Putting the Puzzle of Greece Together
Gordon T. Long (at Macro Analytics) talks with John Rubino (Dollar Collapse) about the current developments in Greece and the seemingly impossible choices facing the Greek people and their government.
THE ACCOUNTING CHARADE
To better understand how Greece and the EU found itself in this perplexing problem, John Rubino traces the history of Greece prior to joining the EU. John doesn't hold back in describing the manipulation of economic numbers carried out by Greece, abetted by Goldman Sachs to gain entry into the EU. Greece never met the Maastricht Treaty bar but nevertheless was granted entry. Goldman Sachs and the International Bankers were the big winners. In the short term so were the Greek people.
UNLIMITED SPENDING
John further goes on to detail how cheap money suddenly became available to Greece and the other poor peripheral countries. The exploding growth in debt to them was perceived and treated to be debt backed by the EU. John describes it as:
"It was like giving a teenager an unlimited credit card with no supervision. You should have expected nothing less!"
The situtation in the EU with its peripherals was actually not to dis-similar to the bankers' "game plan" regarding US Agency debt (Fannie Mae and Freddie Mac) which were also perceived to be backed by the US government.
When these agencies got into serious financial trouble during the Financial Crisis the US government accepted the liabilities for these agencies and placed them in "conservatorship" thereby burdening US tax payers with the negligent lending practices they had calously incurred. EU tax payers are likewise being handed the bill for what can only be described as a wonderful party of staggering pension benefits and limited taxation for the Greek people and a lending bonanza for the bankers.
PARTY IS OVER AND THE HANGOVER BEGINS
The financing of the debt incurred cannot possibly be financed by Greece's economy nor absorbed by the EU, for fear that the other delinquent debtor nations will demand the same easy way out.
Of course what is happening here is the banks have made enourmous profits on loans that should have never been made and are now sliding the responsibility to EU taxpayers.
Many Greeks see no real solution and therefore cash runs on the banks will continue to leave Greek banks insolvent as more money is fruitlessly pumped into them by desperate and naive EU officials.
