What’s Really Going On? Tsipras and Grexit

Ok so if you are hip to the game, and I trust that you are, you’ve probably been fretting about a Grexit for several years now. At the very least you have heard of the P.I.I.G.S. countries. For the uninitiated, we are speaking of the countries of the European Union who have been embroiled in a Sovereign Debt Crisis since right after the near-crash of the economy in 2008, namely Portugal, Italy, Ireland, Greece and Spain. The crux of the issue is that each of these countries has far too much public debt but as each country has turned over its control of monetary policy to the European Central Bank(ECB) they cannot simply print money, mess with interest rates, or buy their own bonds(Quantitative Easing) to fix the problems the way that the Federal Reserve does for America. Basically if these governments were private individuals they would be bankrupt, no lender would touch them as though they had the plague…

So let us turn our attention to the G of the PIIGS; Greece. Greece has been a left-leaning socialist state for many a year now. The fact that a majority of their people are employed by the government means that public expenditures are bound to be extreme. Their underlying economy simply cannot support the levels of spending, not that it doesn’t happen elsewhere, it is just that the typical shenanigans that central bankers pull to keep the game afloat are unavailable to the Greeks. Back in 2009 once it became apparent that Greece was in real trouble, the geniuses in the financial world started buying up Greek bonds because the spreads were just soooo juicy. Apparently the big-wigs at Goldman Sachs and Co. did not think that a default was even remotely possible…Perhaps they had some inside information…

Anyways, in 2010 in came riding, on pale horses, the black-knights of the troika(EU, ECB,  IMF) to the apparent rescue with 110-Billion-Euro bail-out. They were not however bailing out the Greeks, they were bailing out the banksters who were holding the Greek bonds. This is analogous to you having no money to pay your mortgage, but the bank; instead of foreclosing on your house they decide to lend you even more money, so you can pay them back, your income has not improved, you still can’t afford your payments and now you have even more interest payments to make on top of it. It is therefore not surprising that the first bailout was followed by more bailouts, like the 240 billion in 2012, and some minor bondholder haircuts(a nice way of saying losses). This second bailout was only granted based on an agreement  with the Greeks to implement austerity measures(cut-backs on spending) and of course the Greeks rioted much in the same fashion that the American F.S.A.(free-shit army) would if they suddenly cut food-stamps.

Things finally came to a head at the end of 2014 when the Greek people elected the left-wing Syriza party on a platform of standing up to the Troika. At first, their leader Alexis Tsipras talked a good game about repudiation of debt and actually had the balls to explain it how it really is. It was pretty encouraging, that is why I was so disappointed, when in the most recent bail-out negotiations, in February, Tsipras completely folded and gave in to every single demand of the bankers. I suspect that the jackals literally put a gun to his head and said sign here. After all they took out JFK and got away with it, what would anyone care about some backwater Greek politician…

Here is me thinking that I shoulda got me some of those Greek bonds when they were on the cheap…but then again I have ethics….which is why I never made to the top of the bankster world, just high enough to get a seat at the table…

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s