Gold Daily and Silver Weekly Charts - Some Lengthier Thoughts on Greece and Repression

"But in substance, Mr Tsipras’ plan relies far more heavily on raising taxes — and not cutting spending — than bailout monitors had suggested.   In a country that has a spotty record in collecting taxes, that has raised concern among some of the creditors, as has the potential recessionary effect high new taxes could have on the economy."

Financial Times, Deal or No Deal

 

I thought it was interesting that, in the judgment of the financial class, harsh cuts to pensioners and the social systems and regressive VAT taxes are good, but raising corporate taxes and income taxes on the wealthy are bad.   Austerity must be meted out, but only on the 'right people.'    This does seem to be the measure used by the Troika, and the international financial class that owns them these days.  It is even fashionable in Kansas and Wisconsin these days from what I hear.

The Greeks may very well be bad at collecting taxes as they say.  They are probably not draconian enough, invasive enough, and insufficiently ruthless.  In the Land of the Free they will triple a disabled woman's student debt with interest and fees, and then refuse to dispense any of it in bankruptcy.  Now that's entertainment.  

But the Greeks certainly are not particularly good at cutting costs either. And the Eurocrats should surely know since they keep coming back and asking them to do it more and again.  Perhaps it is just a habitual thing, as the Western governments have found in their own experience that preying on the vulnerable and the weak is a much more sustainable task.  And you don't have to lead them as much.

 

But oh the hypocrisy!  They are rank with it. 

For these EU economic propeller heads to worry about 'potential recessionary effects' in Greece from raising taxes is laughable.  At every opportunity these self-important plutocrats have abused their powers and positions to create massive financial bubbles, which they use to reward themselves and their cronies handsomely.   And afterwards, they plunge the public into depression-like conditions with their crackpot neoliberal prescriptions, while pompously prevaricating about virtue and 'thrift.'   The financial class are serial economy wreckers. 

In pursuit of a second opinion, I contacted one of the more experienced minds amongst the Greeks, which is saying quite a bit, and he often does and very well, with lawyerly precision.   I asked him for his take on the situation there.  And so here it is with a few parenthetical notes from your maître d'hôtel.

"Greece will not honor these obligations any more than it has its prior ones during the past decade. It may privatize a few assets, and it may even pretend to cut pensions. There is practically zero chance it can achieve the primary surplus targets it has accepted because its economy is not going to be able to grow quickly enough. (and few will be, thanks to the quackonomics of the ruling class).

We will be back at this charade six months from now, more or less, and then again later.   The Greek goal is most likely to extend and pretend until the political landscape changes in Europe, as it will eventually. What is much less clear is what the ultimate resolution might come to resemble. The EU is not sustainable as it is. I have no idea what is going to cause the Very Serious People to come to that realization and what will remain after they cannot kick the can any further.  (It is not clear to me how many unstable financial systems and their supporting kleptocracies will be resolved as well.) 

As you have noted, the game is just beginning in Greece. I am not even sure I would say 'game on' yet. Some hard times are going to be visited upon the various countries of Europe. 

I strongly suspect, however, that since the technocrats in Brussels and the troika have been tone deaf in overriding the will of the people and their elected governments in the weaker periphery countries, it will come back to haunt them. The end result is likely to be the exact opposite of what they seek to ensure.

Instead of greater economic, fiscal, and political integration (with power concentrated in Brussels and Bonn), they are likely to revive stronger anti-EU nationalism in the periphery, as this will be the only means the weaker nations will have of effectively fighting the stronger nations. When enough nations in the periphery see the light, the EU will no longer be able to continue in its current form. I am curious to see how this process will play out."

Pnev̱mató̱di̱s Diki̱góros

 

Overreach and hubris in a self-proclaimed elite, leading to their miserable decline and downfall through a series of self-inflicted and unintended missteps?  Always a solid call.

 

I tend to agree with his take on this. How could I not? Except perhaps that I think the presence of the Greek Parliament will be weighing more heavily in this matter than expected. 

 

It may be just a bias really, a visceral fear I have of very pissed off Greek women.  Keep your hands over your eyes and other tender parts.  Perhaps it is a hangover from a youth wasted on classical studies, and ancient myths and dramas. 

One gets the sense that a very impressive banquet of consequences is being prepared for the neo-liberal legislators and their masters in the global predatory class. 

How and when it is served is another matter.  I have no doubt that the financiers would love to supplant Syriza, and install more pliable legislators in their place. This seems to be the popular trend in that area of the world these days. 

This nonsense we have seen in the precious metal markets this week is just more of the same sort of thing really, the sturm und drang of those who would master the world.  Our leaders.

 

There was little legitimate action in The Bucket Shop the past two days.  It is an option expiration after all. China came back from its holiday on Monday.

Have a pleasant evening.