It’s A Very Critical Moment: The Euro Zone Is Now Facing The ‘End of World’ Risk. When You Look At What Happened In The Last Days Of Lehman Brothers, The Similarity Between Greece And Lehman Is Frightening! When All Negotiations Break Down, Everything Collapse!!
This is the full-length feature film, not a documentary, and so far, it’s pretty good. James Cromwell plays Hank Paulson.
The Troika has left the negociating room today, something’s boiling…
Greece’s negotiations with international lenders hit another snag on Oct. 16 when the envoy of the International Monetary Fund (IMF) broke off talks and said he had to brief the agency’s chief, Christine Lagarde on the lack of progress.
The abrupt departure of Poul Thomsen, the head of a team that also includes representatives from the European Union and European Central Bank in the so-called (EU-IMF-ECB) Troika, postponed the talks, dashing Prime Minister Antonis Samaras’ hopes of reaching a deal on $17.45 billion in spending cuts and tax hikes before an Oct. 18 meeting of EU leaders.
END OF THE SAILING TRIP
It is now clear that “growing our way back to solvency” is not going to work. The pernicious reversal of real meaning, in government-friendly slogans and one-liners, makes it commonplace to hear that “previous do-nothing policies”, unlike today’s pro-active policies, were sailing government ships towards the whirlpool of national insolvency. Today’s pro-active newspeak is that “expansionary austerity” will work, especially in Europe. Several governments, for example of Italy and France, actually claim in print and out loud that the schizophrenic mix-and-mingle of austerity for most and free cash for selected corporate cronies, not only the banks but also a few hand-picked others, such as the Sustainable Economy crowd, heralds a New Age of Growth, perhaps by 2014 or 2015.
Instead, with leaden inevitability the austerity cure reduces growth, weakens the private sector including the banks, and further damages the fiscal position it was intended to correct. Borrowing continues, of course, but the chase-your-tail circus leads not only to recession, but to depression.
The inevitability of this is, with characteristic newspeak and hypocrisy, recognized by invoking the Asian Locomotive, high commodity prices, energy transition, sustainable development, climate crisis and even (why not?) the War on Terror. Somewhere, out there, the ships are sailing on a mirror-flat blue sea and Big Things can be done. At such times – more than somewhat reminiscent of the 1930s to economic and other historians – one reall dangerous spinoff is the search for War-and-Circus solutions to the bad news pyschosis that do-nothing policies can only produce.
Economic terrorism, including the threats of massive inflation, overnight changes of fiat moneys (internal or domestic debt default), wealth confiscation and destruction is now a clear line of OECD government business, although unsurprisingly not “communicated” this way. A natural counterpart of this terrorism is international conflict – not with Desert Rebels – but with creditor and debitor nations almost inevitably reverting to mercantilism as their national response to a no-win global context.