote “Since the financial crisis all major advanced economies have been in a debt trap where low growth deepens the burden of debt, prompting the private sector to cut spending further. Persistent economic weakness damages the extent to which economies can recover. Skills and capital atrophy“, I agree with that premise, yet this was a given already in 2011. I foresaw these events in 2012 and I read as bankers all over the place were hosting to ‘bright weather forecasting‘ whilst not taking the cautious steps that should have been taken. We can either state that politicians were too stupid to consider the dangers, or they were happy to leave the mess to those who followed (like Labour left hundreds of billions in debts to the Liberals in Australia), after that we see banks and the media in cycles of ‘bad news management’ slowly lowering expectation and forecasts, whilst the money had already been spend. So, yes Mr Carney, you state a good quote, it is just incredibly incomplete!

So, when we read “Carney has been vocal in his support for the European Central Bank’s decision to start buying government and commercial debt in its own version of the quantitative easing programmes, but said the Frankfurt-based central bank was unable alone to eliminate the threat of a prolonged stagnation“, we see nothing wrong. It is to the smallest degree commendable, only to the smallest degree, because several governments had entered a state of overspending, followed by ‘bad news management’ an intertwined cycle that would undo whatever headway quantitative easing would bring. The need for greed will always win in the end, so those programs are just a fantasy, Greece has some evidence of that part too, as they were part in both sides of that game. Isn’t it nice when the bank plays player one, player two and acts as the bank in the middle. That part truly sucks if you are player three and four in a game of monopoly. If we see Germany as player 3, than who is player 4?

I’ll let you do the math there!

You see, the actual solution would have been to take a stronger position on IP rules and regulations. An approach to ease the path for the small innovator of newly designed products. As several IP sides were all about setting goals towards ‘business’ (read big business), they forgot that when we look at the period between the 50’s and the 70’s, innovation came from the small inventors. Nearly every economy starts stepwise from small players and small innovators. Today, the players are so focussed on the large amounts, they tend to focus on large players like Apple and Microsoft and they forget that these companies, for a larger part live of the premise of the Vulture cycle, you pick the carcass until the hunter shoots a new prey, then they wait until it is feeding time. Small innovators (like Markus Persson with Minecraft) have the actual idea, which a large company then buys for 2 billion plus. As small innovators are given space to proceed and as larger players are denied blocking patents to force amalgamation of the true visionary into their moulding process that is the moment when economies will truly move forward. That is how you get forward momentum!

So when we see the final quote by Mark Carney “Carney said the eurozone’s unemployment rate of 11.5% was more than double that of the UK, but its fiscal deficit – the gap between tax revenues and spending – was only half the size of the UK’s. The eurozone, he said, should be using a “constructive” fiscal policy to support demand and mitigate the “tail risks of stagnation”“, we should wonder who he is catering to. As I saw it, the article was all about policies that are interesting for the boards of directors of the corporations, but the people will only be allowed the conceptual benefit on the tale end. Benefits that might have been a realistic form of support for treasuries all over Europe if they had done something actual to properly set up tax policies. Catering to big business stopped being constructive or lucrative for governments for half a decade now, how much longer will you take until you figure out that big business only caters to their own board of directors?

 

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