Tuesday, May 1, 2012

Greeks Show Courage

Dear Greek People

While your leaders Claim that Austerity is the only way, this is only to protect the same Banks that have stolen from you since Austerity was thrust upon you.

A countries Debt balance is in reality  a Theoretical number between the Country, Bank and intermediaries such as ECB and IMF.

There is no reason why this Theoetical number can't simply be Cancelled

Businesses do it all the time, where a Theoretical Balance is agreed to be written-off.

It is a pity the Centre Left and Right parties in Greece Do not show Courage and do what is right for the Greek People.

Even after all the Austerity by 2020 the debt to GDP is basically the same, so what is the point of all this austerity to end up with the same Debt to GDP ?

 We are ever hopeful this would be a new beginning for Greece


  1. You are so correct but I tend to believe that most greek parties have been funded in order not to "show courage" There are two new parties rising quckly "independent greeeks" and "Syriza" that plan to re-negotiate the debt. Unfortunately the 2 parties are not presented by main tv channels, as the old parties of PASOK and New Democracy that have been leading the political life the since 1974. There is much talk going on from Journalists, that the debt is non-negotiable and that a return to drachma would be a nighmare.
    Only 3 days to election day, I hope that finally things will change in Greece!
    Santorini island, Greece.

    1. Hi Georgia

      I really feel for you all. I am sitting in London and all I can do to help is use my knowledge of economics to hopefully sway the argument that a Greek exit from the Euro while short term painful, is the most efficient and quick method of restoring prosperity to Greece.

      In reality Greek Debt is tiny in comparison to say America. $15 Trillion and who's counting anymore America has actually caused the Greek Tragedy with the ability of Printing endless amounts of money.

      While it would seem there is corruption etc in Greek government, hear in the UK we have our own Government corruption. America would have even more corruption and is down to the type of Capitalist system that has evolved particularly in the past 10 years

      There is a massive fear of a Euro exit and it would be better for this to be orchestrated in a controlled manner.

      But I can assure you that as night follows day and day follows night, an Economic Miracle will occurr once Greece Exits the Euro.

      Judging by the current Greek Money supply it would seem almost everyone has withdrawn virtually all of their money from Greece now and would be somehow or other holding it in Euro's (Either under the mattress, in London property, Gold etc) in preparation for the inevitable Greek exit from the Euro. A large amount of this money will flood back into Greece via a new currency and will re-ignite the economic engine.

      I will write another Blog on the fact that Greece could be the new Economic Miracle ? There is a major opportunity for substantial investment in Renewal Energy in Greece and for Greece to start supplying other countries with Energy.

      I appreciate the major media in Greece has been drumming into people that Bailout Non Negotiable. Like with any contract businesses at times fail to pay. Is the ECB really going to sue Greece if Greece simple says "No Not Paying"

      The Boston Tea Party is a great example in history where civil action resulted in a momentous change.

      Greece is at that point now where such a dramatic change will set the scene for a prosperous future.

      The more people who may read my Blog and understand that there is a much better solution than Austerity will be part of that change


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  3. Please let me ask you something, since you have knowledge of this matter. In the GReek politic scene right now are two wings.The wing of Parties that are against the Memorandum, and ask a renegotiation each one of them with a different way. These parties are SYRIZA, INDEPENDANT GREEkS, COMMUNIST PARTY, DEMOCRATIC LEFT PARTY. The other wing is the IMF signers, THE PASOK AND NEW DEMOCRACY party that already signed the memorandum as being the previous goverment, and with special personal letters to EFSF and IMF, declared that they will continue the memorandum after the elections in case they become goverment again. The election result
    is that people chose parties against the IMF policy, but because of the greek election low, they are unable to form goverment at the time.
    This is what the two parties of New Democracy and Pasok say. On the other hand, the other wing, says that all the money we gother now, pays firstly the IMF and EFSF downpayments, if we stop paying
    of course there will be money to give for pensions and wages e.t.c.
    My question in case you have the answer is very clear. Is the money Greece "produces" enough to pay for the wages and pensions in case we stop paying the IMF and the EFSF?
    I tend to believe that the borrowed capital with the interests is so high, there is no way it can be paid in full anyways.
    I will publish and translate your previous answer as well as some of your posts to my facebook page and my blog.
    Thank you

    1. Hi Georgina,

      The problem is that Greece does not 'produce' any money. Like all Euro Zone country it has to borrow and continually re-borrow all its Euros from private banking and finance. Greece has been unable to borrow from 'the markets' for some time and is now financed by the Troika. A big wad for debt repayments and a little one to continue running the country. But only if Greece complies with its conditions.

      It is absolutely true that if the Troika withholds its loans then the government will have no Euros to pay its employees. It will have to pay them with Drachmas instead. Any government that is not ready for this will risk having to put the country under military command. The beauty of the state issuing money is that it can get things done by rewarding people instead of having to hold a gun to their head.

      The issue of whether Greece can pay for wages and pensions comes down to if it is producing the goods and services that the wages and pensions will be spent on. The problem is that the scarcity of Euros means that much of wealth of the nation does not trade for lack of monetary representation. Issuing the Drachma can solve this problem.

      It worries me that none of the Greek political parties seem to have thought seriously about the best way to return to use of the Drachma. Even Syriza seem to relying entirely on bluffing it out with the Troika. If the Troika call their bluff and they are not prepared then Syriza could find itself in the very difficult position being a leftist government explaining to the established organs of state that their workers will be the first to be paid in Drachmas.

      No-one is talking about how to return to the Drachma, just that they will avoid it at all costs. Yet it is close to inevitable and there are many different ways in which it can be done.

      My suggestion is that the Drachma is issued as a purely soft internal currency to circulate alongside the Euro which Greece and Greek continue to use for hard currency requirements. Drachmas will replace Euros as the medium of exchange for most internal transactions and the remaining Euros can be consolidated for hard currency purposes: securing essential imports, servicing public and private debt and an allowance in incomes to give citizens some Euro spending power.

      While Greece's Euro credibility is low, it's citizens may have to face up to reduced Euro spending power but that should not stop them from living well on the resources the nation can provide for itself which they access with the more plentiful Drachma.

      The black and white choice of suffer austerity to stay in the Euro or loose the use of the Euro is false. Undoubtedly PASOK and New Democracy are wedded to following the demands of the Troika because that is the only path that will keep their wrongdoing covered up, not because it is the best path for Greece. It is absolutely normal that a country facing unsustainable debt should carry out a debt audit. I'm am sure that an audit of Greek debts would get the Greek public off the hook but not without the exposure and downfall of those responsible for them. The bailout deal is all about protecting the guilty. Greece would remain in the Euro but only as a ghetto of sub-European living standards kept as an example of what happens to the improvident. To reject it, Greece must have a plan to issue the Drachma in a way that plays fair with the Euro.

    2. Greece is like any business accept we are talking about a Nation.

      Nobody so far has actually developed a Business Plan, enabling Greece to trade its way out.

      For example long term there are strategic benefits for Capital Investment in developing Renewable Energy in Greece that can then be of substantial benefit to the rest of Europe with Greece being paid in Euro's for example.

      So it is totally not true for your Major parties to claim the rest of Europe will not want anything to do with Greece.

      I can assure you there will be many more English tourists coming to Greece spending loads of local currency if Greece returned to Drachma.

      You could easily double the number of tourists holidaying in Greece if the currency were cheap (Although I accept that you would find it very expensive coing to the UK.

      However a case in point is that I am orginally Australian and over 10 years ago the Pound Sterling was very strong 1 Sterling to 3 ozzie Dollars at its peak. Now Sterling has 1/2 in value and getting 1.5 ozzie dollars for 1 pound. It has meant that I have not been back to Australia since 2005 but my parents came to UK and europe last month (might be final time as they are getting on) it was very cheap for them.

      However due to Australian Dollar being very strong, the Austrlian Economy is now struggling as it is now not competitive.

      It is much easier to be a competitive economy with a poor currency exchange rate,that is why China has been so successful it has artificially kept its currency pegged to American Dollar keeping it low. China's growth rate is now slowing but if they now started letting their currency rise their people will internally start to feel wealthier.

      It will be painful a Euro Exit but managed correctly, it is my theory that a huge Commodity collapse is in the making in any event that will counteract the fall in the currency, so Inflation will not take hold as mainstream claim.

      The air time Your mainstream parties get on claiming why a Euro exit will be bad is simply incredible.

      I hope you are well aware of the Goldman Sachs element http://www.demagaga.com/tag/international-monetary-fund/

  4. Hi Georgia

    I will be at london school economics this afternoon and We will discuss this very issue.

    My view is the money supply has been taken out economy not by IMf but normal people afraid of loosing their money in banks.

    As soon as greece exits euro into new currency this money will come back into economy. Slowly at first.

    IMf Are just their to ensure banks get their money . IMf run by big banks It is about time country stood up IMf and said no enough.


  5. Thank you so much I will be waiting for your reply!!

    1. Hi Georgia

      There still is disagreement in the way forward but have set up another Blog that you can direct people. It is my view that need to start preparing for Greek exit Euro setting up a UK based Social Enterprise as a Greek Reconstruction Fund