Greek fire

I do not think that the content of the letter is particularly controversial. The primary objective behind the Troika loans was to prevent a "sudden" Greek default shortly after the world experienced the most severe economic crisis since World War 2. Everyone is aware of the wide-ranging effects caused by the the bankruptcy of a single bank, Lehman Brothers, so there were many who genuinely feared what would happen if an entire country in the Eurozone, which backs the second largest reserve currency as well as the second most traded currency in the world, would default during those uncertain times.

The true purpose of the loans was to prevent panic on the markets and to provide some breathing room. The mandated austerity measures were more of an after-thought designed to make it easier to sell voters in other countries on giving loans to a bankrupt country.

That being said, it is difficult to take Tsipras´ letter serious considering that he immediately announced a sizable spending spree after gaining office but failed to adequately address how he plans to increase revenues in, as he pointed out, a shrinking economy.

Greece is in a very tough spot and I am afraid things will become even worse before they will get better.
 
JoBBo said:
The primary objective behind the Troika loans was to prevent a "sudden" Greek default
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The primary objective of the Troika loans was to protect the Troika. They already had the Greeks over a barrel but default would have let the Greeks slip out of the trap and would have negatively impacted the Troika's credibility (and collapsed their balance sheets but that's just another way of saying the same thing). Making a loan to someone to pay off their other loan to you is ... just paper shuffling to look like you're doing something.

JoBBo said:
The true purpose of the loans was to prevent panic on the markets and to provide some breathing room.
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And also to keep Greece in debt. By propping up unpayable loans with new unpayable loans the game goes on. But the purpose of the original loans (and therefore also the continued purpose of the new loans) is to extract wealth from Greece. The purpose of ALL loans is wealth extraction (for no effort).

JoBBo said:
The mandated austerity measures were more of an after-thought designed to make it easier to sell voters in other countries on giving loans to a bankrupt country.
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The voters don't get to decide who gets loans. Nothing has to be sold to the people - bankers make all the decisions and when banks lend money they don't take it from anyone else, they create it by creating the loan - which they can then keep on their books as an asset to generate further loans against.
But imagining that austerity is an afterthought in the Greek case ignores that austerity has been tied to loans used to extract wealth from third world countries (and their willing dictators who make a cut on the deal) for decades and perhaps for ever. The situation we are in now is partly because the mathematics of loan creation and interest are exponential and voracious and
without bankruptcy as a safety valve, needs continually more credit creation to maintain and the third world countries cannot support this bubble any more. The bankers are now eating into their own back yards. That which is impossible to pay will not be paid. Sooner or later you HAVE to hit that wall.

JoBBo said:
That being said, it is difficult to take Tsipras´ letter serious considering that he immediately announced a sizable spending spree after gaining office but failed to adequately address how he plans to increase revenues in, as he pointed out, a shrinking economy.
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It could be interesting indeed. How will he pay for the spending? He can use a parallel currency. Governments can create currency without cost instead of letting the banks do it. Something based on a government bond that can be used to pay taxes is a good start. After all, Hitler built Germany from an economic basket case to an almost unstoppable power (should have stayed friends with Russia but Hitler hated commies, oh well) by ditching the international banks and creating a new government issued currency. He still had to deal with banks when he wanted to buy munitions and supplies from places like the US of course, as he needed to pay with US dollars but at home he could pay with his own money. Nazi Germany is just the most impressive turnaround but other countries have also taken this route, especially those with currencies closely tied to foreign currencies.

By the way, you should look at what Robert Mudell, "father of the Euro" created it for.

"It puts monetary policy out of the reach of politicians," he said. "[And] without fiscal policy, the only way nations can keep jobs is by the competitive reduction of rules on business."
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An opening shot across the bow for the new finance minister? Anti-Semite!!! That's a rather big gun to bring out for a first round, but then again, a quick read of the article shows there isn't much in it. Apparently he criticizes the separation wall (a structure already found to be illegal by the International Court of Justice 10 years ago).

On the other hand, there's a nasty implication in such stories that only people loyal to Israel are suitable to be finance ministers.
 
Be careful.

Paul Craig Roberts has been inside the government but that doesn't mean he can't be a crazy conspiracy kook. However, he may just have more grounds on which to base his suspicions.

And I also know that reading a post like this is hard to do without eye rolling - it's just too much condensed assertion in one go in much the same way evolution is too much to take in and too far fetched sounding in sound-bite form for a person from a different belief system.

Nonetheless, while I haven't read Brothers, but have read lots of material on the same topic, and I have read Confessions of an Economic Hitman and am familiar with the operation Gladio court case and they may sound like the clashes of criminal gangs, in reality that is what international relations is like, especially for a top dog. There is no higher law that forces nation states and their rulers (who are not necessarily the same people we are told they are) to abide by any standard except group coercion and might makes right.

When you stand up to the mob loan shark you get a visit from the shilo and if a couple of broken legs doesn't smarten you up then the head hunter comes - because disrespect can't be allowed to stand.

As noted in one of the most subversive bits of animation ever made:
 
FluffyMcDeath said:
An opening shot across the bow for the new finance minister? Anti-Semite!!! That's a rather big gun to bring out for a first round, but then again, a quick read of the article shows there isn't much in it. Apparently he criticizes the separation wall (a structure already found to be illegal by the International Court of Justice 10 years ago).

On the other hand, there's a nasty implication in such stories that only people loyal to Israel are suitable to be finance ministers.
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Just read the article. What a lot of hot air.
Mendacious hot air at that.
 
FluffyMcDeath said:
The primary objective of the Troika loans was to protect the Troika. They already had the Greeks over a barrel but default would have let the Greeks slip out of the trap and would have negatively impacted the Troika's credibility (and collapsed their balance sheets but that's just another way of saying the same thing). Making a loan to someone to pay off their other loan to you is ... just paper shuffling to look like you're doing something.
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Please do not take this the wrong way but do you know what "Troika" stands for?

And also to keep Greece in debt. By propping up unpayable loans with new unpayable loans the game goes on. But the purpose of the original loans (and therefore also the continued purpose of the new loans) is to extract wealth from Greece.
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The new loans given to Greece are interest-free until 2022. Even after 2022, the interest rates that will be charged are well below what Greece would have paid on private capital markets.

The purpose of ALL loans is wealth extraction (for no effort).
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It does take effort to review loan proposals, to assess risks, to handle administrative tasks (contracts, taxes, etc.), to monitor repayments, and so on.

The voters don't get to decide who gets loans. Nothing has to be sold to the people
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They do decide whether the government officials who decide who gets loans will remain in office after the next election...

Plus, it would be difficult to sell Germans on austerity measures at home (further privatizations, etc.) after its government happily wired tens of billions of Euros to another country with no strings attached.

But imagining that austerity is an afterthought in the Greek case ignores that austerity has been tied to loans used to extract wealth from third world countries (and their willing dictators who make a cut on the deal) for decades and perhaps for ever.
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Well, Greece is not an African country.

The situation we are in now is partly because the mathematics of loan creation and interest are exponential and voracious and without bankruptcy as a safety valve, needs continually more credit creation to maintain and the third world countries cannot support this bubble any more. The bankers are now eating into their own back yards. That which is impossible to pay will not be paid. Sooner or later you HAVE to hit that wall.
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The point of the Troika loans was to ensure that Greece would not have to rely on private loans with substantially higher interest rates.

By the way, you should look at what Robert Mudell, "father of the Euro" created it for.
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Does it really matter what a single person has to say about it? Having a common currency is neither inherently good nor bad. (West) Germany´s central bank has been famously independent (i.e. protected from direct political influence) for many decades and, as far as one can tell, it seems to have done a decent job.
 
JoBBo said:
Please do not take this the wrong way but do you know what "Troika" stands for?
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I believe so. The two main members of the Troika who would be effected by default are IMF and ECB. Their balance sheets would look very bad without having a new loan (as an asset) on the books. They need to have the asset of a new loan else they may not be solvent. In fact, it looks like they need to originate a loan for the entire amount, without haircuts, or they are toast. They must have things tied up in a bad way if they can't swallow a write-down. Of course, it could just be playing hardball and they could take a write down - they just don't want to.

JoBBo said:
The new loans given to Greece are interest-free until 2022. Even after 2022, the interest rates that will be charged are well below what Greece would have paid on private capital markets.
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Maybe interest free (and that's about pretty much to be expected if you notice that many bonds carry negative yields at the moment. However, do the loans come without other strings? Don't they come with expectations of certain policies including further deregulation and privatizations, etc (all the usual IMF wish list)? Would you take a zero percent loan if it came with the condition that I could sleep with your wife and daughters and use your kitchen as my toilet? The conditions the IMF attaches to loans is always onerous.

JoBBo said:
It does take effort to review loan proposals, to assess risks, to handle administrative tasks (contracts, taxes, etc.), to monitor repayments, and so on.
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It doesn't take billions of dollars of effort.


JoBBo said:
They do decide whether the government officials who decide who gets loans will remain in office after the next election...
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Sure, they get to decide that, but they do not get to decide that they want to undo the bad deals their crappy government made. Voting guys out after they have done what you didn't want them to is NOT control. The politicians can fix their future and make sure they get good jobs with the central bank and be all set up when they get voted out - with nothing that can be done about it afterwards.

JoBBo said:
Plus, it would be difficult to sell Germans on austerity measures at home (further privatizations, etc.) after its government happily wired tens of billions of Euros to another country with no strings attached.
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Nobody needs austerity and money doesn’t need to be wired. Debt forgiveness would do the trick and 99% of people would instantly be better off. It's actually that simple. The pundits will say "but what about people's pensions" etc, but that's not where most of the money is. It is mostly owed to private banks and the private individuals that own them.

JoBBo said:
Well, Greece is not an African country.
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No, but it IS a country and that which works on African nations works on other nations too.


JoBBo said:
The point of the Troika loans was to ensure that Greece would not have to rely on private loans with substantially higher interest rates.
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Perhaps they can get loans from other countries with other interests. Russia has mentioned that it could kick some money their way. The BRICS are setting up their own alternative to the world bank which could give a similar loan but with less onerous tie ins. But ultimately, Greece wouldn't be able to get those private loans with their credit and that would leave the IMF and ECB in the painful position of not getting their money or a new loan - the banks that Greece owes have the most need of getting them to take a new loan. That may sound strange but when a bank lends out money they get to keep that debt as an ASSET. If all the debts were paid off or forgiven banks would have almost no assets left.


JoBBo said:
Does it really matter what a single person has to say about it?
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I think it does when that single person is the principle architect of the currency and he tells you what the purpose of that currency is. I think that's really quite important.

JoBBo said:
Having a common currency is neither inherently good nor bad. (West) Germany´s central bank has been famously independent (i.e. protected from direct political influence) for many decades and, as far as one can tell, it seems to have done a decent job.
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Being independent isn't necessarily a good thing. It means it is protected from political influence and that means it is protected from the influence of the people of Europe, but it is NOT protected from the interests of it's private owners who will use it to increase their own wealth at the expense of the people. It also doesn't protect the bank from the laws of mathematics especially the exponential function which is invariably fatal to debt based monetary systems that embrace compound interest.

Start your refresher on the exponential function here:
 
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