Greece Fires

Never on Sunday but over the weekend, the Greek parliament pushed through EU-mandated (read German bank-mandated) austerity measures. 

I have zero sympathy for the welfare-state mentality of the Greeks.  However, this has been coming for a long time, and the  process has always been obvious to anyone caring to look.  Spending more than you take in will always result in some form of bankruptcy, even if you are a government in control of the printing presses.  Inflation is just counterfeiting when done by the government.  America is in the same condition.  Obama had promised to halve the budget deficit.  His budget for the next fiscal year -- and we hope his last -- projects a 1.33 trillion dollar deficit.  Projections -- except when they are about saving or reductions -- are laughably understated.  My guess is that the shortfall would end close to 2 trillion, but since his inauguration 3 very long years ago, Obama has already increased the national debt by an amazing 50 percent.  He had to do something for an encore.

But back to the Greeks.  Crude is up as the euro has strengthened over the dollar.  The insanity of this is evident when you think about it.  Severe austerity is being imposed on the people of Greece in order for the ECB, Germany, France, and probably the Fed, to pump more money into continuing to make the payments on worthless Greek paper.

Now, admittedly, an outright bond default in Greece would have shaken the euro badly, possibly driving it down to $1.25 but probably not much lower immediately as a lot of the mess is already priced in.  I am having trouble understanding, though, exactly how printing more euros to throw down a rathole is much of an improvement.  The bondholders, except for special groups of banksters, have already taken significant haircuts on the face value of their bond holdings.

The cutting of government spending in Greece means that the national GDP will collapse further.  Cutting taxable wages will result in less revenue into the treasury.  In all likelihood, then, the debt picture will not show any short-term improvement.  In the long-term, Greece will default anyway, probably immediately after an election of a nationalist party that is willing to flip off the EMU and return to the drachma.

Keep in mind that both Greece and Italy are being run by EU-imposed governments headed by EU technocrats.  From the article:

Greece and Italy are both run by caretaker governments after their democratically-elected leaders George Papandreou and Silvio Berlusconi were forced to resign last fall. Both countries will have to hold elections by 2013, and many would-be candidates are concerned about the fallout from supporting these hard-hitting measures.

These are dictatorships forced on the nations through their treaty agreements.  If you think about this for just a moment, you realize that Italy and Greece are not considered sovereign nations.  Germany is the central controlling force in Europe.  They are running the show through the super-national structure.  The Greeks, Italians, Irish, etc. have no real say in who governs their country.  We have kind of come to accept, in the United States, that, for example, a sitting governor in a state could be removed via federal indictment for some sort of crime.  We know the federal government imposed its will by force upon the several states and declared that we are one nation in fact as a result of our own Civil War.  Berlusconi and Papandreou were "forced to resign" but not charged, as far as I know, with crimes.  No war has been fought in Greece.  Yet.  Democratically elected leaders have been removed and replaced with those who will do the bidding of the German banks.

Here is the response of the EU-appointed head of the Greek government, Mr. Papademos, to the riots:

“This vandalism, violence.. they have no place in a democracy and will not be tolerated," he said in a television address before the Greek parliament voted. “I call on the public to show calm. At these crucial times, we do not have the luxury of this type of protest. I think everyone is aware of how serious the situation is.”

 I don't know.  Perhaps the irony is lost in translation.