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Moving forward, let us see to what extent Europe is being propped up by China in, what may become,
the final frontier for the US.
In other words, the demise of the Euro may well be in the interest of the US, as a means of creating
the illusion that the US Dollar is then a safer haven.
After all, for this financial system to collapse it would have to take China with it.
We would still need a US Dollar on the playing field (or playground) for that to happen, so the Euro Land would have to fall first (imo).
Also something I've never quite understood is how quiet things are about Japans economy,
not to mention the effects of the floods presently in Thailand.
I wonder how these compare to the problems in Greece.
So what would Germany do with it's Euro's in all this.
Needless to say I'm just a lay person in these things, but I'm reminded of the quote from Kundara
"most of life happens to us while we're busy looking the other way"
The question has not been correctly asked. Why should Germany leave the Euro?
What we observe is a clash of cultures. Southern Europeans have the habit of spending more than they can afford and then activate the printing press to deflate the debt. With a common currency they cannot activate the printing press, as the European Central Bank has a target for inflation and monetary stability.
If you cannot activate the printing press because you have accumulated too much foreign denominated debt, there are two solutions
-> beg for money
-> default
The solution adopted now is half a default, and even if the Greek debt is reduced by 30 or 50 %, it is not sure that they can shoulder the remainder. They are still running huge budget deficits. This is a Greek and not a German problem. So in the end it is up to Greece to reintroduce the drachme. But then who would want this? Greek citizens are very creative when it comes to channeling funds abroad.
So the likely scenario is just a default, which can trigger further defaults and which cannot be averted by the printing press. After all Europe's debt is not higher than the debt of the US, but the FED does not have targets for controlling
inflation that are as severe as the targets of the European Central Bank.
What has this to do with Germany? The Southern Europeans need a scape goat. It is the exclusive fault of the Germans that Greece has run budget deficits of over 10% for over 10 years. Politicians also blame banks for the national deficits. It is always easier to blame somebody else.
So tomorrow if you put on a short postion, when you shouldn't and if you overtrade and your account is depleted, just blame the broker or your software.
Athens - Greece's biggest pension fund has paid out up to 8 billion euros in fraudulent pensions in the past decade, highlighting the widespread welfare fraud that exists in the debt-ridden country, a report said Monday.
Rovertos Spyropoulos, the director of the Social Security Foundation (IKA), said that between 7 and 8 billion euros had been paid to deceased claimants over the last 10 years.
According to the report in the Greek daily Kathimerini, the money in question is often claimed by relatives, or remains idle in bank accounts.
The original question of the thread is neither right or wrong, it is just a question.
Looking at the "why", would be another question, and a good question, but it seems to lead to a blame game of sorts.
I cannot see how any individual country or culture could be to blame.
We are supposed to be guided by elected or, as per the European "government", unelected officials,
expert at these affairs. !!
This issue and the original question is not directly about Greece or who or which country or culture thinks is a "scapegoat" or not. I can however, appreciate the sense of injustice that is invoked in this maze of inter-connectedness
of nation states and cultural identities.
There are division on multiple levels in the word, the extents of which are coming to light almost at the speed of light in recent times and Greece is, imo, just a manifestation of this.
Your analogy of a trading position making a loss and blaming the broker I understand to mean that if you don't play by the rules you have no one else to blame.(apologies if I've misunderstood you).
But Greece was never in a position to be able to play the same game, nor even on the same playing field.
It's a futile and irrelevant argument, imo and with respect.
If anything the world is perhaps coming to the realization that it is the "game" we have all been led to believe is "how" and "why" we should function, that is in question. In any game, there will be losers and winners. At times this is not
always obvious or apparent and we don't always win or lose in the same way or for the same things.
Just some thoughts.
PS: posted this elsewhere but worth a second listen imo.
One way or another, corruption exists, I guess.
we could look into the military arms deals made between Greece and France/UK for example, in the midst of the
Greek bailouts. We lend them hundreds of millions only for the Greek government to purchase hundreds of millions worth or military arms.
Look at the City in more depth for examples of political manipulation, unaccountability, tax havens and the like.
Which ever way we cut it, the general populace is taxed to pay for everything regardless of their culture or country.
Greece is not amongst the poorest European countries, but they were running huge public deficits for over 10 years, and faked all financial information sent to the European officials. Now all of a sudden they discover that they have accumulated an unsustainable debt.
There are some rules, if you want to be on the playing field, but if you cheat all the time and have an incompetent or corrupt administration not enforcing taxes and pay billions to the deceased then you will end up with a huge public debt.
And that is waht happened.
I personally love Greece and have been there several times, but I do not think that the country has had the political leaders which it merits. I believe that the political leaders may have had more interest in serving their own pockets than their country..
"A little over a month ago, Zero Hedge started an avalanche in the financial sector, and an unprecedented defense thereof by the "independent" financial media and conflicted sell side, by being simply the messenger in pointing out that the gross exposure of one Morgan Stanley to the French banking sector is $39 billion. The firestorm of protests, which naturally focused on the messenger, and not the message, attempted to refute the claims that Morgan Stanley (and many others) are overexposed to Europe (both banks and countries) by stating that gross is not net, and that when one nets out "hedges" the real exposure is far, far lower. The logic is that bilateral netting, as the principle behind this argument is called, should always work - no matter the market, and that counterparty risk, especially when it comes to hedges, should always be ignored because banks will always honor their own derivative exposure. Obviously that this failed massively when AIG had to be bailed out, to preserve precisely the tortured and failed logic of bilateral netting was completely ignored, after all things will never get that bad again, right? Well, wrong. Because the argument here is precisely what the exposure is when the chain of netting breaks, when one or more counterparties go under (such as MF Global for example, which filed bankruptcy precisely due to its hedged (?) European exposure - luckily MF was not in the business of writing CDS on European banks or else all hell would be breaking loose right now). So little by little the story was forgotten: after all when everyone says gross is not net, contrary to what history shows us all too often, everyone must be right. Today it is time to refresh this story, as none other than Bloomberg pulls the scab right off and while confirming our observations, also goes further: yes, banks are not only massively exposed to Europe, but they are in essence misrepresenting this exposure to the public by a factor of well over ten!...............
With banks on both sides of the Atlantic using derivatives to hedge, potential losses aren’t being reduced, said Frederick Cannon, director of research at New York-based investment bank Keefe, Bruyette & Woods Inc.
“Risk isn’t going to evaporate through these trades,” Cannon said. “The big problem with all these gross exposures is counterparty risk. When the CDS is triggered due to default, will those counterparties be standing? If everybody is buying from each other, who’s ultimately going to pay for the losses?”
"Have a sinking suspicion that the way the Eurozone has handled the past week's Greek threat has set the stage for the collapse of the Eurozone (here's looking at you Italy, over and over) now that Merkozy has made the possibility of a country leaving the Eurozone all too real? You are not alone: Morgan Stanley's Joachim Fels has just sent a note to clients in which he not only commingles three of the catchiest and most abused apocalyptic phrases of our time ("Emperor has no clothes", "Water Pistol not Bazooka" and "Pandora's Box") he also warns, in no uncertain terms, that "by raising the possibility that a country might (be forced to) leave the euro, core European governments may have set in motion a sequence of events which could potentially lead to runs on sovereigns and banks in peripheral countries that make everything we have seen so far in this crisis look benign." And when a major investment bank, itself susceptible to bank runs warns of, well, bank runs, you listen."
