Band-Aid Dilemma

I do not get insulted with comments such as ‘the olive countries (Spain, Portugal & Greece)’ ... As far as Greece is concerned, you can add ‘feta and yogurt country’ as well (I have a sense of humor). We are bombarded with visual and auditory stimuli from the time we wake up until we pass out each night from sheer exhaustion. Our global economy now exemplifies the worst of human traits - we are at an evolutionary crossroad.

Yes, the elites of Greece enjoyed substantial benefits during the boom borrowing times. The elitist European countries (Germany, in particular) loaned money to Greece knowing full well they would not be able to pay it back. It reminds me of Bank of America and their loans to unqualified home buyers in the U.S. …

Germans want to have their cake (easy credit throughout Europe to support their export economy) and eat it too (want all those borrowers to repay all the loans handed out to them). You can’t have it both ways. Bleeding the patient is what has been implemented by the European economic doctors. Sort of like sucking the air out of a dying man’s lungs to help him breath. The basic equation of all economic theory is "supply = demand" ... Does anyone believe that austerity-driven job destruction will lead to economic growth?

European leaders are bound together to the economic doctrine responsible for this disaster. The tide is starting to turn. The people of Greece, Spain, Portugal and Ireland (and to a lesser degree Italy) are becoming slaves to the rich and powerful Euro Bankers. Sure, they were on a spending binge for a long time, and the time has come for them to ‘tighten their belts’ but there are two sides to every story.

What purpose is served by delaying the inevitable? After the recent bailout, Greece will have more debt on its shoulders than it had before. Can it get anymore convoluted than that? The difference is the Greek debt is not to the bondholders (which is negotiable) but to ‘governments’ and the IMF. Certain ‘governments’ and the IMF will control Greece – they will not be able to negotiate anything. Some Germans and Austrians have suggested that Greece sell some of its land and islands (even to Turkey) in an effort to reduce its debt. (Isn’t it amazing how history has a way of repeating itself?) Ask any trader in the world who has benefited the most from the Euro crisis and I guarantee the answer will be ‘Germany’ … What countries will be next?

It’s time to put delusional beliefs about the virtues of austerity in a depressed economy behind us. I would have rather had seen Greece default, go back to a severely devalued drachma and rebuild its economy for the next 10 years by offering really cheap tourism, olive oil, feta and yogurt. I’m serious! The bailout will help take Greece’s debt from 160% of GDP to around 120% by 2020. (If anyone thinks the bailout, spending cuts and tax increases is going to help – see the state of our economy here in the U.S.) You cannot cut spending and expect an economy to grow. For the next 10 years, Greeks will not have enough money to buy goods and services. I give it a year - two at the most - until we see widespread bloody riots in the streets. I will not be surprised if the civil unrest in Greece becomes a precursor for a coup. A dictator will take over the country (and we all know who will be pulling the strings in the background). Again, it’s amazing how history has a way of repeating itself.

As for our situation, here in the U.S., we print money like there is no tomorrow (the dollar being the reserve currency), and we have natural resources (something Greece does not have). This has helped the U.S. avoid a debt crisis or currency devaluation so far. We are 15 trillion in debt, growing at over one trillion a year, and unless we bring our deficit under control, it is only a matter of time before the U.S. dollar decreases in value significantly or long-term interest rates go up.

The vultures are having a field day – it remains very much in their interests to keep things as they are for as long as they can. A number of American PE firms are now in Europe cruising the Aegean air searching for carrion with their well-trained noses.

The great middle class is going to be less and less. There will be extreme wealth and extreme poverty. I hope I’m completely wrong. It will be hard on people who never experienced doing without, but it’s amazing what you can get along without. You don’t have it, so you begin to spend more time with your family.

I hope for nothing. I fear nothing. I am free. – Nikos Kazantzakis