the first one to default will get the biggest heat but will have clearly an advantage - because ultimately everybody will default. so why to load citizens with the debt service. let's play another hand... p.s. from this perspective i do not understand why gold is not above 10,000 already.
From http://english.capital.gr/ : Le Monde Discloses Euro-Rescue For Greece European states are planning to help Greece so as to avoid a budgetary disaster, French daily Le Monde reports Thursday on its Web site. "According to our sources, different governments, including France and Germany, are looking, in consultation with European authorities, at the details of a mechanism to give financial support to Athens," the newspaper reports. In return the states will demand that Greek intensifies its consolidation plan, the paper says. German Ministry of Finance dismissed the story, while Greek officials said that EU wants Greece to solve its own problems. "We reject this report," finance ministry spokeswoman Jeanette Schwamberger told Dow Jones Newswires. The news agency also quotes a Greek government source as saying that EU Wants Greece To Solve Own Problems and that there are âNo Signs Of EU Bailout For Greece.â Meanwhile, an European Commission spokeswoman said she would "not comment on fictuous reports of speculative nature." And China Shouldnât Buy Greek Debt, Yu Says China shouldnât buy a large portion of Greek government debt to help rescue the country because the securities are more risky compared to U.S. Treasuries, Yu Yongding, a former adviser to the Chinese central bank told Bloomberg âIt is unreasonable for an economist to support a diversification away from an unsafe asset class to a much more unsafe asset class,â Yu said in an e-mailed response to questions of Bloomberg. âLet European governments and the European Central Bank rescue Greece.â âEven if pricing is attractive, one key problem for Greek government bonds is the lack of credibility,â Yu said. âWe trust U.S. statistics on debt and deficits. The numbers are not pretty but we have a pretty good idea, so we would know what we are buying. In contrast, Greeceâs statistics have been sharply criticized by the European Commission.â
in other words; when chinese buy shit they want to know what you had for a dinner - interesting perspective on investing.
Good post and questions. I suspect a bailout is likely as modern economic thought and order and Global agenda require adhesion and adherence over national sovereignty. I do also suspect that Nationalism will spark turbulence; however my concern is "SupraNationalism" in economic reform in the EU and, albeit slim, a return to the doctrine of Charlemagne and the risk of a Fourth Reich. http://en.wikipedia.org/wiki/Supranationalism This guy might be one to keep an eye on as the EU takes shape: http://en.wikipedia.org/wiki/Karl-Theodor_zu_Guttenberg
Hell everyday! lol how's the high speed access out there I wonder? Does get pretty quiet in the winter. Maybe just a season home
ECB prepares legal ground for euro rupture as Greek crisis escalates Fears of a euro break-up have reached the point where the European Central Bank feels compelled to issue a legal analysis of what would happen if a country tried to leave monetary union. By Ambrose Evans-Pritchard Published: 5:12PM GMT 17 Jan 2010 âRecent developments have, perhaps, increased the risk of secession (however modestly), as well as the urgency of addressing it as a possible scenario,â said the document, entitled Withdrawal and expulsion from the EU and EMU: some reflections. The author makes a string of vaulting, Jesuitical, and mischievous claims, as EU lawyers often do. Half a century of ever-closer union has created a ânew legal orderâ that transcends a âlargely obsolete concept of sovereigntyâ and imposes a âpermanent limitationâ on the statesâ rights. Those who suspect that European Court has the power pretensions of the Medieval Papacy will find plenty to validate their fears in this astonishing text. Crucially, he argues that eurozone exit entails expulsion from the European Union as well. All EU members must take part in EMU (except Britain and Denmark, with opt-outs). This is a warning shot for Greece, Portugal, Ireland and Spain. If they fail to marshal public support for draconian austerity, they risk being cast into Icelandic oblivion. Or for Greece, back into the clammy embrace of Asia Minor. ECB chief Jean-Claude Trichet upped the ante, warning that the bank would not bend its collateral rules to support Greek debt. âNo state can expect any special treatment,â he said. He might as well daub a deathâs cross on the door of Greeceâs debt management office. This euro-brinkmanship must be unnerving for the Hellenic Socialists (PASOK). Last weekâs â¬1.6bn (£1.4bn) auction of Greek debt did not go well. The interest rate on six-month notes rose to 1.38pc, compared to 0.59pc a month ago. The yield on 10-year bonds has touched 6pc, the spreads ballooning to 270 basis points above German Bunds. Greece cannot afford such a premium for long. The country must raise â¬54bn this year â front-loaded in the first half. Unless the spreads fall sharply, the deficit cannot be cut from 12.7pc of GDP to 3pc of GDP within three years. As Moodyâs put it, Greece (and Portugal) faces the risk of âslow deathâ from rising interest costs. Stephen Jen from BlueGold Capital said the design flaws of monetary union are becoming clearer. âI donât believe Euroland will break up: too much political capital has been spent in the past half century for Euroland to allow an outright breakage. However, severe 'stress-fracturesâ are quite likely in the years ahead.â As Portugal, Italy, Ireland, Greece, and Spain (PIIGS) slide into deflation, their ârealâ interest rates will rise even higher. âIt is tantamount to hiking rates in the already weak PIIGS,â he said. This is the crux. ECB policy will become âpro-cyclicalâ, too tight for the South, too loose for the North. The City view is that the North-South split may cause trouble, but that there will always be a bail-out to prevent a domino effect. âIf a rescue turns out to be necessary, a rescue will be mounted,â said Marco Annunziata from Unicredit. It comes down to a bet that Berlin will do for Club Med what it did for East Germany: subsidise forever. It is a judgement on whether EMU is the binding coin of sacred solidarity, or just a fixed exchange rate system like others before it. Politics will decide, and in Greece it is already proving messy as teams of âinspectorsâ ruffle feathers. The Orthodox LAOS party is not happy that an EU crew dared to demand an accounting from the colonels. âThe Ministry of Defence is sacrosanct,â it said. Greece alone in Western Europe treats the military budget as a state secret. Rating agencies guess it is a ruinous 5pc of GDP. Does the country really need 1,700 battle tanks, 420 combat jets, and eight submarines? To fight NATO ally Turkey? Merely to pose the question is to enter dangerous waters. Who knows what the IMF surveillance team made of their mission in Athens. The Fundâs formula for boom-bust countries that squander their competitiveness is to retrench AND devalue. But devaluation is ruled out. Greece must take the pain, without the cure. The policy is conceptually foolish and arguably cynical. It is to bleed a society in order to uphold the ideology of the European Project. Greeceâs national debt will be 120pc of GDP this year. S&P says it will reach 138pc by 2012. A fiscal squeeze â without any offsetting monetary or exchange stimulus â will cause tax revenues to collapse. Debt will rise higher on a shrinking economic base. Even if Greece can cut wages without setting off mass protest, it lacks the open economy and export sector that may yet save Ireland in similar circumstances. Greece is caught in a textbook deflation trap. Labour minister Andreas Loverdos says unemployment would reach a million this year â or 22pc, equal to 30m in the US. He broadcast the fact with a hint of menace, as if he wanted Europe to squirm. Two can play brinkmanship. http://www.telegraph.co.uk/finance/...r-euro-rupture-as-Greek-crisis-escalates.html