Euro! Stop here!

Any day longer will make it worse!

Much worse!

Prior to have to live through an explosion of this Unified European Currency and see the European Union become a battlefield I demand this stupid adventure to be stopped here and now!

At the moment we might have a smallish chance left to settle this suicidal experiment in a controlled and organized way. Any day longer this "Einheitswährung" as it is called in Germany, the "Unity-Currency" of something that is far from being a Unity, is strangling those totally unequal economies and peoples it will become worse; worse than any cut could be today!

Unemployment rates in the South soar with young people under 25 reaching 55% in places, overall a >25% rate of unemployment in Greece, Spain, Portugal, soon Italy are only what we will see next in other states and France, The Netherlands, even the UK once the bread and games are over with. And shortly thereafter in Germany! Combined with severe cuts into training and education all this is the recipe for extreme social pressure and economical depression of unseen dimensions; industrial output shrinks at record rates all over Europe and that is not machinery and production slowing down but complete plants shut off and people send to hell; that hell of trying to find a job in an environment that does not create labour but exported and exports any job possible for the sake of boosting wholesale markups until retail collapses along with purchase power.

If there is any intelligence left in Europe it should, it must act now; neither a bank-union, bank banks, ultra low or even negative interest rates nor any of these stunningly ignorant and all the same money-printing-Ponzi-bonanzas will solve the disaster that one currency pulled over what was an unprepared, inhomogeneous Europe, not unified economically, not legally, not socially, has caused.

As to Pound Sterling people will say it is good where it is, strong and an independent alternative, so why call for the Euro to be ended? The Pound is only so strong like the Euro is weak, independence is history and UK is still part of the Eurasian continent.

The Euro must end here! Der Euro muß weg!

Carpe diem!

Sudoku - but insolvent

Numbers and figures, everywhere...

source

A displacement activity is the result of two contradicting instincts in a particular situation. Birds, for example, may peck at grass when uncertain whether to attack or flee from an opponent; similarly, a human may scratch his or her head when they do not know which of two options to choose.
Displacement activities often involve actions to bring comfort such as scratching, drinking or feeding...

... or playing Sudoku; it suits the German Finance Minister Schaeuble, playing a game on numbers; the limitation to 9 digits might be helpful to understand Draghi's 10¹² figures.

  

And, when there are no more numbers to play with, George has the answer:

“The British Government has run out of money because all the money was spent in the good years,” the Chancellor said. “The money and the investment and the jobs need to come from the private sector.”

  source

It would be interesting to learn more about George Osborne's definition of "the money", "the investment" and "the jobs". I am afraid he would avoid the answer as would he want to tell us the truth he would have to say:

"We are now and finally entering the really bad years as we exported most of the labour and jobs; deliberately, but so cleverly and to such an extent where those countries now fortunately covering what were our jobs will unfortunately not come out with those again any time soon; we failed the investment into education and innovation, training, R&D, any infrastructure and, regrettably, the good money we stuffed into the bad banksters' throats created a snowballing system that we are now lethally hooked on. Yes, you too: private sector; we will have to declare this the biggest Ponzi game in the history of money, ever.

Awkwardly, I can only declare the game over once its over."

As so often good old China has the answer to it all. Here is a must read: some extracts of the letter "To the indebted nations of Europe", written by Huang Xiangyang, a senior writer with China Daily.

We want you to know that we are your friend in your time of need.
...
But that does not mean you should take China's help lightly.
...
To be frank, some of us don't understand why the rich are holding out their hands to the poor and asking for money. For common Chinese people, the wealth of your nations is unimaginable. The average monthly income of your citizens - at around $4,000 in countries such as Germany and Belgium - is 12 times that of the average Chinese citizen. The Chinese workers in the factories in coastal cities have to work 12 hours or longer each day with basically no days off, while workers in France enjoy two months of paid vacation, national holidays and regional festivals each year. If we can save 50 percent of our earnings, surely it should be possible for you to save just 1 percent of yours.
...
Perhaps now that China has shown its goodwill toward you with its chivalrous purchasing of European debts, we can expect some demonstration of goodwill from you. I think you should recognise China's market economy status as soon as possible. After all it is of no substantial significance. China is going to get the status anyway in a few years' time according to the World Trade Organisation rules. Good relations are all about reciprocity.

I hope everything goes fine with you.

Well, first, I congratulate Mr. Xiangyang for being able and allowed to explain our situation to us so clearly; this expresses China's openness and gives us a clear picture of where we are.

Alone, while I thank you for your frankness, Huang, none of our Misters Neo or Lib want to hear the truth; as the cow they hand-in-hand with their generous lobbies milk still fills their buckets it is business as usual. Some play Sudoku, probably helpful to delay Alzheimers; others declare their country for insolvent; both issues and persons have in common: no consequences.

I referred to the below video before... in October 2010; nobody is interested, most laugh but it is not funny:

The game goes on. While America is exploring new ways of not calling the emergency printing of green floods "QEx,-y,-z" the BoE still uses the old fashioned term of Quantitative Easing; yet, Mr. Draghi has made progress, he is much more innovative by digging out old, proven technologies that precisely explain the weapon's function:

Admitted: LTRO (Long-Term Refinancing Operations) sounds what it is but boring; so Draghi's "Dicke Bertha" (Big Bertha) is a much more loving expression and really, being made from pure hard German Krupp steel is a much more trustworthy operation: now totalling to +€1trillion, while facing enormous cuts else- and everywhere. No problem for Draghi's, in fact anybody's Bertha!

Whether you call it LTRO-1 or -2 or-n, Target2, Bad Bank, trash-buying-ECB or Eurobond it is all the same quantitative easing; while they desperately wish all those tricks of QE finally created inflation it is a nonstarter, a pop and no kick while banksters celebrate Christmas and Easter in one every time Draghi fires Thick Bertha; speculatively inflated costs meet deflated goods leading us further into depression. And all we do is watch, some hope, few try to discuss, most couldn't care less.

I might contact Mr. Draghi and explain to him what that "Dicke = thick = Big" in Big Bertha also translates into.

Carpe diem!


P.S. as much as I hate to come back to it: the EURO is history, it is writing its own oblong death's oath. For the Pound it would have been better to have ended in 2002; good memories are golden.

if it wasn't so sad

... I would recommend laughter!

EUROland is celebrating 10 years of - YES! - the Euro!



I am used to hearing b...s..., but that's setting a new record:

Europe builds bridges... and inspires hope... it also has a common currency, the Euro, our money!

The first twelve to introduce the Euro banknotes and coins in 2002 were Belgium, Germany, Ireland, Greece, Spain, France, Italy, Luxembourg, The Netherlands, Austria, Portugal and Finland...

... all of which are now tumbling in different levels of bankruptcy!

One advantage is that there is no need to exchange money when travelling within the Euro area.

True: having cut into education for many years would now make it virtually impossible to calculate a cost of a beer in Spanish Peseta for anybody used to the Pound; sorry, I meant to say: the Euro.

Mario Draghi:

Over the past decade the Single Currency has become a symbol of integration and co-operation and the Euro banknotes and coins have become part of our daily lives. Despite the challenges currently faced by Europe as well as the rest of the world the people of the Euro area can rest assured that the European Central Bank will remain faithful to its mandate of maintaining price stability.

This is a joke, is it it? The decade's best joke. Listen yourself, I guess we all paid for that brilliant marketing BS!!

It reminds me very much of this Gentleman and his reassurance to the World, whereas nobody would want to build a wall...:

_____

It is terribly unreal this world; but then this is reality:

That shows UK's oil production curve in a severe decrease. It suggests the UK is saving for later or it is peak UK oil... More on this you will find here (in German).

_____

And, as I have had no time to blog being heavily involved in PassivHaus(ing) here is something to laugh, even though it might be an old joke but more importantly be very sad:

WALKING EAGLE

On a recent trip to the United States, Tony Blair, Ex-Prime Minister of the UK, addressed a major gathering of Native American Indians. He spoke for almost an hour on his plans for a Carbon Trading Tax for the UK and Europe At the conclusion of his speech, the crowd presented him with a plaque inscribed with his new Indian name - Walking Eagle.

A very chuffed Tony then departed in his motorcade, waving to the crowds.

A news reporter later asked one of the Indians how they came to select the new name given to Tony Blair. They explained that Walking Eagle is the name given to a bird so full of shit...
...that it can no longer fly.

Tell me, please, who of those eagles working for us, our future and themselves still fly? And, is there an Eagle in the walking Euro?
 

Apropos Tony, the Blair, here ...

is more on him, and here on him and his best pal! Oh, if you think I don't like him; that's really giving the facts no justice.

Walking...tssss!

Carpe diem!

daughter's heroine

I chose my mum to be my heroine because she is hardworking,
trustworthy and has to put up with me, my brothers and sister.

as seen in Charleston Academy; Inverness

Trustworthiness: would it not be nice to be able to rely on this virtue? The people of Japan did when they were told by their ingenious and omniscient politicians how brilliant their nuclear power technology, those highly trained managers and technicians were and how safe it all was and is:

TOKYO—Government officials failed to distribute to thousands of people pills that could have minimized radiation risks from the March nuclear accident, government documents show.
The disclosure is the latest evidence of government neglect of emergency procedures in the chaotic days after the disaster, in which an earthquake and tsunami damaged the Fukushima Daiichi nuclear plant.

WSJ ASIA: Japan officials failed to hand out Radiation Pills in Quake's Aftermath

Not even the most simple of all measurements they were capable of initialising. What ignorance, falsehood and stupidity? Failure across the board with no consequences for the failed.

Don't you expect the governments of Euroland to have any clue of what they started when they imposed the EURO upon us and even less when it comes to handle the current crisis out of which there is no way by inventing new dubious ways of accounting (for) ever more debts, every day. That's treating ill patients with more illness; or more debts with more cuts; or trying to safe a dying City from Financial Transaction Tax while betting on a deceasing currency watching what was to be a globalised world and celebrating that nonsense of "we are not part of it"!?

Glad to say: the basics never change; the escape into what is a young sister's and daughter's basic trust into her mum was and is the last resort. Parents: proud as can be; and responsible!

Carpe diem!


more:

Truth or Paranoia? Activists Claim Parts Of Tokyo Are More Radioactive Than Chernobyl

6 months into Japan's cleanup, radiation a major worry

bank recapitalisation, i.e. bailout #?

The book is worth reading, same for Simon Johnson's blog The Baseline Scenario. Yet, as for many economists if not for all the "turning in circles" is becoming a regular form of commenting as, really, this current crisis is now boiling down to the classical Catch-22 situation. I commented on Simon's blog post Should we expect another round of bailouts where he supports not another bail-out but "a full-scale recapitalisation program" for the banks...

“A full-scale bank recapitalization program is required, along with management changes at almost all major European financial institutions.”

Simon,

I disagree; this “full-scale bank recapitalisation” you suggest will be nothing else but another bailout!

Why would any private third party recapitalise any bank, if the bad debts (and any trailing Bad Bank) wouldn’t be taken over by who else but the tax-payer and how would you recapitalise and sort out e.g. the ECB, the Worst Bank next to the FED, I guess, sitting and whining on stacks or call it bombs of worthless PIIGS bonds?

And, what you call “management changes” – I suggest you replace the “almost” by the term “all” and add a “complete” – is what James K. Galbreith put into simple words in March 2009 , already – nobody listened, the Banksters got bigger and even more successful, since:

…as long as the old management is in place, there are no incentives to cooperate in the evaluation you need to make.

There was clearly a systematic failure. But that does not mean there was no criminal energy around.

When a bank is insolvent, the incentives for normal banking practice disappear. They become perverse.

“Perverse” might sound inappropriate, but it hits the nail on the head of a trade that lost its function, purpose and dignity – long ago.

One more point: even bailing out the banks again would not take us anywhere if at the same time this EURO problem wouldn’t be solved. It is a Catch 22 situation; call it a Gordian knot which according to the myth needs one hard swing of a sword to cut it, only; but then there is the Dollar, the YEN, China, peak everything and anything.

All in all it is going to be one long da.. hard touch down!

...

There is not much I could add at this point other than there will be no easy or simple solution for what Mr. Kohl and friends created when they played gods of all currencies and installed a completely immature EURO and at the same time there is no easy way forward for our world that is peak-almost-everything including coming up to 8 thousand million people living beyond its, our habitat's means on a finite and insolvent planet.

Carpe diem.

the truth, here in German...

... nothing but the reality!


;

Dirk Mueller, one of the few speaking it out: the Euro (Greek) rescue packages is money irresponsibly wasted, peculated tax payers' money that nobody will ever see again in a situation that in normal circumstances, yours and mine, would be called "delay in filling bankrupcy", an act heavily enforced by penalty; this is all neglected for the sake of the banks, the banksters, who write the blueprint and dictate the conditions and are busy taking shelter. 

Greece will default once all the Greek bonds and related CDS - and those of the directly related PIGS and friends- will be in the safe tax payers' hands such as the government owned insurances and all kind of public and Bad Banks led by the wonderful ECB and its national fellow players.

All governments are slaves to the banksters, the very same who started it all. James Galbreith put it right, already in 2009 - nothing has changed but got worse for the masses.

Carpe diem!

Greece: a twofold problem...

 ... and a reset solving it, only!

 

Here is a link to watch a CNBC video with Michael Spence talking about Greece: he sees Greece's problem having two parts:

• sovereign debts
• lacking competitiveness

No surprise after discussing this for many months; he obviously wants to keep the logical rest of his analysis a secret; may be he wants to be invited back for coffee to be interviewed again; he should have added that certainly all the PIGS or GIPS (or into what ever you mix them) and many more of those in total 17 Eurozone countries face the same twofold burden; in fact Germany might be the only country being still competitive - however, the German sovereign debt problem is getting bigger with every cheque and guarantee signed and with every junk paper the ECB prints money against. In addition Germany's competitiveness will be hit hard, abruptly and brutally once its so-called European partners will be sick to the back teeth with austerity, cuts, unemployment, no-future chances, sell-offs and still more people demonstrating 24/7 against what more and more will be named "The rich Krauts' revenge!".

Michael Spence also mentions a possible sabbatical for Greece from the EURO; that wouldn't change a thing; only once the majority felt like taking one or two or more sabbaticals we might as well turn times back, press reset,  to 1979, the year when the very successful EMS was introduced.

I believe this reset is necessary; it is strongly advisable, I hope it will come soon! If it then takes us back to 1979, good! If the reset comes too late it might throw us back further; ante 1958 (Treaties of Rome); hopefully not beyond?

Carpe diem!

euro's suicide, round III

Getting ready for OE x + QE y + ...

With Axel Weber out of the race for becoming ECB president and Ireland and Portugal printing more EUROs to pay their (bankster's) bills the flood gates could not be open(ed) any wider for the next rounds of Quantitative Easing... and the ongoing competition for the weakest currency showing the highest inflation. There could come a time where paying back EURO debts will be cheap...

Carpe diem!

new year: old news

All the best for another year of more of the same: unsolved but mixed problems! Take it easy!

On the Euro and the Yuan;
China and Grangemouth;
Affordables, efficiencies
and the Scottish Expo!

The Euro's main function now during its finale seems to be to assist the US $ in paving the path for the Chinese Yuan to become the world's sole key currency. Sounds odd?

Nothing odd about China's intelligent moves to install themselves as the one and only superpower while the decadent rest watches and applauds. And really, for all their investments they use that green paper covered in rot and mold while most of their investments into e.g. deprived harbours in Portugal, Greece or Scotland are covered by petty cash:

The operators of the Grangemouth oil refinery have struck a deal with China's largest oil and gas producer to safeguard the future of the facility.

At the weekend, it was announced that Scotland and China had sealed a major green energy deal, worth $10m (£6.4m).

Petty cash that opens a flood gate - for China:

It will see technology pioneered in Scotland used at a new renewable energy conversion plant in China.

Combined with technology transfer: clever deals, China! I would like to see that "technology pioneered in Scotland"; to me it rather seems like Grangemouth needs an urgent upgrade itself to possibly understand that 20 or 30 metre high flare flames from burning off flare gas 24/7 could be considered as an substantial waste of energy, not to mention an enormous carbon belcher - obviously it is not any financial problem: we, the stupid customers using stupid gas pumps or desperately in need of energy to fight the cold in our eco-houses will be paying the bill: anyway!

Oh: and two flames are heating up that frosty sky above those human ecotopes at least twice as efficient!

Those Low Energy Home Tenants sitting in eco-friendly homes representing all those stupid marketing credentials while facing sky high power bills would probably love to have their share in those Chinese flames of Grangemouth.

"Some of them are switching the heating off altogether because they cannot afford to keep it going. To build eco-houses that people cannot afford to live in is just not right."
The development, a mix of flats and two and three bedroom houses, was built by Tulloch Homes Express just over 12 months ago.

The properties are fitted with under-floor heating powered by an exhaust heat pump system which recycles hot air. In its 2010 annual report Cairn boasted that the homes would provide tenants with low heating and water bills.

By the way, I commented on the article; must have been lost for many days or could it actually be the case that the Inverness Courier does not want to lose an express client?

This is old news, again an unsolved but an ever increasing problem; the modern society's version of "biting the hand that feeds one..." called progress, growth, prosperity and a human life!? In Germany it is currently called "dioxin crisis", you could also name it "Haiti" or "banksters" or just "peak globe"!

click to enlarge

That last August, remember? I dared to write about our visit to the Scottish Housing Expo, a lot of criticism, some asked me why I would be so grumpy? No mention of me being unfair, wrong or untrue. Here is an update on its sales:

Sales of properties at the site of Scotland's Housing Expo have been mixed almost five months after the event finished in August last year.

Albyn Housing Society said it had sold 10 of its 11 homes at Balvonie Braes in Inverness.

The organisation added that there was interest from someone in its remaining property.

Highland Housing Alliance, one of the expo organisers, has still to sell all of its 27 homes.
The event, showcasing eco-friendly and energy efficient designs, was held during the whole of August.

Backed by Highland Council and the Scottish government, the expo attracted 30,000 visitors.

This "backed by ..." you can find here; a +two million package with mixed sales and modern cladding:

No, I am not a grumpy old man; not yet, just an old, slightly mixed sarcastic realist.

Carpe diem!

Happy Christmas from Nigel Farage

Greece is on strike, Spain will be down graded, Belgium and Portugal are sha(c)king; Ireland is forced into saving (more and more), UK students meet Charles while Berlusconi is paying €500k per vote to stay in power; this all allows Merkel and Sarkozy to run the show, order more paper and China to buy what's left.

Carpe diem!

it is the race to the bottom...

Finally some experts and insiders are taking this currency war for what it is, a race for cheap labour and a war on jobs! From 2:45 it starts to become interesting - but you read most of the arguments earlier in this blog.

It is a matter of time, only, until the Pound will be effected. Latest when one of the PIIGS fails or Germany can't sign the next cheque it will become dramatic, really volatile and totally unpredictable. Of course, they will try to delay this as long as possible because once they fail German export will be collapsing. The big players have taken all precautions possible, the rest will have to shrink and fight for survival.

Carpe diem!

it's either out ... or out ...

... but who, how and when?

Nigel Farage in an interview with Michael Mross on the EURO, it having been a mistake, the timing of its exodus and the undemocratic European Union:

Carpe diem!

MSTYV = PIIGS

It is never too late to find out interesting things even about something that is going to be history, soon.

Every EURO coin has a national side; an EURO banknote does not, but you can still find out, which of the EURO countries printed it. Was that done to allow for a cheap exit?

M stands for Portugal, S for Italy, T for Ireland, Y for Greece and V for Spain. May be it makes sense to check what you have and get as the EUROs of those countries might soon be traded separatelly and most probably at a fraction of the likes of X (Germany), U (France) or P (Netherlands) which will make it easy to lead us down the garden path.

The letter "J" was set aside for notes printed by the U.K. - I wonder whether we will ever have to watch out for those?!

Carpe diem!

perspectives

energy, EURO, warming, snow
and other gates and crunches

The snow has piled up higher than ever during our years here in the Scottish Highlands; yet, its sheer mass and the fact that it came in just one 36 hour blizzard inspires to go back and dig out the experts' headlines about the North Atlantic Drifts slowing down etc. Together with that impressive photo documentary on ICE it could make sense. "Could" because it certainly needs more scientific background and evidence than what one lay man can deliver.

However, while I rather stick to the "collecting" of evidence and perspectives I found the below links interesting:

Bill Gates on energy






Al Gore's opinion: NYT OP-ED Contributor


Kate Sheppard: Most Credible Climate Skeptic Not So Credible After All


BBC's Robert Peston: Why withdrawal of Rock guarantee matters


CrisisMaven: The Euro as a Basket Case



Nice views.


Carpe diem!

euro's song of swan

EURO is history!

Its failure was programmed when this artificial currency was forced over so different economies such as the German and the Portuguese or the French and the Italian; during the last weeks there was not even the slightest hint that any or a certain group of the member states, the ECB or the EU is working on a plan to safe the currency by installing measurements that would allow economies of different levels and needs (!) gather under the same currency roof.

Not that I know all the answers and it very likely is long past 12 o’clock but it is obvious that there are no solutions to heal the programme’s failures.

To collect vast sums of money for filling a Greek hat (how often?) will see a number of other hats pop up, some larger, some smaller; the economies slipping almost on a global scale emphasising the battles for labour and commodities, also for weak currencies and low labour cost, this all inflamed by the banksters' egoism will all but protect the EURO.

So the question is: "What’s next?". Not so much a “how does this end?” but rather a “what will we be left with?” and “how will we go on?”.

Anyway, it might take a little or much longer; but an awful end might shorten an awful time!

Carpe diem!

what took you so long, oh lord?

telegraph: Lord Mandelson backs state investment bank plan

The Business Secretary believes that a state-run bank could create funding streams for sectors that traditional banks might otherwise ignore.

It took the politicians far more than 12 months to finally understand that the collapse and then absence of "traditional banking" in connection with the banksters' egoism is drying out the economy; now of all things the German kfw has been detected as the possible bank-business-model that could help supplying the markets with credit. That's a joke?! Just remember the IKB disaster!

1
By the way, the proposed €5bn that Germany has to throw into Greek's hat to collect the €25bn will be printed by the same kfw. What a career from the Marshall Plan to the "global economic crunch super print shop"?

2
kfw = "Kreditanstalt fuer Wiederaufbau" meaning something like the "bank institute for reconstruction".

3
Why seek far afield and go through all the expense to "learn" from kfW? We own the RBS where "RBS" could well stand for "Re-Build-from-Scratch"!


Carpe diem!

status quo - february 2010

I have little to add to GEAB's blunt analysis and summary of what has (not) been achieved and what we might see happening unless some smart people come up with even smarter ideas to cut that Gordian knot we - driven by our super smarties of politics and economics - have managed to get ourselves into.

For the article in German language (French, Spanish) please see here.

- - - - -

LEAP/E2020 is of the view that the effect of States’ spending trillions to « counteract the crisis » will have fizzled out. These vast sums had the effect of slowing down the development of the systemic global crisis for several months but, as anticipated in previous GEAB reports, this strategy will only have ultimately served to clearly drag States into the crisis caused by the financial institutions.

Therefore our team anticipates, in this 42nd issue of the GEAB, a sudden intensification of the crisis in the second half of 2010, caused by a double effect of a catching up of events which were temporarily « frozen » in the second half of 2009 and the impossibility of maintaining the palliative remedies of past years.

As a matter of fact, in February 2010, a year after us stating that the end of 2009 would mark the beginning of the phase of global geopolitical dislocation, anyone can see that this process is well established: states on the edge of bankruptcy, remorseless rise in unemployment, millions of people coming to the end of their social security benefits, falling wages and salaries, limiting of public services and disintegration of the global governance system (failure of the Copenhagen summit, growing Chinese/US confrontation, return of the risk of an Iran/Israel/USA conflict, wars worldwide… (1)). However, we are only at the start of this phase for which LEAP/E2020 will supply a likely timeframe in the next GEAB issue.

The sudden intensification of the global systemic crisis will be characterised by the acceleration and/or strengthening of five fundamental negative trends:

. the explosion of the bubble in public deficits and a corresponding increase in state defaults
. the fatal impact of the Western banking system with mounting debt defaults and the wall of debt coming to maturity
. the inescapable rise in interest rates
. the increase in issues causing international tension
. a growing social insecurity.

In this GEAB issue our team expands on the first three trends of these developments including an anticipation on Russia’s position in the face of the crisis, as well as, of course, our monthly suggestions.

In this public announcement, we have chosen to analyse the « Greek case », on the one hand because it seems indicative of what 2010 has in store for us, and on the other because it is a perfect illustration of the way in which news and information on the world crisis is moving towards « make-believe news » between blocs and interests which are increasingly in conflict. Clearly it is a « must » to learn how to decipher worldwide news and information in the months and years to come which will be a growing means of manipulatory activity.

Progression of the percentage of net new U.S. debt bought by China, net new U.S. government borrowing, percentage of outstanding U.S. Treasuries owned by China (2002-2009) – Sources: US Treasury, Haver Analytics, New York Times

The five characteristics which make up the « Greek case » into the tree with which one tries to hide the forest

Let’s take a look at the « Greek case » which has concerned the media and experts for several weeks now. Before entering into the detail of what is happening, there are five key points to our anticipation on the subject:

1. As we stated in our anticipations for 2010, which appeared in the last GEAB issue (GEAB N°41, the Greek problem will have disappeared from the international media’s radar several weeks from now. It is the tree used to hide both a forest of much more dangerous sovereign debt (to be precise that of Washington and London) and the beginning of a further fall in the world economy, led by the United States (2).

2. The Greek problem is an internal issue for the Eurozone and the EU, and the current situation provides, at last, a unique occasion for the Eurozone leaders to require Greece (a case of « failed enlargement » since 1982) to leave its feudal political and economic system behind. The other Eurozone countries, led by Germany, will do the necessary to make Greek leaders bring their country into the XXIst century in exchange for their help, at the same time making use of the fact that Greece only represents 2.5% of Eurozone GDP (3) to test the stabilisation mechanisms that the Eurozone needs in times of crisis (4).

3. Ango-Saxon leaders and media are using the current situation (just like last year with the so-called banking tsunami coming from Eastern Europe which was going to carry the Eurozone away with it (5)) to hide the catastrophic progression of their economies and public debt and attempt to weaken the attractiveness of the Eurozone at a time when the USA and the United Kingdom have increasing difficulty in attracting the capital which they so desperately need. At the same time Washington and London (which, since the coming into effect of the Lisbon Treaty is completely excluded from any management of the Euro) would be overjoyed to see the IMF, which they control completely (6), brought into Eurozone management.

4. Eurozone leaders are very happy to see the Euro fall to 1.35 against the Dollar. They well know that it won’t last because the current problem is the fall in the value of the Dollar (and the Pound Sterling), but they appreciate this « whiff of oxygen » for their exporters.

5. The speculators (hedge funds and others) and banks heavily involved with Greece (7), have a common interest in trying to bring about rapid Eurozone financial support for Greece, since otherwise the rating agencies will, unintentionally, pull a fast one on them if the Europeans refuse to dig into their pockets (like the scandalous actions of Paulson and Geithner over AIG and Wall Street in 2008/2009): indeed a lowering of Greece’s rating will plunge this small world into the throes of serious financial losses if, for the banks, their Greek loans are similarly devalued, or if their bets against the Euro don’t work out in due course (8).

2008 comparison of the deficits and Eurozone GDP of Portugal, Ireland, Greece, Spain, France and Germany – Source: Der Spiegel / European Commission, 02/2010

Goldman Sachs’ role in this Greek tragedy… and the next sovereign defaults

In the « Greek case », just like in every suspense story, a « bad guy » is needed (or, following the logic of an old-style tragedy, a « deus ex machina »). In this phase of the global systemic crisis, the role of the « bad guy » is usually played by one of Wall Street’s big investment banks, in particular by the leader of the gang, Goldman Sachs. The « Greek case » is no different as indeed this New York investment bank is directly implicated in the budgetary conjuring tricks which allowed Greece to qualify for Euro entry, whilst its actual budget deficits would have disqualified it. In reality it was Goldman Sachs who, in 2002, created one of its cunning financial models of which it holds the secret (9) and which, almost systematically resurfaces several years later, to blow up the client. But what does it matter, since GS (Goldman Sachs) profits were the beneficiary!

In the Greek case what the investment bank proposed was very simple: raise a loan which didn’t appear in the budget (a swap agreement which enabled a ficticious reduction in the size of the Greek public deficit (10). The Greek leaders at the time were, of course, 100% liable and should, in LEAP/E2020’s opinion, be subjected to Greek and European political and legal process for having cheated the EU and their own citizens within the framework of a major historic event, the creation of the single European currency.

But, let’s be clear, the liability of the New York investment bank (as an accomplice) is just as great, especially when one is aware of the fact that Goldman Sachs’ vice-president for Europe was, at the time, a certain Mario Draghi (11), currently President of the Italian Central Bank and a candidate (12) to succeed Jean-Claude Trichet at the head of the European Central Bank (13).

Without wishing to pre-judge Mr. Draghi’s role in the affair of the loan manipulating Greece’s statistics (14), one should ask oneself if it wouldn’t be worthwhile to question his involvement in the affair (15). In a democracy, the press (16), like parliaments (in this case Greek and European), are expected to take on this task themselves. Considering the importance of GS in world financial affairs these last few years, nothing that this bank does should leave governments and legislators indifferent. It is Paul Volcker, current head of Barack Obama’s financial advisors, who has become one of the strongest critics of Goldman Sachs’ activities (17). We already had the occasion to write, at the time of the election of the current US President, that he is the only person in his entourage having the experience and skills to push through tough measures (18) and who, at this moment, knows what, or rather whom, he is talking about.

With this same logic, on the issue of transparency in financial activities and state budgets and using the ill-fated role of Goldman Sachs and of the large investment banks in general as an illustration, LEAP/E2020 takes the view that it would be beneficial for the European Union and its five hundred million citizens, to exclude former managers of these investment banks (19) from any post of financial, budgetary and economic control (ECB, European Commission, National Central Banks). The mixing of these relationships can only lead to even greater confusion between public and private interests, which can only be to the detriment of European public interests. To begin with, the Eurozone should immediately require the Greek government to stop calling on the services of Goldman Sachs which, according to the Financial Times of 01/28/2010, it still uses.

If the head of Goldman Sachs believes he is « God » as he described himself in a recent interview (20), it would be prudent to consider that his bank, and its lookalikes, can seriously behave like devils, and it is therefore wise to draw all the consequences. This piece of advice, according to our team, is valid for the whole of Europe, as well as every other continent. There are « private services » which clash with « public interests »: just ask Greek citizens and American real estate owners whose houses have been repossessed by the banks!

To conclude, our team suggests a game to convince those who seek where the next sovereign debt crisis will surface: simply look for those states which have called upon Goldman Sachs’ services in the last few years and you will have a serious lead (21)!

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Notes:

(1) The recent statements of G. W. Bush’s Secretary to the Treasury, Hank Paulson, about the fact that Russia and China plotted to bring down Wall Street in the autumn of 2008 show the extent of the big global players’ paranoia. Source: Daily Mail, 01/29/2010

(2) During the last four years our team has regularly exposed the anomalies in calculating US GDP. We will make no further comment here on this very « Greek » aspect of American statistics. As to the development of the American economy over the next few months, it is sufficient to note that the Truck Tonnage Index went into freefall in January 2010, just as it did at the end of the first half of 2008. Source: USAToday, 02/11/2010

(3) See the chart below which puts the « Greek problem » into proportion against Eurozone GNP.

(4) For which GEAB has emphasized the necessity for four years, as well as the wide public support (an average of more than 90% according to GlobalEurometre monthly polls) a Eurozone economic governance could count on.

(5) As a reminder here, GEAB N°33 was one of the rare media sources which, in Spring 2008, revealed the dishonest and manipulative aspects of the big fear of a « banking tsunami » coming from Eastern Europe which was supposed to carry away the Eurozone banking system. At the time, the Euro had fallen to much lower levels than those seen today…only to rise again several weeks later. For those who wish to understand the current media position, we suggest a re-read of the GEAB N°33 public communiqué.

(6) The fact that a Frenchman is its head changes nothing.

(7) Source: Le Figaro, 02/12/2010

(8) That said, media manipulation in this area is remarkable. These last few days one has seen/read/heard almost everywhere that huge sums have been bet on a fall in the Euro, some eight billion US Dollars. In fact this « huge sum » is only a drop in the ocean of the world currency markets which turn over several hundred billion USD a day. Source: Financial Times, 02/08/2010

(9) With the same highly constructive regard for the countries where it operates as that which led it, in the United States in 2006/2007, to provoke a fall, for its own benefit, in the value real estate based financial products which it had sold to its own clients.

(10) Sources: Spiegel, 08/02/2010; Le Temps, 13/02/2010; Reuters, 09/02/2010

(11) During Italy’s preparation for Euro entry, he was Director General of the Italian Treasury. Sources: Bank of Italy; Wikipedia; Goldman Sachs.

(12) Very strongly supported by the London and American financial milieux, to which we have already alluded several months ago in one of our reports… and, of course, by Silvio Berlusconi. Source: Sharenet/Reuters, 02/10/2010

(13) His strongest adversary is Axel Weber, current head of the Bundesbank.

(14) What would be surprising is that the European head of the bank making a loan intended to hide a portion of a country’s public deficit, and himself the former Treasury head of a neighbouring country, should not be aware of such an undertaking.

(15) And, considering his past positions, one can only appreciate his sense of humour when he calls for a reinforcement of Eurozone economic management. Source: Les Echos, 02/13/2010.

(16) Which, for the present, satisfies itself by copying articles from the Anglo-Saxon press casting the Greek case in the role of « wrecker of world markets » repeating at length that the Euro will fall… whilst it trades at a level which the same media thought it impossible to achieve only four years ago.

(17) Source: Reuters, 02/12/2010

(18) He belongs to that generation of Americans who built the « post-war US empire », who know its weak points and exactly how it works, contrary to Summers, Geithner and others like Rubin. Our team rarely compliments Barack Obama, but if he continues to listen to the likes of Paul Volcker, he is definitely moving in the right direction.

(19) Our team knows, from first-hand knowledge, that there once was a time, thirty years or so ago, when investment bankers would take action having the long term interests of their clients at heart. This period is long gone and now they only act in their own short-term interests. From this, we should draw the inevitable conclusions and exclude them access to key posts in the public service, rather than try and reform their behavior. If there were child investment bankers (as there are child soldiers) one could, perhaps, hope to save a number of them from their addiction to short-term profits, but for adult investment bankers, it’s far too late.

(20) Source: Times, 11/08/2009

(21) For the private sector, ask Lehman Brothers, AIG…they will confirm its accuracy.

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Carpe diem!

greek times in piigs' land

Did anyone notice?


All these ECB, IMF, FED, BoE and more activities to fill holes and bridge gaps, alter accounting rules, invent pseudo-new measurements, install relief valves or boosting pumps, bad banks or stimulation packages - all this will not solve any of the system’s basic failures. It won't make a blind bit of a difference.

If it is not Greece that threatens to face the world’s economies with sudden death it will be any other one of the PIIGS, or Japan, or Belgium, or in fact just name any country; you will hardly fail to hit a “fit for failure” candidate.

What would it take to put a country like Greece back on track (if it ever was on one)?

That's simple: in today’s world it would be a competitive currency that allowed Greece to offer cheap labour; they would have to have low cost energy and affordable commodities at hand; a well-trained, skilled and willing workforce would be next on the wish list to not only fight but win the battles against countries like China, India, Russia…; of course, its domestic infrastructure from roads to collecting taxes would have to be sound and in working condition.

It is a pity that at the same time and just by chance every single one of the fellow countries are on the same trip enhancing the battles even more for exactly the same golden pitchers: labour, energy, commodities: growth for growth sake while facing the limited horizon of what can be stolen from the rest of the crowd.

That’s all daydreaming; in reality we have gone too far into that cul-de-sac that now does not even allow turning.

Carpe diem!