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 Turning the Crisis CornerPosted on Jun 12, 2010
In a metaphorical walk around the debt crisis block, Greece’s prime minister has said that he believes his country is “turning the corner” as economic recovery efforts by the ransacked country may have started to pay off. Greece avoided defaulting on its debt last month after it was awarded a $131 billion rescue package from euro zone countries and the International Monetary Fund. —JCL
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By Fat Freddy, June 13, 2010 at 9:21 am Link to this comment
Mark
Sorry to disagree, but we are not headed towards deflation, we are headed towards hyperinflation, unless, of course, the dollar crashes first, which seems unlikely considering the recent performance of the Euro. The Euro will crash first. Deflation should actually be embraced. It’s the only way to get rid of all of the bad debt and mal-investments.
http://mises.org/daily/1254
Report thisBy Mark, June 13, 2010 at 6:59 am Link to this comment
(Unregistered commenter)
OF COURSE HE’S GOING TO SAY THAT GREECE HAS TURNED THE CORNER!
He can’t possibly tell the truth, because to do so would send everything spiralling downward.
It’s nothing more than “happy talk”, meant to reassure the nervous.
It’s the same crap the “leadership” in the U.S. does. Put a positive spin on everything in the hope that people will swallow it, and as a result, stand pat, or maybe even start acting like things REALLY are better. Anything that keeps the masses from running for the exits and thereby precipitating a crash.
Make no mistake about it. We’re headed towards deflation. Governments prefer that it take place in a slow and somewhat orderly fashion, versus a headlong tumble to the bottom.
Nevertheless, it’s gonna be a bumpy ride
Report thisBy Fat Freddy, June 13, 2010 at 6:09 am Link to this comment
I came across this excellent article which explains, in layman’s terms, why we should be Austrians.
http://www.ritholtz.com/blog/2010/02/we-are-all-austrians-now/
Report thisBy Fat Freddy, June 13, 2010 at 5:24 am Link to this comment
The 131 billion to Greece is just a part of the 1 trillion of the ECB TARP-like program. The ECB (and the US) will soon find out that you can’t inflate (currency, assets) your way out of a major recession and into prosperity. Money is not wealth. Just ask Japan, Argentina and Mexico (to name a few).
But the ECB isn’t really inflating the currency, right? It’s not quantitative easing (QE) in the “traditional” sense. They claim most of these loans have been “sterilized”, through foreign currency, or liquidity swaps with other central banks. I have yet to find an adequate definition of “sterilization”. It’s just another Keynesian “feel good” propagandist term.
When you marry fiat currency to fractional reserve banking, and legalize accounting fraud, you have a recipe for disaster.
We’ve been down this road before. People don’t realize how close we were to collapse when Nixon abandoned the Bretton Woods agreement, which only kicked the can down the road. There are some very tough decision that are going to need to be made. The question is, do we have the courage to make them, and is it too late?
Report thisBy FRTothus, June 12, 2010 at 7:44 pm Link to this comment
We know who’s being “paid off” in this bail-out of
Report thisEuropean bond-holders. What’s next? If California
goes “bankrupt” is New York going to loan it money and
impose “austerity Measures” and “structural re-
adjustment plans”? Will the China on the US, or must
it always be done by US quislings? The demise of the
euro would be a good thing. Greece must regain its
sovereignty from the European Central Bank, as the US
must rid itself of the Fed (our corporate puppet Obama
recently strengthened!).