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Letters by a modern St. Ferdinand III about cults

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Plenty of cults exist - every cult has its 'religious dogma', its idols, its 'prophets', its 'science', its 'proof' and its intolerant liturgy of demands.  Cults everywhere:  Corona, 'The Science' or Scientism, Islam, the State, the cult of Gender Fascism, Marxism, Darwin and Evolution, Globaloneywarming, Changing Climate, Abortion...

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Tuesday, February 21, 2012

The Zeuro – another day, another 'bailout' which will never transpire

Bailing out Greece or Franco-German banks?

by StFerdIII

Now a 'new' plan to give the Greeks $130 billion and cut bondholder value by 70%. Surely this will work – if implemented – for 6 months before another round of moral hazard funding is needed ?

No worries according to sundry economists and MSM talking heads. Greece is small. Greece is unimportant. Greece must be put 'in context'. It is 5% of the Euro economy and worth a bag full of pistachios in the great scheme of Global GDP. It is a moral project and the EUtopians will fight for the Euro because the Euro is right. The irrational fantasy of international socialism is credited with 'stopping another European war', when in reality it was the Cold War and US military power and bases on the Continent, resonates with the elite and the chattering media. It is completely divorced from reality – much as yet another 'plan' to bail out Greece aka French and German banks who hold about $2-3 Trillion of bad sovereign debt. Nice business model. The State is the banking system. The Banks are the State.

Grecian austerity measures or 'massive' cutting of budgets, account for 2% or less of GDP. Wow. The entire edifice of what got Greece into trouble in the first place will not be harmed nor reduced in any meaningful way. The retirement age might creep up. Pensions and free education reduced somewhat. But the nexus of socialism with corruption which finds its expression in unions, high taxes, bribes, and a paternalist corporatism will not be impacted. The 'huge fiscal cuts' endlessly and mindlessly repeated by the MSM are in reality skin abrasions, not surgery on the Greek fiscal body. No real reforms will be initiated of course.

Neither will the Greek economy be able to grow. Saddled with the Euro the Greeks have no ability to set proper wages based on supply and demand. Monetary, labor and capital rigidity and indeed capital scarcity will doom Greece. Greek wages are up 30% in the past 10 years – thanks to the Euro where all prices revalued upwards and government laws supporting minimum wages, higher union wages, and the 'right' of workers to have raises.

The best plan for Greece is to exit the Euro or ZEuro. A controlled withdrawal would force Greece to reduce needless budget spend and restore financial confidence through sound monetary policy. A devalued Drachma would restart the manufacturing and tourist industries and deflate external Greek debt. It would also end the Greek drama for the rest of the EU, though it is clear that the entire zone is technically bankrupt.

But this will never happen, so there shall be an endless stream of rhetoric, meetings, press releases and never-to-be-implemented bail-outs announcements. The real concern of Europe is of course the Franco-German banking system. The Greeks get nothing out of these 'bailouts' except a loss of sovereignty, social unrest and yet another reward – moral hazard – for implementing failed socialism.  

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