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The World May Slip On Greece And Break China!

“If a bank were guaranteed to get its money back, plus interest, no matter what it did, the whole system wouldn’t work. Imagine I were to walk into the nearest branch of the Royal Bank of Scotland and say ‘You know, I just got a really great tip on the horses. Think you could lend me a couple million quid?’ Obviously they’d just laugh at me. But that’s just because they know if my horse didn’t come in, there’d be no way for them to get the money back. But, imagine there was some law that said they were guaranteed to get their money back no matter what happens, even if that meant, I don’t know, selling my daughter into slavery or harvesting my organs or something. Well, in that case, why not?
Why bother waiting for someone to walk in who has a viable plan to set up a laundromat or some such? Basically, that’s the situation the IMF created on a global level— which is how you could have all those banks willing to fork over billions of dollars to a bunch of obvious crooks in the first place.”

Debt: The First Five Thousand Years by David Graeber

Now I’ve heard a lot of complaints about the fact that Greece is full of Greeks who apart from being responsible for a lot of myths, do nothing but sit round drinking coffee and playing dominoes. And I’ve also heard a lot of nonsense about how Greece took the money and the fact that they don’t want to pay it back just shows how childish and irresponsible they are.

Well, I could spend a lot of time trying to explain how the Greek myths don’t just end with Achilles and that there’s more than a couple being invented about the events of the past ten years, but I think that we’d be here a long time and I’d have to get very technical. Far more technical than you’d understand. In fact, I’d have to get even more technical than I’d understand because I haven’t read enough about how the IMF works to fully explain the whole Greek situation.

However, I thought, given that a lack of expertise hasn’t stopped people writing letters to the paper telling us such useful things as the Greeks have always been lazy because they left the Acropolis unfinished. Neither has it stopped opinion writers working on the theory that because they have a column, then what they say must be worth listening to even if they think that the banks in Greece will run out of money by the end of the week, as opposed to cash. Why will they run out of cash? Well, because people keep withdrawing it and nobody wants to deposit it, because they’re worried that the banks’ll run out of cash. God, why don’t the Greek government make watching “It’s A Wonderful Life” with Jimmy Stewart compulsory viewing at this point.

Anyway, I thought that I should put in my two cents worth at this point. Well, I know it’s only two cents but every little bit helps in an emergency, and now that the Budget Emergency seems to have passed in Australia, I figure we should all help out.

Tonight I started reading “Debt: The First Five Thousand Years” by David Graeber. I didn’t quite know what to expect because I only bought it because I thought the title was something to do with me paying off my mortgage. However, in the first chapter, he made the point that suggestions we should pay off debt have nothing to do with economics, they were more to do with morality. Which is exactly the point I made when I wrote about Greece earlier this week. And whenever I find anyone who agrees with me, I immediately decide that they’re a genius, so I’m looking forward to reading the rest of the book just to see if he stays as clever as me for the whole book. (Before you judge me too harshly, just remember Tony Abbott became Prime Minister with logic like that… Mm… On second thoughts, judge away!)

So, let’s just not go down the path of morality. Let’s just accept the idea that some are peddling that Greece and the Greeks are irresponsible, shiftless children who shouldn’t be allowed to make their own decisions.

Ok, for the purpose of simplicity and because to generalise about all Greeks is to be racist, I’m just going to imagine that the Greeks are one person – let’s call her Helen – and I’m going to write the rest of this about Helen, so I don’t get taken to court by any of the Greek Treasurers because we all know how sensitive treasurers can be to criticism.

The Story of Helen

Helen went to the bank a few years ago and said that she wanted to move into the exclusive Euro Estate. The bank said that even though she was only working part-time with very few assets that should be fine. Everyone in the Euro Estate would benefit from the rising real estate prices.

Unfortunately, in 2007, prices stopped rising and Helen was getting less work which meant that the bank grew concerned about Helen’s ability to repay her loan, so they worked out a plan where Helen would stay home and let the interest bill grow, but every week or so, she’d have to go to the bank and tell all the other people how sorry she was and shine the shoes of the bankers.

One day, Helen announced that she wasn’t going to do any more shoe shining and that she’d like to actually have a real job. The bankers grew very, very angry and said that everyone needed to pay their debts. But Helen was resolute. She was about to point out that many of the bankers themselves hadn’t paid their debts. And that there was a thing called bankruptcy and if you declared yourself bankrupt, then the joke was on the person who’d lent you the money. And she was going to ask if the bankers thought so little of her, why did they lend her the money in the first place. But at this point one of the bankers interrupted to tell her that if she didn’t want to shine shoes then she’d have to move back to where she was before she borrowed all the money…

Ok, this story has a few holes in it as an allegory, but it’s a whole lot closer to the truth than most of the guff you’re reading at the moment. And yes, it doesn’t have a satisfactory ending.

Well, I was going to end with Helen getting married and living happily ever after. But then I thought about it.

Anyone been to a Greek wedding? They keep smashing the plates. Which would just make some people concerned about China!



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  1. Andreas Bimba

    Clearly a scam from the very beginning.

    The neo-liberal European bankers lobbied for the loose regulations, set up and staffed the central banks and European supervisory institutions, put in place compliant politicians and bureaucrats then bought the local Greek banks, made a packet in commissions for billions and billions of dodgy private loans to Greek and regional oligarchs, and when the loans went bad got the Greek government to bail out these banks leaving the Greek people with a debt they can’t pay.

    The central and international banking Troika just delayed and enlarged the debt by throwing more money at Greece and STUPIDLY INSISTED ON TOUGH AUSTERITY measures for Greece which further shrunk their economy and REDUCED THEIR CAPACITY TO PAY BACK THE DEBT as well as creating much more misery for the Greek people.

    So the Greeks will probably default passing on the debt to primarily the German taxpayers who by trusting and electing their corrupt or incompetent leaders are partly responsible. No doubt like here, the German media was heavily under the control of the neo-liberals and was able to ‘guide’ public opinion during all the appropriate elections. Germany also benefited the most from the resulting low euro which greatly enlarged their export miracle, so in the end tough tits to the Germans.

    A mass public guillotining of bankers, media owners, dodgy oligarchs and corrupt politicians may provide some light entertainment to the millions made unemployed or forced to live in poverty because of this scam but revolutions are no longer this entertaining apparently.

  2. Matters Not

    Ross, this article is very, very clever and at so many levels.

    I dips my lid.

  3. gangey1959

    Here here. Well spoken Bruce.
    Let them break as much china as they like. It’s called payback. Or not as the choice takes you.
    And while they (we) are doing that, we’ll just flush the TPP down the septic system, and everyone will be better off.

  4. Liz

    Fantastic article and my thoughts exactly. I hope Helen sticks to her guns. Unfortunately the bankers are fully aware that if they let that happen Sharon, Mary & Jill will be next in the queue, which will undermine the Euro Estate. I watch with interest the opening of this big can of worms, whilst hoping other countries will have the courage and foresight to regain control of their own economies.

  5. Harquebus

    Every economy is inextricably linked to energy. Now, surplus energy is gone and energy per capita is declining resulting in decreased productivity and decaying GDP growth. Resource depletion compounded by population growth.
    One can come up with all sorts or explanations and economic gobbledygook but, this is the bottom line.

    Economic problems are physical problems and economics does not factor physics nor our environment.
    The blithering of economists today would be hilarious if, our current situation which, they got us into by the way, wasn’t so serious.

  6. khtagh

    Why doesn’t Greece demand the money plus interest from the WW2 they allowed Germany to default on?? They only paid back 15%.

  7. diannaart

    People, blaming Greece for their predicament, need to ask themselves why did the lenders continue to lend?

    Being a creditor is often another ruse for power.

  8. miriamenglish

    I remember watching a fictional TV show in which a crooked loan-shark lends outrageous amounts to people who can’t afford to repay, then he returns later with threats to break the person’s legs if they don’t repay it along with astronomical interest. The idea is that the person ends up paying several times the debt in interest, or if they never get out from under it, paying for the rest of their lives and willing to do anything, legal or illegal, to service the debt. This seems to resemble the business model of a lot of banks these days (minus the leg-breaking). I have a friend who has already paid for her house a couple of times over in interest payments, and she still hasn’t discharged her “debt” to the bank. They threatened to take her house a while back and she angrily told them she’d burn the house to the ground if they tried that shit.

    Tony Abbott and his cronies are trying to do this to students too. To be fair, Labor started it with the repellent HECS method of milking students instead of investing in them. But the LibNats want to milk the kids forevermore though, by loading them down, first with obscene costs and then with terrible interest rates, meaning that most of them will pay for the rest of their lives for their education, making them indentured servants. It certainly is a great way to discourage kids from getting an education. In a short time we could go from being one of the best educated and most literate countries on the planet to being way down near the bottom with third world countries and USA. Only the internet, with all its free online courses and libraries, might stop that fall… except that LibNats and Labor are trying to wreck that too. 🙁

  9. diannaart

    A frightening and possible future for Australia, Miriam. Let Greece be a warning to us all.

    I was surprised at those who expressed shock at Greece voting against a future of indentured servitude – who would vote to live in poverty paying a loan than can never be repaid?

  10. miriamenglish

    Folks, you really must read this:
    It has been going viral on the internet, with good reason. It’s a fairly long read, but speaks so much good sense it is totally worth the time.

    In it an economist discusses why economics is generally used to obscure rather than illuminate, and why the Abbott government’s plans for the economy can’t work and why they continue to push them even though they can’t work.

  11. Harquebus

    That was a good read miriamenglish. Thanks for that.

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