C’mon Angela, Let Them Greexit
With each passing day it becomes more obvious that Europe is heading for an epochal financial conflagration. So buy-the-dip if you must, but don’t believe for a minute that the US has decoupled. When the euro and EU eventually implode it will rattle the bones of every gambler and algo left in the casinos anywhere on the planet.
Yes, the school yard name calling and roughhousing now going on in Europe makes it appear that behind the sturm und drang there is some negotiations happening. But the truth is there is nothing to negotiate. Greece is so completely and terminally bankrupt that there is no solution other than default and greexit.
To insist that Greece service the entirely of its staggering $350 billion of debt, as does Germany and the troika apparatchiks, is to advocate the extinguishment of democracy in Greece and its reduction to a colonial mandate of Brussels; and in the process, to eliminate any semblance of economic life among the debt serfs who would inhabit it.
Its just math. Sooner or later interest rates must normalize. For a country with Greece’s profligate fiscal history, there is no possibility that the interest carry cost on a public debt load equal to 175% of GDP could be any less than 6-7% in the absence of EU guarantees.That means that the Greek state’s annual interest bill would approach 10% of GDP before paying down a single dime of principal.
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