Greek Crash Days Away

People reading media reports of the Greek Unions holding national strikes, and expressing incredulity at the lack of gratitude from Greeks when they are about to be bailed out, are not aware of how bad things have got.

Public sector workers have not been paid since January. Their pay has been sliced by 25% when it resumes.

The bail-out is, in any case, conditional on its getting through fifteen parliaments. Fear might drive it through, but it might not. Bail-outs are expressly not permitted in the Treaties.

Interest rates short term in Athens have shot from 5% to 18% in April alone.

The only way out for Greece is to quit the Euro, devalue, default and get going from scratch again. It is only because of the exposure of British, German and French banks Inter alia to Greek debt, and the fears of what will happen next that is causing the impossible to be attempted.

The Greek people want out already. The governments of Europe don’t want to face the coming meltdown which will also ensnare Spain, Italy and Portugal. The problem with any bail-outs is that they only delay and make worse the eventual crash. That realisation is going to dawn before too many billions of good money are thrown after bad.

The markets are ahead of the politicians sending interest rates rocketing, and the Euro sliding, even with the bail-out declared. This will be like Britain’s exit from the ERM. Politicians can speak forever, but markets eventually just go ahead and decide. That moment is getting perilously close. In the battle between fear and hope, fear is winning the game with ease.

And watch out for Sterling in a Hung Parliament – See Guardian – Exchanges open at 1am Friday.

Other reports on the Euro indicate that it will be saved this time, but the market psychology and fear for its longterm survival can only get worse. The price of the Euro is falling, but it will recover temporarily and then fall further later. (I paraphrase).

The Tap Blog is a collective of like-minded researchers and writers who’ve joined forces to distribute information and voice opinions avoided by the world’s media.

6 Responses to “Greek Crash Days Away”

  1. Twig says:

    So why didn’t the ECB spot the greek problem coming (and what else have they not spotted)?

  2. tapestry says:

    The Euro was a bull market phenomenon. Credit expanded worldwide to create unsustainable booms in real estate, shares and commodities.

    The debts are now being unwound.

    The EU and the Euro are a debt-fuelled mistake, in the process of correction.

    Mere bankers cannot stand in the way of unsustainable rushes of insanity. You need people like Mrs Thatcher who can see what needs to be done and who will stand against the herd (hurd!).

    Leaders like that come along but rarely. Cameron is untested in government. I say give him a try. He won’t be knifed from behind like Thatcher.

  3. Twig says:

    Do you think this could be connected to the lacklustre performance in the polls as per the “poisoned chalice” theory espoused here: Anna Racoon

  4. tapestry says:

    The problem for any leader who wants to deal with the actual situation is that first the truth as to how much Labour have really borrowed has to come out.

    It will be fall to the Conservatives to sort out the mess anyway. It’s a case of ‘do we start now?’or ‘do we start later?’

    Mrs Duffy has got as far as refusing to vote Labour. By the time she is voting Conservative, then Cameron and Osborne et al can really get stuck in.

    Once she knows how badly we have all been lied to by Brown and the media, she and all will be shocked into either supporting Cameron, or making way for him by not voting for any other option.

    The postal voting fraud and proxy voting fraud might stop Cameron this time, but as the world swings over into fiscal conservatism, with asset prices tumbling worldwide, and debts being paid off, politics will be only heading one way.

    Either the left parties effectively become right wing and start balancing budgets, or they will be swept away. Cameron will step cautiously to begin with.

  5. towir says:

    Five more years of Labour, and there’ll be nothing left to save.

  6. tapestry says:

    Slovakia says it will not agree the Greek bail-out. But they will be persuaded no doubt.

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