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Posts Tagged ‘Greece’

FromĀ Jim Rickards Discusses Financial Warfare: by Tyler Durden

Some critical insight from Rickards in terms of European geopolitics is the following: “People get so hung up on economics, and efficient markets, and all that which has been largely discredited at this point. But these are NATO allies. Greece controls the ceiling of the Eastern Mediterranean and the Aegean, they have a very robust military budget. Same thing with Spain. Spain’s been a very important NATO ally throughout the cold war, Italy etc. Can you imagine if during the cold war the Soviet Union had undermined all the countries, it would have been the start of World War III. And yet we are letting investment banks do the same thing. We are letting investment banks undermine the finances, cast doubt on the credibility, create civil unrest, riots, death. It’s the kind of thing that in a military frontal assault would be repelled, but somehow we let Wall Street attack the countries and do nothing about it. I am glad that someone is finally standing up, and I expect that Merkel will be joined by others. I am not against speculation. Let speculators put up some money, let them do on an exchange, let the pricing be transparent, let them do variation margin… This no money down shadow credit default swap market is completely destructive.” A little hyperbolic but you get it.

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I must admit the whole European meltdown is happening much quicker than I, a staunch pessimist, would have thought.

I guess we can chalk it up to markets being incapable of waiting. All the articles that I read about the crisis were suggesting that the $45 billion euro bailout package by the IMF and the EMU would allow Greece to hold out for another year at best. Clearly the writing on the wall was so BIG and OBVIOUS that markets decided there was no better time than the present to get the default ball rolling.

Here’s a quote from Naked Capitalism that echos what I have been suggesting for some time. The financial crisis is just getting started:

“So the whole idea that the financial crisis was over is being called into doubt. Recall that the Great Depression nadir was the sovereign debt default phase. And the EU’s erratic responses (obvious hesitancy followed by finesses rather than decisive responses) is going to prove even more detrimental as the Club Med crisis grinds on.”

People are finally starting to pull their heads from the sand (and other dark places) to realize that the World is faced with a monstruous debt crisis, one that never should have been allowed to occur in the first place. It would seem that nothing was learned from The Great Depression. Our governments have been bamboozled by Global Finance. I think that the U.S. political elite deserves a particular concentration of scorn for its irresponsible leadership in these affairs. You can blame the greedy jerks on Wall Street all you want but the ultimate failure has been a political one. American politics, on both sides of the aisle, has allowed itself to be captured by the Military Industrial Complex and Big Finance. Let’s face it, they are one and the same. It is time for the countries of the world to start brushing up their emergency plans. Damage control is what the next 10 to 15 years has in store. I have a very hard time imagining how any kind of normalcy will return until this brewing shitstorm of international idiocy blows over.

I doubt that this Greek crisis is the begining of the end of humanity. After all, the only creature more resilient that people are cockroaches… Even rats wouldn’t survive very long without our staggering amount of waste to feed on. But I deeply feel that this crisis is the beginning of the end of the World as we know it. This is not necessarily a bad thing. Those of us who grew up in the 70s, the dawn of the truly modern age with its computers, television, better living through chemistry, lived in a completely different Universe than our grandparents and even more so than that of our great-grandparents. But to think that the pace at which “innovation” is driving people mad…right fucking mad…can continue without some form of global nervous breakdown is not only wishful thinking but criminally insane. I keep repeating the same point.. The World Wars of the 20th Century were in large part a result of the Enlightenment catching up with itself… The race for economic and intellectual superiority between nations was only understood to be achievalbe through mililtary means. This way of thinking was consistent with human history up to that point but civilzation was not prepared to deal with the genocidal character of mechanized warfare. (more…)

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The World is once again standing uncomfortably close to the edge of the abyss that was so narrowly avoided in 2008 when Lehman’s collapsed. If you don’t have vertigo..you are really not paying attention.

No one knows for sure what will happen when (and it is when) Greece defaults. Will Portugal, Spain and Ireland follow? What will happen to the U.S.?

There’s plenty of speculative reporting out there, just Google a bit and see what you find. Try search terms that include Financial Crisis, Greece, Fallout, United States

Look, I’m no financial expert.. but I have a nose for impending disaster.. My impression is that the people in charge of World affairs haven’t a clue, not even the slightest one, how the hell to get out of this mess, in large part because the leaders of the world are in hawk to financial interests. Oh wait’ we’ve seen this film before haven’t we? It was called the 20th Century.

Money does indeed make the world go round and when it is destroyed through wanton acts of ignorance, the world stops for a moment and then errupts into Anarchy until new monopolies of force carve out equilibrium between nations. To quote Pete Townsend…”Meet the New Boss, Same as the Old Boss.”

Whatever the mechanism, there are way too many people on the planet. It gets a bit of lip service now and again but the issue at stake not just a matter of Maltusian resource management. It is information management. Humanity is overloading from too many people striving for the same thing.. Wealth and Power.. it’s a story as old as the Bible. These conflagrations errupt from the most unexpected direction just when things seem to be getting under control.

If people could be more excellent to each other, all of this crap could probably be avoided. But then I guess life would be boring.

Go Habs Go!

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Today at Naked Capitalism, Yves Smith compares the news that Greece is broke and needs a 45 billion euros bailout (60 billion U.S.) with the collapse of Creditanstalt, an Autsrian bank that collapsed in 1931 when markets thought a sustainable recovery was underway..

“The news about Greece’s bailout has me thinking a lot about Creditanstalt, the Austrian bank which collapsed in 1931. This account bears remembering because we should see the 1929-1933 descent as a two-part episode, with the second part starting in the Spring of 1931 with Creditanstalt.It should be noted that there were a lot of positive economic signs before the Creditanstalt ruined this. The key difference to today is the monetary liquidity and fiscal stimulus, which has buoyed both asset markets and the real economy. But, the situation in Greece makes me think a lot about Creditanstalt.”

She then points to a website that chronicles news from the 1930s to highlight the similarities with that era…

“First, there is the blog site News from 1930 which provides verbatim news from the Wall Street Journal exactly 79 years ago because the September 2008 Lehman bankruptcy roughly corresponds to the October 1929 crash . They have an entry from yesterday with a lot of good data points. The ones I want to highlight are bulleted below. By and large, they are very bullish. Everything is upbeat.”

In a nutshell we’re back to a situtation where just when things seem to be on the mend two years after a critical financial shock a systemically important financial player goes insolvent bringing down Europe and subsequently the U.S. along for the ride.

Check it out. Very interesting, if not unsettling, demonstration of Mark Twain’s insight into the rhymes of the times…

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