I have predicted a coming economic crash and harped on about this again and again.
Nothing has happened to change my mind and I think the crash is closer than ever. All that is needed is an event to trigger an avalanche of debt defaults and derivative calls and the whole house of cards will come crashing down. Some commentators call these "black swan" events and they liken them to that last little snow flake that drops on a huge build up of snow, with the tiny extra weight causing a complete collapse.
One possible black swan event (or snowflake) is a Greek exit from the EU. I don't want an economic collapse which will mean trying to survive in Great Depression like conditions for possibly a decade, but I do despise the European Union. The whole EU monetary experiment that has made banks and not people the centre of economics, and has now created a massive debt based economic system and austerity for increasing numbers of European citizens. Somebody has to say enough is enough and perhaps it will be the Greeks.
Before I hear that the Greeks deserve everything they get because they lived beyond their means we should remember basic true capitalism.
If a bank makes bad loans it is the fault of the bank, and the borrower can be bankrupted but the bank's shareholders (who reap all the profits when the bank makes good loans) also lose out and the bank may even collapse. The losers are the two parties to the transaction. There is nothing wrong with this, and in fact it is healthy in a genuine competitive market.
Not so in the new world of the EU and bank-centric vulture capitalism. Now when a bank makes bad loans the borrower can be bankrupted but the bank is bailed out by government funds in the form of loans from central banks (either from the government of the country itself or in the EU often from other countries). This means the entire country which happened to have a bad bank operating is punished by interest on massive loans and austerity for its citizens. So the individual borrower is punished, the bank where ultimate responsibility lies is not punished, the citizens of the central bank in the lending country are punished (their taxes being socialism for banks) and the citizens of the recipient country (many of whom may be good savers and debt free) are punished. Completely unfair and in fact rewards bad lending practices.
I am constantly amazed that so many intelligent people can't see the flaws in this economic structure and that citizens of supposedly well educated and developed nations put up with it. I believe this is a sign of how all powerful banks have now become. In fact they are so powerful that they have achieved "bail-in" legislation in many nations, with the EU aiming to have this in all member countries within two months. This is no more and no less than blatant theft of depositor funds.
Combined with the bail-ins will be greater and greater restrictions on cash, to force digital banking, which in turn will facilitate bail-ins (the first theft) plus facilitate negative interest rates (the second theft) plus facilitate whatever new and varied taxes (third theft) a bankrupt political-economic system can come up with. I suspect it will be some kind of levy based upon the climate agenda. The speed with which this is happening is frightening.
Over the last seven years since the 2008 financial crisis we have already seen big strides towards an almost exclusive digital financial system and the consolidation of nearly everybody's finances into a smaller and smaller number of mega banks. Even in Australia there are much fewer banks and credit societies. It is easier to slaughter pigs when they are in the same pen, and so it is easy to steal funds when everyone has been herded into a few institutions.
My contempt for the current economic structures is so strong that I want the Greeks (or some other nation) to do an Iceland and break away from the whole corrupt and unjust system. Iceland remember just let the banks fail in 2008 and actually jailed some of the bankers. There was a huge uproar (mostly from British banks that had invested in bad Icelandic banks) but now Iceland is thriving and is a genuine independent and happy nation. We had some modern day Vikings so how about some modern day Spartans!
The media of course never includes a proper discussion of the real economics or of the absurdity and injustice of the Greek situation. You never hear that a "bail in" by the ECB or the IMF does not mean that money is going to the Greek people and their hospitals and schools, it just means that bad banks are being bailed out or other European banks that made bad loans to Greece are being bailed out.
There is a legal concept caused "odious debt". In international law, odious debt is a legal theory which holds that the national debt incurred by a regime for purposes that do not serve the best interests of the nation, should not be enforceable. Such debts are thus considered by this doctrine to be personal debts of the regime that incurred them and not debts of the state. In some respects, the concept is analogous to the invalidity of contracts signed under coercion. Greece should declare much of its debt odious and simply refuse to pay. Also, jail some corrupt former politicians and advisers from merchant banks like Goldman Sachs for good measure.
While the media portrays Greece as a tiny little nation at the mercy of the EU, I read an interesting commentary this morning that perhaps Greece holds all the cards:
"The underlying problem is that financial decisions at the ECB are being made for political reasons. Politicians are trying to pretend that the ECB can continue to create money out of thin air and keep giving Greece a liquidity lifeline. This misguided thinking has consequences, and reality is about to hit home, which raises an interesting question.
Which side is closer to reality? Greece or the so-called troika of the IMF, ECB and EU? I think Greece holds all the cards.
Greece is still generating income from tax revenue, even in its weakened economic state. The problem Greece faces is that it cannot possibly meet its social spending commitments as well as carry its crippling debt burden.
The lenders have refused to grant Greece any debt relief, which was the basic plank of Greece’s negotiating stance with the troika. The troika opposed debt relief because if they grant it to Greece, for the sake of European unity it will need to be granted to every other overleveraged welfare state, which is more than half of the countries in Europe.
Greece can go it alone. It won’t be easy, but it can be done. And it will be much easier to accomplish without the €320 billion debt burden hanging over its head. Greece can just walk away, like Greece and many other countries have repeatedly done throughout history.
Greece wouldn’t be able to borrow again for a long while, but it probably shouldn’t anyway because it has learned its lesson – debt can be unmanageable.
There is one last point about Greece worth mentioning: Greece is clearly preparing for a default.
The Athens government has asked all cities and other governmental bodies to move their available cash into accounts at the central bank. This is being reported in the mainstream media as a way for the central government to get its hands on more cash, but that is not correct.
It is to prevent the ECB from taking this cash of governmental bodies when the ECB finally bails-in the private Greek banks. In other words, in a bail-in the ECB takes the euros deposited in private banks, but not the euros deposited in the central bank. So by putting their euro deposits into the central bank, Greece’s governmental bodies can keep their money out of the hands of the ECB. It’s just more evidence that Greece – not the troika – holds all the cards."
The EU has grown into more than a corrupt economic system. It is also an ever growing inefficient bureaucracy, a meddling nannie state, a gigantic social engineer, a vehicle for United States foreign policy against the genuine interests of Europe, and above all a vehicle for a perpetual war against Christianity in Europe. The collapse of the EU can't come quick enough for me.
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