Socio-Economics History Blog

Socio-Economics & History Commentary

The First Dominoes: Greece, Reality, And Cascading Default !

Illuminists are lining up the dominoes for a collapse of the Eurozone!

  • Greece is on fire. Protestors have rioted across the country and set many buildings on fire. See: Athens – The Morning After: 48 Buildings On Fire, 150 Looted, Hundreds Arrested . Will Greece be able to grow its way out of debt? Most certainly not. The country is going from bad to worse!

    The First Dominoes: Greece, Reality, And Cascading Default ! 
    by Zeus Yiamouyiannis from Of Two Minds, 
    Greece is the epicenter of a drama that threatens to unwind with all the intrigue and subterfuge of ancient Greek myths and tragedies. As with the legend of Icarus, big, and now bigger, transnational banks provoked the gods with their wax-and-feather financial fabrications to create the appearance of soaring wealth. Now that they have flown too close to the sun and their wings have melted, these banks are being brought to earth by the obligations and consequences imposed by their fabrications.

    Rather than take responsibility, these banks seek to appease the gods by sacrificing taxpayers. In fact, if one looks closely, these banks aspire to be gods themselves. They clothe themselves in their indispensability and shield themselves from accountability with tales about how many innocent citizens will be hurt if they don’t get their next bailout. It is as if they say, “We are above the law… We are the law.” Mathematics, legal enforcement, restraint, humility all must fall under the sword of their hubris.

    In the end, just as with a Greek tragedy or a Yeats poem, this center cannot hold and things fall apart. When one abuses the laws and principles of mathematics and capitalism, claiming to be a faithful servant, consequence and accountability eventually catch up. The breaking point inexorably nears. Citizens are beginning to think, voice, and act: “We can do without the false idols that call themselves banks. In fact, we need them to be dissolved for us to survive and thrive.”

    Reality is the revenge of the gods.

    Not just about fairness: Everything unwinds
    This is not just about fairness anymore; it is about the exposure of central, global illusions that affect everyone, not just banks. For the last three plus decades, debt-fueled “growth” has instilled a life sense that everyone gets rich, values always go up, and no one has to pay. If those illusions evaporate than those citizens complicit in this failed fantasy may actually join forces with the realists (those who knew it was a scam all along) to produce unified citizen revolt. Hell hath no fury like the people spurned and lied to, even if many had some responsibility in welcoming and fanning those lies.

    The implicit deal was this: We will collude so everyone gets rich going forward. We will collude so no one has to pay if there is any unwinding. (But, hey, it’s a new era, and that’s not going to happen!) Open default breaks the illusion, and austerity breaks up the collusion. This is why default has to be hidden, deferred, restructured. It is not just about chaos around party/counterparty risk (in particular, cascading claims that are not backed by anything). It is not even just about finance. It’s about all the other things that will unwind, culturally, politically, and psychologically, if Greece defaults and sets into motion the necessity of someone actually paying up. In short, recognition of reality has disastrous consequences for the status quo and its control myths.

    … for more click here!


February 14, 2012 Posted by | Economics, GeoPolitics | , , , , , , , , , , | 1 Comment

Italy, Spain, Portugal Ratings Lowered by Moody’s as U.K. Outlook Negative!

This is what is coming up for the world economy!

  • The Eurozone is on fire. This is creating a massive distraction for the humongous problem in America. Whatever sovereign debt problems the Eurozone has, America’s debt problems are several orders of magnitude worse. The problems of the Eurozone are providing support for the USD via a weak Euro. But no one should be deceived into thinking the chickens won’t come home to roost in America. America is the BIG ONE. When the USD collapses it will be a knock out blow to the global financial and monetary system and send the world economy into an undeniable Greater Depression.

    Italy, Spain, Portugal Ratings Lowered by Moody’s as U.K. Outlook Negative! 
    By Ben Livesey and Cordell Eddings, 
    Moody’s Investors Service cut the debt ratings of six European countries including Italy, Spain and Portugal and said it may strip France and the U.K. of their top Aaa ratings, citing Europe’s debt crisis.

    Spain was downgraded to A3 from A1 yesterday, Italy to A3 from A2 and Portugal to Ba3 from Ba2, all with negative outlooks. Slovakia, Slovenia and Malta also had their ratings lowered.

    “Policy makers have made steps forward but we do not think they have done enough to reassure the market that we are on a stable path,” said Alistair Wilson, chief credit officer for Europe at Moody’s in London. “What will guide long-term ratings is the clarity and the performance of policy makers and the macro picture.”

    The euro weakened while U.S. equity futures retreated. The yen gained 0.2 percent against the euro as of 9:39 a.m. inTokyo. The euro slipped 0.2 percent to $1.3167. Standard & Poor’s 500 Index futures lost 0.1 percent after the stock benchmark climbed 0.7 percent yesterday.

    “The uncertainty over the euro area’s prospects for institutional reform of its fiscal and economic framework,” and the resources that will be made available to deal with the crisis, are among the main drivers of Moody’s action, the ratings company said.

    Recent rating cuts have done little to deter investors, who poured money into the government bonds of nations such as France and Austria even after the countries lost their AAA ratings at Standard & Poor’s last month. U.S. Treasuries returned three times as much as AAA corporate bonds since the world’s biggest economy was cut by one rank in August.

    Austrian Outlook
    Moody’s yesterday also lowered its outlook on Austria’s Aaa rating to negative. Malta’s rating was downgraded to A3 from A2, and Slovakia and Slovenia were both downgraded to A2 from A1. All three were given negative outlooks.

    Moody’s said Europe’s “increasingly weak macroeconomic prospects” threaten the “implementation of domestic austerity programs and the structural reforms that are needed to promote competitiveness.” It said market confidence “is likely to remain fragile, with a high potential for further shocks to funding conditions for stressed sovereigns and banks.”

    … for more click here!


February 14, 2012 Posted by | Economics | , , , | 1 Comment

Peter Schiff: Ben Bernanke is Completely Clueless!

February 14, 2012 Posted by | Economics, GeoPolitics | , , , , , , , , , , , , , , , | Comments Off on Peter Schiff: Ben Bernanke is Completely Clueless!