Monday, May 30, 2011
Memorial Day & Greece
Now onto the economics of the world-- it seems that Greece is slipping into the abyss. Mish posted a link to a Greek site that says that bank withdrawls are picking up the pace. The Greek government and the Troika (IMF/EU/ECB) seem intent on pushing yet more austerity-- and get this-- foreign tax collectors-- onto Greece in the effort to ensure that every last dime is repaid. A default would have serious consequences for the ECB and a number of financial institutions and thus will NOT be tolerated. Unless the Greek people become so unruly that the Army steps in. By nearly all accounts, Greece will run out of money by the end of June. The Greek opposition seems hell bent to block any more austerity and is demanding tax cuts. Here's my guess-- a deal gets done, but when the Greek people begin to understand what it's going to mean for them.. well.. as my tagline says, poverty and serfdom for all.
PS 8pm: It looks like Germany has agreed to another bailout of Greece without bondholders having to take a hair cut. Details are few as yet, but what have they really accomplished other than kicking the can down the road a little further ? How often do we solve a problem of debt with more of it ? I'll be curious to see if foreign tax collectors and more austerity is included.. and whether the Greek opposition (nevermind the people) will buy this one. Also it remains to be seen if Angela Merkel keeps her job.