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Mar

Greece and Default Slight of Hand

   Posted by: chris   in Fish Talk

Greece and Default

Did you ever hear the one about the naked king who got rave reviews for his new clothes, well Greece or should I say the coin flippers who rule the world economies just pulled the wool over our collective eyes and now we all believe that everything is good, Greece didn’t default after all.

What really happened is that the investors/gamblers who waged their billions on Greece where forced to accept a bond swap deal whereby they swapped their existing bonds for new ones with longer time frames and lower interest rates.

Imagine a homeowner in foreclosure getting a new loan with a longer time frame and lower interest rate.

The problem for Greece and most of the Western world is not what they owe but what they are capable of earning.

If said homeowner in foreclosure gets a new loan with an extended time frame and a lower interest rate that reduces his/her monthly payment from $2000 to $1000 it may make little difference to his/her circumstances if they are not making enough to service the new loan payment and eat.

It’s a kinda pregnant scenario, you either are or you aren’t. Pregnant, broke, bankrupt whose counting. Eventually the baby comes. All crows come home to roost as they say, regardless of your dirty little secret.

Greece has virtually no economy other than tourism, unfortunately tourism is dependent on the economies of the tourists which are not in good shape at the moment.

With unemployment north of 20%, regardless of interest rates on it’s bonds, Greece like the king with the new clothes is naked and to eyes that can actually see reality, bankrupt and in default.

Mother Eire is next, it too, now has no economy to talk of and with a reported unemployment rate of 14+ percent and debt to GDP ratio of  almost 1,400%, Greece’s debt to GDP is 182% and according to the media they are so totally screwed. The United Kingdoms is 413%.

The reality of world capitalism is that most people cannot afford to live in the economies which they form, minimum wage and maximum costs result in trickle up economics. Ronald Regan the first doctor of 1% spin really got it wrong and now we need a new spin doctor to apply a very bitter pill to the very 1% that trickle down economics created.

 

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This entry was posted on Friday, March 9th, 2012 at 10:18 pm and is filed under Fish Talk. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.

2 comments so far

ed
 1 

Greece spends too much…retirement age is 55 or so and pensions are overly generous…and everyone is used to it. No one in Greece apparently cares about their country just their fat pensions and life style. Just watch as they burn their country down in protest of much needed austerity measures.

March 10th, 2012 at 9:46 pm
eddie
 2 

A man who never borrows a dollar from another is a man who sleeps soundly.

March 12th, 2012 at 1:17 am

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