Tuesday, June 16, 2015

Greece About to Default

... low as Greece edges closer to a possible default | Daily Mail Online
The chances seem to be pretty high. The Vulture Funds are looking to cash in on those credit default swaps...
Wall Street bets on 75% chance of Greek default
You might be receiving questions about the Greek debt situation and concerns about the outcome.
I thought I would share this article with you.

Why Greece’s pension problems are also ours…
It’s looking more and more like Greece will not be able to reach an agreement with its creditors by the end of this month. That’s when more than $1.8 billion in debt comes due.
A last-minute deal is always a possibility. After all, a so-called “Grexit” event would have huge implications … especially for bond markets.
But even if negotiators suddenly come up with a grand bargain, there’s something every single U.S. citizen should take away from this ongoing crisis …
I’m talking about the fact that Greece’s unsustainable pension system is one of the biggest sticking points between Athens and its creditors.
Essentially, the International Monetary Fund is asking Greece to:
•  Cut its pension promises by the equivalent of 1% of the country’s GDP
•  Quickly address the fact that loads of Greeks are taking early retirement, and
•  Enact other cuts to things like state-funded supplementary pensions.
Meanwhile, Athens says it’s unwilling to take any of these steps.
According to an article from the BBC yesterday:
“[Prime Minister] Tsipras rejected demands for pension cuts, citing his country’s dignity.”
And Mr. Tispras himself was quoted as telling a Greek newspaper,
“Further cuts to pensions after five years of looting under the bailouts can only be viewed as serving political expediency.”
Wait — a country preserves its dignity by defaulting on its debts? And making budget cuts to stave off bankruptcy is considered looting?
(Continue reading over at uncommonwisdomdaily.com )
Thanks Larry, interesting read.
I’d say yes, defaulting may preserve the dignity of the people if not doing so means you’ll drop further into poverty and misery. Defaulting isn’t necessarily a bad thing. While some look to make legitimate business, other “investors”, (yes, lets be kind and call them that) that “lend” money to a country that is falling apart and has no way of repaying have other things in mind. Lets look at it from a capitalist point of view. If I invest money with some shady company looking to sell ice in the north pole, and this company I just invested it suddenly fails, who’s fault is it? It’s mine of course. Mine because I’m the one that made a poor decision and invested in something that had little chance of success. That’s the nature of capitalism, sometimes you lose money, sometimes you make it. If you’re always in a win-win scenario, then you’re unfairly rigging the game to your benefit.
The problem you have in countries such as Argentina isn’t that politicians tried to get rid of the corrupt IMF, but rather that they did so only to steal money themselves. In many ways, Argentina did well on its own all things considered after the crisis. The problem was the massive amount of money stolen by the ruling government.
Greece would do well to put its own people ahead of the interest of companies, foreign or domestic. That you don’t bargain with, the lives of your people, their health and dignity comes before anything else. If they can’t come to an agreement with the EU, then they should default and leave the union.
Fernando “FerFAL” Aguirre is the author of “The Modern Survival Manual: Surviving the Economic Collapse” and “Bugging Out and Relocating: When Staying is not an Option”.


Anonymous said...


In general I agree with you re: Greece being concerned first with its people. Maybe your point is that the international community should not have loaned money to Greece to begin with?

However, over the years I have read numerous stories about how Greeks are given generous benefits in many ways out of proportion to their productivity. That is one way the politicians have been taking care of them.

And also stories about how Greeks do all sorts of things to avoid paying taxes--where the money must come from if the government is going to honor its promises for payouts to the people--That is, if they do not borrow that money from foreigners.

People who have vacationed in Greece tell me how restaurant operators and others want cash payment whenever possible--so they don't have to pay tax on the income. And there are stories about homeowners who install swimming pools putting covers over them so they cannot be seen from the air which would drive up the taxes on their property.

Think of it as a spendthrift child who keeps coming back to his parents for loans which he has promised to re-pay. But which he wants to avoid paying if at all possible. And if that child does not have sufficient other income to sustain his lifestyle, well, that puts the parents into a moral dilemma--"He is our child, but he has his priorities wrong and he is taking our money which he will never pay back. Should we cut him off, or just keep paying?"

We know stories of children like this from all along the income spectrum and what happens when they cannot get more money for nothing. The outcome can be terrible for them and for the parents, but sometimes the children actually do manage to change their ways.

Unless the hardliners in power in Greece decide to impose controls on government spending, the result could be pretty hard on the Greek people--much more hard than if they meet their lenders somewhere in the middle.

However, even if they do compromise get past the current standoff, there is no assurance at this time that it will do anything but delay a harsher outcome later.


Don Williams said...

I would concur. People need to realize that our newspapers are often a pack of
liars and exist to promote the agendas of rich men, not to tell us what is going on. You can deceive and mislead as much by omitting the truth as by telling an outright falsehood. In this case, what is NOT being told is how EU banks and countries helped Greek elites steal everything not nailed down and ship it out of the country. Including massive support for tax evasion by the rich Greeks. Why are London's property prices so high? Because every thief on the planet knows he will be welcome there provided he stole on a large enough scale. Look at the Russian oligarchs.

Americans have no reason to sneer --we are being ripped off in the same fashion. Bill Clinton opened up trade with China in 2000 claiming we would all get rich selling GM cars to the Chinese -- how is that working out? Real median income for middle-aged US workers has dropped 17% since Bill had that brainstorm. Meanwhile, the Clintons have picked up $200 million in net worth because rich men feel inclined to pay Bill $700,000 for a speech. ( I've been to two of Bill's speechs -- in my opinion, any fee over $50 is money laundering.)

So, does anyone know what is in that TPP trade treaty Obama is promoting?