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The ‘Greek Debt Deal’ Is Already Starting To Fall Apart

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Puzzle Pieces - Public DomainThe “deal that was designed to fail” has already begun to unravel.  The IMF, which was expected to provide a big chunk of the financing, has indicated that it may walk away from the deal unless Greece is granted extensive debt relief.  This is something that the Germans and their allies have resolutely refused to do.  Meanwhile, outrage is pouring in from all over Europe regarding what the Greek government is being forced to do to their own people.  Most of this anger is being directed at the Germans, but the truth is that without German money the Greek banking system and the Greek economy will completely and utterly collapse.  So even though Greek Prime Minister Alex Tsipras admits that this is a deal that he does not believe in, he is attempting to get it pushed through the Greek parliament, and we should know on Wednesday whether he was successful or not.  But even if the Greek parliament approves it, we could still see either the German or the Finnish parliaments reject it.  It seems as though nobody is really happy with this deal, and these negotiations have exposed very deep divisions within Europe.  Could this be the beginning of the end for the eurozone?

The Germans appear to believe that they can push the Greeks out of the eurozone and that everything will be okay somehow.  This is something that I wrote about extensively yesterday, and it turns out that a lot of other prominent voices agree with me.  For example, just consider what Paul Krugman of the New York Times had to say about this.  I am kind of amazed that he finally got something right…

Suppose you consider Tsipras an incompetent twerp. Suppose you dearly want to see Syriza out of power. Suppose, even, that you welcome the prospect of pushing those annoying Greeks out of the euro.

Even if all of that is true, this Eurogroup list of demands is madness. The trending hashtag ThisIsACoup is exactly right. This goes beyond harsh into pure vindictiveness, complete destruction of national sovereignty, and no hope of relief. It is, presumably, meant to be an offer Greece can’t accept; but even so, it’s a grotesque betrayal of everything the European project was supposed to stand for.

Greece desperately wants to stay in the euro, and they desperately want money from the rest of Europe to keep coming in.  At this point, they will agree to just about anything to keep from getting booted out of the common currency.  That is why the Germans and their allies had to make the deal so horrible.  They were attempting to find some way to make things so harsh on the Greeks that they would finally choose to walk away.

And to a certain extent it seems to be working.  Even some members of Syriza are publicly declaring that they are going to vote against this package.  The following comes from the Washington Post

Greek Energy Minister Panagiotis Lafazanis, who leads a hard-line leftist faction within Syriza, said in a statement Tuesday that the country’s creditors had “acted like cold-blooded blackmailers and economic assassins.”

Yet he also took indirect aim at Tsipras, calling on the Greek prime minister to reverse himself and tear up the agreement, which he described as a violation of the party’s ideals.

Even if Tsipras can pass the deal in Parliament, as he is expected to do, Lafazanis vowed that the Greek people would “annul it through their unity and struggle.”

Right now, the vote looks like it could be quite close.  Even though Greek Prime Minister Alex Tsipras has publicly admitted that this is a deal that “I do not believe in“, he is really pushing hard to get the votes that he needs.  In fact, according to Reuters he has been actively reaching out to opposition parties to secure votes…

Having staved off a financial meltdown, Tsipras has until Wednesday night to pass measures tougher than those rejected in a referendum days ago. With as many as 30-40 hardliners in his own ranks expected to mutiny, Tsipras will likely need the support of pro-European opposition parties to muster the 151 votes he needs to pass the law in parliament.

But even if this deal gets through parliament, it is highly questionable whether Greece will actually be able to do what is being required of them.  For instance, the 50 billion euro “privatization fund” seems to be something of a pipe dream

Privatisation agency Taiped has put out to tender assets with a nominal value of 7.7 billion euros since 2011, but has cashed in only just over 3.0 billion euros, according to 2014 figures.

On June 26 even the International Monetary Fund (IMF), one of Greece’s creditors, raised eyebrows over the idea of raking in lots of money from privatisations.

It stressed that the sale of public banking assets was supposed to raise tens of billions of euros but it was “highly unlikely that these proceeds will materialise” considering the high levels of nonperforming loans in the banking system.

It said that realistically only 500 million euros of proceeds were likely to materialise each year — at which rate it would take around 100 years to reach the 50 billion euro goal.

For the moment, though, let’s assume that the Greek parliament agrees to these demands and that by some miracle the Greek government can find a way to do everything that is being required of them.

And for the moment, let’s assume that this deal is approved by both the German and Finnish parliaments.

Even if everything else goes right, this deal can still be killed by the IMF

The International Monetary Fund has sent its strongest signal that it may walk away from Greece’s new bailout programme, arguing in a confidential analysis that the country’s debt is skyrocketing and budget surplus targets set by Athens cannot be achieved, reports FT.

In the three-page memo, sent to EU authorities at the weekend and obtained by FT, the IMF said the recent turmoil in the Greek economy would lead debt to peak at close to 200 percent of economic output over the next two years. At the start of the eurozone crisis, Athens’ debt stood at 127 percent.

In order for the IMF to participate in this new Greek bailout, the IMF must deem Greek debt to be sustainable.  And at this point that does not appear to be the case

Under its rules, the IMF is not allowed to participate in a bailout if a country’s debt is deemed unsustainable and there is no prospect of it returning to private bond markets for financing. The IMF has bent its rules to participate in previous Greek bailouts, but the memo suggests it can no longer do so.

But the Germans made it very clear that there would be no bailout unless the IMF was involved.

So what would satisfy the IMF?

The IMF study seems to indicate that massive debt relief for Greece would be required.  The following comes from Reuters

The study, seen by Reuters, said European countries would have to give Greece a 30-year grace period on servicing all its European debt, including new loans, and a dramatic maturity extension. Or else they must make annual transfers to the Greek budget or accept “deep upfront haircuts” on existing loans.

Needless to say, those kinds of concessions are anathema to the Germans.  There is no way that anything like that could ever get through the German parliament.

But to be honest, the Germans never intended for this deal to be successful anyway.  Just consider what German Finance Minister Wolfgang Schauble told reporters on Tuesday

German Finance Minister Wolfgang Schauble made clear in Brussels on Tuesday that some members of the Berlin government think it would make more sense for Athens to leave the euro zone temporarily rather than take another bailout.

This is what Schauble and his allies have wanted all along.  This entire “deal” was crafted with the intent of creating conditions under which Greece could be forced out of the euro.

By this time tomorrow, we should know what the Greek parliament is going to do.  However, that won’t be the end of the story.  One way or another, the Germans are going to get their wish.  But once they do, I think that they will be quite surprised by the chaos that is unleashed.

  • David

    I find this disgusting. Why even vote any more. I does not matter. I hope the Greeks leave. Look at Iceland they are fine now. This central banking must end. We are all debt slaves

    • Da_Neutral_Observer

      Greece will feel the pain of the Grexit for many years. Unfortunately, it is the only choice they have if the Greeks ever want to have a healthy economy again someday. Sometimes you have to take 500 million steps back, in order to take 500.1 million steps forward.

    • kfilly

      Shackled only by our minds. The debt is an illusion created out of a fiction. We should tell all of these bankers to pound sand.

      • Joe Woolf

        I have a few other solutions for the bankers that should be implemented.

        • kfilly

          I do also. My ideas are not fit for public transmission!

          • Sam

            No interest. No derivatives. No to “greed is good.” It is an oppressive way of getting rich of others.

          • Nemnor

            Sam, I agree with you (more or less). Now, to me, getting rich by producing REAL value for society is OK.

            And, to me, it is immoral (even EVIL) to get rich in ways that does NOT add/give REAL value to society – i.e. like through (excess) usury or any other parasitic financial activity (like Derivatives).

            Now get this – usury and derivatives are very much part of the very “fabric” of a Capitalist economy (“free market” or not).

          • Nemnor

            To put this “more succinctly”, usury and derivatives have ALWAYS been among the MAIN activities/operations of the Capitalist financial system (“free market” or not).

            Hence, only a fundamental change away from Capitalism (in any form, “free market” or not), can truly get rid of (excess) usury and other parasitic financial activities we observe in the World today.

          • Evil_shadow

            Same here.I can only say that plan contains rope(lots of it) and high street lights… 😉

    • M.

      Voting has always been a useful trick used by the plutocrats to convince their slaves that they can actually have some modicum of control over what is inflicted upon them. It’s like a pressure relief valve on a steam boiler. The excess pressure that builds up is released by means of elections. It’s perfect, the multitude think “yes the situation worsens every day, but just you wait, we’ll throw ’em all out next year, and then things will get back to normal!” Of course this never happens but they’re too exhausted from work, and too distracted by bread and circuses to notice. Some day it’ll get so bad that even their phones won’t suffice to keep them from realizing the true state of things, but at that point, in fact right now really, it will be far too late for them to do much about it.

      • none

        If they gave me a printing press. I would make the currency for them!
        Oh excuse me. I would just need the computer software to make the currency entries for the banks!
        And I would do it for half the cost.

  • kevin

    All of this will go on forever. Sad but true .no collapse. Soap opera that Michael can write about! Move on witb your life

    • Alwaystomorrow

      It will NOT go on forever but probably a LOT longer than anyone thinks.

      • kevin

        Michael will have to issue anothet alert in January.

    • FortuneSeek3rz

      People are trying to talk America into some sort of “Walking Dead” scenario that would negatively affect millions (or billions) while feigning ignorance that we’re living in one of the most comfortable periods in world history. I find that to be extremely odd.

      • Gay Veteran

        guess you haven’t noticed we’re losing ground every day

  • K

    Let us face the truth, that history teaches. Germany is only good allies or partners, when they are in charge. If you doubt that ask any Italians, from WWII. They were treated like cannon fodder, and shown no respect. Sadly, the Germans have basically, changed not at all. The Greek people have chosen freedom, no matter the cost. May their so called leaders, yet grant then that request.

  • Alwaystomorrow

    The Economic Collapse Blog Has Issued A RED ALERT For The Last Six Months Of 2015

    Published 6/25/2015
    171 days until 12/31/2015.

    For fun, lets do a count down every day until the end of 2015 and see just what happens.

    • Allan

      Always tomorrow, I have been watching you post this comment for awhile now, and the comments that it elicits. I wonder reaching for the “positive out of a negative”, if it is possible for you to actually gift us with a single shred of evidence on a daily basis that somehow points to a non economical collapse? because believe me “ALL” of us would really appreciate it to know that it is “NOT” going to happen? Because really we all know what day it is, as it can be assumed, were all ‘adults” living in the real world, sadly going through the daily grind trying to find the answer to a real problem, Why? because that’s what our fathers and fore fathers would have wanted, that may just help out our fellow Peoples. So please may the love of the Lord look upon you and enable you to shine a knowledge light for all of us. May God Bless you and keep you safe.

      • GetReal4U2

        the trolls on this site are pretty determined…
        May God bless you and your family as well…

        • MichaelfromTheEconomicCollapse

          The trolls only make us stronger. :)

          Michael

          • GetReal4U2

            they seem to be attracted to this site for sure…Awesome article…love the inside scoop…sad deal on the nuclear front however…

          • Gay Veteran

            “…sad deal on the nuclear front however…”

            why?

          • RageHard84

            Trolls are all over the Internet man.

          • keg

            Dont forget the us government supplies 20 % of the money to the imf and we know how bailout happy they are. If the communist in the whitehouse has anything to say about it we will be bailing out the GREEKS. Too funny.

          • keg

            17 percent

          • VigilanteCaregiver

            Amen!

      • Alwaystomorrow

        I can not give you one shred of evidence that a collapse is not happening because I believe it is.

        I
        just do not think that counting down the days until it happens is
        possible. Collapse may be by the end of the year or it may be not until
        your kids are your age.

        Being prepared to
        me is as simple as this. Long before I ever read about an economic
        collapse I lived well within my means always spending less than I made
        and not going into debt except for a home. Now I owe no one 1 cent and
        it has been that way for well over 10 years. To me that is as important
        as all the prepping that people do. I have a modest supply of food,
        plenty of personal protection and a healthy Zantrex interter for power. So I do do a little.

        So by no means do I intend to portray things are good, just that you should do what you can and live your life not worrying.

        God bless you too.

        • Allan

          Always tomorrow well done this is probably one of the best response that has been written on this page. I have and possible a lot of others have learned a great deal from your words. thank you have given me some food for thought as to getting prepared.

        • Nemnor

          Alwaystomorrow, I am making the following “amazing” statement, that probably you and no one in this blog will believe to be true. Here goes…

          IF (just IF) about 90% of the peoples of this World actually choose to “live within their means”, and be basically “debt free” (like ‘Alwaystomorrow’ stated that he/she is, more or less), then the world-wide Capitalist economic system would have ALREADY sunk into total collapse/chaos.

          It is “thanks” to the mass of people (“the 90%”) who, for the past 3 or 4 decades, are living mostly on CREDIT (i.e. “beyond their means”), the now decadent Capitalist economic system is able to maintain a very slow grind towards it’s eventual collapse (rather than face a more immediate collapse).

          • Alwaystomorrow

            Of course I believe what you said.

            I have told my wife that we are the type of people that the world does not want to do business with.

            It is much better for the economy to sell to someone who is more than willing to pay interest on everything they buy…even a burrito.

            The world would cease to exist if people would live within their means.

            Works well for us though.

  • John G

    Paul Krugman is an idiot and fool. No matter how intellectual anyone is and cleaver their BS, living beyond one means obviously does not work, end of story. Nuf said.

    The German productive workers and taxpayers were not born to give away their hard work and life energy to anyone within their country and especially anyone outside outside. And that goes for anyone, anywhere, whenever.

    I am sick of this altruistic nonsense from socialists and religious people that if someones need is great enough then you become their slave to keep them alive. I call BS on that. I say you own your own life, otherwise where does the nonsense stop? In Germany, Greece, here, throughout all of history, no one owes anyone.

    • FortuneSeek3rz

      You should own what is your fault. For everything else charity is a moral imperative.

      • Peter

        “You should own what is your fault.” The world is not black and white. It’s full of so much grey, I could drive a truck through it.”For everything else charity is a moral imperative.” Even Christ said you cannot feed the world.

        • FortuneSeek3rz

          It is more blessed to give than to receive.

      • Gay Veteran

        just like our banks and mortgage companies who gave mortgage loans to people they KNEW could not pay back the loan, the banksters should also lose all the money they lent to Greece

        • FortuneSeek3rz

          If a bank makes a loan to someone they know can’t pay it back they lose two things that are one in the same: time and money.

    • Douglas M. Green

      Well said. In the end, the Greeks want the Germans to retire at 65 to pay for the Greeks retiring at 50. And the argument about the bad loan terms for the Greeks? They entered into those agreements with full knowledge of the terms and conditions.

      • Gay Veteran

        and just like our banks and mortgage companies who gave mortgage loans to people they KNEW could not pay back the loan, the banksters should also lose all the money they lent to Greece

        • Douglas M. Green

          Absolutely, the answer is default. Germany took that risk in making the loans. My anger is to those who think Germany should continue to pay for for Greece living beyond its means.

    • Gay Veteran

      the Germans don’t have clean hands (from The Guardian):

      “…A few months before submarines became the talk of Athens, Yiannis Panagopoulos, who heads the Greek trade union confederation (GSEE), found himself sitting opposite Angela Merkel at a private meeting the German chancellor had called of European trade unionists in Berlin.

      When it came to his turn to address the leader, he instinctively popped the question that many in Greece have wanted to ask. “After running through all the reasons why austerity wasn’t working in my country I brought up the issue of defence expenditure. Was it right, I asked, that our government makes so many weapons purchases from Germany when it obviously couldn’t afford such deals and was slashing wages and pensions?”….”

  • Paul

    Michael
    Besides Greece, Germany, and Finland I thought the other 16 EU countries had to vote on this “deal” as well. If the other countries have to vote on it how many of the 16 other EU countries have to support this piece of trash.

  • GetReal4U2

    the “birth pains” continue…

  • piccadillybabe

    They should just kick their butts out and be done with it. The Greeks are loving all this attention, Why keep rewarding failure with bail outs? Their fiscal policies are a massive failure but the EU keeps throwing away billions of $$$ to keep perpetuating Greek’s black hole monetary system.

  • Paul

    I am rooting as hard as I can for this deal to fail. Democracy is being snuffed out on a global scale. This rigged global Ponzi Scheme needs to end. Let freedom reign!

  • Cranky

    Anyone prepared to give me a “Greek loan”? You give me the money and I never repay it…

    • M.

      No, but I could give you a Jewish loan. That’s the type where you become my slave and give me all the money you’ve got to pay the interest, except a small pittance to keep alive so you can giving me money like a good stupid goy. Since you evidently didn’t know, that’s the type the Greeks got.

      • chris12138

        I’ll never understand the mindset that the lendee is not responsible for the terms of a loan and it’s always the “joo” lender.

        • Gay Veteran

          lend money to someone you KNOW cannot pay you back then you deserve to lose your money

          • Nemnor

            This kind of apparent “irrational” lending practice is directly due to the “pressures” to create “profits” in a decadent economic system.

            However, observe that the “Greek deal” from the IMF, etc. involves much of the “bail out” money going to PAY BACK Creditors.

            Now, as it becomes harder and harder to make a “profit” in the now decadent world-wide Capitalist system, the Capitalists then feel “compeled” to take “desperate” and “irrational” actions (even when there might be little chance of making a profit – i.e. even lend money to people who likely can not pay back).

            However, the “irrational” actions of the Capitalist “investor” is not so “irrational”, once you realize that a central policy of virtually every Government in every major Capitalist economy is to ultimately “shield’ the Capitalists (as much as feasible) from loss. Hence, the massive “bail outs” – i.e. have the Tax Payers pay back the Capitalists to cover their “losses”.

          • M.

            I can well understand why you hate Capitalism, but Communism is not the proper remedy. Capitalism and Communism are two sides of the same coin, they both achieve the same end of enabling International Jewry to gain absolute power over the goyim. The real solution is a system like that of General Franco in Spain. Mussolini also had great success with his economic policies. Italy was spared from the sort of suffering endured in most of Europe and America due to them. What a difference not being under a kosher thumb makes.

        • True Grit

          Obviously, You’ve never applied for a loan.

    • NoMeansNo

      That’s the same as a ‘No Interest Loan.’ Like, I have NO INTEREST in repaying it!!!!

  • Paul

    “Today agreement keeps Greece in state of financial stability. Gives the possibilities for a recovery” Tsipras said this after the deal was reached.
    This is the most absurd statement I have heard this year. That says a lot because you have Muppets like Obama uttering absurd statements like “The shadow of crisis has passed”

    • Diamond_Jim

      Yes, Obama really knows how to cool down a hot mess. His telepathic powers are miraculous. Thank God for the dear leader. Crisis averted…

  • VigilanteCaregiver

    Mike, I’m at the Deutsche Bank’s Asset and Wealth Management site and it’s very interesting reading. A few articles on the Grexit, but also their recommended actions on investments. They’re going long on equities, IT, and Financials (no surprise on Financials); and negative on US T-bills (2 year and 10 year), healthcare (?), utilities, Asian credit, Euro’s and GBP vs USD. The Euro they have dropping in the long term; shorting might bring in a few cents. The Euro vs USD is their biggest concern – claiming it’s too risky now and in the long-term to go up against the USD.

    Gonna do more digging when I have time.

    • pissedlizard كافر ‏

      You hit a goldmine. Thanks for the info.

  • elmcqueen3

    The European Union was a creation by the financial guru’s of the New World Order…it is an experiment atoning global socialism on a grand scale…and Greek’s knows this and has been riding on the coattails of the richer Euro nations expecting them to bail em out time after time after time…knowing that if the European Union is to succeed and not fall apart at the seams they must continue to bail em out with billions and billions of Euro’s…Frankly…I’d like to see this whole New World Order European Union endeavor collapse in the face of the IMF and International Banksters.

  • SM

    Dear Michael, from CIA Factbook data I see that the Greek government tax collection already exceeds 48% of GDP which is among the highest globally but I keep reading that no one pays taxes in Greece. In comparison, the Germans collect 44% of GDP as taxes and America collects 17%. Greece has reduced government expenditure over the last few years, I assume through austerity measures. As a result, their fiscal deficit is less than $ 10 billion in 2014, down from $ 25 billion in 2013. I think they’re already moving in the right direction, don’t you think?

  • XSANDIEGOCA

    I hope the Greeks reject it. This is nothing but modern day Slavery. Yes, they borrowed the money but the Germans and the ECB acted precisely like drug dealers who kept pushing the “dope” until the client was hooked. Before the Euro, the Greeks got by. It was not a perfect system but they maintained their national sovereignty. They had their own currency which they devalued periodically. It was all untidy but it worked. Contrast that period with what we see today. Pensioners reduced to begging for their pensions they have worked for all their lives. People sleeping in the street. Mothers and wives selling themselves around the Acropolis. How utterly ironic that Germany has achieved such continental domination without firing a shot. Hitler would have been envious. Now, listen up America, what you see is what we are going to get one fine day. The degree to which we have been sold out will be made apparent the day you can not use your ATM or Credit Card. It’s coming.

    • GenEarly

      “X” are you are still living in the “Peoples Republik of Mexifornia” ? or went over the wall?

      • XSANDIEGOCA

        Still here. Family wants to stay. My strategy is to give it time. They will come around to my point of view :) Will use the time to research N. Idaho, Wyoming and Montana.

        • GenEarly

          I hope you have the time. I left FL. for GA. Mountains a year ago. Well worth it, No “Ready for Hitlery” bumber stickers. LOL.
          Wyoming may be the best.
          I used Zillow to find my house, selecting by map first to find the right rural spots, then looking for houses in the selected area.
          IMO, load up on preps now, you can always take it with you in a planned move. Good luck!

          • XSANDIEGOCA

            God’s Speed to you too. We are going to need it.

          • GenEarly

            Thanks. FYI: oathkeepers.org
            and westernrifleshooters.wordpress.com

    • Nemnor

      XSANDIEGOCA, you stated – “…Germans and the ECB acted precisely like drug dealers who kept pushing the “dope” until the client was hooked…”.

      Everything you stated (in you post above) are more or less SYMPTOMS of the now decadent Capitalist economic system.

      The main reason the Germans and ECB and (USA) IMF are acting more like “drug dealers”, is that it is becoming more and more difficult to make a “healthy profit” in the now decadent world-wide Capitalist economic system.

      Unlike in the earlier day of Capitalism, the Capitalist system is now at a degree of irreversible DECAY, in which, it can no longer function without MASSIVE CREDITS (i.e. credit even to “debtors” with little or no ability to pay back).

      The world-wide Capitalist system is relentlessly declining towards total collapse/chaos. The massive credits (and eventual “bailouts”) can only “slow down” the decline towards total collapse/chaos.

      • XSANDIEGOCA

        You are correct. The 2 year Greek Bond was paying 50% or more before all this went down. Check out Bill Bonner, President of Agora Financial, talk about the Credit System in America. Very frightening. Toss in the Dollar ceasing to be the Reserve Currency and we could be Greece tomorrow.

  • Patriot Alice

    Tsipras went into negotiations with a knife on his neck created and
    placed there by the Greeks. You can blame the leadership when the people
    have been mislead, but they knew exactly what is involved and they want
    to just blatantly erase their debt. With an attitude like that, I
    wouldn’t forgive one penny, and I’d take their insults very seriously. Europe has been far too generous and patient.

    • Gay Veteran

      what happens when you lend money to someone you KNOW cannot pay it back? you lose your money

      • jakartaman

        Genius – just pure genius!
        How the practice on the one and one half gainer with a twist coming?

        • Gay Veteran

          thanks for contributing to the discussion about Greek debt

    • Diamond_Jim

      There is no shame in defaulting or declaring bankruptcy anymore, as far as I’m concerned. When corporations default on leases or restructure through bankruptcy, they are lauded for their shrewd fiscal decision-making. Why is it then, when an individual gets behind on his mortgage, and defaults, he/she is a deadbeat POS with no money sense? Should they sell everything to continue paying for a mortgage they shouldn’t have and a house they will lose anyway? If there is no shame in banking or on Wall Street, why should poor individuals be held to a higher standard? I would have never said this 10 years ago, but if you are considering it, fear not, and just do it.

      • Nemnor

        AND, as time goes by, many people will also come to realize that the main root cause of the major economic issues facing the USA and the World is the decadent world-wide Capitalist economic system itself.

        As system that, despite the “advances” the World experienced for the past 500 years or so, is so structured to give/allow abundance just for the FEW (“the 1%”), and often at the great detriment of the mass of people (“the 90%”), who might even see their standard of living going down, with millions going below the “poverty line”, and even more and more people living in abject poverty.

  • Aww, did the IMF suddenly get all mooshy and sentimental and principled and decide to say, “HEY! Stop trying to turn those Greeks into bondslaves and sell off their country!”

    Hardly. See John Perkins, Confessions of an Economic Hitman for the IMF’s normal modus operandi

    But then recall that IMF = Washington .

    If the Greeks get booted out of the Euro, they likely turn east, to Russia and China.

    Washington can’t have that. See Paul Craig Roberts for details.

  • john

    if Greece leaves the CEE, millions of Europeans will go there on vacation.
    and no, it s not going to be the end, Greece will pass some bilateral agreements with Europel( like Switzerland and Norway did.)

    the key of a country ‘ success is to keep sovereignty and a true democracy.

  • LWZRGHT

    You can’t un-push a boulder off of a cliff. This course of action began five or more years ago, and we’re only now seeing the negative consequences.
    The scary thing for the U.S. is that Detroit has already gone through this, and Chicago/Illinois are not far behind. Many other cities and states have significant debt problems. Municipal bonds in the U.S. are vulnerable to the same situation as Greece. State governments seem to be unwilling to assist their largest cities, mostly for political punishment for what those staties see as wrongheaded policies. Regardless, muni bond owners are going to see haircuts on their bonds too. Either that or the U.S. Treasury will just inflate us out of the debt.
    “Bailout” doesn’t work like you’re a single boat in an ocean. A small boat is floating in a larger boat, which floats in an even larger one. When these bailouts happen, we’re just tossing the water out of the smaller one into the larger. The larger ones bail out into the largest one. The largest boat, the globalized financial system, cannot be bailed out without the stakeholders actually losing money. You can dump it overboard, but there are big consequences to anyone who owns banks. Which happens to be lots of retirement funds and public pension systems.

    • df NJ

      My problem with many people’s criticisms is everyone is blaming the workers for taking lavish retirement benefits. If you study this the retirement pensions are not lavish.

      From my understanding it’s not the workers who are bankrupting cities like Detroit. Google “Looting the Pension Funds”. So you have to ask yourself. What is more plausible. Some firemen or policemen in Detroit ripping off the city’s pension fund, or, some Wall Street predatory bankster coming in and raping the pension fund with exotic investments. Greed will find a way to steal. And there’s no government in place to prevent the crimes of the predatory shysters because BIG government is “bad”.

  • Gay Veteran

    the imperial power US of A does NOT want Greece to leave the Euro, from Paul Craig Roberts:

    “…Washington has a higher interest than the interests of the US financial interests who purchased discounted sovereign debt with a view toward profiting from a deal that pays 100 cents on the dollar. Washington also has higher interest than the interests of the European One Percent intent on using Greece’s indebtedness to loot the country of its national assets. Washington’s higher interest is the protection of the unity of the EU and, thereby, NATO, Washington’s mechanism for bringing conflict to Russia.

    If the inflexible Germans were to have Greece booted from the EU, Greece’s turn to Russia and financial rescue would put the same idea in the heads of Italy and Spain and perhaps ultimately France. NATO would unravel as Southern Europe became members of Russia’s Eurasian trade bloc, and American power would unravel with NATO.

    This is simply unacceptable to Washington….”

  • CharlesH

    “I’ll take Absolute Clusterfu** for one thousand Alex.”

  • Gay Veteran

    not before the banksters finish looting the country

  • GSOB

    And on a different drum head….

    “Less than one percent of the citizens of this nation stand up and take the oath to defend the Constitution and our American way of life,”

    “If our government can’t take care of that one percent and give us the treatment we deserve, how are the American people to believe that they can take care of any issue that this nation faces?”

    – Chris Dorsey

  • dsd1

    the craziest thing is that the other eurozone countries are not aghast at this situation – do they not think it too could happen to them? i would think they all would be ready to split up just seeing how this turned out for Greece.

  • HM

    In ancient times when you faced insurmountable debt, you sold yourself and your whole family into slavery. It looks like old ideas are being revived.

  • JAY

    Michael, I dont doubt your intelligence nor good intentions. But I dont think we will see stock market crashes, foreclosures, mass layoffs because we have a global central bank economy that micromanages everything. as long as central bankers are in control and as long as 51% of the population think they are entitled to everything, we wont see economic nor financial collapse because the central bankers will prop up whatever they need to. that said, I think we will gradually enter the ASIAN century lead by INDIA.

  • Jim Clark

    Time for Tsipras to brush up on his Thucydides and the Melian Dialogue.

  • Jan Erik Sigdell

    How the Greek saved their arses. A
    tale that has an inherent serious suggestion.

    The government silently printed new
    money, we may call it nea-drachma. But I just for fun call it tsipra. 1 tsipra
    = 100 vakoufakis. It printed banknotes of 1 tsipra and of 5, 10, 50, 100 and
    500 tsipras. Coins would come later. As soon as they were available, it was
    declared to be the valid national currency, but that during a first period,
    also euros would be accepted for payment. However, the change could only be
    paid in tsipras. Euros could be changed to tsipras in the bank. Shops and
    businesses were not allowed to give change in euros. The initial exchange rate
    was 1 tsipra = 1 euro, but this was expected to change as things develop.

    That way euro banknotes quickly
    accumulated in the Greek National Bank. It was suggested to put a stamp on each
    and every banknote, readable only in ultraviolet light: “Payment of Greek
    debt.” But this might involve too much effort because of the very high number
    of banknotes.

    When the inflow of euro banknotes
    into the Greek National Bank slowed down significantly, the whole load of them
    was against an official receipt given to a major European bank in Brussels or
    in Germany as a repayment of the Greek national debt.

    Greek life and business began to
    flourish with the new currency. The EU first hesitated to accept it, but soon
    realized, that they would loose all export business to Greece that way, and
    thus they had to accept the tsipra after some time. The exchange rate changed,
    but had to stabilize at a rate that keeps import from and export to Greece
    alive, in the interest of all partners.

    It did not take very long until
    Greece that way managed to pay most of its debt and still save its economy and
    its freedom from the euro mafia that had wanted to establish full control of
    the country and more or less enslave its inhabitants.

    Because the euromafia merely got their papers back, but the values remained in Greece…

  • mister_roboto

    The problem is, the Greek people don’t realize they can have either the euro or the end of austerity, but they can’t have both.

    • df NJ

      Get rid of the euro.

  • Rufus T Firefly

    ROTFLMAO about a ferret like Krugman whining about the “grotesque betrayal of everything the European Project was meant”. Europe’s 3,000 years of history is about tyranny, imperialism, wars, racism, slavery, oppression, dictators and theft. Only a fool would have thought it would be benevolent.

    Moral: don’t go into debt.

    • df NJ

      Everything is about the preservation of the one World global monarchy:

      “Lincoln printed 400 million dollars worth of Greenbacks (the exact amount being $449,338,902), money that he delegated to be created, a debt-free and interest-free money to finance the War. It served as legal tender for all debts, public and private. He printed it, paid it to the soldiers, to the U.S. Civil Service employees, and bought supplies for war.

      Shortly after that happened, The London Times printed the following: “If that mischievous financial policy, which had its origin in the North American Republic, should become indurated down to a fixture, then that Government will furnish its own money without cost. It will pay off debts and be without a debt. It will have all the money necessary to carry on its commerce. It will become prosperous beyond precedent in the history of the civilized governments of the world. The brains and the wealth of all coun­tries will go to North America. That govern­ment must be destroyed, or it will destroy every monarchy on the globe.

      The Bankers obviously understood. The only thing, I repeat, the only thing that is a threat to their power is sovereign govern­ments printing interest-free and debt-free paper money. They know it would break the power of the international Bankers.

  • John Byde

    The Greek parliament accepted the deal. We can lay off the Apocalypse Now blog entries for a while now, Michael.

  • df NJ

    Gibt uns allen Ihren Ruhestand Geld jetzt du dumm Griechen

  • CensoredSpeech

    Trying to rescue Greece is like throwing good money after bad, a waste of time and resources! It’s best just to cut your losses now! Of course, the socialist countries will never agree until they run out of other peoples money!!

  • Christoph Weise

    It seems to be incorrect that Germany intended to push Greece out of the EURO. To the contrary. It is correct that Tsipras wanted to keep the EURO regardless of the price. It is incorrect that keeping the EURO is good for Greece. To the contrary. Greece has lost its manufacturing sector because of the EURO and the customs union. Greece needs to be forgiven all its EURO denominated debt and it needs an own currency. Instead it keeps the EURO which is poisoning the economy and it keeps all its debt. Greece has been reduced to a continuous-flow water heater for the receivables of it’s creditors. No money will remain in Greece. The economy will crash hard and fast. And the 4th “rescue package” is already visible at the horizon. Including ECB’s emergency liquidity assistance loans (ELA) overall greek government liabilities are close to EURO 0,5 trillion. It is correct that chaos will be unleashed. That is the product of Tsipras failing to understand and the German governments unwillingness to push Greece out of the EURO-zone.

  • GSOB

    America’s enemies are:
    ISIS
    IRAN
    NORTH KOREA
    RUSSIA
    CHINA
    In that order……
    And its the governments of those entities that hate America the most.
    Monkey see. Monkey doo doo

  • The Struggle within America—Isaiah Saw It All!
    by Avraham Gileadi Ph.D.

    Many regard Isaiah’s prophecy as a sealed book. Who does it address, only people in the past? A key to this mystery exists in the linear and synchronous structures that govern the book of Isaiah. These enable us to read it as a prophecy about the past but also as a prediction of the future. The book of Isaiah, in other words, serves a twofold purpose. Without taking anything away from what happened in the past, it uses the past as an allegory of the future. In that case, persons and nations of Isaiah’s day typify ones who perform similar roles at the end of the world. The names of past persons and nations function as codenames for their endtime counterparts.

    The importance of understanding Isaiah’s message increases daily as world events line up like planets for the fulfillment of his prophecy. Under the codename “Egypt”—the great superpower of Isaiah’s day—America is predicted to suffer spiritual decline, political ineptitude, economic collapse, internal anarchy, and invasion by a foreign military world power from the North—a latter-day “Assyria.” On the other hand, a community of covenanters in “Egypt” will turn back to Jehovah,
    who will send them a savior and deliver them. In the end, at the commencement of the millennial age, America will again become “my people”—a covenant people of God (Isaiah 19).

    5. 20. 2010

  • End-Time “Egypt”—A Superpower in Decline
    by Avraham Gileadi Ph.D.

    Isaiah’s use of types of ancient world powers that foreshadow End-Time ones extends to the great superpower Egypt. As with all nations and persons who appear in the book of Isaiah, their true identity emerges when we observe how Isaiah characterizes them, not when we apply historical or archaeological data, though at times that may help. In searching the world today for a nation that matches Isaiah’s description of “Egypt,” the sole candidate is America. That connection is further strengthened by the fact that God’s people anciently dwelt in Egypt, that Joseph ruled Egypt, and that the birthright tribe of Ephraim sprang from Joseph and Asenath, an Egyptian woman.

    Isaiah’s “Egypt,” however, is a superpower in decline: “The ministers of Zoan have been foolish, the officials of Noph deluded; the heads of state have led Egypt astray. Jehovah has permeated them with a spirit of confusion; they have misled Egypt in all that it does, causing it to stagger like a drunkard into his vomit. . . . Manufacturers of combed linen and weavers of fine fabrics will be dismayed. The textile workers will know despair, and all who work for wages suffer distress. . . . I will stir up the Egyptians against the Egyptians; they will fight brother against brother and neighbor against neighbor, city against city and state against state” (Isaiah 19:2, 9–10, 13–14).

    11. 16. 2011

  • PAul

    Michael
    my biggest fear has been becoming a reality for a number of
    years.

    This is just the final nail in the coffin.

    I apologies for any negative posts I have made in the past.

    I always feared you were correct, it’s clear to me now that
    we are coming close to the end now.

    I have made plans for this thanks to websites like this one
    and should personally be ok but I don’t really care about that.

    I fear ww3.

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