Italian Government Exposure to Greece: €61.85 billion; Spain at €44.42B

I came across this table at ZeroHedge. This article is very worth reading.

Exposure to Grexit table

Italy’s taxpayers are exposed to the tune 3.8% of the country’s GDP. Spain is at an even higher 4.1%. The jist is that a hard default by Greece on a No vote will mean all those assets turn to zero, which jacks up the debt ratios of these already extremely indebted governments, and pushes interest rates extremely higher overnight.

My feeling is that the central banks have a week or two at most to contain the bond markets by printing money faster than they ever have before, after the Greeks vote No, if they do indeed vote No. We’ll find that out in a few hours.

Money supply growth in the US is already fading fast.

עת לעשות ל-ה

 

What a day to be reading “Democracy, The God That Failed”

I started a new book last Shabbat. Hans Hermann Hoppe’s “Democracy: The God That Failed.” He’s not as good a writer as Rothbard, sentence structure more confusing and convoluted, but his mother tongue is German like Mises, so considering, it’s pretty good.

The thrust of it is that democracy is actually a step backward for humanity, and monarchy is preferable. For many reasons, one being that monarchy is privately owned government, where the right of confiscation is capitalized into one dynasty, allowing for lower time preference rates (farsightedness) insofar as preserving the right of confiscation and maximizing its value long term.

Democracy is publicly owned government, which is worse, because the government officials cannot capitalize their right of plunder, and therefore their time preference rates become much higher (shortsighted) and they try to extract as much as they can as fast as they can without worrying about preserving the wealth of the government they are the caretakers of.

Axiomatically, the progress humanity has enjoyed since democracy became the leading form of government has been in spite of democracy, not because of it.

I have only finished the first chapter, but I love the way he splits it between “privately owned” government and “publicly owned” government. One other way to see it is that tax rates in monarchies rarely exceeded 10%. 20% is absolute highest recorded in the Torah by Pharaoh. 20% tax rates in Israel or America would seem puny. We pay much, much more than that. Not just income taxes, but everything taxes. Our standards of living are still higher because we have so much more capital equipment, more for the government to steal without starving us.

So it is very interesting that the pinnacle of democracy, a plebiscite, a referendum, may lead to the starvation of an entire country (Greece).

I would much rather live, ceteris paribus, given current levels of capital and technology, in a monarchy where I know that he won’t steal so much from me as to bankrupt himself. A democracy is much more dangerous. If you’re going to tell me that a king can just kidnap me whenever he wants me as fodder to fight his wars, yes, that’s true.

And I point you to Vietnam and the forced draft in Israel.

COINCIDENCE? The Greferendum Will Take Place on the Fast of 17 of Tamuz

I looked at the calendar just now and noticed that the Greek Referendum, or the so-called Greferendum on Eurozone membership is going to take place on 18 Tamuz. The fast is postponed one day because the 17th of Tamuz falls out on Shabbat.

I also noticed that the 4th of July falls out on 17 Tamuz this year. The 17th of Tamuz marks the beginning of the ominous 3 weeks from 17 Tamuz to 9 Av, when Jews are advised to pretty much hunker down and don’t take any major risks. On 17 Tamuz, the walls of Jerusalem were breached, Moses broke the Tablets, Apostemos burnt the Torah, an idol was placed in the Beit HaMikdash, and the daily offering ceased.

I also noticed that last Friday, the day that Alexis Tsipras called off negotiations on the bailout and called for the Greferendum was the 9th of Tamuz, which is the original fast day that we now observe on the 17th of Tamuz.

This could all be nothing, but it could mean something. I guess we’ll find out in a few days. The financial world is hanging by a hair. And yes, I could be wrong.

What Happens When Greece Can No Longer Pay Riot Police?

Headline article on Business Insider today is “Greeks are Withdrawing Money from ATM’s Faster Than They Can Be Replenished”.

The accompanying picture is a bunch of Greek State soldiers with riot gear. The minor danger here is that the riot police will get out of hand and start beating or shooting protesters when things get really desperate.

But the major danger is this: What happens when the Greek State can no longer pay its own riot police?

What happens when these people aren't paid?
What happens when these people aren’t paid?

Greece Defaults in Three Days, Global Collapse May Begin July 1

This will be the ultimate test for the global financial system to date, since the 2008 financial crisis. I turned on my computer Motzei Shabbos and it took me a few minutes to make sense of all the headlines. Apparently, what is happening is this.

Greece’s creditors want spending cuts, Greece says only tax hikes. That I already knew. Then the creditors, the “troika” or the “institutions” or whatever you want to call them, say “No, we’re serious, it’s either spending cuts or default.”

The official bailout expires June 30. Tsipras and Varoufakis said OK, we’ll do a referendum to see if the people want spending cuts or default. Tsipras and Varoufakis ask for a few weeks extension to the official bailout program which expires June 30, because they cannot organize a referendum by then.

And the troika says no, no extension.

So the referendum is meaningless.

Therefore, Greece will default for (nearly) certain on June 30. Now, here’s the interesting part. If the global financial system is as unstable as I believe it is, there will be a bond attack in Spain and Italy. If that bond attack is not quelled within a week, it will spread to Portugal and Ireland. Or it could be Portugal and Ireland first and then Spain and Italy. Point is, there will be a bond attack somewhere and interest rates will skyrocket for some Eurozone country deeply in debt.

If that is not quelled by massive money printing the likes of which have never been seen, you’ll start to see the carnage cross oceans.

Basically, it comes down to this. If the global financial system can withstand the first few weeks of this default, then there will be no global financial meltdown. If it can last the first 2 weeks, then collapse is another 10 years away. If in the next two (maybe three) weeks we see interest rates skyrocketing globally, then this is the end of the current global monetary system. I honestly don’t know. But everyone knows what I’m rooting for.

Let’s see what happens. And prey for the Greek people. No matter what happens globally, they are going to be starving in the streets because of government restrictions on their economic activity, AKA capital controls. They will lose their savings, but anyone with gold and silver will be OK. (And lead.) If you have any family in Greece, tell them to get out of the country in any way possible right now. I mean right now, don’t even sleep on it. Boat, plane, walk across the border to Macedonia, it doesn’t matter. Just get out.

5 Days until Greek Bailout Expires

The sticking point, apparently, is that the Greek government wants to raise taxes, and the IMF wants it to cut spending.

The IMF is right here. Higher taxes will mean richer Greeks move out, or evade them. Spending cuts will lower the deficit, and free the economy to a degree, adding to growth.

To rephrase the current positions, Greece says, “I want to eat more.” The IMF says, “We want you to go on a diet.”

If they do exit the Euro, boy oh boy will they be going on quite a diet.

This is really a contest in how much Greece’s leftist government really believes in the power of money printing. If they think it really does solve everything, they’ll leave the Euro and print their own if they don’t get the deal they want.

Will this be the last last last last deadline? I don’t know. Somehow I doubt it.

Greeks Partying Hard as the Ship Sinks

This is not about the negotiations. It’s actually a dry news story about an actual event that happened and is happening and can be documented, rather than rumors of a report of possible private conversations with intonations and predilections and intimations of something maybe blah blah behind closed doors deal thingee between Greece, and its creditors the CIA, IMF FBI KGB, KKK, ECB, and CBS.

So the Greek public broadcasting station ERT is being reopened. Davka now. Wow. 1,500 state employees hired to spew bullshit about what all the Greek politicians are doing, saying, not doing and not saying so everyone can know. All the time.

I wonder what the hell they’re going to pay the 1,500 bullshit workers with.

Once described as a “haven of waste”, Greece’s public broadcaster relaunched on Thursday evening with a live concert by famous local musicians in central Athens…

“Today ERT is back, once again tasked with providing a service to Greek society of prompt and impartial information. The stakes are high; to show that a public organisation can serve the public interest,” said Tsipras.

It’s thought around 1,500 staff are being gradually rehired as programming progressively resumes.

Reporting from the reopening, Nikoleta Drougka, our correspondent in Athens said: “Here at the ERT headquarters, the mood is celebratory.”

Live it up you wacknuts. Party hard. You don’t have much time to enjoy it, so may as well go out screaming.

It reminds me of that snippet from Yirmiyahu (Jeremiah) where God tells him to redeem a field while the Babylonians are busy burning Yehuda and killing everyone. Yirmiyahu asks what’s the point. God says that fields will still be redeemed in My land, no matter what’s happening.

In Yirmiyahu it’s a sad but beautiful note of ultimate continuity in the face of catastrophe. The meaning is, ultimately, we’ll be back. And we are.

But with his reopening of some stupid public broadcaster, it’s like an dark universe version of that same message. We screwed up. So at least let’s screw up some more before the bell tolls. Have a party. Woo hoo.

Greece Proposal Rejected Again as 5.2 Magnitude Earthquake Hits Athens

According to WSJ, Greece’s latest proposal to get its hand on more bailout money was swiftly rejected.

BRUSSELS—A compromise proposal sent by Greece on Tuesday as part of an effort to unlock an impasse with creditors over its bailout program drew a swift and negative response from officials at the European Commission.

President Jean-Claude Juncker told other commissioners at the EU executive arm’s weekly meeting that the proposal appears to backtrack from an agreement on budget targets struck between him and Greek Prime Minister Alexis Tsipras at a meeting last week, a person familiar with his remarks said.

In the meantime, a 5.2 magnitude earthquake hit Athens this morning.

Foreshadowing.

DEFAULT Greece Rejects Take it or Leave it Deal

By tomorrow when its June 5 IMF payment comes due, Greece will be in default. That’s it. Game over. Now the dominoes will start to fall.

Watch the bond market.

From the AP:

ATHENS, Greece (AP) — High-ranking members of Greece’s governing radical left Syriza party say they cannot accept a deal proposed by the country’s creditors during a meeting between Prime Minister Alexis Tsipras and the head of the European Union’s executive arm.

Tsipras’ meeting with Commission President Jean Claude Juncker, which ran into the early hours of Thursday, failed to yield a breakthrough in Greece’s protracted negotiations over the release of remaining bailout funds.

FINALLY The Answer on Greek Default and Grexit Coming TODAY

We don’t know the details because “the conversations are private”, but the three biggest mafia gangs in the Eurozone – the European Commission, the European Central Bank, and the International Monetary (Government Bail Out) Fund, AKA the Troika, or Institutions, or Mobsters, or Former Student Council Presidents Suddenly In Charge Of A $#!+load Of Stolen Money, have given the Syriza Welfare Whiners a take it or leave it offer.

If Greece rejects it, a full bank run will begin, and the whole system will begin to buckle.

Yesterday we had another gold flag, by the way. Stocks down, dollar way down, bonds down, gold up.