Journal roman_mir's Journal: I was wrong on Greece 3
I was wrong on Greece
In my previous comment I said this:
The difference between US and Greece is this: Greece is in Euro and cannot print, so it either quits Euro and goes back to Drachma and prints the money into oblivion causing a crash of its bonds/treasuries/currency OR Greece bites the bullet. Greek's Government for some reason decided to go the High Road and to be Honest for some reason, I need to figure it out.
well, I was wrong about EU and Greece altogether. The so called High Road of paying the creditors is not really coming out of the pockets of Greeks. Now it is obvious that EU IS going to print Euros.
So Germany committed to printing a trillion euros to save Greece now, whatever Greeks are going to be doing in terms of taxes and cutting spending is purely a token move. Of-course for some Greeks this token move will still be painful enough, why, they may have to cut from 16 to 12 monthly salaries in a year for some people, outrageous I tell you.
However the main point is this: EU just like US decided to monetize the debt. They decided that the creditors will get their money back 100 cents on an Euro. This is basically a move by the heads o the EU States to save the ASSES of their banker friends, who made all of these outrageous loans to the Greeks when they should have known better and should have seen that Greeks could NEVER pay back, just like US can NEVER pay back.
But apparently the banker friends of EU Governments were right!!! They are right!!! They can lend any money to any EU State and they will never be called on a bad bet. All of their bets are good, they are covered.
Do you understand what is happening? The harm that should have been carried out, the lost debt that must have hurt the bankers that loaned the Greeks the money is now socialized between all citizens of the European Union. It is the same thing that is happening and will continue in US, the bad debt that should have been defaulted on is socialized by all of the citizens of the US.
These bankers have it all figured out, it is amazing! They can lend money to any government of US or EU States and they will NEVER lose the bet and will not even lose the interest, in fact their interest is guaranteed! It is amazing!
So the truth is that Euro is going to be just as worthless as the USD only somewhat later in time because US is much ahead of Europe on this road to hyper-inflation.
So I admit it, I was wrong. I was wrong that there is a government that is willing to take the High Road and be honest and do what really needs to be done: Default. They have to default so that the debt is paid not 100cents on a dollar but at the rate at which they can do. So that the lenders are not rewarded for their stupid behavior and lending practices but are punished and learn to be diligent and to care about where the money is going.
Who will suffer now? Not only the Greeks, who SHOULD be suffering for this, but the rest of the EU citizens will suffer, all of them are poorer now and will continue being poorer in the future with these governments.
Who will come out as a winner? The bankers. They now have assurances of 2 major states: US and EU that their bets will not go bad, that they do not need to be careful who they lend the money to. This is how moral hazard is created.
Another winner: Gold, Silver and other various commodities.
Get rid of your dollars and euros, buy and hold gold and silver. The fiat currency is dead.
the upside (Score:2)
My wife and I are planning a vacation to Greece next summer. If the trend in this chart [google.com] continues, this could be our cheapest vacation ever.
Re: (Score:2)
Definitely could, I suggest enjoying it to the max (and avoiding the riot areas) because in a couple of years the USD could be one fifth of what it is today compared to gold and Asia may just stop sponsoring all of this partying that's taking place on its tab and then things will get interesting.
You missed a bit (Score:1)
"Do you understand what is happening? The harm that should have been carried out, the lost debt that must have hurt the bankers that loaned the Greeks the money is now socialized between all citizens of the European Union. It is the same thing that is happening and will continue in US, the bad debt that should have been defaulted on is socialized by all of the citizens of the US."
Given the IMF is kicking some into the can as well - US taxpayers are helping pay the tab as well