Tuesday, June 21, 2011

Greece: The Canary in the Coal Mine?

This article captures the worst fears - the idea that the situation in Greece may be revealing what is coming to the U.S. and to the world:

The Financial Collapse of Greece: The Canary In The Coal Mine For The Global Economy?

The rest of the world needs to sit up and take notice of what is going on in Greece right now. This is what can happen when you allow government debt to spiral out of control.

Once it becomes clear that you can't pay your debts, a financial collapse can happen very suddenly and you start losing your sovereignty to those that you must turn to for financial help.

That quote gives us the key point, and one worth reflecting on very seriously. Greece is on the verge of losing every last shred of their national sovereignty, as the bailouts will make them dependent on the whims of both the IMF and the EU. It could happen here, and one wonders if a further global financial collapse would be the stimulus which ultimately leads to a world government.

These aren't points to be considered casually.

So is the financial collapse of Greece the "canary in the coal mine" for the global economy?

EU finance ministers have given the Greek government two weeks from Monday to approve another round of brutal austerity measures. If the austerity measures are not approved, Greece will not receive the next bailout installment of 12 billion euros. If that happens, the whole globe better buckle up because it is going to get crazy.

July 3rd is the deadline. Basically the EU has put a gun to the head of the Greek government. Without this bailout money, Greece will default and economic hell will break loose all across the country.

This is a date worth watching closely, because it may give us a window of insight into what is coming for many other countries just a few months or years behind Greece and their progression to bankruptcy.

Sadly, it has become apparent that the first bailout is not going to be nearly enough for Greece. A second bailout, which will be the same size or even larger, is already being discussed. This is going to put the Greek people even more under the heel of the money powers in Europe.

Keep in mind that all of these "bailouts" are just more loans. There is no way that the Greeks are ever going to be able to repay all of this money.

But this is what happens when a nation lets debt get out of control.

For years and years it can seem like all of that debt does not have any consequences, but then the day of reckoning comes and it is a complete and total nightmare.

These facts cannot be emphasized enough. We can continue to bury our heads in the sand, or we can watch Greece and what happens there as shocking insight into what is to come:

This is often what happens to third world nations that cannot pay their debts. Organizations such as the IMF or the World Bank will come in and insist that they tax their people more, cut back on their spending and sell some of their public assets to big corporations.

In other words, you are "owned" by the IMF.

Greek Prime Minister George Papandreou recently gave the following warning to the Greek people about what could happen if this debt crisis ends badly....

The consequences of a violent bankruptcy or exit from the euro would be immediately catastrophic for households, the banks, and the country's credibility

Not only would a Greek default be a total disaster for Greece, it would potentially be a total disaster for the entire global financial system.

Sung Won Sohn, an economics professor at California State University, recently made the following statement about the seriousness of the debt crisis in Europe....

"The European debt crisis has the potential to have as big an impact as the subprime mortgage crisis did in the United States"

The "truth" of these consequences as stated recently by The Guardian:

A year of wage and pension cuts, benefit losses and tax increases has taken its toll: almost a quarter of the population now live below the poverty line, unemployment is at a record 16% and, as the economy contracts for a third year, economists estimate that about 100,000 businesses have closed.

So where is this leading? See Portugal. Spain. Ireland. Italy. Belgium. France.

The frightening thing is that Greece is not alone. Ireland has already received a bailout and they are probably going to need another one at some point.

Portugal is a financial basket case and they are probably next in line for a bailout.

The employment situation in Spain is absolutely nightmarish. Spain will probably be able to squeak by without a bailout if the global economy stays stable, but if the dominoes start to fall Spain could be in a massive amount of trouble very quickly.

Not that many people are talking about Italy, but the truth is that Italy has a huge debt problem. On Friday, Moody's warned that it may downgrade Italy's Aa2 debt rating at some point within the next 90 days.

Belgium and France also have very substantial debt problems. They probably would not be the first dominoes to fall, but if the "contagion" starts to spread they could certainly have massive problems.

And that isn't all:

The truth is that Europe's entire financial system is extremely vulnerable right now. Big banks all over Europe (and especially in Germany) are leveraged to the hilt. All it would take to topple many of them is a stiff breeze.

But the U.S. is rapidly approaching a day of reckoning like the one that Greece is going through. The U.S. government has piled up the biggest mountain of debt in the history of the world and faith in the U.S. dollar is dying.

The economic crisis in the United States gets worse with each passing year. Yes, the Federal Reserve can print up stacks of money and send it over to Europe, but that isn't going to solve anything in the long run. The truth is that the U.S. is not even going to be able to keep itself from drowning.

And we see this ominous closing

The world financial system is far more vulnerable today than it was back in 2008. The next wave of the financial collapse is going to hit at some point, and when it does it is going to probably be even more painful than the last wave.

Our world is becoming an incredibly unstable place.

You better get ready.

As stated before - how long before the "world leader" steps forward?

The situation is ripe. When the Middle East explodes, the world will be even more ripe for his appearance on the world stage.

It can't be long now.


Anonymous said...







STEPHEN in hawaii !!!!

Caver said...

You just never hear the media talk about this in the Main Stream....but go read many economists reports on the financial pages....

The USA economy is in worse shape than is Greece. Now, what does that say for our future? Why are all these smart folk in Washington...on both sides of the aisle...completely ignoring this?

How much do they know that they don't want us to realize and when do we get a chance to find out? Is it something they plan to leave under the Christmas tree this year....or in October.

Or will it all be not relevant by then?

Interesting times B&S.