Not Greek To Me! ~ The Risk Averse Alert

Tuesday, July 30, 2013

Not Greek To Me!

"The first necessity is to stabilize the patient, who is on the verge of collapse. This is not about stimulus, it’s not about returning to growth, or returning to full employment, this is about preventing a disaster which will lead to the breakup of the Euro Zone and the European Union, and will lead in that direction in my view quite soon if nothing is done. So that’s what I’ve been talking about over the last month.

"My thoughts on this were very much crystallized by the visit to Greece after the trip to Croatia. The question is, what’s the evidence?

"Okay, here’s some evidence. The Greek government failed to sell its gas monopoly to Gazprom for a very modest sum because Gazprom’s analysts believe, accurately, that they could not trust the forecast of income from the gas monopoly. And did I mention that this is a gas monopoly? We are talking here about a reasonable projection on the part of a competent firm that the economy underpinning the revenue stream of the gas monopoly is failing. Right? It doesn’t take much if we ask ourselves, on what basis does a rational government sell a gas monopoly for cash? The only reasonable answer is: When it needs cash immediately and does not expect to survive for very long, because a gas monopoly is a revenue stream that goes on forever unless you sell it, in which case it goes away. It’s just crystal clear what the situation is from the eyes of the government of Greece at the present time.

"Now when they fail to sell the gas monopoly, then on six hours’ notice with no cabinet discussion and no parliamentary debate and no vote, they shut the state radio and television, ostensibly to save 200 to 250 million euros over the course of a year in order to satisfy an arbitrary demand for that amount from the troika, and to show how tough and resolute they were.

"Well, the Greek people said, no, that’s enough. That’s enough. You can put up with a lot of privation, but you cannot put up with a direct attack on the one – however flawed – institution of public discourse that the country actually has. You can’t do it, so the journalists took over the buildings, the trade unions kept the power on, and the crowds went outside to protect them. It was fantastic.

"But it was something that really tells you you’re not far away from the brink. And there are more things that can and will happen over time, but you’re not far away from having a confrontation that will lead to a real, let’s say, breaking point. And, of course, we’ve already seen the political repercussions in the sense that the one of the coalition partners left the government, leaving it with a majority of three. And it does not take much for a majority of three to lead to new elections."

James Galbraith "On Social Breakdown and Financial Stress in Europe"
Alrighty then. This interview contained a nice plug for Greece's pro-EMU Syriza, too: a political force representing a "threat" we might suppose much like that leading to the recent demise of an imperialist-serving, nation-wrecking, warmongering Muslim Brotherhood in Egypt. In other words, Team Fraud finds itself increasingly challenged abroad, as well as at home.

Open season on who will be the next Fed Caesar certainly reveals this in the person of Larry Summers. Much like circumstance surrounding failure to sell Greece's gas monopoly, the mere suggestion that, Larry Summers be the next Fed chairman rather exposes just how close to chaotic collapse the Federal Reserve System is. That it needs at its head a galling creep whose sheer arrogance will be enough to subdue resistance to perma-bailout of hopelessly insolvent casinos masquerading as "banks" at the very least exposes today's renewed chatter over Fed "tapering" as raising to a boil panic over rising interest rates. Indeed, the pressure is so intense we hear of a decreasing supply of U.S. Treasuries on account of improving tax receipts. Trouble is, though, something has to give. The pigs need an ever increasing supply of investment grade debt to paper over the mountain of trash this ever increasing debt supports. Without it, the debt and the garbage it sustains implodes. Beware, then, the false flag venturing provocations leading to the big war...

Word on the Street
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