The Beginning Of The End
The Beginning Of The End By Michael T. Snyder - Kindle Version

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A Warning Sign For The World

Any financial system that is based on debt is doomed to fail.  Today, we are living in the greatest debt bubble that the world has ever seen, and if all of a sudden people could not use credit to buy things our economy would immediately ground to a halt.  Unfortunately, no debt bubble can last forever.  When this current debt bubble finally bursts, faith in the financial system is going to disappear, credit is going to freeze up and there is going to be a massive wave of bank failures.  Right now, Greece is a warning sign for the world.  Nobody wants to lend money to Greece, the Greek banking system is dying, one out of every four businesses has already shut down, unemployment is soaring and the Greek economy has now been in recession for five years in a row.  Sadly, the economic implosion in Greece is rapidly accelerating.  The Greek economy shrunk at a 7 percent annual rate during the 4th quarter of 2011.  That wasn't supposed to happen.  Things were supposed to be getting better in Greece by now.  But instead the Greek depression is getting even worse, and very soon the rest of the world is going to be going through what Greece is currently experiencing.

Unfortunately, most in the mainstream media are treating what is happening in Greece as an "isolated incident" rather than as a very serious warning sign for the world.

Thankfully, there are at least a few reporters out there that are realizing the gravity of the situation.  The following is how one reporter from the New York Times recently described what life is like in Greece now....

By many indicators, Greece is devolving into something unprecedented in modern Western experience. A quarter of all Greek companies have gone out of business since 2009, and half of all small businesses in the country say they are unable to meet payroll. The suicide rate increased by 40 percent in the first half of 2011. A barter economy has sprung up, as people try to work around a broken financial system. Nearly half the population under 25 is unemployed. Last September, organizers of a government-sponsored seminar on emigrating to Australia, an event that drew 42 people a year earlier, were overwhelmed when 12,000 people signed up. Greek bankers told me that people had taken about one-third of their money out of their accounts; many, it seems, were keeping what savings they had under their beds or buried in their backyards. One banker, part of whose job these days is persuading people to keep their money in the bank, said to me, “Who would trust a Greek bank?”

Can you imagine?

Greece is experiencing a full-blown economic collapse and nobody can see a light at the end of the tunnel at this point.

As I have written about previously, the overall rate of unemployment in Greece has now risen above 20 percent and the youth unemployment rate in Greece has soared to an astounding 48 percent.

Deleveraging can be an extremely painful process.  Greece has been forced to try to reduce the size of its budget deficit, but every time it cuts government spending that causes economic activity (and thus government revenues) to slow down as well.

Now the EU and the IMF are demanding that even more very painful austerity measures be implemented in Greece even though Greece is already experiencing a full-blown depression.

The EU and the IMF are demanding that Greece fire 15,000 more government workers immediately and a total of 150,000 government workers by 2015.

The EU and the IMF are demanding that wages for government workers be cut by another 20 percent.

The EU and the IMF are demanding that the minimum wage be slashed by more than 20 percent.

The EU and the IMF are also demanding significant reductions in unemployment benefits and pension benefits.

Of course all of those cuts are going to make the short-term economic conditions in Greece even worse.

The rioting, looting and burning of buildings that we are witnessing right now in Greece is likely to continue for quite some time as exasperated citizens attempt to express their frustrations to politicians that simply do not seem to care.

According to the National Confederation of Greek Commerce, recent rioting resulted in damage to 153 businesses in Athens.  45 of those businesses were totally destroyed.

You can view some stunning footage of the current rioting in Greece right here.

Despite all of the austerity measures that have already been implemented, the truth is that Greece is very likely to default soon anyway.

There is a very good chance that the new austerity agreement that the Greek parliament just approved will never be implemented.  There are new elections scheduled for April and the current party in power is polling in the single digits.

The new Greek government is likely to look much different from the current one, and nobody knows for sure if the new government will follow through on any of the promises being made by the current government.

In addition, the German parliament must approve this new deal with Greece, and the German parliament is not scheduled to vote on it until February 27th.  Considering the mood in Germany right now, approval is not guaranteed.

So there are all kinds of things that could go wrong with the "deals" that are currently being discussed.  The truth is that a Greek default in the coming months seems to become more likely by the day.

Some in the financial world almost seem eager for a Greek default.  The following is what Jon Moulton, the chairman of Better Capital, recently told CNBC....

"If I was Greek, I wouldn’t be going for these measures, I’d be going for default and getting it over with. Would you like two to three years of pain or 20?"

But a disorderly Greek default would not be a pleasant thing for the global economy at all.  A recent article in the Guardian detailed what some of the consequences of a Greek default and exit from the eurozone might be....

But default and "re-drachmatisation" would be a costly and chaotic process. In the long term the euro might be strengthened if some of its weaker members headed for the door. But in the short term banks across the eurozone might have to be closed to prevent a run on the single currency as investors speculated about which country might be next. A new wave of bank nationalisations would be likely to follow as lenders counted their losses on now worthless Greek debt.

Capital controls would have to be imposed and borders shut to stop money flooding out of Greece. Portugal, Italy and Spain would come under intense pressure from investors wary about the risk of another victim. Banks everywhere, already reluctant to lend, would cut back hard, nervous about their exposure to the bonds of all Europe's crisis-hit states.

And the financial crisis in Europe is going to continue to spread well beyond Greece.  Moody's Investors Service just downgraded the credit ratings of six European nations.  The following is how Bloomberg described the downgrades....

Spain was downgraded to A3 from A1 with a negative outlook, Italy was downgraded to A3 from A2 with a negative outlook and Portugal was downgraded to Ba3 from Ba2 with a negative outlook, Moody’s said. It also reduced the ratings of Slovakia, Slovenia and Malta.

Countries such as Italy, Spain, Portugal, Ireland and Hungary are heading down the exact same road that Greece has gone.  Greece was the first one to experience a full-blown depression, but soon Greece will have a lot of company.

Greece is most definitely a warning sign for the world.  If you keep recklessly piling up debt, eventually a day of reckoning comes.  It is inevitable.

But Barack Obama does not seem to understand this.  He continues to pile another 150 million dollars on to our national debt every single hour.  He knows that cutting spending significantly right now would hurt the economy and that would significantly hurt his chances for another term.

Needless to say, Barack Obama is not likely to do anything that is going to significantly hurt his chances for another four years in the White House.

So we continue to roll on toward disaster.

The U.S. financial system is like a car with no brakes that is heading straight toward a 5,000 foot drop at 100 miles an hour.

It is all going to seem like fun and games to some people until we hit the canyon floor.

Once that happens, nobody will be laughing.

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  • THE GUARDIAN

    One should not think that the evntual fall of Greece will end all. Be ready the United Nations
    is ready with Bancor ( new paperless currency ) that private banks will have no part of. The word is they will cancel out all debt!
    Think of the possibilities…no arms sales, no drug sales Etc. Will this be world peace?

    • Highspeedloafer

      Son, You need to grab a bible, get in a bible preaching church and learn what is truly going on. The peace you are dreaming of is a false peace which will end very abruptly and culminate in a global war.

  • Mixer

    Richard,
    Believe me, law enforcement and the military are aware of what is going on, and are watching very carefully. When the thugs make their one world order move, they better pack a lunch…..

  • Sid Davis

    The US Constitution in Article 1, Section 8 authorizes Congress to COIN money, and in Article 1, Section 10 prohibits the States from making gold and silver COINS legal tender. Article 1, Section 8 does not authorize Congress to print money, and if fact the first draft of the US Constitution in Article 1, Section 8 included the authorization to print bills of credit (paper money), but after debate this provision was removed. The Founding Fathers knew well the creation of the boom/bust cycle and depreciation of bills of credit that had occurred when Colonial governments and the Continental Congress printed them and spent them into circulation, and did not want the economic ravages of this imposed on their posterity.

    The Federal Reserve Act of 1913 undid what the Founding Fathers gave us in the Constitution. The purpose was not to enrich the Federal Reserve Bank itself, but to have this central bank create the reserves for Commercial Banks to use to create checking account balances out of thin air and loan them to governments, businesses and individuals, at interest. This resulted in a huge expansion of debt of the public where interest was paid under these indenture agreements to the banks. And the end result was transfer of the wealth of the average person to the Commercial Banks.

    Few people understand the mechanism. We have no money in circulation. All we have is bank credit. You work and your employer writes you a check to transfer bank credit from his name to your name when you deposit the check in your checking account with your bank. You may put some of this into a savings account or CD with your bank, these being just another form of bank credit. You may cash a check to get Federal Reserve Notes, which are just bank credit of the Federal Reserve Bank instead of your local bank.

    When people need money and can’t earn enough, they often borrow from Commercial Banks. The banks don’t loan you another customers money; there is no money, just bank credit. What they do is have you sign a note payable to them and they add an equal amount to your checking account balance, creating more bank credit out of thin air. Of course you pay interest on the loan of this magic bank credit. The bank uses their own reserves, which are ultimately provided to them by the Federal Reserve Bank in order to cover any interbank demands if their customers write checks to customers of other banks. Ultimately the reserves of the banking system are created out of thin air by the Federal Reserve Bank either by making loans out of thin to the Commercial Banks or by buying debts, mostly debts of the federal government.

    It is all one big scam where banks got the federal government to remove all gold and silver coins, real money, from circulation and use as legal tender, and forced us to use bank credit instead of money. Unlike gold and silver coins which were provided by mining companies digging precious metals out of the ground and taking them to the US Mint to be coined, and then spending them to pay their bills, bank credit is only created by banks and mostly loaned into circulation, capturing us as indentured servants. What the economists falsely define as money is really just bank credit. The M2 “money supply” in 1932 was $50 billion (which actually included some gold and silver coins in addition to Federal Reserve Notes, checking account balances and savings account balances) and today it is $9,450 billion (all bank credit – no gold or silver coins).

    That is one slick scam to have issued this huge amount of bank credit to collect interest on. But it is worse than just the theft of wealth via interest payments, because the issuance of bank credit drives up the prices of things as it stimulates economic activity (boom phase), driving down the value of the bank credit in the process. But when we become so burdened by the indenture agreements (Notes Payable to the banks)we signed when we borrow bank credit, the economy seizes up as most of our income goes to the banks as interest and principal repayments, leaving us little to spend elsewhere, and the bust phase arrives. (Note that when we pay the banks principal and interest, outstanding bank credit decreases, dragging down credit in circulation.) People become scared and hold onto what bank credit the can, until the whole scam freezes up.

    Then they just start over with some new version of scamming us out of our wealth. The banks own the venal politicians, and the public goes through the charade of elections to give them the illusion that they control the government instead of the corporations.

    If you will forgive me the pun, give them credit; they have played us well.

    • mondobeyondo

      You are correct.

      There is no real money in circulation. Just a bunch of IOU’s (also known as Federal Reserve Notes), promising a payment that they know they can’t deliver on.

      Real money is gold and silver.

  • Θάνος

    i am Ellinas, i am a firefighter, my fire station is in a building without heating the last 4 days with -11C outside but it is ok with that,they reduced my wage about 200 euros (from 1550 to 1350 11 years service married 1 child and a home loan of 550 euros),there is an average tax of 18%
    on goods and services and if an additional tax turns out i will not able to for it.
    When 5000 euros debt accumulates to the state i will be jailed and that is a fact i am preparing for.
    I do no not have the money to pay for my country’s debt it is death or jail.

  • Θάνος

    a sample of Greek cost of living

    o.4 kg bread less than i pound 1,25$
    1 liter (0.264172052 US gallons) milk 1,5$
    1 liter (0.264172052 US gallons) gasoline 2,21$

  • Chiefosage

    It seems like a real plan when one knows that the banking elite have contemplated the ease of ownership of Greece by offering to buy the whole country for pennies on the dollar. What a plan! I believe that is what they will do.

  • elder

    it is no wonder to me, that The Greece, which is the foundation of these current civilizations is going to suffer first and most of all. The reason to my understanding of all this is that I know the history the way it is, and the sooner we learn new, harsh ways of surviving, the better for us, therefore, The Greece has that privillage naturally, and deserves it too.

  • DB200

    The EU and the IMF are demanding that Greece keeps bleeding but give – a.o. through the ECB – enough support that the patient just survives.

    In the meantime, all government owned assets change hands for a reasonable price, so that interest can be paid back. Once everything is privatized, the country goes into default. The Greek are then empty handed, the other European tax payers pick up the bill presented by the EU and ECB and the investors/banksters are the winners!

  • http://economiccollapse.com Almeda

    The puppermasters of the world definitely want a total global collapse. This serves their purposes of total world control and enslavement of mankind. We will see protestors in the streets everywhere crying for someone to bring this all to an end–and they will.

    • http://www.facebook.com/profile.php?id=100004398132843 Andy Tunariu

      exactly! these bastards know very well what they are doing and it is all planned to look like a theatrical play among themselves. But they all agree on the plan.

    • http://www.facebook.com/people/Lorraine-CyrLongmire/100001355718119 Lorraine CyrLongmire

      We need a shakeup, we need to show the rich that thier money is useless and show them we can create a different and better system.

  • http://www.facebook.com/profile.php?id=100004398132843 Andy Tunariu

    pull your money out of the bank and keep it cash. Also better start training your body to live on basic food like grains and rice and the sort because it will become even harder as the years pass. A lot of humans are going to die. Those who will survive will be the hardy ones who can live like desert grass with no support.
    think about it.

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