We should watch closely to see how Greece handles its biggest problem — pensions — since the U.S. and Europe are certain to face the same problem eventually. Try to monetize it, which is what I predict the Greek government will do, and you get hyperinflation. Try to pay for it by reducing benefits and increasing taxes, which is what Greece’s creditors are demanding, and you get: 1) instant, ruinous deflation; 2) a plunge into poverty for nearly everyone; and, 3) taxpayer riots that pit the private sector against government employees.
Whatever happens, it will be fascinating to see how Greeks vote next Sunday, when they will be asked to approve or reject creditors’ stringent demands. Leftist parties all over Europe are urging their Greek comrades to hang tough. But then, it’s not French, Irish and Italian socialists who will suffer instant economic deprivation and calamity if Greece tells Belgium to suck eggs. Nor will they be the ones challenged to pay for life’s necessities with drachmas that are going to be spurned by the rest of the world and depreciating by the day, if not by the hour.
An op-ed piece in the Wall Street Journal said Greece’s national identity and its “European dreams” are at stake, but that’s just twaddle. Under the best of circumstances, Greece will be panhandling till the end of time. It can never pay what it owes — not to Europe, not to itself, not to its retirees. The only question is whether Greek voters can grovel sufficiently next Sunday to get Germany to pretend, at least for the time being, that the economy of a deadbeat country can somehow be salvaged. As for the French, Spanish, Portuguese and Italians, they should practice kindness as events unfold, since they will all be belly-up themselves in the not-so-distant future. Take a free trial subscription that will allow you to access not only the touts, bulletins, updates and impromptu trading webinars during market hours, but a 24/7 chat room that draws veteran traders from around the world.
The content on this site is protected
by U.S. and international copyright laws and is the property of GoldSeek.com
and/or the providers of the content under license. By "content" we mean any
information, mode of expression, or other materials and services found on GoldSeek.com.
This includes editorials, news, our writings, graphics, and any and all other
features found on the site. Please contact
us for any further information.
Live GoldSeek Visitor Map | Disclaimer
The views contained here may not represent the views of GoldSeek.com, Gold Seek LLC, its affiliates or advertisers. GoldSeek.com, Gold Seek LLC makes no representation, warranty or guarantee as to the accuracy
or completeness of the information (including news, editorials, prices, statistics,
analyses and the like) provided through its service. Any copying, reproduction
and/or redistribution of any of the documents, data, content or materials contained
on or within this website, without the express written consent of GoldSeek.com, Gold Seek LLC,
is strictly prohibited. In no event shall GoldSeek.com, Gold Seek LLC or its affiliates be
liable to any person for any decision made or action taken in reliance upon
the information provided herein.