Istanbul Archeological Museum Trojan Horse (Wikipedia) |
While
Americans are eagerly signing petitions to ban the American flag on the heels
of Louis Farrakhan’s Nation of Islam leader call to ban the Stars and Stripes “due
to its links to racism” or are busily banning anything attached in any way to
the Confederate flag and our history, the United States and the world are in
serious financial trouble driven by out-of-control debt, particularly the most
visible nation of all, Greece.
Healthcare
for illegals, gay marriage, and other non-stop crises occupy the American
overwhelmed minds, while the Trojan Horse of huge national debt and loss of
sovereignty to the globalist Transpacific Partnership (TPP) mystery “committee”
are ignored.
Greece is
bringing to the forefront the issue of debt, what happens when it spends 60
percent of GDP, lives from borrowed billions, and refuses to curtail spending
on entitlements, expecting more bailouts from the EU, essentially Germany.
Banks and
the stock exchange are closed for the week, issuing a 60 euros limit per
withdrawal. Not unexpectedly the euro fell against the dollar and the British
pound. Sky News reported Prime Minister Tsipras as blaming the European
partners and the European Central Bank for the debacle because creditors “have
refused a request to extend Greece’s international bailout beyond Tuesday,
until after the referendum.” The move risks a Greek default on 1.5 billion
euros payment to the International Monetary Fund.
Tsipras
claims that the bank deposits of the Greek people are fully secure and the
payments of wages and pensions are guaranteed. I am not so sure that is the
case since Greece is carrying a government debt load of over 175 percent of its
GDP. Countries cannot service such level
of debt without printing money. http://www.tradingeconomics.com/greece/government-debt-to-gdp
The European
Central Bank will maintain its “emergency cash lifeline to Greece’s banks”
without an increase. The Emergency Liquidity Assistance (ELA) on which Greek banks
depend, if lowered, may force the country out of the Eurozone.
There were
many economists, of course, who questioned the wisdom of accepting Portugal,
Italy, Greece, and Spain into the EU because their monetary policies were plagued
by high inflation. Others believe that a return to the drachma may not be such
a bad idea.
Expecting
the worse after banks announced closings, Greeks stood in long lines to
withdraw cash from ATMs and many horded gasoline and food. After five years of
various bailouts, demonstrations, protests, refusals to adopt more austerity
measures, negotiations between the leftist government of Prime Minister Alexis
Tsipras and Brussels creditors have broken down. For months economists have
predicted Greece’s pull out from the Eurozone.
In preparation
for the national referendum on July 5, police patrols are more visible especially
around ATMs. Tsipras asked voters for a “yes” or “no” vote on the bailout
proposal considered by his government as confiscatory. The plan would “raise
taxes and hurt pensioners,” forcing Greeks to “an endless cycle of austerity.”
But the Greeks have been told few details of the deal – nobody really knows the
implications of a “yes” vote or a “no” vote and everyone fears they “would
become Venezuela.”
But the well-off
Greeks, fearing the election of the leftist Syriza, have already moved money
out of Greece or took cash out and stored it elsewhere.
The Tsipras
government favors a “no” response to the referendum because the bailouts terms
are “humiliating” and would deepen Greece’s economic recession. But without
bailouts, “most Greek banks would have totally collapsed by now.” http://www.dailymail.co.uk/article-3141480/Hundreds-queue-outside-banks-fears-Grexit-grow-ahead-MPs-vote-bailout-referendum.html
It has been
reported that withdrawals of 500-600 million euros have emptied more than 2,000
ATMs. When the austerity referendum was
announced, people started withdrawing money. When the Greek banks reopen, would
they need bail-ins like the Cypriot banks? Would the depositors be forced to
accept worthless I.O.U.s for their cash?
The European
Union has required its member countries to enact bail-in legislation. Bail-ins
force creditors and shareholders to rescue troubled banks. Cyprus citizens
holding private bank accounts had to take “haircuts,” a form of wealth
confiscation. Private pension funds were raided in Poland. http://www.dcclothesline.com/2013/09/25/cyprus-style-wealth-confiscation-is-now-starting-to-happen-all-over-the-globe/
Bailouts
forced taxpayers to financially rescue big banks that had engaged in risky
financial activity, using the infamous “too big to fail” excuse.
How much
longer can Germany sustain the very shaky European Union? Should they bring
back their own currency, the Deutsche Mark? As more large deposits and capital
leave Greece when banks reopen, corporate asset controls may emerge. The Greek
market may be shocked and defaults of various debt instruments may emerge.
A Romanian
friend, Florina, explained the Greek crisis in terms that most people can
understand. “I loaned money to a family in a time of financial crisis so that
they can survive, and the family did not curtail their spending, they blew the
money on unnecessary stuff; now the family is holding a meeting to vote if they
are going to pay me back or not. That’s Greece now.”