"The issue which has swept down the
centuries and which will
have to be fought sooner or later is the people versus the banks."
John Dalberg Lord Acton
Greece is the most awkward of the EU
countries by far in terms of economic
There is no conceivable way that Greece
can remain in a single currency union without regular transfer payments from the rest of the EU to compensate them for holding a highly overvalued currency relative to their own economy, geared more to the Germans and
The problem is that the political structure of
the EU does not accommodate
this sort of adjustment,
and within the current political character of the EU
the notion of such payments
is abhorrent. The Germans,
for example, have never thought of themselves as 'fellow Europeans' with a country such as Greece, and the economic
structure of Europe does not easily
lend itself to de
Compare this to the US, with
Greece as one of the poorer
states, which receives much more in tax receipts and federal projects than the tax revenue that they send in.
It 'works' in the US because
it is one nation by
structure and by character. Despite
their regional differences, most Americans can comfortably think of themselves as 'Americans' first
wherever they might live. Unless they are urban cowboys from Texas perhaps (lol).
Every time I look at the
structure of the EU politically and economically with the one currency I ask myself, "What were they thinking?"
There is no way to go by halves with a single currency and no accompanying political union.
But this is the sort of
building by half measures
to which Europe has often
been susceptible. Bureaucrats love compromise, often blinded to how weak and unsustainable that compromise might be. Any deal is not always better than 'no deal,' except to the dealmakers.
So either the EU will
change politically, which
is highly unlikely, or Greece will leave the EU and once again obtain its own currency.
I think that outcome is almost
predetermined. Now it is only
a question of 'how' and mostly with
regard to the possibilities of cross-contamination
in the financial realm.
The best solution is for Greece
to simply leave the EU,
default on its debts, nationalize its banks, and restore the drachma at some highly
devalued level. I think Iceland shows the way in this. This will greatly disappoint the private
financiers who are licking
their lips at the prospect of buying real
national assets on the cheap with
The worst problems will be for the European banks who hold Greek
I would consider seriously an action that allows the banks to simply write off the Greek debt, and declare all CDS on Greek sovereigns null and void except for those who actually
hold Greek bonds, to the extent of fifty percent of their nominal value.
If this is not workable, I would suggest that Europe also should nationalize
and restructure their banks.
This is what ought to have been done in 2008, and much of what has been done since then is
waste. The greatest resistance to this will come from the one-worlders and their friends in the Anglo-American financial cartel. They would also like
a single world currency, which
is unworkable without government by a 'new
The absolute worst model is the American way, in which the banks are given the keys to the Treasury,
the markets, and the political
process, and allowed to
do as they please, while maintaining a thin facade of legitimate government by the
They may as well get this
done, and stop the charade. And then
the rest of the world can
begin thinking of how they might reform
international trade, replace the existing reserve currency system, and bring the Anglo-American privateers back under control once again.