Monday, February 6, 2012

A Greek tragedy

If you thought this was about the play Electra you're on the wrong page.

Greece situation - Good god this amazes me. Greece is set to default on their debt and the European Union wants more austerity for the country. It's as if finding a starving person you tell them to get more food you'll have to eat less and the food they'll be given will need to be stored to pay me back interest on this food. Only here we're talking about money but actually it isn't money. It is debt and promises and bringing hardship on people most of whom had nothing to do with the problem. I can just about see how this will all play out. The loans will be made then neatly packaged and leveraged and sold again to some unsuspecting fund manager in the attempt to rebuild the house of cards. They (investors) will of course buy a hedge against a collapse at a very high price and again the insurance will be underfunded. And when the music stops and the bill comes due we'll be right back where we started.
And what could be gained through a bankruptcy? A default would do no less harm. Greeces' primary problem stems from the fact that the bulk of their income comes from tourism which has been wiped out with the current economic downturn. This could be a glimpse of things to come in the U.S. if we keep outsourcing our manufacturing. It's been reported that we have lost 45,000 factories (not jobs but whole factories) over the last ten years a trend that can not continue. We may have added a couple of hundred thousand jobs in the last month but in what areas?

I see today Merkel and Sarcozy are becoming impatient at Greeces' foot dragging. Can you blame Greece? They get a choice of two poison pills. Take your pick red or green either one will kill you. But if they wait they'll infect the doctor causing him great pain. Interesting Mexican stand off we have here but we know the clock is ticking because Greece has until March to make a decision. Nothing like waiting until the last second before the bomb goes off but in this case it'll go off anyway you look at it. Imagine if you were hit with a 29% tax bill and hearing that the government wanted yet more? I have to ask just how do you squeeze blood out of a turnip Ms. Merkel and Mr. Sarcozy?


The Blog Fodder said...

Greece ought to cancel all debts owed and drop the Euro. Once they have their own currency back they can control their economy again. It will be hard on the population in the short term and who cares about the banks or France or Germany. In fact, the PIIGS ought to all cancel their debts.
Everyone says the end of the world will come. Pfft. The end of the banks will come.
Russia defaulted. Argentina defaulted. the world didn't end.

Demeur said...

Very true Fodder I agree. It's the only real solution.

BBC said...

No one wants to go from living well to living more basic, fuckem'.

Anonymous said...

Well, Greece could sell off some islands to other nations. I'm sure Turkey would be interested in e.g. the rest of Cyprus.

And Iran will soon need a new home if Israel nukes 'em :-( Or vice versa.

S.W. Anderson said...

"We may have added a couple of hundred thousand jobs in the last month but in what areas?"

Ya want fries with that?


Re: Greece. I suspect at the heart of this is a situation similar to our own, with wealthy, well-connect people and businesses having finagled so many tax dodges and loopholes, on top of what they just plain cheat their way out of, that the burden has fallen on to people whose ability to pay declined precipitously with the Great Recession and, as you said, declining tourism. The government lacks the good sense and cojones to get the money from those who have it and have been skating, and the rest can't cough it up. Thus, the impasse.

Creditors ought to write off some of the debt. Greece's government should go after those who have the money to pay more taxes. Every effort should be made to increase productivity, grow the economy and broaden the tax base. Austerity is more likely to make things worse than improve them.

Randal Graves said...

Don't mock fries, we'll all be working there someday.

Demeur said...

SW I see no change anytime soon when our government is owned by those who committed this crime.

Randal save me a clean apron would you?

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