Is this the beginning of the end for the eurozone? On Thursday, Germany rejected a Greek request for a six-month loan extension. The Germans insisted that the Greek proposal did not require the Greeks to adhere to the austerity restrictions which previous agreements had forced upon them. But Greek voters have already very clearly rejected the status quo, and the new Greek government has stated unequivocally that it will not be bound by the current bailout arrangement. So can Germany and Greece find some sort of compromise that will be acceptable to both of them? It certainly does not help that some Greek politicians have been comparing the current German government to the Nazis, and the Germans have fired back with some very nasty comments about the Greeks. Unfortunately for both of them, time is running out. The Greek government will run out of money in just a couple of weeks, and without a deal there is a very good chance that Greece will be forced to leave the euro. In fact, this week Commerzbank AG increased the probability of a “Grexit” to 50 percent. And if Greece does leave the eurozone, it could spark a full blown European financial crisis which would be absolutely catastrophic.
What the Greeks want right now is a six month loan extension which would give them much more economic flexibility than under the current agreement. Unfortunately for the Greeks, Germany has rejected this proposal…
Even though Germany is already saying no to this deal, Greece is still hoping that the Eurogroup will accept the deal that it has proposed…
At this point, the odds of a deal going through don’t look good.
But there is always next week. It is possible that something could still happen.
However, if there is no deal and Greece is forced out of the euro, the consequences for Greece and for the rest of the eurozone could be quite dramatic.
The following is how the Independent summarized what could happen to Greece…
An immediate financial crisis and a new, deep, recession. Without external financial support the country would have to default on its debts and, probably, start printing its own currency again in order to pay civil servants. Its banks would also lose access to funding from the European Central Bank.
To prevent these institutions collapsing Athens would have impose controls on the movement of money out of the country. The international value of the new Greek currency would inevitably be much lower than the euro. That would mean an instant drop in living standards for Greeks as import prices spike. And if Greeks have foreign debts which they have to pay back in euros they will also be instantly worse off. There could be a cascade of defaults.
In anticipation of this happening, people are already pulling money out of Greek banks at a staggering pace…
And if we do indeed witness a “Grexit”, the rest of Europe would be deeply affected as well.
The following is how the Independent summarized what could happen to the rest of the continent…
If there is no deal, we could see a Greek debt default, Greece could be forced to leave the eurozone and go back to the drachma, the euro could collapse to all time lows, all the banks all over Europe that are exposed to Greek government debt could be faced with absolutely massive losses, and the 26 trillion dollars in derivatives that are directly tied to the value of the euro could start to unravel. In essence, if things go badly this could be enough to push us into a global financial crisis.
At the end of the day, there are essentially only two choices for Europe…
#1) Find a way to make a deal, which would maybe keep the current financial house of cards together for another six months.
#2) A horrifying European financial crisis starting almost immediately.
In the long-term, nothing is going to stop the economic horror which is coming to Europe, and once it starts it is going to drag down the entire planet.
The mainstream media in the U.S. is being very quiet about this, but the truth is that the U.S.-backed government in Kiev is starting to lose the civil war. This week, the separatists captured the very important railway junction of Debaltseve despite the fact that a ceasefire is supposed to be in place. Buoyed by a constant influx of Russian weapons and supplies, the separatists have gained a clear upper hand in the conflict. But this was not supposed to happen. When protest groups that were funded, organized and advised by organizations in the United States violently overthrew the democratically elected Ukrainian government, the Obama administration was hoping that the Ukrainian people would rapidly embrace their new pro-western leaders. Instead, the nation was plunged into a very bitter civil war that could go on for many years. And as the battlefield stands right now, the government in Kiev will probably be forced to concede even more territory in the months ahead as more weapons and fighters arrive from Russia. The Obama administration could decide to intervene by shipping large amounts of weapons and supplies to the Ukrainian government, but that could turn the civil war in Ukraine into a proxy war between the United States and Russia. And the thing about proxy wars is that sometimes they turn into real wars.
As I mentioned above, this week the separatists took full control of Debaltseve. The following is how CNN described the situation on the ground…
The scene of devastation is staggering in Debaltseve, the town at the heart of the battle between Ukrainian forces and pro-Russian separatists in recent days.
Barely a house is unscathed by shelling. Elderly civilians trapped by the fighting still cower in basements. After most Ukrainian forces pulled out Wednesday, the separatists are now in control.
It’s obvious there’s been a seismic shift on the battlefield. But it’s not yet clear what the Ukrainian withdrawal means for the shaky peace deal that came into force Sunday.
Will the separatists halt their offensive, satisfied with the territory they hold? Or will they be emboldened to push for more?
And of course this is all part of a much larger trend. The separatists have been winning new territory for months.
I want to share with you a couple of maps. This first map shows what the conflict looked like last summer. As you can see, the territory held by the separatists was mostly limited to areas around the cities of Luhansk and Donetsk…
This next map shows what the conflict looks like today. As you can see, the separatists have captured an enormous amount of territory…
So have you heard about this from the mainstream media in the United States?
If not, why not?
Could it be that we aren’t supposed to know that the U.S.-backed government in Kiev is actually losing the war?
Needless to say, this would never have been possible without the direct involvement of Russia. Publicly, the Russians are denying that they are funding, supplying and arming the separatists. But everyone knows that they are. The Russians consider the civil war in Ukraine to be a fundamental matter of national security. And it is hard to blame them. Just imagine how the U.S. government would be responding if there was a civil war in Canada.
So with massive Russian backing, the separatists have been able to turn the tide of the war very much in their favor. The following is an excerpt from a recent Business Insider article…
The battlefield gains by the separatists throughout the east of the country can be attributed to the constant inflow of Russian weaponry. In Nov. 2014, Russia moved a column of tanks and artillery into eastern Ukraine drastically changing the battlefield calculus.
In addition to tanks and artillery, Russia has provided the separatists with arms ranging from grenade launchers and mortars to anti-tank weapons and anti-aircraft guns.
As a result, Russian-backed rebels have huge military advantages over Ukraine. Crucially, the rebels receive logistics and armaments from the Russian military while also being able to take refuge in Russia during a Ukrainian assault.
This is not how the Obama administration wanted things to go.
And now the Obama administration is faced with a choice. Either they do nothing and watch the government in Kiev continue to lose ground, or they arm the government in Kiev and risk turning the conflict into a proxy war with Russia.
So what is Obama going to do?
It is hard to say. But there is little doubt about what the hawks in Congress want to do…
But do we really want to start a proxy war?
As I mentioned above, proxy wars can ultimately lead to real wars.
And in the case of the United States and Russia, a real war could mean the use of nuclear weapons. For much more on this, please see a couple of my previous articles…
We should have never interfered with the democratically elected government in Ukraine in the first place.
And now that war is raging in Ukraine, I fear that the United States and Russia have been put on a collision course which will end very, very badly someday.
As President Barack Obama continues to receive criticism for his refusal to use the term “Islamic extremism,” some federal authorities and law enforcement groups in the United States assert that anti-government groups pose a bigger threat than ISIS.
The Department of Homeland Security circulated an intelligence assessment earlier this month which focuses on right-wing sovereign citizens and other domestic extremists.
“Some federal and local law enforcement groups view the domestic terror threat from sovereign citizen groups as equal to — and in some cases greater than — the threat from foreign Islamic terror groups, such as ISIS, that garner more public attention,” reports CNN.
While hyping the threat posed by sovereign citizens, who have been involved in sporadic violent confrontations mainly targeting police officers over the last five years, the DHS has completely dismissed intelligence obtained by Judicial Watch that ISIS militants stationed in Juarez, Mexico could be planning attacks inside the United States.
ISIS militants are openly bragging about the fact that they have sleeper cells within the country waiting to conduct devastating attacks on U.S. soil as the Obama administration frets about not using the term “Islamic” while worrying about right-wingers committing traffic violations.
As we have exhaustively documented, the federal government has consistently downplayed the threat of Islamic terror in favor of pushing hysteria about right-wing extremism.
The FBI’s most recent national terror threat assessment list completely omits Islamic terrorists, instead focusing on sovereign citizens and the militia movement.
A 2012 University of Maryland study funded to the tune of $12 million dollars by the DHS characterized Americans who are “suspicious of centralized federal authority,” and “reverent of individual liberty” as “extreme right-wing” terrorists while glossing over the threat posed by Islamic extremism.
Last August, over a year after the Boston bombing, the Department of Homeland Security also listed sovereign citizens as a more deadly potential terror threat than Islamic extremists, placing sovereign citizens number one on the list.
PSA’s for the Department of Homeland Security’s See Something, Say Something program also failed to portray terrorists as Muslims on numerous occasions, preferring instead to depict the bad guys as white middle class Americans.
Returning veterans have also been characterized by the federal government as a bigger threat than Islamic extremism.
The Obama administration’s obsession with hyping the threat of domestic extremism seems clearly geared towards demonizing its ideological adversaries – libertarians and conservatives – while the true threat posed by the Islamic State, whose members have repeatedly threatened to attack the United States, continues to be sidelined.
Some federal and local law enforcement groups view the domestic terror threat from sovereign citizen groups as equal to -- and in some cases greater than -- the threat from foreign Islamic terror groups, such as ISIS, that garner more public attention.
An administration official says the White House is focused on the threat from all terrorists, including from sovereign citizen and other domestic groups.
A survey last year of state and local law enforcement officers listed sovereign citizen terrorists, ahead of foreign Islamists, and domestic militia groups as the top domestic terror threat.
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