The Greek Pompeii

The Last Days of Pompeii was a widely read historical novels of the 19 th century published in 1835 by Edward Boulgouer Liton. In this writer tried to deliver not just the fate of the ancient Roman city under ashes and lava of Vesuvius, but the end of an entire social system sunk into the most absolute decadence and corruption. The last days of living and the Greek Pompeii as the most unscrupulous and hardened represented a deeply decadent system can not find another solution other than the official controlled bankrupt the country and its people, which equals disaster similar to that sowed Vesuvius .
In 99.9% have raised the chances of bankruptcy in Greece according to market analysts insurance against default risk (credit default swap - CDS) relied on a report in the CNN (20 / 9). According to the report, investors agree swaps against default, ie bets on whether or not there will be a bankrupt country, bill to nearly 100% (99.9%) the probability of default by the Greek debt.
Details of the research firm Markit quoted by CNN show that the probability of default by the Portuguese debt amounts to 62% of Irish debt to 51% of Italian debt at 33% (before the announcement of the downgrade from S & P) and the Spanish debt at 28%. As the CNN, the bankruptcy of Greece could lead investors to abandon the debt and other troubled European economies, including Portugal, Ireland, Italy and Spain. Thus, while Greece has an external debt of 300 billion, which is believed to be mostly in the hands of European banks, aggregate debt and of these five states is 2.8 trillion. euro.
If we assume that the bonds of five states located primarily in the portfolios of European banks suffer a minimal loss of about 10% of their nominal value, then talk about the loss of the class at least 280 billion. A loss that the banks should compensate the capital increases. From where? Certainly the loss of government bonds in the five countries may well be much higher since the Greek bonds have lost far more than 50% of their nominal value, Portuguese 40%, Irish 35%, while the Italian and Spanish around 20%. To determine how much was fake the whole game with the recent 'test of strength "of the banks of the eurozone, it suffices to see that any such scenario is not included and thus the estimated capital strengthening of banks was reduced to 2.7 billion euros.
This situation has led central banks around the world rising gold market. They provide collapsing economies and banks in the eurozone and therefore high volatility in the dollar and the euro. So try to boost their reserves into gold to reduce their dependence on the reserve currencies. So the net purchases of gold by central banks in recent times was the largest of the last twenty years. While the next time it is estimated that purchases of gold by central banks will be the biggest since the collapse of Bretton Woods 40 years ago (FT, 19 / 9).
This trend has been the launch price of gold to over 1,900 dollars an ounce and estimates are that by the end of the year will exceed 2,300 dollars an ounce. It is worth noting that this trend is excluded, the Bank of Greece, which continues to reduce stocks of gold available. And while countries that have exploitable deposits of gold to use to enhance their monetary position, Greece has offered its own gold reserves to a private consortium. What the Greece needs? The fate of under Troika and the euro is programmeni.
Amid such a storm, the debate about what can be done with Greece has passed into a new phase. Not long ago the debate on eurozone staffs concerned not whether, but when it officially bankrupt Greece and how. Now it seems that the debate has focused not on when or how will bankrupt the country, but whether and how it can be kept within the euro.The thinking seems to dominate is that Greece should be officially bankrupt directly controlled manner and kept within the euro at all costs.
How can this happen? By transfer of the Greek debt EFSF (European Financial Stability Fund). "The exit from the eurozone would be a disaster," emphasizes the Kölner Stadtanzeiger (20 / 9) In an interview for evrokrisi and Greece, the German economist Lars Felnt, board member of the German government expert on the economy. Mr. Felnt rejects the view that evrovoitheia to Greece is like a bottomless pit by saying that "the present situation of non-payment of credit is a problem for the entire euro area and would exacerbate the crisis. So after the administration of these funds must organize the restructuring of Greek debt. "
When asked if the newspaper restructuring simply means 'debt relief', the German economist, replied in the affirmative, explaining: "The council of experts on the economy (the German government) has a specific proposal: to transfer the debts of Greece from the public creditors, and private creditors-European rescue fund EFSF. In return receive all creditors other secure bond fund, but at half the nominal value of Greek government bonds. This means that creditors will waive 50% of their claims. The European Financial Stability Fund (EFSF) can then as a major creditor of Greece put pressure on Athens to launch the necessary reforms in the economy. "
In observing the newspaper that a restructuring of Greek debt by 50% a disaster for Greek banks Lars Felnt stresses that the EFSF should be available approximately 20 billion to bail them out. The German economist also believes that the European rescue fund (EFSF) should be converted to a financial institution to be able to lend, but to play properly the role of fireman in crises and concludes that the exit of Greece from the Eurozone will " constituted a disaster "because" mowing the debt would touch no more than 50%, but 80 or 90%. The Greek economy and financial system of the country would sink into chaos, and would pave the way for speculative attacks against the euro and the Eurozone.Anyone who believes that the exit of Greece from the Eurozone is a solution is, at best, irrelevant. "
This is "Plan B" of Germany, Greece, as the locals have named the propagandists of modern dosilogismou. Before we would actually have to say that it is irrelevant who incited the outset that the euro is a solution especially for a country like Greece. Now we paramythiazan themselves for years with the theory of the "strong euro" tells us that to go from one dafto would spell disaster. Very soon, much sooner than they think some people will find even the most skeptical of what formal controlled bankruptcy within the eurozone. What, say, a true disaster of no return.
Who do you serve this project? Us to clear up the great and much George Soros, who in a recent article says: "There is no other alternative than importing the ingredient is missing: a European fund with the power to tax and therefore therefore to borrow. This would require a new treaty and its transformation into an integrated EFSF Fund ... The fact that there is provision for a possible bankruptcy or defection of three small countries [Greece, Portugal, Ireland] does not mean that these countries should be abandoned. Instead, a smooth bankruptcy - who will pay the other eurozone countries and the IMF - will offer in Greece and Portugal policy options. Furthermore, would end the vicious cycle that currently threatens all deficit countries of the eurozone, according to which the austerity weaken the prospects of development, leading investors to require a prohibitively high interest rates and thus forcing governments to cut costs further. Leaving the euro would make it easier for them to regain their competitiveness. But if you are willing to make the necessary sacrifices could also stay. In any case, the EFSF will protect bank deposits and the IMF will help to recapitalize the banking system. This will help them to escape from the trap they are in today. It would be against the interests of the European Union to enable them to collapse and drag them down the global banking system. "(T he New York Review of Books, 15 / 9)
In short, Soros, perhaps the most characteristic representative of currency speculation, is interested in rescuing the euro, with Greece within or outside the eurozone. What I propose is turning into a permanent EFSF Treasury for the entire euro area with the ability to tax at European level and also to borrow by issuing its own bonds. The proposal does not differ substantially from that of a "plan B" of the German government nor the exhortations and pressures Gkainter to European partners.
Only such a solution does not allow either to even formally independent exercise of financial and general economic policy in any of the member states of the eurozone. Except, of course, Germany and possibly France. Europe should consider the possibility of the medium, it can intervene in the internal affairs of states which violate the rules of budgetary discipline, said Friday (16 / 9) German Chancellor Angela Merkel. "We think the medium probability of intervention in Europe in countries which do not satisfy their duty," said Merkel, adding that what matters is the stability of the euro."Whatever works contrary to this objective should be overridden," he said. Germany has a duty to help to ensure the future of the euro as the common currency has boosted German exports, he said. The excess of the European debt crisis "is a controlled process of successive steps" to employ politicians for years, he said.
Of course the truth is that the controlled bankruptcy of Greece has already begun. This says economics professor at Oxford, the German Clemens Skirts and adviser to Finance Minister of Germany, Wolfgang Schäuble. Speaking at the DW (20 / 9) raised the following arguments. "Based my opinion on the fact that Greece, in cooperation with the governments of the eurozone has been negotiate partial debt restructuring, as eg the lengthening of the duration of repayment of loans. This is typical of a bankruptcy, as well as the reduction of interest and the renegotiation of loan terms. "
Mr. Skirts do not pay particular attention to the controversy that has erupted within the ruling coalition in Germany after the statements of President of the Liberal Finance Minister Philip Resler need to coordinate bankruptcy in Greece.He believes that took place in the campaign. "In light of the data supports the Greek bankruptcy process has already begun and will continue."
As stated by Mr. skirts or cut Greek debt should be around 50 to 60%. "Only in this case, he says, the country would have a perspective." But then Greece will take a decade to "prosper." How evimerisei? But with more rigor, more cuts and hoping.
The interesting thing is that all are called, are designed and applied in the middle of the most universal and global crisis, which everyone acknowledged that it is first and foremost a tremendous inequality of income and wealth.Particular in inside of developed countries. It is significant that a recent IMF study concludes that "higher income inequality in developed countries associated with the increase of domestic and external debt ... The common element of the experience of major deficit countries is a sharp increase in income inequality in recent decades, as measured by the share of income enjoyed by the richest 5% of the income distribution of the country ... This increase in inequality has contributed to deterioration of the global savings-investment balance in the richest countries and the poor and middle class borrowed from the rich and foreign lenders. This, together with other factors mentioned above, can fuel current account deficits. »(IMF, Finance & Development, September 2011, Vol. 48, No. 3).
What the researchers concluded earn the IMF in this relationship of unequal distribution of income, and debt crisis? "The restoration of equality by redistributing income from rich to poor will not only meet Robin Hood of this world, but could also help save the world economy to another major crisis. »(IMF, Finance & Development, December 2010, Vol.47, No. 4) Of course, in practice the IMF insists on the famous "structural changes" darting unequal distribution of income and debt to the heavens. With victims of peoples and countries.