Saturday, July 4, 2015

The Mother Of All Contagions

Somewhere, I forgot where, I read the following statement yesterday:

"The most feared contagion of all is that Greece returns to the Drachma and starts booming."

Something worth thinking about.


  1. There is no such risk. With SYRIZA, Greece will shut itself in a mediterranean Venezuela. SYRIZA will immediately decrease unemployment by half, through hiring 1.000.000 to the public sector.

    1. Agree!
      Could be with completely other circumstances but not with Syriza.
      The will be lifted out before anything else happens.

    2. Agree. Civil war and chaos are more likely than prosperity. I would say, if there is no, we are likely to get Obama's help.

      US Marines will come to distribute cans of beans, raisins etc.

  2. When our esteemed owner of the blog writes that it is worth thinking about such subversive ideas, I attribute this to much too high temperatures outdoor o__0


  3. Disturbing read

    1. I agree with many of the outcomes, which will be terrible. I do not agree with the analysis. The situation is now crystal-clear: the Troika (led by Germany and the IMF) is determined to remove Syriza from power, whatever the outcome on Sunday. Even if Tsipras concedes anything that they ask, they will still refuse a deal. Greece will collapse.

      Why? Because this is about European politics and not economics. The eurozone countries are terrified of the political consequences (especially in Spain, Portugal and Italy) if Syriza continues in power, promoting an anti-austerity argument that is actually based on economic reality. Their only political solution is to remove the government, and if it is necessary to destroy Greece and the Greek people (to remove Syriza) they will do so.

      I do not know what to advise my Greek friends. Unless European politicians come to their senses, this is a crucial and terrible event in European history that we are about to experience.

  4. Yanis Varoufakis accuses Europe of terrorism

    Greece’s finance minister Yanis Varoufakis has compared the action of his country’s European creditors to terrorism.

    Never one to fear giving offence, the outspoken minister told El Mundo that the country’s lenders were trying to instil fear.

    What they’re doing with Greece has a name -- terrorism. What Brussels and the troika want today is for the yes (vote) to win so they could humiliate the Greeks.

    Why did they force us to close the banks? To instil fear in people. And spreading fear is called terrorism.

    The troika refers to the International Monetary Fund, the European Central Bank and the European Commission. It is interesting that Varoufakis used the word. When Syriza came to power they pledged to expel the troika from Greece, but only succeeded in changing the name - to “the institutions”.

    Varoufakis also said he was sure of reaching an agreement with Greece’s creditors if the country votes no.

    Because there’s too much at stake, as much for Greece as for Europe, I’m sure. If Greece crashes, a trillion euros - the equivalent of Spain’s GDP - will be lost. It’s too much money and I don’t believe Europe could allow it.
    Guardian - LIVE (from el mundo)
    Continued ----------------->>>>

    1. "Yanis Varoufakis accuses Europe of terrorism" [...]
      "Varoufakis also said he was sure of reaching an agreement with Greece’s creditors if the country votes no."

      So Yani wants money from terrorists? Has he no dignity?

      I am sorry but I cant take him serious anymore. If the show was planned as a big greek melodram Yani fits perfectly in the role of the clown.

    2. Yanis knows all about dignity - could probably lecture about the subject - but that is on the quantitative side of things.

      Real authority and real dignity and for that matter - real intelligence, wisdom and to be cultivated - are connected to reality in real time and are on the qualitative side of things.

      He has the knowledge but wouldn´t necessarily be skilled or radiate these things - as his latest rounds of gaming demonstrate. He played high - and lost the game in his own backyard - academically and geographically speaking - he already knows that in the heart of hearts.
      He gamed Merkel. Merkel won. That´s all..

  5. Gamofakelakis puts all his chips on that If Greece crashes, a trillion euros is lost - (but not to fear - if you only will vote NO he sign the contract the day after) and mark the EU as terrorists.
    He puts his reputation, his country and all the money in the bet.
    As he hadn´t anything to do with the outcome after 5 months catwalk- gameplay and nothing to show for at home.
    The finance-minister defines a false choice. There are more options at hand.
    What will happen after a NO is that even if Greece crashes there is no immediate risk of contagion - but before anything else happens Syriza will be forced out of that office and then EU will do the cleanup.
    Bad gaming in other words and game over for the red brigade.
    Socialists has their first loyalty to their ideology - which is international - and rather see a workers world without borders.(and nations)
    They are big on relativism and anything goes - reason is the enemy of the people - which is the state.
    Yes, in a funny way the good finance-minister is right - EU - is totalitarian and terroristic - but we don´t need one more socialistic revolution to manage that problem. Thanks but no thanks!
    Syriza tries to rally the left in Europa - with more chaos and bad wills. Do we want this - one more rerun from the last century - one more revolution - like the 60-ties - that got us in this sorry state in the end.
    And all your sorrows you have brought on yourself - and now it is time to man up.

    Wolfgang Schäuble kind of reply:
    Germany’s finance minister has said there will be no quick deal with Athens after Sunday’s referendum.
    In an interview with top-selling tabloid Bild, Wolfgang Schäuble forecast difficult talks, although he promised that the Greek people would not be left in the lurch.
    Greece is a member of the eurozone. There’s no doubt about that. Whether with the euro or temporarily without it*: only the Greeks can answer this question. And it is clear that we will not leave the people in the lurch.
    He also said that the risks of the crisis spreading to other European countries were limited.
    Even if it came to a collapse of some individual banks, the risk of contagion is relatively small.
    The markets have reacted with restraint in the last few days. That shows that the problem is manageable.
    Any talks with Greece on an aid-for-reforms deal would be “very difficult” after Sunday’s vote, Schäuble said, but he predicted that in a year’s time, Europe would be stronger than it was before the Greek crisis.

    The best reply though I´ve seen to this is this:
    But Athenians are in no mood for backhanded humor, because as one 83-year old told WSJ this week, “Tsipras has turned this country into North Korea."
    continued ------------>>>>>

  6. Note Tsipras and not EU in the statement.
    And there you have it. The chips are in - time to show the cards.
    Hope the ride was worth it.

    In the end I believe that this chaos will lead to something better.
    It will hopefully inspire a gathering to manage a reality and maybe in the end - to a new kind of sovereign nation with engaged citizens.
    It would be fitting if this new kind of order would start off i Greece - the birthplace of democracy - and now - democracy 2.0
    We all live in a (as Peter Schiff put it) zero-interest bubble that soon is going to pop - and make instant history.
    Over Europe the citizens will rise and take charge beyond ideology - not in some old fashioned revolutions - rather to manage the reality in a new and innovative way.
    The old world is gone and now is the time to create a new order.
    It will not happen this year - Greece should make a deal and get back the lifeline - but within 5 years it will roll.
    The mission is to create new structures that can rise as the old one falls - to carry the day.
    The ideologies belongs to the old order - and is not needed anymore.
    The new order is not collectivism - it is not individualism - it is the individual in a context - it is about social networking in itself - as a culture.
    The central order, governments and central banks are about to fall - in a natural evolution.
    The birth of the Soverign Man is about to come - not now - but in a few years…

    See you on the other side.
    Bob Dylan - The Times They Are A Changin' [Watchmen Intro]

  7. For once (almost) progressive NYT put the hammer to the nail!

    Don’t Bet on Syriza

    But what has this done for the country as a whole? That the Constitution seems to exclude referendums on fiscal matters is perhaps a legal nicety but it highlights the government’s rather cavalier attitude toward existing political institutions. It talks about the people’s will but shows a worrying disregard for the democratic bodies and procedures it says it is protecting.
    He believes a “no” vote would let him return to negotiate in Brussels from a position of strength. This reveals a stubbornness to face facts that amounts to a kind of magical thinking.

    Greece is not the only country with voters, and each of Mr. Tsipras’s fellow European prime ministers already has their own democratic mandate. Will they defy the will of their voters and cave in to save the euro? Almost certainly not to Mr. Tsipras, given the trust that he has frittered away over the past five months. Whatever he may say, the likely outcome of a “no” vote is thus an eventual return to the drachma.

    If the electorate votes “yes,” more political uncertainty and new elections would be the likely outcome. At least abstention implicitly recognizes the futility of the whole exercise.

    What Mr. Tsipras has fundamentally disregarded is Greece’s extreme weakness. On the one hand, it is weak like any small country, with limited capacity to affect the rules of international life. But it has the additional weakness of a poorly functioning economy and a crushing debt.
    But at the same time, the party evokes the potential strength of unfettered people power; the leap to genuine sovereignty to be made by leading a worldwide revolution against austerity. And, failing that, in a phrase heard more and more the past few months in Athens, there is talk of a kind of collective suicide, like those Greeks who blew themselves up rather than surrendering to Turkish forces two centuries ago.

    This rhetoric didn’t appear out of thin air. It bears the marks of the milieu that formed Mr. Tsipras as he grew up in the years after Greece’s seven-year military dictatorship ended in 1974. A student culture flourished in the following decades that placed a premium on activism, and saw a revolutionary potential in every high school occupation.

    It was passionate, literate in Marxist theory, highly factional and partisan. Manifestoes and party lines proliferated. A lot of time was spent in meetings debating the democratic implications of everything from canteens to faculty appointments. Student leaders, obsessed by the history of the German occupation, devoured memoirs of wartime resistance heroes and dreamed of a struggle to rival theirs.
    Having made pledges to voters that they can’t fulfill, Mr. Tsipras and his colleagues present this as their generation’s heroic moment. Bolshevism collapsed; wartime resistance was crushed. But perhaps, they hope, Syriza can lead the country to a new kind of revolutionary victory, striking a decisive blow against international finance capital.

    I wouldn’t bet on it.

    The last time Greece repudiated its debt was in 1932: a short-term recovery followed, which was already petering out when World War II began. Repudiating debt back then was a positive move because the entire world was doing it and the real costs of default were low.

    This time around, the situation is very different. The consequences and costs would be far worse, the potential for domestically generated growth much less, and many of the benefits associated with Europe — Greece as an attractive site for foreign investment, putting its geopolitical position to good use, and the transformation in values that came with the opening up of what was 40 years ago a much more introverted society — will be put at risk.

  8. Italy no longer Greece's "companion in misfortune"

    Italy’s prime minister Matteo Renzi has said his country is no longer a “companion in misfortune” of debt-ridden Greece, as it was three or four years ago.

    We need to stop calling Italy the sick man of Europe, because it’s no longer true.

    Speaking on Italian television Renzi said Italy was no longer afraid of the consequences of Greece’s financial troubles - unlike during the 2011 crisis when fears were high of contagion spreading from the Greek crisis to many other heavily-indebted European nations.

    Reforms undertaken in Italy have shown that “we are on the side of those who seek to resolve the problem” he said.

    Spillover from the Greek debt crisis is no longer such a big fear for Italy, Spain and Portugal.
    With the European Central Bank standing ready to intervene, Renzi’s confidence is well-founded.

    More lonely news for Team Tsipras/V and the Red Brigade in the bunker of Happy - Go Planet Syriza.

  9. What was the question again? Greek voters confused by baffling 74-word referendum conundrum that demands a simple 'yes' or 'no' to decide country's future

    Nearly 10million Greeks will take to ballot booths tomorrow for referendum
    Greece will decide on Sunday whether or not to accept a euro bail-out
    If rejected the country is likely to leave the euro but try to stay in the EU
    But voters are confused by the baffling 74-word overcomplicated question


    'Should the deal draft that was put forward by the European Commission, the European Central Bank and the International Monetary Fund in the Eurogroup of June 25, 2015, and consists of two parts, that together form a unified proposal, be accepted? The first document is titled 'Reforms for the Completion of the Current Programme and Beyond' and the second 'Preliminary Debt Sustainability Analysis.''
    Daily Mail - UK

    Crisp and clear for everyone involved! Right?

  10. I believe that if Greece crashes and leave the Euro zone it will affect none in a short term period but in a long term period it will destroy Europe as we know it. Nothing will be the same again, and when a debt crisis appears into another country such as Italy, Spain or Portugal then the rescue financial programs will not be enough...

  11. I suppose some people in Brussel fear it and some people in UKIP or Front National dream about it as it could lethally damage the Euro-currency.
    Nevertheless I wish Greece a new blooming, inside or outside Euro and EU.

    1. Hi Roger,

      Thank You As always. My concern in general inside/outside the euro, exactly what kind of "blooming" we will have.


    2. New ways offer many chances but as well many risks.
      As long as the Greeks dont allow to get stolen their democracy as Tsipras friend Putin did with Russia, you will be able to exchange Syriza if their way do not fit Greeks ambitions anymore. So the worst possible mistakes should be avoidable.

      And one wish to all Greeks regarding their new start: The last referendum was negative on both sides, Yes as well as no-campaign.
      Please try to look more for the good things in people and opportunities to improve them than for the bad ones to demonize it.
      No human is angel only or devil only. We all have good and bad spots inside. If you see and praise the good things in persons, eg in your loved woman you strengthen her and her beautiful sides. If you concentrate and damn the bad things in persons you weaken them and often strengthen their bad side.
      There is a good reason christianity (as I know it) is a religion of love, not of hate. That helps to strengthen the good and lovely sides of people, their angel part.

      So cultivate and strengthen the good and beautiful flowers in the next blooming. :-)

      Best regards,

  12. Interesting article in Zerohedge about Greece real problems from a Greek businessman - domestic cleptocracy, organized crime and lack of rule of law.
    Interesting info about Tsipras too...

    One Heretic, And Not-So-Simple, View On The Greek Referendum

    Neither Greece’s ailment, nor its cure, is its currency, be it the euro or the drachma, or its pensions—whether too low or too high. Greece’s cancer is the purely domestic cleptocracy which has been sucking the country dry for at least thirty-five years (that’s as far back as I can remember, older people may argue this may have been going on for much longer).

    You think I’m exaggerating? Let’s look at a couple of interesting statistics, then. According to the UN comtrade database, supplies of bunker fuel to ships in Greece went from $25m in 2008 to $1.72bn in 2014. Exports of fuel to Turkey went from $204m in 2007 to $3.2bn in 2014. Exports of fuel to FYR of Macedonia in the same timeframe went from $72m to $614m (for comparison purposes, Greece’s GDP in 2014 was $238bn). Either Greek refineries got very efficient during the crisis, or other refineries in the region got very inefficient. Or it could be that the cleptocrats, hit by the crisis in their other half-way legit businesses, had to supplement their income with other, far more lucrative ventures.

    Well, according to the New York Times “Organized crime […]dominates the black market for oil in Greece; perhaps three billion euros (about $3.8 billion) a year of contraband fuel courses through the country. Shipping is Greece’s premier industry, and the price of shipping fuel is set by law at one-third the price of fuel for cars and homes. So traffickers turn shipping fuel into more expensive home and automobile fuel. It is estimated that 20 percent of the gasoline sold in Greece is from the black market. The trafficking not only results in higher prices but also deprives the government of desperately needed revenue”.

    According to the FT “George Papandreou, the former socialist premier who resigned in 2011, also claimed he was brought down by oligarchs after a finance ministry campaign to tackle widespread fuel smuggling revealed a Balkanwide scam that cost Greece €3bn a year in lost taxes”.

    Its’ not as if these smugglers are thousands. They’re a handful of people, whom practically every Greek knows by name. Unlike Escobar, they are not in hiding. They’re feted by the press as “successful businessmen” and are being sat next to prime ministers.

    There are similar tales to be told in natural gas, energy and practically every sector that has to do with the state.

    If that’s not fixed, irrespective of whether the currency of Greece is the euro, the drachma or the rupiah, there can be no end to Greece’s plight. Is Tsipras likely to fix that? I’ll give you a hint: most Greek oligarchs voiced their support for Tsipras ahead of the general election in January. Before him, they of course supported his predecessor.

    What I think, is that Greeks should be united in their fight for the rule of law and against the cleptocracy, and not divided over a referendum on an absurd question. That division, however, serves the cleptocrats well—they can go about their usual ways unnoticed. Whoever said “divide and rule” knew what they were talking about.

    1. very very very good point.