Socialists win Greece

That is certainly a viable possibility. However it makes two assumptions:

1) Greeks will resist the austerity to the point where it is ineffectual. I think it's hard to say yet how it will pan out. Tax evasion was so wide spread before that even if the reforms are a little effective, it might be enough. We're talking about a country where medical doctors declare their yearly income as less then $10,000 Euros. If they enforce the laws strictly on tax evaders large sums of cash could turn up fairly quickly. But I'm not expecting miracles, but it may be a case where a small improvement may add up to a lot. The big concern for me is that the decreased wages and increased taxes may cause the economy to shrink more then they expect. They've taken into account that it will shrink, but if they get that number wrong then we may see big problems.

2) That Europe won't be forgiving of Greece's imperfect implementation of the austerity package. Fact is Europe has been breaking it's own rules for some time now, I wouldn't be surprised if they bend them a little so long as they some effort on the Greek side. Honestly, I think if it weren't for the elections in Germany the bailout money would have been handed over to Greece far sooner.

I'm not saying Greece is not going to default. Greece is by no means out of the woods, and that life will be hard for Greece even if they squeak through.

As for Greece devaluing it's currency, there's certainly is merit too that. However, Greece doesn't have much in terms of exports. Some agriculture products but Greece is just too small with very little in terms of good agriculture land for it to depend on exports. Tourism has remained strong for Greece throughout the Eurozone's lifespan so I can't expect it to change dramatically. Also, being a cheap tourist destination isn't much to base an economy on. Tourism is too dependent on weather and season and can easily be sabotaged by instability (raised tensions with Turkey would decrease tourism which would in turn decrease Greece's capabilities to defend itself). Plus tourists are just annoying. Greece needs to move into other sectors (one idea was to create English speaking universities). The Eurozone represented hope for moving past being just another great tourist destination. However, if they do default that's pretty much what they'll be stuck with.
 
metalman said:
The EU doesn't have the money to bail out Greece ... and Portugal ... and Spain ... and Italy ... and Ireland ... which is where this is heading. So the EU has to hold Greece to an austerity plan.
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No-one has the money to pay off the US debt. I don't have the money to pay off my mortgage. That's not what debt is about. Debt is owed in the future, it is a promise of future wealth. If I owe you a hundred turnips but I can only grow 20 per year then you will get your turnips over five years unless you demand them all now in which case I will default and you will get zero. Forcing people into default doesn't help you unless you have different motivations other than recovering the promised wealth.
So in the end Greece will end up with an severe austerity plan enforced by inflation, rather than the modest austerity plan the IMF is asking for now.
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Austerity after default is much preferable to austerity while repaying. Ultimately repaying isn't even the plan. Look at how this scam was used on the third world. Permanent debt slavery is the plan to prevent nations from gaining the capability to topple the current masters. A debt free austerity will allow Greece much more strategic economic freedom in the future.
 
Mike,

apparently the German and French gov's are trying to get the people of Europe to funnel money to their arms manufacturers by the ruse of laundering it through Greece as a bail-out.

As for the rest, it's a classic IMF squeeze. It's not designed to help but to cripple the people of Greece and make them more "useful" to the owners.

You may not respect Alex Jones but Greg Palast is a solid guy. check this out.
 
FluffyMcDeath said:
If I owe you a hundred turnips but I can only grow 20 per year then you will get your turnips over five years unless you demand them all now in which case I will default and you will get zero.
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Greece is growing 20 turnips a year, eating 25, and then borrowing another 20 to make the payment on the original 100.

what's the greek word for Ponzi?

FluffyMcDeath said:
metalman said:
So in the end Greece will end up with an severe austerity plan enforced by inflation, rather than the modest austerity plan the IMF is asking for now.
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Austerity after default is much preferable to austerity while repaying. Ultimately repaying isn't even the plan. Look at how this scam was used on the third world. Permanent debt slavery is the plan to prevent nations from gaining the capability to topple the current masters. A debt free austerity will allow Greece much more strategic economic freedom in the future.
Click to expand...

I've seen Mexico go through 2 devaluations, they only made a recovery each time because they have natural resources & used their cheap labor to boost exports. The Mexican middle class & poor took the brunt of the austerity by inflation. 25% of the Mexican labor force had to leave Mexico to find work.

Greece trade is limited to Olives, Olive Oil, Ouzo & Tourists. Greece has no manufacturing base and no matter how cheap the labor, what company would re-locate there now?

Their only assets... Islands and Archaeological sites

Greece will have an mass exodus, like the Irish last century, and Mexicans currently
 
FluffyMcDeath said:
apparently the German and French gov's are trying to get the people of Europe to funnel money to their arms manufacturers by the ruse of laundering it through Greece as a bail-out.
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I see nothing wrong with that really. Greece has always bought military hardware from France and Germany. In fact they are expecting to receive brand new frigates from France. Yes, some of Greece's current outstanding debt is payment for the French frigates, not sure why it should be considered shady for France to expect part of the bailout to cover payments for the frigates.

As for the rest, it's a classic IMF squeeze. It's not designed to help but to cripple the people of Greece and make them more "useful" to the owners.
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France and Germany are obviously looking out for their interest - a defaulted Greece will cause problems throughout the Eurozone. I believe the IMF route is far better then default. There are many other factors one needs to consider with Greece. For one, a default means they'll be booted out of the Eurozone. This will result in a run on the banks as people will want to keep their money in Euros before it's converted to the devalued drachma. This will likely cause the government to freeze everyone's accounts over night. The country will plunge into poverty and will most likely be plagued with riots. This all happened in Argentina but will probably be worse in Greece. I'm already seeing sings of ultra nationalist sentiments and if things hit rock bottom Albanians and other visible minorities will most likely get the blame for everyone's problems. A Kosovo style war is very much a possibility in Greece. So a default really is the worst case scenario for Greece.
 
Glaucus said:
FluffyMcDeath said:
As for the rest, it's a classic IMF squeeze. It's not designed to help but to cripple the people of Greece and make them more "useful" to the owners.
Click to expand...
France and Germany are obviously looking out for their interest - a defaulted Greece will cause problems throughout the Eurozone.
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Europe's Web of Debt Graphic

a default by a single EU nation will send other eurozone countries tumbling

A collapse of Greece could collapse the Euro currency.
 
metalman said:
A collapse of Greece could collapse the Euro currency.
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Which is why they should hold out for a better deal rather than taking what the (US bank controlled) IMF tries to stick them with. They shouldn't get stampeded into something rotten. The creditors are the one who face the real losses. It was their risk and if they bet wrong it's their own fault.
 
Glaucus said:
This will result in a run on the banks as people will want to keep their money in Euros before it's converted to the devalued drachma.
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The bank run may already have occurred. There probably isn't any money left and people are just waiting to find that out.
So a default really is the worst case scenario for Greece.
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A new loan without production is just more illusory wealth. It doesn't help. The pensions will be gone so there is nothing to retire on. The public pay will be squat so all pay will fall. The Greeks will be the mexicans of Europe, desperate to cut deals with businesses to attract them with lax labour laws an blind eyes turned to pollution problems. This will push everything down for all the other players in Europe. The winners will be transnationals as usual - that's what the Eurozone is for. The more countries that drop out of it, the better. Diversifying the currencies will make the region more economically resilient again.
 
I may have put these up at some point in the past but I'm not sure. Anyway, it's about what happened in Argentina and so it's somewhat relevant to Greece.

[youtube:3hugcpbp]UlDNMB6wYmI[/youtube:3hugcpbp]
[youtube:3hugcpbp]78ddURofMWs[/youtube:3hugcpbp]

Also, here is some John Perkins, former economic hitman, talking about how it's done - with a nice little animation to illustrate.
 
redrumloa said:
If there was genuine wrongdoing, they should go for it. It seems they were willing participants with the banks though, so I am failing to see where they can take legal action for something they were involved in.
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So, if you buy a house and then find out that you didn't own it because the person who sold it to you was perpetrating a fraud you would have no case because you willingly bought the house? It seems you are a little foggy on what "fraud" is.
 
FluffyMcDeath said:
So, if you buy a house and then find out that you didn't own it because the person who sold it to you was perpetrating a fraud you would have no case because you willingly bought the house? It seems you are a little foggy on what "fraud" is.
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Playing a shell game with their currency, they knew full well they were playing a shell game. Where is this lack of home ownership I seemed to have missed?
 
The prior PASOK government hired Goldman Sachs to do the currency swap so as to hide the dire situation the Greek economy was in. This is very important to note, the Greek economy was already in trouble before Goldman entered the picture.

Some report that Goldman shorted Greece shortly after. Is that illegal? Perhaps as it would be on insider information. Not sure how they shorted Greece, but maybe through the CDS market? If so then that's something worth investigating, however, we should still keep in mind that the net effect of this would be what we saw recently: Greece's borrowing cost would increase due to market speculation of it's defaulting. Bad as that is, one still can't blame Greece's decades long economic problems on Goldman. Without market speculation Greece may have borrowed itself out of this mess on more favorable terms, but it still would be in a mess.

I think Fluffy's analogy doesn't quit fit, but I do believe an investigation is warranted.

Having said that, I worry that this may be a political move to deflect some blame away from the government. PASOK is slipping in the poles (so is New Democracy. KKE and LAOS, the ultra nationalist party, are picking up votes however - not a good thing). Things could get desperate. I'm hoping that once the first debt payment is made (tomorrow) things may calm down. But damn the EU for waiting until the very day before to deliver the funds. The IMF in comparison delivered the funds last week.
 
redrumloa said:
Playing a shell game with their currency, they knew full well they were playing a shell game. Where is this lack of home ownership I seemed to have missed?
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Fraud is misrepresentation. Just because you were involved in a deal that involved fraud, it does not necessarily follow that you are guilty of fraud.

If the government knew they were playing a shell game and brought Goldman in to help them out then Goldman WOULD become a party to a fraud (since they are sophisticated experts who know better). That would simply mean that the former government and Goldman committed fraud. This would be a positive finding if no current members of the ruling party were implicated. It would open the door to prosecutions that could recoup some of the loss.

If, on the other hand, the former government went to Goldman to make hedges offsetting debt with the honest intent to better their debt situation and Goldman sold them a bill of goods then that would be prosecutable too.

Goldman would be liable for promoting or actively participating in a fraud the same way Arthur Andersen was with Enron. Whether they acted to defraud Greece, or acted with Greece to defraud the EU, Goldman would be guilty.
 
FluffyMcDeath said:
If the government knew they were playing a shell game and brought Goldman in to help them out then Goldman WOULD become a party to a fraud (since they are sophisticated experts who know better). That would simply mean that the former government and Goldman committed fraud.
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That is exactly what they did, but at the time, that particular type of fraud was not illegal. It was made illegal since and Greece claims this technique was never used illegally. But you're right, it was done to deceive the EU that Greece had a healthy economy so that they could get a favorable lending rate. But in this deal, Greece was the King Pin and Goldman was the Hit Man. Greece investigating Goldman on this deal is kinda preposterous.
 
Glaucus said:
But you're right, it was done to deceive the EU that Greece had a healthy economy so that they could get a favorable lending rate. But in this deal, Greece was the King Pin and Goldman was the Hit Man. Greece investigating Goldman on this deal is kinda preposterous.
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But Europe knew it was a shell game but wanted to expand anyway. They were either over eager or were planning on squeezing Greece once in and thought they could do it without hurting themselves. There is plenty of blame to go around.
 
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