Greece

Three Things I’m Sick of in the Greek Debt Drama: “Experts”, “Save the Country”, and “Talks are Private”

rafifarber Eurozone Crisis, The Jewish Libertarian Blog ,

Anyone who reads TJL will know I follow the Greek situation very closely. But there are three things, specifically, that I’m really sick of reading out of the main stream media.

The first is referring to the schmucks involved in negotiating this mess as “experts”. An expert is someone who can demonstrate that he actually knows something with predictive value. Like the guy who discovered General Relativity. Albert Something. Or whatever his name was. He can say that the light of a star next to a solar eclipse would bend a certain amount of degrees which proves that gravity bends light and therefore spacetime and be correct. He’s an expert. QED.

But the pure idiots negotiating a “deal” for a bankrupt government are experts in nothing. Have demonstrated nothing. They are experts in vomiting bullshit that is absolutely nonsensical but sounds like it may mean something profound.

Look, you don’t have to understand General Relativity to understand the concept of the light of a star moving to the left or to the right around a solar eclipse. You can see the before and after pictures and compare them, even if you’re a stupid person. But nobody understands what these negotiations, that are deliberately hidden from view as to their details, because they are inherently nonsense, and there are no experts for God’s sake. There is a congress of average people good at sophistry that are saying nothing and making it sound like general relativity.

Here’s General Relativity: Big things bend space. So if light goes around one of these bends, it will curve, and you’ll see it in a different place. That’s it.

Can ANYONE explain to me what these “experts” are “discussing” for so long that it requires months and months and months of nothing?

No, because of the second thing that pisses me off, “The conversations are private.” My ass they’re private. They’re dealing with public debt, with people’s money they were forced to pay, with future taxes, how much they will be forced to pay in the future, and everything else that has to do with the public’s money, discussed by publicly elected idiots, who ask the public for votes. These conversations should NOT be private. They should be on the air, C-SPAN like, with private backdoor talks absolutely prohibited on pain of a public whipping. Everything these “experts” do should be videotaped and recorded, from when they wake up in the morning to when they go to sleep, and continuing while they snore in their beds. 24-7, recording recording recording. Any minute missed leads to a public whipping by the people who pay their salaries.

“Public” servants, if they are indeed servants and not thieves (they are of course thieves and not servants) should have ZERO right to do ANYTHING private, AT ALL. Not even conversations with their spouses about their sex lives. Yes, the public servants can and should have the option of pushing a button on their mandatory recorders that will alert listeners that they are about to talk about or do something that would normally be considered private like go to the bathroom, warning viewers to stop tuning in to C-SPAN. But this would only be to accommodate the sensibilities of viewers and listeners, so as not to gross them out if they want to tune out, NOT for the “public servants'” rights to have a private life. They have no right to have a private life if they live off of tax money. Zero right, none at all.

But public viewers, who they serve and who pay them for EVERYTHING they do, should still have the right to tune in, to anything whatsoever that they do at any time in any situation with ZERO exceptions.

Third, and the thing that pisses me off the most, is this whole garbage about “saving greece” and “Greece will collapse.” Greece will not collapse. The GOVERNMENT will collapse. They will run out of money. And their only power will be to force the people to accept a new currency which they will have exclusive rights to print, thereby stealing from them even more.

If the government collapses, the Greek people will be free. They won’t all suddenly die. But the government, if it is forced out of the Euro, will then print drachmas and force people to use them. If they refuse, there will be hyperinflation and a black market money. Then the government, which produces zero value, will starve from lack of funds.

Can Greece Pay Up €750M Tomorrow?

rafifarber Eurozone Crisis, The Jewish Libertarian Blog , ,

Yanis Varoufakis says it can be paid. Many aren’t too sure about that. But even if it is, there won’t be enough money left to pay Greek bureaucrats, who will have to be issued IOU’s, which will start circulating as a parallel currency, which will be a de facto exit from the Euro. I went over this in my column for  TheStreet.

The Greek government passed a controversial bill on April 24 mandating local governments to transfer idle cash reserves to the Greek Central Bank. From there, the funds can be borrowed by the state to (theoretically) squeak by its upcoming IMF bill, totaling €967 million ($1.05 billion): some €201 million of interest payments, due by May 6, with a €766 million principle payment coming up on May 12.

The problem is, the bill might be far too little to help.

It looks like the Greek State will barely get through May 6, but after that, the numbers are disputed, and time is of the essence. While the government estimates the idle cash seizure move will net anywhere from €1.5 billion to €2.5 billion, secondary reports of local Greek media claim that only €160 million has actually been collected from local authorities, hospitals, universities and municipalities.

Whether the Greek State defaults to the IMF or defaults to its own bureaucrats doesn’t matter. They want to spend more money and the people who print the money don’t want to give it to them. So they’ll have to print their own. That is the meaning of Grexit.

Watch Italian bonds. They’re next.

A Conversation I had Years Ago with Feiglin Sheds Light on Greece

rafifarber Eurozone Crisis, The Jewish Libertarian Blog ,

I remember it was April 28, 2010. Happens to be the Gregorian date of my Savta Betty’s Yahrzeit. The last time I wrote a post about her it was for when my daughter Dafna Betty was born. A lot has happened since then. I said there that if I had a son I’d call him Fry, and I did have a son, thank God, and I called him Fry (Efraim), after Phillip J. Fry my favorite cartoon character, and Avraham, after my Sabba. Since then I also now have a niece named Lila, which is close enough to Leela from the same cartoon, so there’s now Fry and Lila, which is almost perfect.

But anyway, on April 28, 2010, I was finally released from prison, AKA the army, after six months of wasted time. The very next day, I went to Herzliya to hang out with Shmuel Sackett in front of the Herzliya Likud branch. It was a Likud central committee vote about postponing the Central Committee elections. All that seems so remote now as I couldn’t give a crap about Likud anymore.

To the point finally, I love ramble writing. We lost that vote. Moshe Feiglin was considering leaving the Likud then. We spoke for a few minutes a few days later and he said to me something like this:

“Look if we leave Likud, Netanyahu will have a party, Ketzaleh (then head of the extreme right wing National Union party) will celebrate, but one thing will remain: Reality. And the reality is, we need Jewish leadership.”

And so it is with Greece. I can’t find a single main stream media source that doesn’t baffle you with bullshit about this whole thing. Nothing written in the mainstream says anything about reality.

The reality is, the Greek government wants to spend money, and it has no money, and it can’t get any money. That’s reality. Whatever Tsipras and Varoufakis and the rest of those wacknut clowns claim is “just” and “fair” and whatever other label they want to put on it, there’s nothing left. They spent it all. That’s it.

Money may be fiat these days, but it still represents tangible wealth, of which there is only a finite amount that cannot be printed into existence. It has to be produced. And government doesn’t produce anything. The only tangible things it produces are designed to destroy wealth, like armies and weapons. And spies and drones and prisons.

So however long this drags out, reality will remain. Greece wants to spend money that it does not have. After all the games and all the tricks and all the blabbering about justice and fairness and values and morality and all the other crap pulled out of Greek politician’s asses, it’s either there or it isn’t, and it just ain’t there.

The reality is, Greece will default. And further out, all governments going deeper and deeper into debt will default. It’s simply reality. It cannot be stopped by sophistry and Orwellian equivocation and fancy meaningless language fed to the mainstream media. No one, nothing, can stop it.

And once it starts, the dominoes will fall very quickly. Reality will always stand in the way of bullshit. No exceptions.

 

Greece Raiding Pensions, This is What Will Happen Everywhere

rafifarber Eurozone Crisis, The Jewish Libertarian Blog ,

The evil of social security and other government-mandated savings programs is that when the government runs out of money, they will take it all.

All of it will be gone. When the Federal government can no longer sell bonds to pay its existing bonds in its $18,000,000,000,000 Ponzi scheme, everything will be gone. Anyone with any savings in any government program will have nothing.

From The Telegraph:

Greece plans to raid coffers as creditors dash hopes of resolving cash crisis

Athens could force pension funds to transfer assets to the government as desperate Greeks tout possibility of delaying IMF repayments

That’s Newspeak. Here’s what it means, sans Orwellian crap:

The politicians who force pensioners to save money through their programs will force the people who they made save that money to give them that money in order to pay back the megapile of tax loot made up of loot donations from every developed State in the world.

Because God forbid the IMF, an institution that never earned a damn thing for providing something to consumers in the marketplace, should lose money.

Another Domino to be Added to the List of Catastrophic Catalysts

rafifarber Economics, The Jewish Libertarian Blog , ,

I’ve known this for a while, but never saw it in graphic detail. Bob Wenzel of Economicpolicyjournal, a blog I visit every day, had this infographic up on his site today.

Top Holders of US Debt

I’ve always known China is the largest holder of US treasury debt in the world. I didn’t know that Japan was right behind.

Japan is the only country on the planet that is more into Keynesian economics than the US. As I mentioned in my last post about the bonobo chimpanzee behaving former IMF head Dominique Strauss Kahn who only attended 4 sex parties a year, Japan is somewhere between 240% and 500% in debt to GDP. Whichever number you want to pick, it’s the highest debt to GDP ratio on the planet. And Japan holds $1.24T in face value of US treasury debt.

If this isn’t a highly unstable house of cards, I really don’t know what is. The situation is just beyond any scope of reason, while the media makes you blissfully unaware of any of it or its meaning. The most indebted country in the world is being propped up by the country with the highest debt concentration in the world.

These are aftereffects of a country that destroys another with two nuclear bombs and then proceeds to nurse it back to health. How would you feel if someone beat the living crap out of you to within an inch of death and then put you on life support until you sort of recovered? You’d feel indebted. $1.24T of indebtedness.

Sooner or later some tiny domino is going to fall. If you feel like you have to sneeze, duck and cover.

 

Yanis Varoufakis Running on the SYRIZA Ticket in Greece Elections

rafifarber Eurozone Crisis, The Jewish Libertarian Blog , , ,

I’ve written about Yanis Varoufakis a few times. I check him out whenever there’s a flare up in Greece. There’s one now, so I headed over to his blog and found that he’ll be running on the SYRIZA ticket. He seems a genuine guy, with some really whacked out ideas on centralizing the entire European banking system with a bunch of bonds he made up in his head.

If I remember correctly, he wants Greece to default on the debt, liquidate it, and stay in the Eurozone nonetheless. If this is what he really wants, he won’t be able to accomplish it in SYRIZA. SYRIZA wants an end to the bailout scheme, which is doing nothing but putting Greece into even more debt (it’s debt to GDP has not fallen contrary to popular perception) and at least that aspiration is a good one. But what SYRIZA wants instead is an end to austerity and a free ride to keep spending.

If Varoufakis actually wins a seat, which seems likely, he will likely start to butt heads with his pretty-boy party leader Tzipras, a far leftist who thinks prosperity is invented out of nothing by the good graces of politicians like himself.

End the bailout Varoufakis and Tzipras will agree on. What happens after that, and they’ll start fighting. Tzipras will want more spending, which if he pushes it, will end up pushing Greece out of the Euro by force because Europeans (by which I mean Germans) are not going to finance it anymore. This, Varoufakis doesn’t want. And if they do get pushed out, there will almost certainly be hyperinflation in its drachmas within weeks.

So let’s see what Yanis does. He writes:

My greatest fear, now that I have tossed my hat in the ring, is that I may turn into a politician. As an antidote to that virus I intend to write my resignation letter and keep it in my inside pocket, ready to submit it the moment I sense signs of losing the commitment to speak truth to power.

Keep that letter handy Yanis. You’re going to need it once you see that your fellow politicians are not going to want to cut their spending.

EUROZONE CRISIS 2.0 Greece Teetering Again…Surprised?

rafifarber Eurozone Crisis, The Jewish Libertarian Blog, Uncategorized , , , ,

The global financial system is like a lake right before a limnic eruption. I just learned about this phenomenon from Scishow.

A limnic eruption is when a lake explodes. Carbon dioxide leaks into it for centuries from magma below, and if the lake is stagnant and the water doesn’t circulate much, any little thing can set it off. When it does, all the dissolved carbon dioxide below wells up to the surface and the whole lake blows up, together with a cloud of carbon dioxide that suffocates everything within a several mile long radius.

Anything can set off a chain reaction that will bring down the entire global sovereign bond market. I don’t know when it will happen, but the next thing in line as a candidate to light the fuse is, once again, Greece.

I just read a particularly horrendous article in The Guardian about this. The situation is like so. Two years ago or whatever it was, Greece agreed to a giant bailout in return for cutting its budget. Unemployment is above 25% in Greece and poverty is in the 40% range.

The point of cutting its budget is obviously to lower its debt, for the government to spend what it takes in only, and – a totally radical idea – run surpluses to actually pay some of it back, like normal people in debt do. Instead of Ponzi Scheming your way into “rolling over” the debt, meaning paying back old debt with new debt.

So here’s what the “Austerity” in Greece from “draconian” government budget cuts looks like since 2012.Greece Debt

Since “Austerity” began, the debt went up.

The problem now is that Greece is having trouble naming a president. There is one final round to do this on December 29, and if their politicians fail to name a head politician, a party called Syriza will likely come to power in snap elections (like the ones here in Israel on March 17). Syriza wants no more “Austerity”. Meaning, they want to spend more.

Well that’s nice, but more of what, exactly? Euros? You’re being cut off. Drachmas? Who the hell is going to trust that piece of paper when you can’t pay back a damn bond? Look for money, you ain’t got none. Comb the desert like they did in Spaceballs, and “We ain’t found S$*T.”

I will pick apart the worst parts of this guy Owen’s gross follies, but in a general sense, his problem is that throughout the whole piece of garbage, he equates prosperity with government spending. Because the government cut its budget, that’s why people are poor.

Prosperity is proportionate to economic freedom, not government spending. Greece has very little of the first, and a LOT of the second.

Real government austerity would be cutting the bureaucracy down to bare bones nothing. Let businesses start up with no papers, no permits, no nothing. Let people work with no documents, no restrictions, no rules except no slavery. Open up your borders to all imports, all exports, lower taxes to almost nothing except to keep courts and an army running. Default on all bonds and let the bondholders take the losses. Let money arise organically and stop printing it. That’s all you have to do. Greeks are not idiots. They know how to produce things. They have simply grown accustomed to government handouts and now that the pig trough has run dry, they want more but there is nothing left.

Here are some of the worst lines from the article:

What misery has been inflicted on Greece. One in four of its people are out of work; poverty has surged from 23% before the crash to 40.5%; and research has demonstrated how key services such as health have been hammered by cuts, even as demand has risen.

Owen doesn’t understand supply and demand and monopolies, while he probably opposes the latter in word, but not in deed. When a single entity is in charge of providing a service and others forbidden by government from competing, or if one single entity is heavily favored and subsidized by government over potential competitors, that is a monopoly. In a monopoly, supply and demand do not work because the price mechanism is broken. So the monopoly, like a health services monopoly, can cut services even when demand rises, and make the same amount of money because it can charge whatever it wants. There are no competitors. This is what happens in monopolies. The solution is to get rid of the monopoly, end government health services completely, and let anyone treat anyone however they choose.

This though, is the worst:

Syriza’s manifesto proposes that repayment of debt could come through economic growth, rather than from budget cuts. It wants a European new deal backed up by an investment bank; an all-out war against the tax avoidance endemic in Greek society; an emergency employment programme; a raised minimum wage; and the restoration of collective bargaining.

How in hell are you going to pay back 175% of your entire economy through “growth” while at the same time supporting a massive-sized government that got you bankrupt in the first place?! Even worse, if you’re complaining about 40% poverty, how is an “all-out war against tax avoidance” going to make anyone richer?! They’re in poverty as it is, and you want to end tax avoidance? Meaning that if these poor poverty-stricken people pay more taxes to YOU, Syriza, everyone will be richer?

An “emergency employment programme”. That sounds terrifying, especially when it comes just before “a raised minimum wage”. When 25% of the entire country is unemployed, you want to make it even harder for people to get a job?! Here’s my “emergency employment programme”. Zero taxes or regulations on starting a company. Zero restrictions or regulations on hiring people. That’s it. I have a better idea than increasing minimum wage. Make it a law that employers must keep hiring until unemployment reaches 0%, or else they go to jail. How about that?

Here’s just wacky psychobabble:

That’s why Greece desperately needs solidarity. Firstly, there’s a point of principle: to defend sovereignty and democracy from attack, whether from within or without. But a Syriza government could spur on other anti-austerity forces across the continent.

Can anyone extract any meaning from these sentences? Greece needs solidarity. OK. Sounds all nice and cheerleadery. “Defend sovereignty and democracy from attack from within or without” – do these words say ANYTHING? What do they mean? They mean nothing. It’s just meaningless pep talk from a sophist. “Anti-Austerity forces across the continent” – WHAT austerity? THIS?

Eurozone Government Spending

Austerity is when spending goes down, not stays the same.

Is it THIS?

Debt to GDP Eurozone

Isn’t debt supposed to go DOWN when you’re being “austere”? Isn’t that the DEFINITION of austerity?

So how could Greece be a limnic explosion? If Syriza is elected, they will try to increase government spending with money that does not exist, and get kicked out of the Euro for trying. Greek bonds will default, banks holding those bonds will need bailouts or crash, and the bonds of other weak Eurozone governments like Italy and Portugal will plummet, pushing yields up to the point where the Ponzi Scheme no longer works because there are no new suckers to buy the new bonds and roll over the debt.

From there, once a country the size of Italy goes down, that’s a LOT of bonds, and the whole global financial system could explode, suffocating all those who have not insulated themselves from the explosion.

Will this happen? Yes, eventually and soon. Will it necessarily happen this way? No. But we’ll see.

 

How would the Eurozone function under a gold standard?

rafifarber Eurozone Crisis, Gold and Silver , , ,

How the Eurozone functions now:

  1. Government of Country A wants money to bribe citizens of A for votes.
  2. Government A goes into debt by selling bonds, and gives money to people of A, and gets reelected.
  3. Government A needs more money, so it sells more bonds, and gives it to people of A.
  4. Government A sells so many bonds that debt surpasses GDP of A. People get worried that A will not pay bonds. Interest rates rise.
  5. ECB buys hundreds of billions in bonds of A to “stabilize the system”, and gives A the money it printed to buy them, in exchange for going even deeper into debt.
  6. A defaults, ECB stops giving them Euros.
  7. A leaves the Euro and prints its own currency.
  8. Currency A plummets in value because nobody else wants it. People of A have nothing to exchange for goods and services. They starve and riot.

Debt is encouraged in a fiat system because in the back of their minds, investors always know the central bank will guarantee the bonds, enabling countries to go so deep into debt that they will never be able to pay it back. How would it work under a gold standard?

  1. Government of B wants to bribe its citizens for votes.
  2. Government A goes into debt by selling bonds for gold, gives gold to people of A, and gets reelected.
  3. Government A needs more gold, so it sells more bonds. But they can’t sell as much since investors are trying to conserve gold rather than keep lending it to A. Interest rates rise.
  4. Investors in A’s bonds are literally running out of gold. They stop buying bonds in order to conserve gold for other purposes.
  5. ECB does not buy any bonds either since ECB does not exist. Gold is money and it is spread around, given in exchange for goods and services.
  6. A’s debt is large, but manageable, because nobody allowed them to go too deep into debt in an attempt to conserve their gold reserves.
  7. A cuts its budget, stops borrowing gold, and begins to pay back its debt in gold by exchanging goods and services for gold. Life is harder, but the budget is eventually balanced and the debt is repaid.
  8. In the next election, people of A elect fiscal conservatives who understand that it is a bad idea to go too deep into debt.

World War III will be started with a printing press, not a bomb

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Aside from the fact that the mantra is repeated by virtually every media outlet, mainstream and otherwise, why should any Eurozone country defaulting have anything to do with that country leaving the Euro? Except for Yanis Varoufakis, who is virtually the only Keynesian econometrician who seems to have a workable solution for Europe, everyone else just assumes that default equals exit. Why should this be?

Take the United States for example. The US is a dollar zone. All fifty states use the dollar, and California is about to go bankrupt. Is anyone seriously discussing California leaving the dollar zone if it defaults on its debt? No. Miami, where I come from, declared bankruptcy when I was a kid. Did anything happen to my family? No, because we weren’t stupid enough to buy the municipal bonds of a bankrupt municipality. And by the way, Miami did not exit Florida after it went bankrupt. As it should happen in a bankruptcy, those who own the debt lose the money. That’s it.

So why are we even discussing Greece “leaving the Euro”? Why should they? How does that help anything? Who decides if they are going to be kicked out? Who is in charge of the Eurozone who makes these decisions? Why should it even be an option? What is going on here, has anyone asked these questions?

If Greece did “exit,” it wouldn’t be Greece leaving of their own accord. What would happen is that the European Central Bank would stop giving Greece euros to fill their ATMs, and the country would literally run out of currency and they would have to start printing their own. So the answer is whoever is in charge of the ECB makes these decisions.

Who is in charge of the ECB? Mario Draghi, an Italian? I doubt he’s the one who’s going to make the final decision to stop giving currency to a Eurozone member.

Whoever has his hands on the switch is probably in Germany. The implication is that the Germans literally control Europe. They decide who’s in, who’s out, who starves, who lives, who dies. Germany conquered Europe. Again. Without anyone noticing. It’s August 31, 1939, but instead of Poland, the Krauts are about to invade Greece.

It’s interesting. We always thought World War III would be started with a nuclear bomb. It looks more and more likely that it will be started with a printing press.

Greece is out of bailout money; Spain is locked out of bond markets

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The New York Times is reporting today (June 6) that Greece is running out of money to pay its immediate obligations. This is mostly because they’re not getting enough bailout money because the bailer outers don’t know if Greece’s next government will agree to the terms of the bailout, and Greece doesn’t have a government yet because the Greeks couldn’t decide whether or not they want to agree to those terms. So another election is scheduled for the 17th, elections cost millions of Euros which the Greeks don’t have, and in the meantime they have no money left.

The terms, by the way, are that Greece must commit suicide if they are to be able to collect on their bailout.

The budget gap is widening as the so-called troika of lenders — the International Monetary Fund, the European Central Bank and the European Commission — withholds 1 billion euros in bailout money earmarked for government financing while it waits to see whether new leaders elected June 17 will honor Greece’s commitments.

Even if the troika delivers that money, Greece will struggle to cover its obligations. It underscored a harsh reality that is playing out in other troubled euro zone economies. Prolonged austerity is making it harder, not easier, for governments like Greece to become self-reliant again.

What the New York Times isn’t telling you is that the ECB is making a nice profit off the so-called Greek austerity, which is only inflating Greek debt all the more. Yanis Varoufakis calls it “ponzi austerity”.

Meanwhile, Spain is complaining that nobody wants to lend Spain money anymore. They warn that if that happens and nobody lends Spain money anymore, they won’t be able to pay back the money they owe to other people who lent them money in the past. So they need new money to pay back previous lenders.

The Ponzi scheme is about to end! Quick! Somebody print some Euros for the love of the Eurozone!

Tomorrow there’ll be something about Italy. Just end this thing already and put Europe out of her misery.