9-May-12 World View -- Greece returns to full fiscal crisis

[John]

9-May-12 World View -- Greece returns to full-scale fiscal crisis as new elections loom


Nationalistic China increasingly threatens Philippines militarily

** 9-May-12 World View -- Greece returns to full-scale fiscal crisis as new elections loom
** http://www.generationaldynamics.com/cgi ... 09#e120509



Contents:
Kofi Annan says Syria is on brink of civil war, and only his plan can prevent it
New elections looming for Greece
Greece faces major new financial crisis and may leave eurozone
Greece and the 'Kick the Can Theory'
Nationalistic China increasingly threatens Philippines militarily


Keys:
Generational Dynamics, Syria, Kofi Annan, Bashar al-Assad,
United Nations, Security Council,
Greece, Antonis Samaras, SYRIZA, Alexis Tsipras,
European Central Bank, ECB, China, Philippines,
Scarborough Shoal, Huangyan Island, Hitler, Lebensraum

[OLD1953]

I think the British commentator is forgetting just how bad things are in Greece. When someone has nothing to lose, they will start demanding desparate measures. If new elections are held in June, the Greeks will very likely double down against austerity. And the French aren't going to put up with much more of it either.

Leaving the EURO for the Drachma is just a new bandaid to replace the old one, but it would offer some hope, and that's where the Greeks are now, grasping at any possible straw. So what would be the ultimate end of tying Greece to the EURO and never leaving? Since they will eventually be unable to do anything else, they'd be forced to sell Greece to outsiders, then they'd be forced to leave Greece, and the last Greek out would trade his last EURO for a German sausage. This simply will not happen. From that standpoint, I find the Greek spending on arms to be quite logical.

http://digitaljournal.com/article/318237

When the Greeks pay in devalued drachmas, then the German banks will fail and Germans will start talking about war as something to be considered and not abhorred. And Greeks will be damn glad of all those weapons.

Of course, it could very likely happen that all of NATO will be at war with someone else before that happens, and all debts simply cancelled in some fashion. But if nothing else broke the peace, eventually Europe would choose sides and go at it over debt vs austerity.

[vincecate]

I think the British commentator is forgetting just how bad things are in Greece. When someone has nothing to lose, they will start demanding desparate measures. If new elections are held in June, the Greeks will very likely double down against austerity. And the French aren't going to put up with much more of it either.

Leaving the EURO for the Drachma is just a new bandaid to replace the old one, but it would offer some hope, and that's where the Greeks are now, grasping at any possible straw.

Mish thinks the anti-austerity will win the next election:
http://globaleconomicanalysis.blogspot. ... ction.html

If Greece goes to the Drachma and still spends far more than they get in taxes, after defaulting on their debt or paying with money worth far less, there won't be many people loaning them money. So they will have to print to cover the full deficit. They have a good chance of hyperinflation.

[mannfm11]

This South China Sea mess looks a lot more serious than Greece. I can't see the US allowing a Chinese attack on the Phillipines. Maybe the Mayan Calendar is right on schedule?

[Reality Check]

This South China Sea mess looks a lot more serious than Greece. I can't see the US allowing a Chinese attack on the Phillipines. Maybe the Mayan Calendar is right on schedule?

China is carrying out aggression by Oil Drilling Rig. The threats of military action are just designed to lay the ground work for using the Chinese military to protect those rigs from the Philippine police and the Philippine military enforcing Philippine territorial claims to the waters near the Philippines.

It is just not credible that Obama would go to war with China, even if China started drilling for oil three miles off the Philippines coast line.

Obama would want to negotiate for a few decades first. The same way he is "talking" with Iran and North Korea. Translation: "Obama would 'insist on" letting China have China's way while claiming that in 10 or 20 years the United States might do something about such 'unacceptable behavior' if China does not agree to talk about, talking about, negotiating about, reaching a compromise on the way China is drilling for oil".

As the Obama administration would put it: "no one could say that Obama had not made it clear that such behavior by China was unacceptable to the United States".

[Reality Check]

If the Philippines and the U.S. were serious about protecting Philippine territorial waters from China they would build a serious of small air force bases around the various Phillipine islands protected by large garrisons of Phillippine troops and capable of providing underground shelters for U.S. Air Wings that could fly in and protect the Philippines waters from Chinese naval vessels.

If the Philippines and the United States had the ability to sink any, and every, Chinese ship half way between China and the Philippines the threat of military action by China would be a joke.

At the present time only Obama and United States policy toward China under Obama's lack of leadership is a joke.

[Reality Check]

I think the British commentator is forgetting just how bad things are in Greece. When someone has nothing to lose, they will start demanding desparate measures. If new elections are held in June, the Greeks will very likely double down against austerity. And the French aren't going to put up with much more of it either.

Leaving the EURO for the Drachma is just a new bandaid to replace the old one, but it would offer some hope, and that's where the Greeks are now, grasping at any possible straw. ...

How exactly are the Greeks going to "double down against austerity". Throw a tantrum and threaten to hold their breath if the Germans insist the Greeks do, what the Greeks promised to do, before Germany gives the Greek government more "free money" ???

Are the Greek people going to burn down Greek buildings and kill Greek people in riots to make the Germans "feel bad"???

The Greek government ( this Greek government, or the last Greek government nor any future Greek government the Greek people may vote in ) can not re-pay the money they borrowed and agreed to repay, nor can the Greek government pay their own people wages and retirements a previous Greek government promised the Greek people the Greek government would pay. It is not either or. It is neither unless they jump through the hoops required to get more money ( more loans ) from the other governments of the EU. The Greek people can vote for a government that refuses more loans from Europe, but that does nothing for the Greek people but cancel their paychecks and retirement checks.

The only way the Greek government can pay partial retirements and partial wages and partial debt repayments is if Germany and other European countries loan them more money to do so.

The Greek government cannot print money to re-pay their debts and give that printed money to their people like the United States, because the Greek government uses money printed by other governments they do not control.

The Greek government must borrow more, or default on both the Greek government's previous promises of wages and retirement payments to the Greek people and default on the Greek government's previous promises to repay previous debts.

The Greek people can hold their breath, throw a tantrum, or go back to printing their own money, paying their own people in their own worthless money, and default on their debts, or jump through German hoops and get more Euro ( European paper money ) loans from Germany and the rest of Europe.

The former Greek money is no longer used and has no value. If they start printing it again it will be worth less than the paper it is printed on.

It is one of those lose, lose, lose situations that Obama, with his 1,500 Billion dollar per year increases in the debt, is driving the U.S. toward at break neck speeds.

[Reality Check]

I think the British commentator is forgetting just how bad things are in Greece. When someone has nothing to lose, they will start demanding desparate measures.

The austerity plan already agreed to by the Greek government provides for Loans from the rest of Europe which will allow Greece to pay part of the wages and part of the retirement payments the Greek government had previously promised to the Greek people.

The austerity plan allows the Greek government to continue to borrow money ( run a budget deficit ) for may years in the future just so that austerity measures are limited. If Greece can not borrow money it will be forced to balance it's budget which will require much larger austerity measures and much larger tax increases.

So the suggestion that the Greek people have nothing to lose if the Greek government declines those loans is false.

Part of a retirement check is better than no retirement check.

Lower wages are better than no wages.

Two out of three people keeping their government jobs is better than one out of ten people keeping their government jobs.

The Greek people do have a lot to lose.

[Reality Check]

Between World War I and World War II, Europe did forgive all of Germany's debt.

The result was the economic recovery and militarization of Germany and the economic collapse of the rest of Europe ( the Great Depression in Europe ).

So the Greeks do have some historical precedent for hoping for stupid moves on the part of Europe as a whole which might allow them to walk away from their debts and recover economically.

Of course that would be at the expense of every other citizen of every other country in Europe.

[Reality Check]

I have a solution for Greece to avoid another election.

Two of the top three parties ( based on the most recent election results ) supported both the EU bailout and the austerity plan which was a condition of that bailout.

The members of those two parties should, for 90 days, support with their votes in parliament, the largest anti-austerity party forming a government made up only of members of that anti-austerity party.

Let that anti-austerity party attempt to re-negotiate the bailout and/or run Greece without the bailout money ( without more loans to finance a Greek budget deficit forcing them to immediately balance the budget ).

Then in 90 days two of the three largest parties could force a new election by voting no confidence in the anti-austerity government.

Then the Greek people would be able to see what each party of the three largest parties are offering.