1. The Topic of the Month for October is "Make this the Perfect Bugout Location". Please join the discussion in the TOTM forum.

Eurozone on the Brink of Disaster

Discussion in 'General Discussion' started by workhorse, Nov 2, 2011.

  1. workhorse

    workhorse Monkey+

    The Greek government teetered and stock markets around the world plummeted Tuesday after months of negotiations to save the Greek economy were suddenly thrown into disarray by the prospect of a public vote.
    One day after Prime Minister George Papandreou stunned Europe by calling for a referendum vote on the EU bailout, the ripples reached from Athens, where some of his own lawmakers rebelled against him, to Wall Street, where the Dow Jones industrial average plunged almost 300 points.
    Papandreou convened his ministers Tuesday night, and a spokesman said the prime minister was sticking to his decision to hold the referendum. Papandreou has also called a vote of confidence in his government, to be held midnight Friday.
    “The referendum will be a clear mandate and a clear message in and outside Greece on our European course and participation in the euro,” Papandreou said, according to a statement released by his office. “No one will be able to doubt Greece’s course within the euro,” the statement said according to CNBC.
    It is unclear whether Papandreou will have enough support. Several Socialist lawmakers have openly rebelled, with one going as far as defecting. Milena Apostolaki‘s departure whittled Papandreou’s parliamentary majority to just two deputies, leaving the party with 152 seats in the 300-member legislature.
    Apostolaki’s departure “shows clearly that the government itself is losing gradually its cohesion,” said George Tzogopoulos, a political analyst from the Hellenic Foundation for European and Foreign Policy.
    He estimated that “that the government will not be able to remain in power for many days” and said it was likely that Papandreou “will call an early election very soon.”

    Since the shock announcement, and as reported earlier on The Blaze, the worldwide reaction to the Prime Minister’s surprise referendum has been terrible. And things may get worse.
    “Markets nosedived around the world, with billions wiped off the value of Britain’s leading firms, as Athens announced extraordinary plans to sack its military leaders amid rampant speculation that it was trying to head off a coup d’etat,” writes the Guardian.
    Yes, Athens has allegedly removed its top military leaders. Panos Beglitis, Defence Minister, and a “close confidante” of Papandreou, reportedly summoned generals from Greece’s army, navy and air force and informed them that they were all being replaced.
    No official reason for this sudden action has been offered.
    “The development gave the impression that a Turkish-style military conspiracy was suspected by the government, but no such rumours or allegations had circulated in the country,” writes Paul Anast of The Telegraph. “Greece has been free of political interventions by the military since the overthrow of the military junta that ruled the country in the 1967-74 period.”
    The Foreign Office in London downplayed the rumor of a military takeover saying, “officials in Athens were insisting that the Government had planned for some time to clear out its top brass,” reports the U.K. Mail.
    However, according to The Telegraph, consideration for military changes weren’t even scheduled until Nov. 7. Furthermore, according to the same report, the scheduled annual reviews are more about promotions and retirement benefits then they are about upending the entire military.
    “It’s all over. The government is about to collapse,’ said one Greek official in a U.K. Mail report. Greece’s former deputy finance minister Petros Doukas agreed: “The **** has hit the fan.”
    “The referendum is a bad idea with a bad timing,” said Lionel Jardin, head of institutional sales at Assya Capital, in Paris, in the CNBC report.
    On top of a possible military coup, EU leaders are furious with Greece for potentially plunging the entire eurozone into ruin.
    “This announcement surprised all of Europe,” said a clearly annoyed French President Nicolas Sarkozy, who has been scrambling to save face for Europe before he hosts leaders of the Group of 20 major world economies later this week.
    “Giving the people a say is always legitimate, but the solidarity of all countries of the eurozone cannot work unless each one consents to the necessary efforts,” he said.
    Germany was even more infuriated. A leader in German Chancellor Angela Merkel’s center-right coalition said he was “irritated” by Papandreou’s announcement and said the eurozone would have to consider turning off the flow of money which has kept Greece afloat over the past year, reports Reuters.
    “This sounds to me like someone is trying to wriggle out of what was agreed — a strange thing to do,” said Rainer Bruederle, parliamentary floor leader for the Free Democrats and a former German economy minister. “One can only do one thing: make the preparations for the eventuality that there is a state insolvency in Greece and if it doesn’t fulfill the agreements, then the point will have been reached where the money is turned off.”
    There is a real possibility that the referendum vote will reject the bailout deal. According to several analysts, many Greeks were unhappy with the EU deal because it would force them to agree to additional austerity measures which include severe cuts to public salaries, pensions, and benefits.​
    article-2054406-0E8F0F6300000578-460_634x970. A referendum vote may end with a Greek rejection of the EU bailout. The Greeks were not exactly happy with the terms of the bailout (“even though it means the banks will write off 50 per cent of the country’s debt") and some critics have gone so far as to depict Germany's Angela Merkel as a "Nazi Overlord."

    “If the Greeks are not ready to support Papandreou’s reforms, Greece faces an uncertain future in Europe,” said Michael Roth, Europe spokesman for the opposition Social Democrats in Berlin, in a Guardian report.
    But is the situation really all that bad? Here’s a little perspective from The Independent:
    The . . . economic crisis [could] cost millions of jobs around the globe and trigger mass social unrest, the world’s most powerful nations were warned yesterday . . .
    The UN agency warned that it could take until 2016 for global employment to return to the levels of three years ago – and that anger could erupt on the streets of Europe and other continents as a result.
    Eurozone On the Edge of Disaster | TheBlaze.com
  2. beast

    beast backwoodsman

    "here i come esther, its the BIG one"
  3. Seawolf1090

    Seawolf1090 Adventure Riding Monkey Founding Member

    England wisely stayed off the Euro, and Germany is talking of going back to the Deutschmark. The EU isn't long for the world. A questionable idea poorly implemented. Hope the various nations can ride the crash in and walk away from it.
  4. Ajax

    Ajax Monkey++

    How will the fall of Greece affect the rest of the world? I guess the way the EU is all tied together is the problem, I'm just trying to figure out why it's such a bad thing for us.
  5. Clyde

    Clyde Jet Set Tourer Administrator Founding Member

    The problem is what we don't know, Ajax. One of the primary currencies of the world is about to go up in flames. This could bring down banks, stock markets, etc., who have played the credit default swap game. In fact, based upon the fact these items are unregulated, we only have an idea that the global CDOs & CDSs are in the Trillions of dollars.

    Credit-Default Swap Risk Bomb Is Wired to Explode: Mark Buchanan - Bloomberg

    Selling More CDS on Europe Debt Raises Risk for U.S. Banks - Businessweek

    Globally, as the banks are now intertwined with these off balance sheet instruments. If they bet the wrong way and are truly too big to fail, then all hell breaks loose. Uncertainty creates market chaos.
    Quigley_Sharps likes this.
  6. dragonfly

    dragonfly Monkey+++

    I saw this morning where someone mentioned the "foolishness" of the EU to have all gone to the EURO's and have lost their control over their country's finances!
  7. pmbug

    pmbug Golden Cockroach

    They have set us up the (derivative) bomb.

    Derivative exposure is magnitudes/multiples of the amount of real money that exists in the world. Most banks are technically insolvent, but accounting games are keeping this from being apparent. Should Greece (or Italy or Spain or Portugal etc.) default on their debts, the global financial system will seize up with a lack of liquidity.

    What happens from there is unknown, but chances are good that it will be [Egon Spengler]bad[/Egon Spengler].
  8. radpug

    radpug Monkey+

    Ya silly them, they should have created the Fed.
    Then the people would still have control of their countries finances
    And money.

  9. fedorthedog

    fedorthedog Monkey++

    The death of the Euro will end the one world government movement. Money is where they must start. It is more important than language.
  10. pmbug

    pmbug Golden Cockroach

    If the people are not awake and vigilant, it could be the spark/genesis for a one world currency (to prevent the problems that are happening now from occurring again you see). I would not put it past TPTB to try it. I'm afraid there are simply too many people who are not paying attention to the things that matter and are far too trusting of their leadership to act in their best interests.
  11. ghrit

    ghrit Ambulatory anachronism Administrator Founding Member

    In effect, we had a one world currency, it was called the US Dollar. National pride and misplaced faith in the European Union sorta brought on the Euro. Bad idea, methinks, and national pride will cause it's fall as we see happening. Everyone wants to have his very own medium of exchange as a matter of national pride. A common MoE just makes the accounting a bit easier. You can see that having a common MoE simply spreads the risk such that if one goes down, it takes the rest for a ride.

    Really, it pissed them off that the USD was so strong that competition could not happen. They thought the Euro would level the playing field. Well, it did. Right about the subbasement elevation. No matter the damage we've done to ourselves with the inestimable aid of foreign and domestic derivatives, the USD is still hard to beat in international markets.
    mysterymet likes this.
survivalmonkey SSL seal        survivalmonkey.com warrant canary