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While Germany’s finmin Schauble is about to burst at few capillaries after reading the latest provocation from Tsipras in which he said, according to Reuters, that:

GREEK PM TSIPRAS SAYS I SIGNED I DEAL I DO NOT BELIEVE IN BUT I’M WILLING TO IMPLEMENT AND WILL ASSUME RESPONSIBILITIES

It should be the Greek people that are reeling by another, even greater stunner, just spoken by the Greek PM during his TV interview: an admission from the chosen Greek “leader” that Greece, as a
sovereign nation, no longer exists:

GREEK PM TSIPRAS SAYS LENDERS GIVE A MESSAGE THAT IN COUNTRIES UNDER A BAILOUT THERE IS NO POINT IN HOLDING ELECTIONS

So the Troika makes it clear that countries under a bailout, such as a Greece was and is about to be indefinitely again, democracy is finished and the country becomes a sovereign ward of a few unelected bureaucrats, and the Greek “prime minister” who also just admitted he is now nothing but a puppet of Greece’s new unelected leaders, is Ok with this.

The good news, at least for those who seek to connect dots, is we can now close the book on what Schauble was talking about when he said “Aber glauben Sie mir, das Problem ist lösbar” in this 2011 interview with Welt am Sontag:

Schauble: “We decided to arrive at a political union via an economic and currency union. We had the hope – and we still have it today – that the Euro will gradually bring about political union. But we’re not there yet, and that’s one of the reasons why the markets are distrustful.

Welt am Sonntag: “So will the markets now force us into a political union?”

Schauble: “Most member states are not yet fully prepared to accept the necessary constraints on national sovereignty. But trust me the problem can be solved.”

At this point it is probably also worth repeating what Latvia’s outgoing president Berzins said two weeks ago:

…click on the above link to read the rest of the article…

We Are All (or Should Be) Greeks Now

July 10, 2015

We Are All (or Should Be) Greeks Now

Their ‘No’ vote splashes a spotlight on ugly austerity, and its powerful puppeteers.

The temple of neo-liberalism and its ideology of social suicide in the interests of the banks has been breached. The hysteria in European capitals (particularly Germany) after the resounding “No” vote by the people of Greece is entirely appropriate. For decades now developed country governments and their enforcers, the IMF and the World Bank, have managed to bamboozle people in country after country, convincing them that up is down and black is white — that austerity and recession are nirvana — pie in the sky, bye and bye.

Until now.

The “No” vote — accomplished despite a hysterical campaign of fear by literally the entire Greek and EU media — is like a bright flash of light, however momentary, revealing the true nature of the conditions imposed by international finance and its political puppets in Western capitals. And who better to wield that bright light than Greece’s heretic economist and (now former) finance minister Yanis Varoufakis. An accomplished economist and an even better propagandist, he single-handedly reframed the Greek crisis from one of blaming lazy Greeks to blaming greedy EU banks.

Talk about great theatre: to contrast himself with the endless stream of men in suits from the euro-zone bureaucracy, he gave a news conference the day of the vote wearing a T-shirt. He was rejected by his fellow finance ministers as a negotiator because he, unlike most of them, actually understood economics and was prone to ridiculing their constant repetition of neo-liberal slogans.

The war between democracy and international finance, effectively suppressed for decades by complicit Western politicians and co-conspirators in the corporate media, is now out in the open for all to see. And what we see should have us declare that we are all Greeks now.

…click on the above link to read the rest of the article…

Someone Pull The Plug or This Will End in War

July 10, 2015

Someone Pull The Plug or This Will End in War

I was going to write up on the uselessness of Angela Merkel, given that she said on this week that “giving in to Greece could ‘blow apart’ the euro”, and it’s the 180º other way around; it’s the consistent refusal to allow any leniency towards the Greeks that is blowing the currency union to smithereens.

Merkel’s been such an abject failure, the fullblown lack of leadership, the addiction to her right wing backbenchers, no opinion that seems to be remotely her own. But I don’t think the topic by itself makes much sense anymore for an article. It’s high time to take a step back and oversee the entire failing euro and EU system.

Greece is stuck in Germany’s own internal squabbles, and that more than anything illustrates how broken the system is. It was never supposed to be like that. No European leader in their right mind would ever have signed up for that.

Reading up on daily events, and perhaps on the verge of an actual Greece deal, increasingly I’m thinking this has got to stop, guys, there is no basis for this. It makes no sense and it is no use. The mold is broken. The EU as a concept, as a model, has failed and is already a thing of the past.

It’s over. And anything that’s done from here on in will only serve to make things worse. We should learn to recognize such transitions, and act on them. Instead of clinging on to what we think might have been long after it no longer is.

…click on the above link to read the rest of the article…

Gold and the “Grexit” Threat

July 10, 2015

Gold and the “Grexit” Threat

The Everything is Fine Meme

Initially, we were also a bit surprised that the gold price didn’t rise when the threat of a Greek exit from the euro area became more palpable following the breakdown in negotiations and the outcome of the Greek referendum. After all, it was to be expected that “risk assets” would suffer and so-called safe haven assets would be sought after, at least temporarily.

However, upon giving the matter some thought, we have concluded that gold’s lack of a response (in fact, it went slightly down rather than up, so there was actually a response) could actually be explained quite easily. For one thing, speculators increased their net long position in gold futures by more than 20,000 contracts net in the week before the negotiations broke down, apparently in anticipation. While they did so, the gold price barely budged, so in a sense it was “wasted firepower”.

Grexit-gold

Image via eghtesadnews.com

Prior to the breakdown in negotiations between the troika and Greece, speculators increased their net long position in gold (above the net hedger position is shown, which is the inverse of the speculative position) – click to enlarge.

When no large increase in prices occurred on the Monday after the referendum had been announced, these new positions were quickly liquidated again. The downturn in prices in turn emboldened speculators to add to their short positions, pressuring prices even further.

There are other reasons for the reaction as well. One is that in spite of a bit of a wobble in stocks, the essential “everything is just fine” story hasn’t really been derailed. The dangers of a “Grexit” are probably underestimated and up until recently, no-one believed it to be a likely outcome anyway (it still isn’t, although it is more likely than it once used to be).

…click on the above link to read the rest of the article…

Why Grexit is the most likely outcome

July 9, 2015

Why Grexit is the most likely outcome

Ahead of Greece’s referendum on a bailout plan in early July, EU decision makers, including Eurogroup Chairman Jeroen Dijsselbloem, warned a “no” vote might lead to Greece’s exit from the Euro. After Greece’s overwhelming “no”, and Eurozone leaders’ latest ultimatums, there are a number of factors that indicate that “Grexit” may indeed be the most likely outcome.

1. Greece is already in default to the IMF

Last week, Greece defaulted on its obligations to the IMF, even if we technically would need to say it was put in“arrears”. Greece is the first developed country to do so. Currently, the Greek banking system is dependent on the ECB allowing the Greek Central Bank to issue loans to Greek banks through a scheme called Emergency Liquidity Assistance (ELA). As the name suggests, this funding can only be provided to deal with liquidity problems, so it cannot prop up insolvent banks. Greek banks are intimately linked with the insolvent Greek state, meaning they are insolvent themselves, meaning in turn that the ECB would need to cut off funding.

The necessary two thirds majority needed within the ECB Governing Council to block the Greek Central Bank from creating euros to lend to Greek banks under ELA hasn’t been reached so far. As a result, the ECB has had to come up with all kinds of excuses, the latest being that it will only cut off ELA funding for Greek banks in case there is “no prospect of a deal”. The ECB’s excuses are likely to run out soon, especially if the Greek government defaults on payments to the ECB on 20 July. This week, the ECB restrained ELA a little more, but it’s expected to provide ELA funding at least until Sunday. Political cover would be needed for any further actions though.

…click on the above link to read the rest of the article…

Europe is blowing itself apart over Greece – and nobody seems able to stop it

July 8, 2015

Europe is blowing itself apart over Greece – and nobody seems able to stop it

Prime Minister Alexis Tsipras never expected to win Sunday’s referendum. He is now trapped and hurtling towards Grexit

Like a tragedy from Euripides, the long struggle between Greece and Europe’s creditor powers is reaching a cataclysmic end that nobody planned, nobody seems able to escape, and that threatens to shatter the greater European order in the process.

Greek premier Alexis Tsipras never expected to win Sunday’s referendum on EMU bail-out terms, let alone to preside over a blazing national revolt against foreign control.

He called the snap vote with the expectation – and intention – of losing it. The plan was to put up a good fight, accept honourable defeat, and hand over the keys of the Maximos Mansion, leaving it to others to implement the June 25 “ultimatum” and suffer the opprobrium.

• Greece crisis live on Wednesday

This ultimatum came as a shock to the Greek cabinet. They thought they were on the cusp of a deal, bad though it was. Mr Tsipras had already made the decision to acquiesce to austerity demands, recognizing that Syriza had failed to bring about a debtors’ cartel of southern EMU states and had seriously misjudged the mood across the eurozone.

Instead they were confronted with a text from the creditors that upped the ante, demanding a rise in VAT on tourist hotels from 7pc (de facto) to 23pc at a single stroke.

Creditors insisted on further pension cuts of 1pc of GDP by next year and a phase out of welfare assistance (EKAS) for poorer pensioners, even though pensions have already been cut by 44pc.

They insisted on fiscal tightening equal to 2pc of GDP in an economy reeling from six years of depression and devastating hysteresis. They offered no debt relief. The Europeans intervened behind the scenes to suppress a report by the International Monetary Fund validating Greece’s claim that its debt is “unsustainable”. The IMF concluded that the country not only needs a 30pc haircut to restore viability, but also €52bn of fresh money to claw its way out of crisis.

…click on the above link to read the rest of the article…

With Yanis Gone, Now Troika Heads Must Roll

July 6, 2015

With Yanis Gone, Now Troika Heads Must Roll

Now that Yanis Varoufakis has resigned, in the kind of unique fashion and timing that shows us who the real men are, it’s time to clear the other side of the table as well. The new finance minister, Euclid Tsakalotos, should not have to face the same faces that led to Europe’s painful defeat in yesterday’s Greek referendum.

That would be an utter disgrace, and the EU would not survive it. So we now call for Juncker, Lagarde, Schäuble, Dijsselbloem, Draghi, Merkel and Schulz to move over.

It’s time for the Troika to seek out some real men too. It cannot be that the winner leaves and all the losers get to stay.

The attempts to suppress the IMF debt sustainability analysis were a shameful attempt to mislead the people of Greece, and of Europe as a whole. And don’t forget the US: Lagarde operates out of Washington.

It cannot be that after this mockery of democracy, these same people can just remain where they are.

It’s time for Europe to show the same democratic heart that Varoufakis has shown this morning. And if that doesn’t happen, all Europeans should make sure to leave the European Union as quickly as they can.

Because that would prove once and for all that the EU is no more than a cheap facade, a thin veil behind which something pretty awful tries to hide its ugly face.

Here is Yanis’ explanation behind his resignation:

Minister No More! (Yanis Varoufakis)

The referendum of 5th July will stay in history as a unique moment when a small European nation rose up against debt-bondage. Like all struggles for democratic rights, so too this historic rejection of the Eurogroup’s 25th June ultimatum comes with a large price tag attached. It is, therefore, essential that the great capital bestowed upon our government by the splendid NO vote be invested immediately into a YES to a proper resolution – to an agreement that involves debt restructuring, less austerity, redistribution in favour of the needy, and real reforms.

…click on the above link to read the rest of the article…

Greece Votes NO – Let The Chaos Begin…

July 6, 2015

Greece Votes NO – Let The Chaos Begin…

The result of the referendum in Greece is a great victory for freedom, but it is also threatens to unleash unprecedented economic chaos all across Europe. With almost all of the votes counted, it is being reported that approximately 61 percent of Greeks have voted “no” and only about 39 percent of Greeks have voted “yes”. This is a much larger margin of victory for the “no” side than almost everyone was anticipating, and it represents a stunning rejection of European austerity. Massive celebrations have erupted on the streets of Athens and other major Greek cities, but the euphoria may not last long. Greek Prime Minister Alexis Tsipras is promising that Greece will be able to stay in the euro, but that gives EU bureaucrats and the IMF a tremendous amount of power, because at this point the Greek government is flat broke. Without more money from the EU and the IMF, the Greek government will not be able to pay its bills and virtually all Greek banks will inevitably collapse. Meanwhile, the rest of Europe is about to experience a tremendous amount of pain as financial markets respond to the results of this referendum. The euro is already plummeting, and most analysts expect European bond yields to soar and European stocks to drop substantially when trading opens on Monday morning.

Personally, I love the fact that the Greek people decided not to buckle under the pressure being imposed on them by the EU and the IMF. But amidst all of the celebration, the cold, hard reality of the matter is that your options are extremely limited when you are out of money.

How is the Greek government going to pay its bills without any money?

How are the insolvent Greek banks going to operate without any money?

How is the Greek economy going to function without any money?

…click on the above link to read the rest of the article…

Greek Citizens Vote “No” on a Bailout Offer that no Longer Exists

July 6, 2015

Greek Citizens Vote “No” on a Bailout Offer that no Longer Exists

An exercise in futility has just ended in Greece, with its population voting down an offer that has expired almost a week ago already. Given the futility of the referendum, its outcome was actually irrelevant from a formal perspective – once the verdict was in, Greece and its creditors would be exactly back where they were half a year ago already: at square one.

In one sense the referendum’s outcome was of course not futile: It has solidified the current Greek political leadership’s grip on power. It merely hasn’t brought it any closer to a solution. Greek voters want Greece to retain the euro, but they cannot vote on how much money governments (or rather, taxpayers) of other countries should hand to Greece or under what conditions. They can also not vote on whether the ECB should resume lending to technically insolvent banks.

yes and no Futile exercise

Cartoon by Ilias Makri

There are of course powerful reasons why the EU is indeed interested in implementing another can-kicking agreement. For instance, as Carl Weinberg has pointed out in Barron’s, a Greek default is a very costly affair, as what were hitherto contingent liabilities will have to be reflected in government budgets:

“Greece is on the verge of defaulting on 490 billion euros ($540 billion) in loans, bond obligations, central-bank liquidity assistance, and interbank balances. Who will bear those losses? Greece’s creditors, which are all public entities across the euro zone, and that are on the hook for some €335 billion in loan guarantees. How will those losses be covered? Bonds will have to be sold that will roughly equal the increase in annual debt purchases by the European Central Bank announced last January.

…click on the above link to read the rest of the article…

The Biggest Issue Now Is “The Math”

July 6, 2015

The Biggest Issue Now Is “The Math”

Some quick pre-market observations from Bloomberg’s Richard Breslow

Just Don’t Nip Out for a Haircut

The Greek citizenry voted and the handicappers got it very wrong. The result of the vote was called much earlier than anyone expected. It wasn’t close.

Much was made last week of the abrogating of responsibility by PM Tsipras by allowing the referendum. How can mere citizens be trusted with understanding such difficult issues? Issues that the technocratic experts got nowhere with. No one expected the result. No one was set up for the result. Chaos will ensue. But here we are, admittedly early the next morning and the markets are remarkably calm

Merkel and Hollande will meet. The ECB will meet. The Greek cabinet will meet. Cool heads will prevail. The unpopular Varoufakis is not gloating, he is resigning. The base case remains that a deal will happen because it must happen. The Greek people may have gotten us closer to a deal than all of the summits ever could

EUR/USD has held inside last Monday’s range. Two Mondays in a row, the pair has traded below 1.1000 and quickly rejected those lower prices. The 100-DMA (1.1057) is looking more like a pivot than a line in the sand. USD/JPY has bent, but not broken; 122.00 continues to be an important level and is holding. Watch the JPY as a measure of safe-haven demand

I remain a USD bull and still think EUR/USD will go lower, but its resilience in light of all the news is impressive.

Bund futures are higher, but holding well below the 55-DMA (153.61). U.S. 10-yr futures are holding below the important 127-00 level. Watch 126-16 as interesting support. Below there we are back into familiar territory

…click on the above link to read the rest of the article…

It was the creditors who pushed Greece over the edge

July 5, 2015

It was the creditors who pushed Greece over the edge

Post image for It was the creditors who pushed Greece over the edge

If they had truly cared, the creditors could have easily prevented a default. Sadly, they found it more important to punish Greece and set an example.

Image: sticking posters for the NO campaign ahead of Sunday’s referendum.

On Tuesday, Greece became the first developed country to default on the IMF — and the pro-creditor camp is already propagating the convenient self-serving myth that the country’s “radical” and “irresponsible” government is somehow to blame for this. Nothing could be further from the truth.

To begin with, we should note that defaults come in many forms and guises — and not all of them are the debtor’s fault. In my own research on the political economy of sovereign debt, I identify at least four types of default: (1) negotiated reschedulings; (2) voluntary restructurings; (3) unilateral moratoriums; and (4) outright debt repudiations.

What is interesting about sovereign debt in general (and about international lending in particular) is the almost wholesale absence of repudiation. By and large, countries try extremely hard to repay their debts in full and on time — even when they cannot. In the worst case scenarios, they may be able to negotiate a rescheduling or restructuring of the debt with their lenders. In exceptional cases, countries can declare a moratorium on repayments. While this was very commonprior to World War II, it is extremely rare today.

In this respect, the first thing to note is that Greece clearly did not repudiate its debts outright: despite the preliminary conclusions of the Greek parliamentary debt audit committee, which found much of the country’s debt to be odious, illegitimate and illegal, the Syriza/ANEL government still formally recognizes the legally binding character of the debt contracts. Its IMF default therefore looks more like an undeclared moratorium: Greece could still settle its arrears with the Fund at a later stage if it somehow managed to secure new credit.

…click on the above link to read the rest of the article…

Privately Owned Greek Media Line Up With The One Percent Against The Greek People

July 5, 2015

Privately Owned Greek Media Line Up With The One Percent Against The Greek People

The latest report from Greece indicates that the privately owned Greek media have taken a stand against the Greek people and for the One Percent:

Yesterday’s demonstration in favor of ‘No’ in Syntagma Square of Athens had gigantic proportions and great fighting spirit.

Instead, the rally of supporters of ‘Yes’ was enormously smaller without breath and passion.

Of course, with the exception of state television, all TV channels mainly or exclusively showed the second (Yes), saying that it is a big demonstration, exhausting every possibility to conceal and distort reality.

A climate of hysteria and terror has been cultivated by all private media (the public ones consist an exception) , which present the ‘No’ vote as an emerging Armageddon. The same media produce a permanent stream of lies and distorted or even more nonexisted statements that nobody in reality manages to confirm or deny.

Former prime ministers, senior military officers not on duty, the archbishop of the Greek Church, have come out in favor of ‘Yes’, saying the ‘No’ vote threatens Greece’s position in Europe and the national security of the country.

The political discourse of SYRIZA remains at a level far beyond what is required by the situation and its practical mobilization is very weak. But there is a deep popular wave of peaceful revolt against the Mighty which is struggling against the fear and insecurity current.

Greece, China, and Russia – a Plan B for Greece

July 5, 2015

Greece, China, and Russia – a Plan B for Greece

If the Greeks were to vote ‘No’ what would happen next? Well no one can say. But here is a quick thought on what I hope the Greek government might have been exploring if they are excluded from the euro. It’s just food for thought nothing more.

They have to be prepared to have a currency that does not depend on Europe supplying Euros. So they will need another currency – hopefully their own. I think we can be sure no western company has been printing them. There are few such companies and there is, I think, no possibility that they would be able to keep secret a contract from Greece. But both Russia and China can print notes. So would it not have been prudent to ask Putin to print up plane loads of Drachma and be prepared to fly them in?

Who would back this currency? Greece is not Great Britain with a long established reasonably trusted currency backed by a big slice of global financial trade. So I do not think they could launch an orphan currency which the drachma would be if it did not have some relation to a major clearing or reserve currency.

For all Obama has, apparently, lobbied the EU to be more conciliatory towards Greece I am not sure he would leap at the chance to help Greece with its debt. He might of course. A chance to reenforce US power in that part of the world. But he already has power there so I doubt he would be willing to ‘pay’ much. Russia and China, however would gain much more by having Greece as a beach head in to the EU and, more importantly, into Nato.

…click on the above link to read the rest of the article…

Sunday’s Vote Will Determine Liberty Or Serfdom

July 3, 2015

Sunday’s Vote Will Determine Liberty Or Serfdom

According to history books, democracy originated in Greece. Of course, historians could be mistaken, but this is the prevailing view among Western populations with enough awareness to be interested to know.

What we are witnessing today, July 2, 2015, is that after 2,500 years in the Western World only the current Greek government is interested in democracy. The Greek government, to the surprise and consternation of every other European government, has called a referendum for the Greek people to decide the fate of Greece. For resorting to democracy, the Greek government has been universally denounced in the Western World.

So much for Western democracy.

The greatest and most successful propaganda scam in history is the one that convinces the world that they are nobody if they are not part of The West, the indispensable peoples, the exceptional peoples. If you are not part of The West you are nobody, nonexistent, a nothing.

This prevailing propaganda might prevail in Greece on Sunday, in which case a fearful and intimidated Greek population might vote against the only government that, instead of accepting a payoff from Greece’s enemies, fought for the welfare of the Greek people.

If the Greeks vote for their oppressors and against their own government, democracy in the EU will cease to exist.

2,500 years ago Greeks saved their independence from the Persian Empire. Sunday’s vote will tell us whether Greeks have again served liberty or whether they have succumbed to Washington’s Empire.

The fate of all Europeans and of Americans themselves will be settled on Sunday.

Troika Maneuvering to Rig Greek Referendum

July 3, 2015

Troika Maneuvering to Rig Greek Referendum

In a TV interview, Mr. Varoufakis said very clearly, “This is a very dark moment for Europe. They have closed our banks for the sole purpose of blackmailing what? Getting a ‘Yes’ vote on a non-sustainable solution that would be bad for Europe.”

I must admit, most politicians do not come even close to the truth, but Varoufakis seems to be the ONLY finance minister who understands the demands of the Troika are not plausible for any nation. Merkel has tried to skirt any responsibility by saying this is a Troika decision. One must seriously ask, are those in the Troika just totally brain-dead? Their blackmail and economic war against Greece will be evidence to ensure that Britain leaves the EU. The ONLY thing that saved Britain was Maggie Thatcher’s effort to keep Britain out of the euro for she knew far too well where it would lead. The view in Poland is also now anti-euro. Any Brit who now does not vote to get out of the EU and the grips of the Troika is ignorant of world events and the political power play going on.

The EU leaders will not travel to Athens until after the referendum. Suddenly they realize that their powers are so off the wall that they dare not expose their own schemes. Hollande of France wants a resolution for he fears a Frexit is gaining momentum. Obama wants a resolution, fearing Greece will be forced into the arms of Russia, breaking down NATO.

Yet through all of this, there is no hope because those in power are clueless. The Troika refuses to solve the euro crisis because they only see their own self-interest and assume they can force their will upon all the people.

…click on the above link to read the rest of the article…

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