The Greek debt crisis, epicenter of the Eurozone debt crisis, has in recent months receded from the global headlines. This may have given a false impression that the Greek economic crisis has been solved. However, official statistics just released by Athens demonstrate that Greece remains struck in a fiscal and economic catastrophe that is clearly a depression by any known measurement.
In November, the Greek jobless rate reached a record high level of 28 percent, an increase from the unemployment figures from the previous month, which stood at 27.7 percent. Most alarming, youth unemployment in Greece, defined as those seeking jobs under the age of 25, now stands at a staggering and almost incomprehensible 61.4 percent.
To understand how disastrous the unemployment rate is in Greece, just compare the current level of 28 percent with the jobless rate prior to the onset of the nation’s debt crisis in May of 2010, which stood below 12 percent. Official talk from the government in Athens is that thanks to the skill and brilliance of Greek politicians, the country’s economic woes are on the mend. Reality says something very different.
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Chilling video about Hillary Clinton and the 2016 presidential election from the author of the provocative book, “Hillary Clinton Nude: Naked Ambition, Hillary Clinton And America’s Demise.”
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According to the EU commissioner from Germany, Gunther Oettinger , Greece will need another financial bailout form the Eurozone-which really means primarily German taxpayers. Not surpassingly, Greek politicians are denying the need for another bailout. This is an old game; the politicos in the Eurozone, especially from the fiscally vulnerable PIIGS nations, always maintain they do not need a bailout just before they beg for one.
While the official word from Athens and the Eurozone is that things are getting better for the Greek economy and its fiscal balance, the truth is that the unemployment rate is at about 25 percent; the majority of the youth are unemployed, and Greece still depends on massive loans to survive, rhetoric to the contrary not withstanding.
According to Oettinger, Greece will need in 2014 a bailout of at least 13 billion dollars. Bear in mind that Greece has already received two separate bailouts that exceed $200 billion, along with a write-off of more than $100 billion of its external debt, which is in fact another bailout. Chances are that the figure of $13 billion needed in extra support is a lowball figure. Despite the disappearance of the Eurozone crisis from the headlines in recent months, it remains an acute and dangerous reality, while Greece continues to be ground zero for the European debt crisis.
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HILLARY CLINTON NUDE
WALL STREET KILLS--A CHILLING NOVEL ABOUT WALL STREET GREED GONE MAD
To view the official trailer YouTube video for “Wall Street Kills,” click image below:
In a world dominated by high
finance, how far would
Wall Streetgo in search of
profits? In Sheldon Filger’s terrifying novel about money, sex and murder, Wall Street has no limits. “Wall Street Kills” is the ultimate thriller about greed gone mad. Read “Wall Street Kills” and blow your mind.
The last of several versions of the Eurozone bailout of Greece had a projection that Athens would have its debt to GDP ratio peak at 167 percent. The Greek authorities are now saying (surprise) that this initial estimate was far too rosy. The latest forecast on the Greek debt bubble? It is now projected to hit a peak of 192 percent in 2014.
As for the Eurozone’s previous forecast that the Greek sovereign debt to GDP ratio would decline to a still high 120 percent in 2020, that is clearly untenable. The Greek crisis is beyond salvaging, and more bailouts merely spread the contagion throughout the Eurozone, eventually sucking in the strongest economies in the monetary union. But let’s be clear; should Greece leave the Eurozone, as is being increasingly speculated on, such a policy measure would have its own negativities. Had an orderly exit by Athens from the Eurozone been crafted earlier in the crisis, those repercussions could have been managed. Now the Eurozone politicos have created a situation in which all the remaining options are saturated with dire consequences.
WALL STREET KILLS--A CHILLING NOVEL ABOUT WALL STREET GREED GONE MAD
To view the official trailer YouTube video for “Wall Street Kills,” click image below:
In a world dominated by high
finance, how far would
Wall Street go in search of
profits? In Sheldon Filger’s terrifying novel about money, sex and murder, Wall Street has no limits. “Wall Street Kills” is the ultimate thriller about greed gone mad. Read “Wall Street Kills” and blow your mind.
The latest statistical measure of the catastrophic economic depression hammering Greece reveals that in Q1 of 2012 the Greek economy contracted 6.2 percent. The Greek economy, beyond any doubt, is in free fall. Without recourse to printing its own money, the euro-strapped Greeks cannot even inflate away their debts. Unless, of course, they exit the euro. Then, they will have many other financial and economic problems left to contend with.
As the Greek economy implodes, the political establishment in Athens is helpless. The most recent Greek parliamentary election punished the pro-austerity establishment parties, strengthened the parities opposed to the austerity deal with the Eurozone, but left no clear winner. The latest talks to cobble together a coalition government have failed. New elections will take place in a few weeks.
The politics and economics of Greece are feeding on each other in a self-sustaining negative feedback loop. They are both in complete disarray.
Over the weekend the highest ranking cadre of inept European Union politicians were gathered in solemn deliberations, as they once again promise the world that the growing sovereign debt crisis in the Eurozone will be permanently “solved.” But the issue is no longer only the debt crisis in Greece, or the other PIIGS countries-Portugal, Italy , Ireland and Spain. The unsustainability of the public debts throughout the Eurozone now have the banking system of Europe on the precipice of disaster. It is likely that many if not most major European banks would fail a real stress tests, not the phony stress tests recently administered.
One of the issues being debated by the European politicians is having the banks accept some degree of loss on their outstanding loans to Greece. The problem is that such a loss would mean transferring the insolvency of Greece to those very banks. The politicians in Europe know that, so they are already discussing how to recapitalize their banks. But with what? The European nations are themselves all heavily indebted. Germany is resisting the call by France to employ the ECB (European Central Bank) as a printing machine to “lend” euros conjured out of thin air to the European Financial Stability Facility; the EFFS would in turn provide the money to the banks requiring recapitalizing.
While the frenzied talk rages on in Europe, the continent’s banking system is headed for a crisis that may rival the impact that the Lehman Brothers debacle had on the global economy in 2008.
Officer Larry of the NYPD is on his way to Zuccotti Park in lower Manhattan to arrest peaceful protesters involved with the Occupy Wall Street movement. Being a public spirited member of the New York Police Department, Officer Larry does remind us that there is a global economic crisis underway that rivals the Great Depression of the 1930s.
As the United States national debt reaches parity with total annual GDP, President Barack Obama continues to preside over a record level of deficit spending by the federal government. He has just sent to Congress a proposed $3.73 trillion budget for FY 2012, while forecasting a record $1.65 trillion deficit for the current fiscal year. Earlier, the Congressional Budget Office projected that the current deficit would reach at least $1.5 trillion. These figures mean that America remains trapped with unsustainable structural mega-deficits, and that more than 40 percent of everything the U.S. federal government spends is financed with borrowed money.
As I have commented on before, this level of government indebtedness just cannot be sustained, and will lead to catastrophic repercussions. While the politicians in Washington, particularly in the Obama administration, pay lip service to the need to “rein in” this profligate public spending, nobody believes that they are serious. The president’s claim that he “plans” to reduce the deficit cumulatively over ten years by just over a trillion dollars is an utter farce, since even by the most optimistic forecasts this would leave a combined deficit over the decade of more than ten trillion dollars.
The problem, however, is not uniquely one of the Obama administration and the Democratic Party. The Republicans, who left for Obama as an inaugural present in 2009 a first-ever annual deficit to exceed a trillion dollars, are as intellectually bankrupt as are their adversaries on the other side of the aisle. The GOP is equally bereft of ideas on how to control this raging fiscal train wreck, offering little more than worn-out cliches such as reducing taxes, as though that would not further exacerbate the federal government’s structural mega-deficit.
What we are witnessing is not only an economic and fiscal calamity in the making. It is as much a display of political dysfunctionality and moral cowardice as it is of inept fiscal policy. Which leads to the melancholy conclusion that it will not be the political echelon in Washington that ultimately imposes budgetary discipline on public spending. Increasingly likely is a doomsday scenario, in which the bond vigilantes, well practiced already with their punishing assaults on the credit ratings of Greece, Ireland and now Portugal, unleash the full fury of the market place on Uncle Sam. When that fiscally apocalyptic moment arrives, not even the impressive weight of political inertia that resides in Washington DC will be able to impede a sovereign debt crisis in the United States that will not only cripple the nation’s economy with devastating effect; it will likely dispossess the next generation of Americans of their future.
From Ireland to Portugal and back to Greece, the catastrophic public finances in the weaker Eurozone economies continue to throw off further nasty surprises, despite the massive debt-based stabilization fund the stronger economies in the Eurozone cobbled together to bailout their weaker partners. An example is found in ground zero of the European sovereign debt crisis, Greece. Fraudulent bookkeeping in Athens hid a massive and unsustainable government deficit. Once exposed, the official word was that the true size of the Greek deficit was now revealed, until that “final” figure was revised upward, then revised at a still higher figure again. Now we are informed that the last “final” upward revision was itself too low, and the latest figure from Eurostat is that the actual Greek public deficit for 2009 was an eye-popping 15.4 percent of national GDP.
The latest news on the Greek deficit, combined with bond spreads widening on Irish and Portuguese debt, are the latest markers pointing to sovereign fiscal doom in the Eurozone.
With Greek long term bonds generating a spread in excess of 400 basis points above German sovereign debt, it is no surprise that ratings agency Fitch has again downgraded Athens, posting a miserable BBB minus. This comes after weeks of verbal gymnastics by the European Union, attempting to fool the markets into believing in its ambiguous, meaningless assurance of a bailout for Greece.
Despite the pontificating of reassurance being offered by a legion of European politicos, it is becoming increasingly evident that Greece is heading towards sovereign debt default at warp speed. In my view, either sooner or later (and much more likely sooner) Greece is fiscally doomed…and that is only the beginning of an irreversible sovereign debt chain reaction that will strike virtually all advanced and major economies, and plunge our planet into a synchronized global depression.
Within the Eurozone Greece has the highest ratio of public debt to GDP, currently at 125%, prompting Fitch to lower the nation’s credit rating. Other rating agencies are likely to follow. The Greek stock market is in a tailspin, while Athens is coping with both an acute financial crisis and social unrest, as a wave a riots has broken out to mark the anniversary of a previous violent outburst.
The level of public debt in Greece is clearly unsustainable. The question being asked is if the Eurozone will bailout the Greek government. Such a policy move is not likely to be well received by the taxpayers in other Eurozone economies with lower debt to GDP ratios, namely Germany and France. More importantly, the dismal economic and financial crisis in Greece, compounded by ruinous public debt problems, follows on the heels of the debt conundrum facing Dubai World. In addition, other Eurozone economies face looming public debt crises in the not too distant future, including Ireland, Spain and Portugal.
Is the next bubble to burst in the global economic crisis a string of sovereign debt crises? Readers of my report, “Global Economic Forecast 2010-2015: Recession Into Depression,” are aware that I project a catastrophic sovereign debt crisis afflicting both the United States and the UK by 2012.
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