Actually- correct that.. most people do everything possible not to have to focus on their own nation's problems, so the chance you get them to care about problems in other parts of the world are slim to none.
But since A&G readers are intelligent and care about more than themselves, I thought I'd pass along a news item I found which could turn into a really big problem in the coming few weeks, particularly in Europe, their banking system and the Euro itself...
Athens Mulls Plans for New Currency.. Greece Considers Exit from Euro Zone (Spiegel Online) -- "Greece's economic problems are massive, with protests against the government being held almost daily. Now Prime Minister George Papandreou apparently feels he has no other option: (his) government is considering abandoning the euro and reintroducing its own currency. Alarmed by Athens' intentions, the European Commission has called a crisis meeting in Luxembourg on Friday night..."
~ It is been obvious for some time that Greece was in very bad economic shape and an eventual default or other dramatic move would be needed by their government to stave off total and complete collapse at the hands of the ECB and IMF. By depleting their credit rating to junk status and forcing harsh austerity to a nation that is heavily dependent on imports and thus has no way to re-build its own GDP independent of bank lending, the impending result should not be a surprise to anyone...
"(Leaving the EU) would lead to a considerable devaluation of the new (Greek) domestic currency against the euro ... Greece's national deficit would rise to 200 percent of gross domestic product after such a devaluation... In other words: Greece would go bankrupt."
~ This all may be well and true.. but it is also fair to say that it Greece staying in the EU is just as harmful to the nation. And to be frank, the only reason Germany and other nations are concerned with Greece at all is because it would affect them and their banks worse.
"What is certain, according to the assessment of the German Finance Ministry, is that the measure would have a disastrous impact on the European economy... the withdrawal of a country from the common currency union would "seriously damage faith in the functioning of the euro zone,"... International investors would be forced to consider the possibility that further euro-zone members could withdraw in the future. "That would lead to contagion in the euro zone,""
"Moreover, should Athens turn its back on the common currency zone, it would have serious implications for the already wobbly banking sector... The change in currency "would consume the entire capital base of the banking system and the country's banks would be abruptly insolvent." Banks outside of Greece would suffer as well. "Credit institutions in Germany and elsewhere would be confronted with considerable losses on their outstanding debts,""
"The European Central Bank (ECB) would also feel the effects... forced to "write down a significant portion of its claims as irrecoverable." In addition to its exposure to the banks, the ECB also owns large amounts of Greek state bonds, which it has purchased in recent months. Officials at the Finance Ministry estimate the total to be worth at least €40 billion ($58 billion) "Given its 27 percent share of ECB capital, Germany would bear the majority of the losses," the paper reads."
~ This all may be well and true.. but it is also fair to say that it Greece staying in the EU is just as harmful to the nation. And to be frank, the only reason Germany and other nations are concerned with Greece at all is because it would affect them and their banks worse.
"What is certain, according to the assessment of the German Finance Ministry, is that the measure would have a disastrous impact on the European economy... the withdrawal of a country from the common currency union would "seriously damage faith in the functioning of the euro zone,"... International investors would be forced to consider the possibility that further euro-zone members could withdraw in the future. "That would lead to contagion in the euro zone,""
"Moreover, should Athens turn its back on the common currency zone, it would have serious implications for the already wobbly banking sector... The change in currency "would consume the entire capital base of the banking system and the country's banks would be abruptly insolvent." Banks outside of Greece would suffer as well. "Credit institutions in Germany and elsewhere would be confronted with considerable losses on their outstanding debts,""
"The European Central Bank (ECB) would also feel the effects... forced to "write down a significant portion of its claims as irrecoverable." In addition to its exposure to the banks, the ECB also owns large amounts of Greek state bonds, which it has purchased in recent months. Officials at the Finance Ministry estimate the total to be worth at least €40 billion ($58 billion) "Given its 27 percent share of ECB capital, Germany would bear the majority of the losses," the paper reads."
"In short, a Greek withdrawal from the euro zone and an ensuing national default would be expensive for euro-zone countries and their taxpayers. Together with the International Monetary Fund, the EU member states have already pledged €110 billion ($159.5 billion) in aid to Athens -- half of which has already been paid out. "Should the country become insolvent," the paper reads, "euro-zone countries would have to renounce a portion of their claims.""
~ Let's really simplify this. What you have in Europe and in the US are ponzi schemes. In fact, the reason its allowed to exist at all currently was that in Autumn 2008, the US Federal Reserve gave Billions of dollars of US taxpayer money to European banks and the ECB and IMF to keep this game afloat.
And like all ponzi schemes there's a tipping point where you just can't keep spinning all those plates or juggling those balls, and then they begin to smash onto the floor. Like in America, to European governments the Investor is the most important entity to please and coddle- they can Not take financial losses of Any kind (haircuts) and governments will use every dirty trick in the book to protect Investors to make sure they and banks never suffer for their sins while nation's populaces pick up the bill.
Maybe this threat by Greece will turn into a non-story.. or maybe this is the beginning of the next wave of financial meltdown.. either way, people best begin waking up and get their financial houses in order as best they can.
~ Let's really simplify this. What you have in Europe and in the US are ponzi schemes. In fact, the reason its allowed to exist at all currently was that in Autumn 2008, the US Federal Reserve gave Billions of dollars of US taxpayer money to European banks and the ECB and IMF to keep this game afloat.
And like all ponzi schemes there's a tipping point where you just can't keep spinning all those plates or juggling those balls, and then they begin to smash onto the floor. Like in America, to European governments the Investor is the most important entity to please and coddle- they can Not take financial losses of Any kind (haircuts) and governments will use every dirty trick in the book to protect Investors to make sure they and banks never suffer for their sins while nation's populaces pick up the bill.
Maybe this threat by Greece will turn into a non-story.. or maybe this is the beginning of the next wave of financial meltdown.. either way, people best begin waking up and get their financial houses in order as best they can.
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