{"id":9549,"date":"2015-06-30T06:45:48","date_gmt":"2015-06-30T11:45:48","guid":{"rendered":"http:\/\/olduvai.ca\/?p=9549"},"modified":"2015-06-30T06:45:48","modified_gmt":"2015-06-30T11:45:48","slug":"ecb-monetarism-and-a-greek-half-decade","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=9549","title":{"rendered":"ECB, Monetarism and a Greek Half-Decade"},"content":{"rendered":"

ECB, Monetarism and a Greek Half-Decade<\/a><\/h3>\n

Greece really should not matter, at all, outside of the tragic plight of the Greeks themselves. You\u2019ll see that message echoed particularly inside the US where the status quo takes a contradictory turn toward reasonableness in order to justify further what isn\u2019t. This is all about asset prices and how they have been so skewed almost everywhere that when one part of that systemic imbibing threatens to pull back the curtain the rest works overdrive to convince that it doesn\u2019t matter.<\/p>\n

Just fourteen months ago, then-Prime Minister of Greece, Antonis Samaras, went on Greek television and\u00a0confidently proclaimed<\/a>, \u201cToday, Greece took one more decisive step to exit the crisis. Confidence in our country was confirmed by the most objective judge \u2013 the markets.\u201d Going further, then-Deputy Prime Minister Evangelos Venizelos objected to any other interpretation, \u201cThe bond issue proves the debt is sustainable, otherwise the markets wouldn\u2019t have bought it.\u201d<\/p>\n

Obviously, those were political statements intended to send a political message in that the \u201cobjective\u201d market was on the side of that current Greek political makeup and the \u201causterity\u201d track into which they proclaimed to be amalgamated, inextricably within the euro currency. Under rational expectations theory, of course, the price with which the Greeks floated that bond was believed to be \u201ccorrect\u201d and thus efficient. The 4.95% yield at the auction, 20 times oversubscribed, certainly seemed to suggest that it was \u201cmarket clearing\u201d in at least that respect.<\/p>\n

\"ABOOK<\/a><\/p>\n

The problem with all of that view is apparent right now. The 5-year bond, after having a pretty good week last week with all the false deal rumors, is yielding this morning almost 23%. The losses embedded in that yield and its price were uniquely predictable, which is what is so damning about Greece as it relates to everything outside of the \u201csmall country on the Aegean.\u201d<\/p>\n

 <\/p>\n

…click on the above link to read the rest of the article…<\/p>\n","protected":false},"excerpt":{"rendered":"

ECB, Monetarism and a Greek Half-Decade Greece really should not matter, at all, outside of the tragic plight of the Greeks themselves. You\u2019ll see that message echoed particularly inside the US where the status quo takes a contradictory turn toward reasonableness in order to justify further what isn\u2019t. This is all about asset prices and […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[37,1619,3186,175,233,6839,1167,2599,6840,431,6841,480,534,6842,6843,1264,670,6844],"class_list":["post-9549","post","type-post","status-publish","format-standard","hentry","category-economics","tag-asset-bubbles","tag-asset-inflation","tag-bond-yields","tag-credit","tag-ecb","tag-financialism","tag-greece","tag-greek-bonds","tag-hysteresis","tag-interest-rates","tag-keynesianism","tag-lending","tag-monetary-policy","tag-plucking-model","tag-rational-expectations","tag-recession","tag-recovery","tag-yellen-doctrine"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/9549","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=9549"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/9549\/revisions"}],"predecessor-version":[{"id":9550,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/9549\/revisions\/9550"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=9549"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=9549"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=9549"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}