By Monty Pelerin
The charade that is Greece and the European Union has been going on now for more than five years. Greece’s financial condition could not be repaired years ago. It is only worse now. It must end badly. The fact that it hasn’t is a sign of the desperation of European socialists and one-world government types.
Does Greece die tomorrow? I don’t know. It depends on how much more money the Eurocrats want to throw into this bottomless abyss. Greece’s fate was sealed several resurrections ago. Nothing has changed except for each talk at a solution being more incredible.
What will Greece’s failure do to world markets? It won’t help, obviously. However, if it hurts them it will show the insanity that rules today’s financial markets. This outcome was inevitable. Only the timing was unknown. Despite this inevitability financial assets continued precariously levitating well beyond reasonable levels. Does that suggest markets are rational? Or, they are being manipulated by central banks? Or that people are stupid for remaining in them? Pick your explanation.
Is this the straw that causes the world-wide central bank scam to collapse? Perhaps or perhaps it causes only the Ponzi scheme of inflated financial assets to collapse. No one knows the answers, but I suspect a collapse of financial assets pulls back the curtain on what governments and central banks have been up to. One may only hope!
The reality is that Greece is merely a pimple on the financial cancer that affects all countries. It is a precursor to what is coming to Japan, China, the US, etc. The metrics of some of these countries are already worse than those of Greece. What differs is their ability to counterfeit. But, the ability to print money is not an escape, merely a deferral. It allows holes to be dug deeper before the water fills them up, drowning economies and citizens.
Every country in the world is insolvent. None are in position to honor their funded debt and social promises. Greece is but a small canary in a small coal mine in terms of what is coming.
Whether Greece is enough to topple the deck of cards will be decided over the next week or so. If it isn’t, something not very far behind it likely will. (my emphasis)
By Monty Pelerin for Economic Noise
By permission Monty Pelerin