Greece Vote Leaning To Exit

Early count shows Greece voting to shit-can the Euro and telling the ECB to stuff it.

There’s several more just like it on the net.

‘No’ Vote Leads With 62% of Vote in Greece Referendum

By Alex Bitter 07/05/15 – 02:33 PM EDT

Update: This article, originally published Thursday at 1:03 p.m., has been updated with Greece finance minister comments reported by the Associated Press and updated election results in the first five paragraphs.

NEW YORK (TheStreet) — With 80% of Greece’s referendum vote counted, official results now show 62% voting “no” and 38% voting yes, according to media reports. The outcome is seen remaining a firm “no” to creditors’ demands for more austerity in return for rescue loans.

Greece’s finance minister said the country’s citizens have said “no more” to continued austerity as returns show the “no” side gaining ground in the bailout referendum.

Yanis Varoufakis, speaking live to TV cameras, said creditors had planned from the start to shut down banks to humiliate Greece and to force us to make a statement of contrition for showing to them that debt and loans are unsustainable.

Varoufakis said “the Greek people said ‘no more’ to five years of austerity.”

Buy popcorn by the barrel, and watch the fireworks.

The ECB error, IMHO, was their test run in Cyprus. Folks in Greece are not dumb. They knew “stay in means bank raid and poverty for a generation”.

Next comes the food fight over sovereignty.

Is Greece inextricably part of the EU, and subject to the dominion of the EU / World Bank / World Court / World Fleecing ? Or is it a sovereign nation that can exit a treaty it does not like and go it’s own way?

Many folks in the EU cite the Texas decision of the US Supreme court as international precident for “once in, trapped for eternity”. We fought a “War Between The States” over it (there was little “civil” about it…) and one can only hope that the rump EU is not willing to “go there” with Greece.

In accepting original jurisdiction, the court ruled that, legally speaking, Texas had remained a United States state ever since it first joined the Union, despite its joining the Confederate States of America and its being under military rule at the time of the decision in the case. In deciding the merits of the bond issue, the court further held that the Constitution did not permit states to unilaterally secede from the United States, and that the ordinances of secession, and all the acts of the legislatures within seceding states intended to give effect to such ordinances, were “absolutely null”.

Expect to see this “international precedent” sited as it relates to Greece and an exit…

It’s going to be a mess, but a very interesting mess… Options range from an ECB capitulation, to a Greek Drachma and economic boom (or bust) as Greece goes on sale (or stays bankrupt); and even to “diplomacy by other means”. The dice are rolling folks, get your bets down now.

At Tallblokes,a commenter has an interesting POV on things:

Ron Clutz says:
July 5, 2015 at 11:04 pm

I can see into the future, and here it is:

Greek Future Revenue

Greek Future Revenue

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About E.M.Smith

A technical managerial sort interested in things from Stonehenge to computer science. My present "hot buttons' are the mythology of Climate Change and ancient metrology; but things change...
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48 Responses to Greece Vote Leaning To Exit

  1. Larry Ledwick says:

    I think the real dilemma here is what is next?
    Early reports is that stock futures are taking a beating. Will that force the EU to come up with a more user friendly solution for the Greeks, like a suspension of payments for 10 years so they can get back on their feet without being in severe financial depression for a generation, or will this force the EU’s hand and eventually lead to a collapse of the union as everyone realizes it is inherently flawed as currently configured.

    (keep in mind the U.S. had to have a do over with our government before we settled on our current Constitution.)

    If the EU holds tough will they boot out the Greeks and force them into the arms of Russia as a financial satellite of Putin’s expansive Russian empire dream? The old Soviet Union tried to bring Greece into the Communist orbit with some success during the post WWII period and early days of NATO. Might this be the trigger for a resumption of that effort?

    The unintended consequences of all this will be key topics in history texts in 50 years I suspect.

  2. Paul Hanlon says:

    One of the things this has highlighted for me is the shocking level of news management that has been going on. I haven’t seen one report (not even on Sky News) about what exactly the Greeks actually had to vote on. All we’re getting is speculation and opinions. Right up to an hour before closing, we were being told that the vote was neck and neck, there were Greek ex-patriots flying in by the plane-load to vote Yes.

    Then one hour of counting later and we find that they have resoundingly voted No. Not only that, but the news that this is actually another (third) bailout wasn’t disclosed until early last week. Also, what they’ve actually voted for is to stay in the Eurozone, but not to have any more austerity ?!!!?

    Politically, the Greek government have pulled off a master stroke. They’ve put the ball right back in the Eurogroup’s court. Even Schauble (German finance minister and leading critic of the Greeks) has had to mollify his tone. His stance is now that maybe Greece should exit for a few years and then return to the Euro when they’re more prepared for the rigours of Euro membership. Inevitably meaning bond-holders will get burned.

    It is the Eurogroup that have been holding out for no debt writedowns (the IMF seem to be more sanguine), but one way or another, this is exactly what is now going to happen, the question is how big is it going to be, and how it will be managed. Portugal go to the polls in October, Spain in December and will be watching proceedings like a hawk. They’re in a similar position to Greece with massive unemployment, and they’re going to insist on getting some of what the Greeks are getting. The Irish elections will be before April 2016, and Italy in 2018 (if their government holds ’til then).

    The only way I see the Eurogroup stopping the contagion is to insist on Greece exiting, possibly temporarily (to put some sort of fig leaf over “European Solidarity”), so that the other four countries don’t get ideas. It’s the only way they’re going to be able to put a line under this and stop it. If they don’t then “Europe” as a project will die a slow and painful death, and will end up with a rump of maybe 10 countries with a sort of Europe-light for the rest.

    Ultimately, this isn’t going to fix the massive imbalances that have built up in the Eurozone. All major decisions are based on what’s best for French and German interests. Germany has a huge export surplus, but most of it is with other Eurozone countries, so you have a huge transfer of wealth going to Germany, which they then have to lend out to someone in order to make a return (and with which to buy more German products), kind of like the dynamic between China and the USA. It is these imbalances that are coming home to roost here, but even if we fix this, they’ll still be there.

  3. p.g.sharrow says:

    Sounds like a no decision, decision. The Greeks voted to forgo the austerity and stay in the Euro Union. I guess they believe that SOMEONE else will pay their bills. What a bunch of vampire bats. pg

  4. omanuel says:

    That is great news: Greeks refuse to be bullied by world tyrants that united nations (UN) and national academies of science (NAS) into a worldwide “Orwellian Ministry of Consensus Scientific (UN)Truths” to save themselves and the world from possible nuclear annihilation on 24 Oct 1945.

    Ancient Greeks laid the foundation of western philosophy, science, self-rule (democracy) and thus comprehended our FOURTH OF JULY SURPRISE & FIFTH OF JULY HANGOVER: National Academies of Science worldwide BETRAYED the public and the most basic principles of science after nations were united on 24 Oct 1945 to save the world from possible nuclear annihilation !

    1. The United States started with the “Declaration of Independence” on 4 July 1776.

    2. We were BETRAYED by the US NAS 169 years later, on 24 Oct 1945, because:

    _ a.) In 1863, President Abraham Lincoln had trusted and appointed a private, self-perpetuating group of distinguished scholars to advise the government on science and technology, without checks and balances – The US National Academy of Sciences (NAS).

    _ b.) Forty-nine years later, nations and national academies of sciences were united under the UN on 24 Oct 1945.

    _c.) During a 70-year secret, worldwide “Social Experiment” that followed (1945-2015), members of the US NAS and their home universities were BRIBED (allowed to benefit individually) with billions of dollars Eisenhower poured into the scientific-military-industrial complex to hide from the public the force of NEUTRON REPULSION IN THE SUN’s PULSAR CORE made our chemical elements, birthed the solar system, sustained the origin and evolution of life on Earth and still maintains dominant control over every atom, life and the climate of every planet in the solar system today:

    Click to access Introduction.pdf

    [The Sun’s interior was changed from iron (Fe) to hydrogen (H) in textbooks, and Aston’s valid nuclear packing fraction was replaced with von Weizsacker’s deceptive nuclear binding energy by consensus purchased with public funds.]

    3. Climategate emails in late Nov 2009 first showed many of us the sad state of government science.

    4. After hearing six years of official excuses for deceptive government science, now – on 4 July 2015 – there is little or no doubt:

    The US NAS (National Academy of Sciences) Lincoln established in 1863 now BRIBES scientists with PUBLIC FUNDS TO BETRAY THE PUBLIC.

    That was the 2015 Fourth of July Surprise for those who still believe any of these post-1945 Orwellian Consensus Scientific (UN)Truths

    AGW Anthropogenic Global Warming
    SNM Standard Nuclear Model
    SSM Standard Solar Model
    BBC Big Bang Cosmology

    Greece may be leading us back from global tyranny to national self-rule, honest economy, and honest science.

    Oliver K. Manuel

  5. Sera says:

    If the hard left/socialist Syriza Party and the hard left/socialist EU get into a food fight, who wins? And, should we expect a hard left/socialist solution to this problem that they created? What would that solution be?

  6. E.M.Smith says:


    Yeah, I’m enjoying that aspect too. The very hard left socialists have run out of money and are asking the hard left socialists to pony up some more… Strange how even hard left socialists can become a bit capitalist then…

    @Another Ian & M. Simon:

    China has a lot of problems. From rampant corruption and lack of ethics, to a demographic wall when the “one child” policy kids have to carry 2 retired parents each, to overbuilt bubbles at government mandate… I’d say it was going to crash, but at 30% off already in about 3 weeks it’s already happened (with more to come IMHO).

    @Larry Ledwick:

    It is going to be exotic, whatever happens. I can’t see Greece making a go of it by staying in the Euro, but can’t see Germany letting them out or writing off the debt. Rock, meet hard spot…


    Yes, they could just print “Greek Euros” for a while… Whatever they do it has to happen fast. I expect ECB to cut them liquidity slack for a few weeks as they figure out who has the biggest legal guns…

    @Paul Hanlon:

    Yup, you got it. The EU / ECB can’t fold as then Italy, Spain, Portugal, etc. line up with even bigger pots. Yet they tipped their hand in Cyprus, so Greece is not going to accept their planned fleecing… and voted not to. Everything is hitting the wall and The People just said “We’re fine with that”. The Greek Government now goes in with a mandate, and the EU / ECB is off script…


    Yes, I think it is good news. It shoves the problems being created by the EU unelected right back in their face, and says that they can’t use the Cyprus Solution on Greece.

  7. tom0mason says:

    Greece is just one state of the EUSSR among 18 others. Should the EUSSR politburo just let it negotiate an exit from the EUSSR, or just let it go bust within the EUSSR? IMO that is the question.

    Consider this —
    Greece is approximately the same size as the state of Alabama but with a population over 11 million. Approimately 15% are aged 15 or less, the same percentage are 65 or more, therefore the majority of Greeks are of working age. (

    If Greece were your home instead of The United States you would…

    be 3.8 times more likely to be unemployed :(
    make 55.3% less money :(
    have 12.22% less free time :(
    be 82.81% less likely to be in prison 8|
    spend 77.02% less money on health care :)
    use 57.05% less electricity :)
    consume 46.02% less oil :)
    be 63.16% less likely to be murdered :)
    experience 23.78% less of a class divide :)
    be 22.53% less likely to die in infancy :)
    be 83.33% less likely to have HIV/AIDS :)
    live 0.74 years longer :)
    have 34.43% fewer babies :o

    Clearly the EU kremlin has no contingency plans for this for Greece or any of its states getting in to similar circumstances. The EUSSR politburo apparatchiks are just playing it by ear and hoping something fortuitous happens. Hope alone is never a good plan.

    If this were happening to a state of America would the Government, the Central Bank (or what) assist it. Or would it be allowed to go bankrupt.? Could, say, California or Illinois be left to go bankrupt, is there a measure they could take that allows for some bankruptcy protection (Chapter 9, or Chapter 11?) Obviously EU socialist state system has no method except exit and go it alone, or stay in and remain poor and in debt for at least a generation, possible longer.

  8. oldbrew says:

    Funny how the EU’s banking arm the ECB can find over a trillion euros (BBC report, link below) of free money for the near-bankrupt banking system, but EU bosses and the IMF still want Greece hung out to dry.

  9. Steve C says:

    Interesting to note that polling has now failed in similar ways twice in as many months, and in different countries. The UK General Election in May was “too close to call” right up to polling day, when Cameron got a modest, but workable, majority. This time out in Greece, it was “too close to call” right up to polling day, when Syriza got a thumping 2:1 majority. Am I being too cynical in suggesting that poll “results” are proving less useful than they used to in persuading uncommitted voters to vote in “somebody’s” preferred direction?

    Anyhow, “No” it is. Pigeons, meet cat.

  10. Gail Combs says:

    I would not want to be in the EU right now since the idiots running the asylum have delivered to Europe a one, two, three punch.

    #1. Cut off the life blood of any economy, ENERGY. Whether that energy comes from coal or nuclear or the muscles of animals or slaves or serfs or peasants, you do not go from idea to wealth/product without energy.

    #2. Flood the area with a a poorly educated immigrant population. Many of whom end up as a drain on the economy instead of an asset ….a Pakistan-born baroness reveals how some of her countrymen have as many children as possible by several wives so as to milk our welfare system….

    …Tragically, over recent decades, the system has become corrupted. It might have once been a safety net for those in real difficulties but, today, parts of the benefits structure have become a lucrative racket for claimants who lack any sense of social responsibility.

    Through its generosity, which now costs taxpayers more than £200  billion a year, Britain’s social security system incentivises idleness and fecklessness.

    And one of the most worrying aspects of this — and which is something that has been a taboo subject for far too long, because of sensitivities about the issue of race — is the way the system is exploited by some migrants from Pakistan and Bangladesh.

    As I said in Parliament this week, there is now a growing wealth of evidence that the generosity of the welfare state encourages some Muslims from these two regions — along with plenty of white families — to produce ever larger families in order to claim extra payments and publicly-subsidised housing. And it’s something the system seems to allow too easily….

    This is the UK but it is at the directive of the EU.

    #3. Reward the government bureaucrats with generous salaries and pensions while strangling the private sector wealth builders with reams of red tape.

    For example one UK dairy farmer, the last one left for miles around, remarked he now spends 60% of his time filling out paperwork for the government.

    This is other excerpts about UK Agriculture I stole from (wwwDOT) back in 2008.

    January 8 2008 ~ “Who will rid us of this pestilent farming?”
    Defra has dropped the word ‘farming’ from its title. The Telegraph today reveals that
    “Defra and the Treasury’s joint vision document of 2006 presented to the EU argued that supports for farming should be completely abandoned…..”

    and the article reinforces the conviction in many minds that for the government, and for the Treasury in particular, farming is a drain on the country’s finances and we are in a “post agricultural era”. We can only repeat what we have already said today: at a time when oil industry executives themselves are admitting it isn’t going to be easy to meet future world oil demand, and the globalised system that brings in cheap food is increasingly unsustainable, the values of local food production and of self sufficiency need urgently to be reconsidered….

    “It’s all part of Defra’s policy to reduce the amount of greenhouse gases. The UK government believes a reduction in livestock numbers will have a marked effect on the statistics. This is the logic of the asylum, where the lunatics are now completely in charge.” .
    James Withers, the deputy chief executive of NFU Scotland, is also quoted: “There is a culture within the UK government of target-chasing, particularly on environmental and energy issues. Fewer livestock will, obviously, mean less greenhouse gas emissions, but how on earth can presiding over a demise of livestock production be consistent with the other big national and international challenges? Environmental protection and reducing food miles, food security, healthy eating and high animal welfare standards rely on a sustainable farming industry throughout the UK.”….

    March 14 2008 ~ British hill farmers doomed by “failed and flawed government policies”.
    A letter in yesterday’s Telegraph spells it out: ” Hill farmers produce excellent meat on poor land, but have been badly hit by flawed policies on animal disease, failed IT systems for payments, huge burdens of regulation, and prescriptive, unworkable environmental schemes dictated by the likes of Natural England and the RSPB. These have resulted in hundreds of thousands of sheep and cattle being cleared from the uplands, leaving scrub. The Government is ruining sustainable systems of land management and livelihoods. Visitors ask: “Where have all the sheep gone?

    ….”Tourism here lives off the backs of the farmers and without sufficient numbers of farmers, tourism too will suffer…there are more dangers as world food shortages increase and populations, including our own, grow….. Government agencies and their advisers implemented destructive, inflexible environmental schemes – ignoring local knowledge – that are destroying productive hill land, farmers’ livelihoods, local communities and rural economies. These environmental schemes are based on out-dated, flawed research to achieve some EU target, although after years of asking, no clear definition of the target has been forthcoming from various Government agencies. ..”

    …..Peter Morris of the National Sheep Association on the subject of the compulsory double tagging rule that threatens the sheep sector (source):
    ” The extra costs that will be incurred will not be picked up by anyone else in the food chain and, with virtually every sheep farmer already losing money, for many it will be the final straw. … All we hear time and time again is that there is a regulation in place and we have to obey it. What is the point when it does not offer benefit to anyone?”
    The fear of BSE gave a sort of spurious justification for many EU measures costing millions. The specific fear about scrapie and vCJD can no longer be sustained. MEP Struan Stevenson warns that when we “have no industry left and rely on imported mutton and lamb” such imports will lack “the rigorous regulations and controls we impose on our own farmers.”
    And for how long can the UK import its food? EU culture commissioner Jan Figel may talk glibly of “our increasingly competitive, globalizing world” (source) but this is mere fiddling as Rome starts to smoulder. Richard Heinberg said bluntly last week ( See oil pages) , “Get thee to the productive side of the economy. Grow something, or learn to make or repair something useful.”

    Anarchy in the EU, apathy in the UK
    In years to come, when the British finally wake up to the part played by the Lisbon treaty in setting up the new “government of Europe”, they will ask: why wasn’t there more fuss about it at the time? There was something forlorn about the few thousand people on the “I Want A Referendum” mass-lobby of MPs in London last Wednesday. Compared with the coverage of the five Green protesters who occupied the Palace of Westminster roof that day, their efforts to save what remains of our democracy were ignored.

    The charade of the Parliamentary “debates” on the treaty lacks any reference to the appalling mess our new EU system of government is making of every area of policy it has already taken over.…..

  11. omanuel says:

    Thank you, E.M. Smith, for your insight and patience as society struggles to understand the strange turn of events during a NEWS BLACKOUT in Aug-Sept 1945.

  12. E.M.Smith says:

    @Tom O. Mason:

    To the best of my understanding, there is no method in law for a U.S. State to file bankruptcy. That may change (or may have already changed) and is only based on a discussion of “Talking Heads” when they were looking at the sorry state of the State of California…

    It would be just as big a mess were California asking The Fed for money or trying to dump their unsustainable debt on Texas…

    Other than not much money and jobs, the stats for Greece look pretty good! 9-)


    Well, that’s pretty much the “WTF” I’ve pondered. Their does seem to be “another agenda” at work. And not just in Greece or with the ECB.

    Private and publicly traded banks get in trouble to the tune of $Billions or $Trillions. They merge until “to big to fail”. The result? Forced mergers to even fewer banks, the failed loans moved to the public purse (via The Fed or The IMF or the ECB or…) and the debtors get whacked with “austerity” and / or forfeitures of assets.and / or ala Cyprus a raid on personal savings and / or…

    Sure looks like a “roll up” operation to me with assets left in the private banker hands and ever fewer of them at that; while “ordinary folks” and “smaller countries” get raided and poverty with The Big Bill stacking up as incredible debt in the public “central banks”.

    Haven’t quite decided if it is “malice” or “stupidity” but it sure isn’t sanity or morality…

    I’m not prone to conspiracy theory forms, but a simple “follow the money” is a bit distressing…

    @Steve C:

    I’ve been wondering that too. Is it incompetent polling? Polling with bias? Or just the “unpopular” with the media side knowing they are not liked, so STFU when the pollsters for the banksters arrives.

    I know that were I polled about any of a long list of Progressive topics, I’d not state my true opinion. Too many times folks have been attacked, tagged and bagged, and generally vilified. It would be a polite “why I think just what the media tells me I’m supposed to think! And say hello to my good friend der Commissar that I’ve never met…”

    I suspect that’s an ever more common thing as folks get more fed up.

    @Gail Combs:

    The basic “issue” is that government is best when it is absolutely minimal, driven from the bottom up by locals and local to the people, and leaves most decisions to free actors in a free market (only acting to keep the market free and fair via preventing collusion, trusts, and monopoly).

    The EU, and increasingly, the USA: Is tending to maximal government, driven from the top down from far far away ignoring the local people, and having most decisions made by paid actors of the government with no clue what The People want (or even worse, not caring at all what The People want) often acting to prevent market forces and pushing the agenda of those who collude, form trusts, and want monopoly power; frequently in a Government-Industry consortium oligopoly.

    The original USA was set up to be of the first form. Local Sheriff was the head law enforcement officer in any local area. Counties had State Senators. States had Federal Senators. Everything from the bottom up. Over the decades, one bit at at time, power has shifted to central control. The end game is always collapse of Empire. Only the details change.

  13. A C Osborn says:

    One thing that I have not seen mentioned on TV or in the MM is the fact that Greece is a “Potentially” rich nation. It has a great deal of Gas ($600Billion) & Oil just off it’s coastline, the value of which dwarfs it’s current debt. It should have started exploiting it last year,especially as the EU desperately needs it to reduce it’s reliance on Russia.
    Why aren’t they being given cash to do so?

  14. Jason Calley says:

    Reporting on Greece seems to be of two varieties. One side says that Greece was a profligate spender of other people’s money. The other side says that Greece was pressured into debt bondage by bankers who create credit out of thin air.

    Here is a clear article from the blame-the-bankers side.

    Personally, I think the truth is some of both sides. The bankers purposely set up Greece to fail, and the Greek citizens enjoyed the free party too much to object. (Just like we here in the US have done so far.) It looks like Iceland is the only country with enough brains and gumption to fight the process.

  15. J Martin says:

    Greece is a structural basket case, its virtually impossible to get anything done without handing a bribe to government officials. The same officials also have a ridiculously generous pension and salary scheme. Social security benefits for non existent disability make the word largesse seem inadequate.

    The EU knew all of this before Greece joined the Euro but stupidly let them in. Grexit has always been inevitable. The sooner Greece are kicked out of the Euro the better.

    Greece has voted to continue to allow the burocrats to live like princes while the rest of the Greek people pay for it. The people get the government the deserve.

  16. Gail Combs says:

    E. M. says….
    The basic “issue” is that government is best when it is absolutely minimal, driven from the bottom up by locals and local to the people, and leaves most decisions to free actors in a free market (only acting to keep the market free and fair via preventing collusion, trusts, and monopoly).

    The EU, and increasingly, the USA: Is tending to maximal government, driven from the top down from far far away ignoring the local people….

    Worth repeating.

    I figure we lost the USA in 1913 with the Federal Reserve Act setting up a central bank and the ratified of the 16th Amendment, authorizing Congress to levy a tax on incomes and thereby allowing the central bank to raid the personal income of citizens. Plus the 17th Amendment redefined the rules about how senators are elected moving senators from representing the state legislatures to being popularly elected so the states lost control of the federal government.

    Now the federal government bribes states to do its bidding. I lost the link, but something like 1/2 the states’ revenue comes from the federal government and not from their citizens.

    States collected general revenues totaling nearly $1.6 trillion in 2010. Thirty-seven percent of that revenue came as transfers from the federal government and, to a much smaller degree, from local governments. The remainder came from state taxes, fees, and miscellaneous receipts

  17. Larry Ledwick says:

    Meanwhile on the other side of the world the ship is taking on water fast and nobody in the major media notices. The Chinese stock market has been on a boom and huge numbers of unsophisticated small investors have poured into the market. Bet they all bolt for the door at the same time (a day late and many dollars short)

    We may be entering black swan territory where lots of issues come together at the same time and knock the wheels off the apple cart.

    The next 6 months or so may be very interesting.

  18. Graeme No.3 says:

    Any bureaucracy tends to expand. It is inherent in the beast.
    Every circumstance is met with “we need more people/resources etc.” It doesn’t matter if it is a disastrous situation engineered by the bureaucracy itself, or a booming economy despite its worst efforts. It is ALWAYS about control.
    The EU was originally set up with bureaucrats in charge, and the politicians having no control. As a consequence it has always expanded, the number of public “servants”, more countries to control, and more and more regulations and those to enforce them. This attitude is why Greece was let into the Euro in the first place, and why there is so much hesitation in letting them go.
    Once you are “in” there is no way out – a perceptive English politician called it “a burning house with no exits” – but the EU will have to find a way for Greece to go. The Greeks can’t pay their debts, they will default. The losses will be added to the amount the general public in the EU has to pay out. In Germany in particular this will cause much political angst, and may even bring down the Government.

    The other disaster is the AGW policies of the EU bureaucracy. The whole apparatus is infected with CO2 phobia, and the resultant decisions are increasingly lunatic. Therein may be the salvation of Greece. They will have to reform their economic system, pay taxes, reduce social welfare (especially fraud), retire at 65, and clean out corruption. I hope they have Hercules on standby. Should they do this, and I have very little faith they will, then their economy will boom, and investment money will be available. There is apparently a large amount of gas just offshore, which could be in strong demand in Europe when they stop burning trees and complete shutting down their nuclear plants.

  19. E.M.Smith says:


    There has been a fundamental conflict from the beginning. I’d been pondering a posting on this, so haven’t brought it up, but I’ve not done it, so…

    Hamilton wanted a strong Federal Central government. Jefferson wanted what the constitution gave us, and “sort of won”. BUT. Hamilton had the “general welfare” clause stuck in, and as we have seen that let The Feds grow astoundingly because it is so vague.

    Then we had the War Between The States ( sometimes called the Civil War, but there was little civil about it… AKA “The War Of Northern Aggression” that is in some ways more accurate…)

    IMHO, the amendments made after that war started the move to a dominant Central Authority more than anything else (as The Confederate States of America had wanted a weak central government with strong States rights; while The Union wanted strong Central Authority and States rights be damned). The Union, winning, set the terms going forward. After that, the Progressives finished the job.

    Want a Jeffersonian Libertarian nation of liberty and wealth? Just take out the “welfare clause” and amendments from about The Civil War onward… (yes, some ought to be kept, like not counting some folks as fractional folks or keeping women out of things; but IMHO that’s about it.)

    @A C Osborn:

    Verrrry Interrresting… ;-)

    Kind of like Israel finding a load of gas off shore and suddenly a lot of folks thought maybe Palestinians ought to have the rights to it…

    @Jason Calley:

    Yes, sort of… Don’t forget that Greece was doing fine pre-entry. It was the Euro that made them too expensive for folks like me to vacation there, then “austerity” hikes taxes so much it is even less viable. That collectively caused tourism and exports to drop. Where else can they make money? That then puts a load of folks out of work, and PRESTO! the GDP part of Debt/GDP ratio plunges and they are in OMG Debt/GDP ratio even without adding a whole lot more debt (to an already large, but manageable, debt…)

    I know I’m talking more about the mechanism, while you are talking about the goal, but it is important to remember that the lack of competitive pricing and taxes caused the GDP collapse that causes the rest…

    @J. Martin:

    Ah, but which is cause and which is effect….

    @Another Ian:

    Well, looks like lots of folks pondering this one ;-)

    Yum, more to read ;-)

    @Larry Ledwick:

    Ah, China. Auguring in a bit… Moving from Communism to “Market Socialism” things work better, and the economy booms. Folks make the mistake of thinking that means Market Socialism is The Best, and try to move from free-and-fair markets to market socialism, which fails… though slowly.

    What I’ve predicted for a long time (but maybe before blogging…) was that China would be a rousing success, until they either embrace free-fair-market capitalism, or eventually auger in as all socialisms eventually do. Looks like we may be about to find out if that speculation was right 8-}

    It’s a bubble, and all bubbles burst. So no real surprise… Perhaps I need to put up some charts on China markets…

    @Graeme No.3:

    There is always a “way out”, even if it is “diplomacy by other means” as has happened often in history.

    Laws and Authority apply right up until they don’t. Collapse is like that.

    It’s a horse race between Germany throwing Greece out, and Greece deciding they have sucked up as much of Other People’s Money as they can get and it is time to burn the lenders.

    Best move is to own your home, have a low taxable profile, know how to grow food and repair your own stuff, and possess the means to defend it. Oh, and have a large survival supply of popcorn and salt…

  20. Larry Ledwick says:

    I think the interesting thing about China is that their root problem is really one of massive over capacity. They could if called to, out produce the rest of the world in many major categories, especially if they went on a war footing. Recently Russia and China have taken to partnership. It could be a marriage of convenience or one of shared complimentary objectives.

    One of the reason folks don’t take Russia seriously is that they no longer have the industrial base that they did during Soviet times. (sometimes referred to as Mexico with Nukes) If (big if) but if they chose to join hands with China, and sell China raw materials and oil in exchange for military hardware manufactured in China, or finished product like steel for military hardware assembled in Russia, and both chose to focus on their primary sphere of influence, they could very quickly become dominant military powers.

    China controlling the western Pacific and Russia putting significant pressure on eastern Europe. With Russian technology and Chinese manufacturing partnered, they would be able to quickly build out military forces that would leave the rest of the world in the dust for a decade or so.

    Since the U.S. has shrunk its Navy to the smallest ship count since prior to WWII and worn out much of our hardware and our troops in a protracted war in Iraq/Afghanistan, and Europe has essentially disarmed since the wall came down, the R/C axis would have a major mobilization advantage if they went on a crash combined rearmament campaign.

    Both have been doing exactly that at a slow simmer just below the threshold that gets everyone anxious for a couple years now. In just a few years, China will be able to hold the U.S. Navy at serious risk anywhere in the western pacific and essentially make Chinese coastal waters a private lake that they can deny passage on at will.

    Russia is also moving to completely modernize her missile forces and produce a new generation of super quiet submarines. Recently they have been engaged in a testing phase to learn what the reaction thresholds are for Europe, and have become quite adept at massing forces quietly without tipping off western intelligence. Often catching Ukraine and others by surprise with the amount of hardware and the speed at which it can be brought to bear.

    The question in my mind is just how desperate are the Chinese to avoid internal chaos? Are they willing to suck up manpower and create jobs out of nothing to feed a massive military build up? If they are willing to do that and also take seriously their rhetoric about being an historical naval power in the sea of China. The that opens the door for them to exploit the fact that the U.S. has given away its leadership and ability to fight on two fronts at once, I could see a military merging of Russia and China to both exploit NATO / U.S. vulnerabilities simultaneously while we are busy beating out other social and economic brush fires.

    The first responsibility of a planner is to explore what is possible, not necessarily if it is likely.
    The facts on the ground tell me such a confluence of interests and a rare window of vulnerability for the west which has not existed for 100 years, just begs to be exploited by some one. The only question in my mind is who, when and how well executed the attempt will be.

    I think the next 30 years will be a very very high risk period for the whole world in that regard as lots of forces are all pushing in the same direction. The younger dogs may be getting ready to challenge the alpha male in the pack.

  21. p.g.sharrow says:

    Popcorn and Salt 8-( OH! Hell, I forgot the popcorn and salt!

    Bureaucrats always destroy the society they manage, ALWAYS
    They have to have complete control, But are not capable of getting needed things done in an effective manner. Civilizations that are completely controlled by bureaucrats can not evolve with changing conditions.
    Civilizations created by free people grow until the bureaucrats gain control, then stagnate and decline.

    We don’t need Them! pg

  22. omanuel says:

    Regretfully, pg sharrow, they very successfully hid reality from society after WWII and successfully induced social insanity (loss of contact with reality).

  23. Gail Combs says:

    E.M.Smith says:
    “……Hamilton wanted a strong Federal Central government. Jefferson wanted what the constitution gave us, and “sort of won”. BUT. Hamilton had the “general welfare” clause stuck in, and as we have seen that let The Feds grow astoundingly because it is so vague….”

    The other phrase that was compromised was “Life, Liberty and Property” ===> “Life, Liberty and the pursuit of Happiness” again that “general welfare” thought got stuck onto the end while property rights got knocked out of the ring.

    I have zero liking for Hamilton even if I am one of his descendants. He always struck me as being a bit of a Trojan horse.

    The other clause that has been bent, folded and mutilated out of all recognition is the ‘commerce clause’ Now the Supreme Court lets Congress use it to tell businesses what customers they can sell to and farmers and gardeners what crops they are allowed to grow for their own use.

  24. Another Ian says:


    Dozer time thinking re Greece

    Didn’t someone make some comment about doing the same thing over and expecting a different result?

    And didn’t someone suggest something about the first rule of holes?

  25. Larry Ledwick says:

    Interesting look at what happens to the general social order as an economy goes into crisis.
    Useful notes to consider if economic disruption comes to your neighborhood.

  26. Larry Ledwick says:

    One more link to practical changes in commerce as the economy circles the drain.

    Obviously everyone is trying to find an asset which will hold value and is outside the money/currency exchange controls. That ends up leading to catch 22 issues with, it may hold value (Rolex watch) but is it liquid enough to pay bills with or buy food. If no one has small denomination cash and everyone is insisting on cash the economy quickly grinds to a halt except for person to person barter exchanges.

  27. p.g.sharrow says:

    One of the talking heads on Fox Business suggested that Greeks move to BitCoin for their banking, rather then banking with government managed entities. pg

  28. Larry Ledwick says:

    According to Bespoke Investment Group, China’s stock markets have now lost $3.25 trillion. To put that in perspective, that’s more than the size of France’s entire stock market and about 60% of Japan’s market.

    China apparently has a 10% circuit breaker, if a stock drops by 10% in a days trading, trading is halted on that stock.

    Not sure that will change the end game only how fast this bubble unwinds.

    Now the question is will this uncertainty in the Asian markets feed back on the uncertainty in Europe over Greece?

    The bad news in my mind might be that that will make the U.S. Market the “safest port in a storm” and pump up our stock bubble and capitol flees uncertainty.

    Popping some pop corn now.

  29. Soronel Haetir says:

    The thing I see with China as a naval power is that I have not yet seen evidence that they can get their manufacturing quality issues under control. It is not just the cheap junk they sell to us that is not up to spec, the same is true of their internal markets as well.

  30. Another Ian says:

    Larry Ledwick says:

    7 July 2015 at 6:12 pm

    This is why some of your gold should be in coin, not ingot if you’re going that way

  31. Sera says:

    Maybe the Greeks should bow to a higher power…

  32. LG says:

    NYT: Germans Forget Postwar History Lesson on Debt Relief in Greece Crisis.

    …a vintage photo resurfaced on the Internet.
    It shows Hermann Josef Abs, head of the Federal Republic of Germany’s delegation in London on Feb. 27, 1953, signing the agreement that effectively cut the country’s debts to its foreign creditors in half.
    It is an image that still resonates today. To critics of Germany’s insistence that Athens must agree to more painful austerity before any sort of debt relief can be put on the table, it serves as a blunt retort: The main creditor demanding that Greeks be made to pay for past profligacy benefited not so long ago from more lenient terms than it is now prepared to offer.
    But beyond serving as a reminder of German hypocrisy, the image offers a more important lesson: These sorts of things have been dealt with successfully before.
    The recurring, historical pattern? Major debt overhangs are only solved after deep write-downs of the debt’s face value. The longer it takes for the debt to be cut, the bigger the necessary write-down will turn out to be.
    Nobody should understand this better than the Germans. It’s not just that they benefited from the deal in 1953, which underpinned Germany’s postwar economic miracle. Twenty years earlier, Germany defaulted on its debts from World War I, after undergoing a bout of hyperinflation and economic depression that helped usher Hitler to power.


    Economic Historian: ‘Germany Was Biggest Debt Transgressor of 20th Century’
    Think Greece’s current economic malaise is the worst ever experienced in Europe? Think again. Germany, economic historian Albrecht Ritschl argues in a SPIEGEL ONLINE interview, has been the worst debtor nation of the past century. He warns the country should take a more chaste approach in the euro crisis or it could face renewed demands for World War II reparations.

    SPIEGEL ONLINE: Mr. Ritschl, Germany is coming across like a know-it-all in the debate over aid for Greece. Berlin is intransigent and is demanding obedience from Athens. Is this attitude justified?

    Ritschl: No, there is no basis for it.

    SPIEGEL ONLINE: Most Germans would likely disagree.

    Ritschl: That may be, but during the 20th century, Germany was responsible for what were the biggest national bankruptcies in recent history. It is only thanks to the United States, which sacrificed vast amounts of money after both World War I and World War II, that Germany is financially stable today and holds the status of Europe’s headmaster. That fact, unfortunately, often seems to be forgotten.

    SPIEGEL ONLINE: What happened back then exactly?

    Ritschl: From 1924 to 1929, the Weimar Republic lived on credit and even borrowed the money it needed for its World War I reparations payments from America. This credit pyramid collapsed during the economic crisis of 1931. The money was gone, the damage to the United States enormous, the effect on the global economy devastating.

    SPIEGEL ONLINE: The situation after World War II was similar.

    Ritschl: But right afterwards, America immediately took steps to ensure there wouldn’t be a repeat of high reparations demands made on Germany. With only a few exceptions, all such demands were put on the backburner until Germany’s future reunification. For Germany, that was a life-saving gesture, and it was the actual financial basis of the Wirtschaftswunder, or economic miracle (that began in the 1950s). But it also meant that the victims of the German occupation in Europe also had to forgo reparations, including the Greeks.

    SPIEGEL ONLINE: In the current crisis, Greece was initially pledged €110 billion from the euro-zone and the International Monetary Fund. Now a further rescue package of similar dimensions has become necessary. How big were Germany’s previous defaults?

    Ritschl: Measured in each case against the economic performance of the USA, the German debt default in the 1930s alone was as significant as the costs of the 2008 financial crisis. Compared to that default, today’s Greek payment problems are actually insignificant.

    SPIEGEL ONLINE: If there was a list of the worst global bankruptcies in history, where would Germany rank?

    Ritschl: Germany is king when it comes to debt. Calculated based on the amount of losses compared to economic performance, Germany was the biggest debt transgressor of the 20th century.

  33. Soronel Haetir says:

    Of course a lot of the post-WWII largess on the part of the US was not out of any sort of humanitarian desire. US leaders saw propping up the Germans as the least bad option when it came to dealing with the Soviets. Western Europe (France and West Germany especially) simply _had_ to function in order to block Moscow.

    One thing I don’t see addressed very often is the degree of corruption in the Greek economy. I’m not talking about just the official corruption (which I do see mentioned regularly) where the government cooked the books before in order to hide how bad the debt situation really was but even on the individual level. Both bribery and tax evasion appear to be huge issues. So long as those issues remain open I really don’t see the Greeks managing to do anything other than just blunder along from one crisis to the next.

  34. E.M.Smith says:

    @Soronel Haetir:

    Saw a news blurb yesterday? that Greece has been in “financial crisis” for over 1/2 of the total interval since it’s independence… in 1820s ish…

    Not exactly a record to inspire confidence.

    Yes, the USA decided “best of the worst options”, but that also meant things like the UK being left to fend for itself and my relatives having hard times getting food there, while Germany was having “aid” flown in for free… Leaves a bit of bad taste…

    When the formal economy is seen as a deeply flawed bad deal, informal economics takes over. One man’s corruption is another man’s “got to eat”. (Not justifying it, BTW, observing it.) So IMHO one of the first things you must do to get the overall economy functioning well and corruption reduced is: Make the formal economy a fair market free of favoritism. Right after that, you need to get the penalties of the tax burden low enough that the tax-take is less of a burden than the risks from going “black market”. When you have “go out of business” levels of taxation, then “corruption” payments become a reasonable alternative… One of the lesser addressed issues of the extreme wrong end of the Laffer Curve…

    At a 5% income tax or 6% wages tax folks would rather pay them than look for other means and take legal risks. At a 25% sales tax, 50% income tax, 45% wage tax, by the time you earn money and spend it, you get nothing left; so going underground is well worth the “risk”; especially as the risk drops since “everyone is doing it” and it becomes known that a 10% “fee” to Der Commissar keeps any legal risks away.

    Say you make a ceramic pot that has an inherent value of $10. Now a 45% wage tax means only $6.50 is available for wages. Take 1/2 that for income tax, you have $3.25 of that value in pocket to spend. With a 25% sales tax 0.81 ‘goes away’ leaving $2.44 of “value received” from that labor. MUCH better to pay $1 in bribes, skip the taxes, and sell the labor black market for $6. You are now “up” on the deal by $2.56 net-net. More than double the “end value received” for the labor.

    I use the level of corruption as an indicator not just of how good or bad the legal system is, but also as an indirect indicator of excessive taxation and too much “socialism burden”.

    My usual example is non-market, though. I make my own bread for about 50 ¢ / loaf. It costs between $2 and $4 / loaf in the store. Using a bread maker and pre-made jars of ingredients, the “labor” involved is near zero and competitive with large bakeries in automation. So where does the other $1.50 to $3.50 / loaf go? Unions (fees, lobby efforts, bribes), high wages for folks doing not much very hard, tax take at every possible level from land to labor to materials to transport to…, fuel costs for transport, middleman fees for the grocery and wholesaler, sales taxes, etc. etc. Put two slice on a plate with cheese between them, it becomes a $10 cheese sandwich… as more layers of intermediation and taxation happen. So instead, most folks make a cheese sandwich at home instead of going out for one… Mine is about 20 ¢ / sandwich instead of $10 ea… But the same thing happens with bypassing the system via graft and corruption and kick-backs instead of just via DIY. At some point the potential profit becomes too big to ignore.

    Now if I could go to a snack stand 2 doors down where the local house frau was selling home made bread cheese sandwiches for $1 each, I’d do it in a heartbeat. And the economy would be bigger. But local “health and business laws” and taxes prevent that; in an attempt to drive me to the local restaurant that gives a “cut” to the unions and government. But that doesn’t happen. Instead, I make my own at home… and the economy shrinks from the available but blocked size. Do enough of that, even shoe factories and steel mills shut down and move out.

    That’s the problem of being on the wrong side if the Laffer Curve. Economies shrink, corruption and black markets (and DIY) expand. Layering “austerity” onto an economy on that side of things just drives the equation MORE toward DIY, black markets, and shrink. “Exactly wrong” results. The only really effective way out is to make the public market as free and fair as the black market and cut the “take” for “intermediaries” to a very modest level (about 20% max is where it starts to be sub-optimal). Anything else is a circular firing squad…

  35. Gail Combs says:

    To back up what E.M. has said a couple of links on the hidden cost of red tape.
    Federal Regulations Have Made You 75 Percent Poorer

    The growth of federal regulations over the past six decades has cut U.S. economic growth by an average of 2 percentage points per year, according to a new study in the Journal of Economic Growth. As a result, the average American household receives about $277,000 less annually than it would have gotten in the absence of six decades of accumulated regulations—a median household income of $330,000 instead of the $53,000 we get now….

    (So it is not like our law makers don’t know this.)

    …The House Small Business Committee has kept a particular focus on federal regulations and policies that are adding to the assortment of uncertainties confronting small business, particularly when those uncertainties add to our nation’s stubbornly high unemployment rate.

    We have held numerous hearings in Congress related to various regulations and have heard continuously that the entire regulatory process is flawed and that it often punishes job
    creators and stifles economic growth. Even President Obama launched an effort to evaluate regulations that create unnecessary burdens. The President has issued an Executive
    Order mandating that agencies do more than the bare minimum required to ensure that stakeholders have an opportunity to communicate their views on agency regulatory actions.
    Unfortunately, the regulatory agencies under his administration have gone in the exact opposite direction from time to time.

    On October 24 of last year, Gallop released a poll that outlined small business owners’ most pressing concerns, and according to this poll, small business owners are most likely to say that complying with government regulations is the most important problem facing them today. That is more than taxes and more than the overall economy….

  36. LG says:

    Standing before the European Parliament yesterday, it took Nigel Farage just four minutes to completely destroy every argument supporting the Eurozone.

  37. omanuel says:

    Productivity and bureaucracy are inversely correlated.

  38. p.g.sharrow says:

    @omanuel; you should add their pay as well:

    The more You pay them, the less they work for You.

    Poorly paid public Servants become become well compensated Rulers.

    We don’t need Them! pg

  39. Gail Combs says:

    I doubt if they have a choice since they have bigger fish (CAGW Paris December 2015) to fry and a Greek Crisis will flip the pan into the mud.

    The last think the globalists want people to know is their model for a world government is blowing up in their face and people are facing major economic hardship.

    For the EU as a model for global government

  40. Sera says:

    Looks like the can kickers bought a new pair of shoes. Give them credit for consistency and athleticism. I hear some say that if Greece goes, the rest will fall like dominos. I hear others say that Greece is only 1.8% and will not matter at all. It’s probably a little of both.

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