Economy
Related: About this forumA New Mode of Warfare: The Greek Debt Crisis and Crashing Markets
http://www.counterpunch.org/2015/06/29/the-greek-debt-crisis-and-crashing-markets/printSo one casualty apart from the credibility of the eurozone, the ECB and the IMF will be these banks. Syriza is positioning itself to provide a public option public banks that will promote the economy, and a national Treasury that will spend government money INTO the economy, not drain it to pay the Troika for having bailed out French and other banks back in 2010-1.
The European popular press is as bad as the U.S. press in describing matters. It warns of hyperinflation if a central bank monetizes as much as one euro of government spending in the way that the U.S. Fed does, or the bank of England or any other real central bank. The reality is that nearly all hyperinflations stem from a collapse of foreign exchange as a result of having to pay debt service. That was what caused Germanys hyperinflation in the 1920s, not domestic German spending. It is what caused the Argentinean and other Latin American hyperinflations in the 1980s, and Chiles hyperinflation earlier.
But once Greece frees itself from the odious debts forced upon it at financial gunpoint in 2010-12, its balance of payments will be roughly in balance (subject to some depreciation of the drachma; 30% is a number I heard bandied about in Athens last week).
To mimic Margaret Thatcher, There is No Alternative to withdrawing from the eurozone. The terms dictated for remaining in it was to sell off all of what remained in Greeces public sector to European and U.S. buyers, at insider prices but not to Russian buyers, even for the gas pipeline that was to have been sold...
Eurozone financial strategists made it clear that they wanted to make an example of Syriza as a warning to Spains Potemos party, and anti-euro parties in Italy and France. The message was supposed to have been, Avoid our austerity and we will cause chaos. Look at Greece.
But the rest of Europe is interpreting the message in just the opposite way: Remain in the eurozone and we will only create money to strengthen the financial oligarchy, the 1%. We will insist on budget surpluses (or at least, no deficits) so as to starve the economy of money and credit, forcing it to rely on commercial banks at interest.
Greece has indeed become an example. But it is an example of the horror that the eurozones monetarists seek to impose on one economy after another, using debt as a lever to force privatization selloffs at distress prices.
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DetlefK
(16,423 posts)"But once Greece frees itself from the odious debts forced upon it at financial gunpoint in 2010-12..."
Greece had catastrophic debts since well before the year 2000.
"Eurozone financial strategists made it clear that they wanted to make an example of Syriza..."
Who? Who said that and where? This is the same as the "some-people-say" on fucking Fox News!
I have a question for you: What should the creditors have done instead of demanding austerity in return for loans?
Hestia
(3,818 posts)went to pay off the banks - only 30% was "allowed" to be kept by the gov't to pay bills and stimulate the economy. As a result of paying off the banks, the Troika then wanted Greece to ask for another bail out, thus compounding the debt AND are wanting Greece honor a 2 billion contract to Germany and France to continue "defense" contracts - 20% of GDP.
All this and the expectation that Greece sell of its Heritage sites at bargain basement prices thus keeping Greece from getting a dime of tourism - 20% of GDP - and get the crumbs from the tourists.
Even the BBC yesterday in its coverage intimated that Germany, et al, need to lighten up and give Greece a break. You can not make good Germans from the Greek culture; not even getting into their sordid history.
magical thyme
(14,881 posts)when you suggested I was paranoid, and didn't get the courtesy of a reply presumbly because you have no reply.
I won't reiterate here.
DetlefK
(16,423 posts)Not as in "being crazy". You stance struck me as very disillusioned.
magical thyme
(14,881 posts)and I've been effed over enough myself by the con game that's currently running the world to not be able to afford to maintain any illusions.
mother earth
(6,002 posts)debt enslavement or going as far as they can take it) and then there's those who just don't give a damn. Hell, they are content to defend...what.."the free market"? This is not capitalism, this is all one corporate coup d'état, and looks like some are either suffering from Stockholm Syndrome, or worst, disrupting for the sake of shutting down anything that veers from their own agenda.
TY for posting, magical thyme, and for seeing the forest beyond the trees.
mother earth
(6,002 posts)I'm a great admirer of his work and try to follow him steadfastly.
TY, MT.