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Debt Crisis: From New York to Greece

The Problem with GreeceThe debt crisis situation in Greece mirrors that of New York and warrants attention. The Merchant stays away from political waters in favor of the opinion that what a merchant does is beyond the ballot. But this disturbance in the seas of commerce sends ripples right to my doorstep.

If you’ve never looked into the subject of the debt crisis or our current state of affairs, prepare yourself to do so, because it gets global and it gets messy.

I set out these past months to get a clearer understanding. In order to prevent sailing information superhighway routes in circles, the fact finding strategies were kept simple and followed a straight line of truthiness. No drama, no specific bias (except in favor of embracing revealing sources) , no b.s.,  and every source is chosen for it’s ability to lead in a coherent fact-based direction.

The World View

A hometown ally in New York City, Gerald Celente, and his friends at the Trends Institute, tracks current events in 300 categories to get a cross sectional view of what’s going on in the world. And although it’s anticlimactic, here’s what’s going on:

“… over the last several years, it’s been rampant speculation worldwide … there’s not a country in the world that has not overspent with cheap money, and with Greece it’s coming home to roost because they’re economy happens to be one of the weaker ones “ - interview with journalist Helen Skopis from Athens, Greece

If Gerald isn’t pulling your leg and is relying on 30 years of precise conclusion making, it seems that most governments made a bad move (for citizens, that is). It would make sense that the world is watching Greece. You don’t have to understand some complex concept of the globalization of finance to know why.

You just need to know what they did, we (other countries) did or vice versa, depending on how you follow up on these points. It’s happening in Italy, it’s happening in Portugal, and in Ireland, in the United States, it’s happening everywhere.

What is cheap money?

Depends on who you give it to :P For a more accurate answer, I’ll direct you to passively skim Modern Money Mechanics because that’s where you get to learn about what a loan is, where “loan” equals the money that passes between Central Bank and State.

Modern Money Mechanics – Wikisource

Jun 26, 2011 – Modern Money Mechanics is a booklet produced and distributed free by the Public Information Center of the Federal Reserve Bank of Chicago.

 

If you can read the whole thing and understand it, all the power to ya. But don’t break your head, you can still get an idea of what goes on by carefully reading the first few stages of how money works. The complex mechanisms that follow sprout out from that humble beginning.

In the U.S. essentially, A Bank buys a bond from the State, providing the State with cash or credit in exchange for payback at an interest. Sounds like a loan? It is. Modern Money Mechanics will show you how that’s how it all begins in economies who operate via Central Banks.

The Governement made it cheap to gamble with cheap money

Peter Schiff of EuroPacific Capital giving a presentation explaining his opinions on what fed the environment leading to the 2008/2009 financial crisis in the United States

What’s important about this video is not the perceived value of one financial professionals hard hitting, anti-government positions. It’s the several series of government actions that you can extract from one who discovers his these as major issues in pursuit of profits in his own private business.

The intervention of Central Banks, legislators, their effects on the markets, and these “moral hazards” can all be cross referenced with local experts and resources. It so happened that these things affected his clients, and by extension, all of us, because he was in the business of managing the wealth of many Americans in global markets.

Savvy economists and finance professionals, if you follow Mr. Schiff’s general chain of events, are in agreement about those interest rates were set at historic lows for reasons not so good for us when all said and done.

As globalization rocks on and fires up in the first decade of the 21st century, we find a lot of what we do here, goes on over there, and vice versa.

The “jest” of it

Clarke and Dawe – European Debt Crisis

www.mrjohnclarke.com “Roger, Financial Consultant” Originally aired on ABC 7 Report, 20/05/2010 World Economy Explained

“The question was … how can broke economies lend to other broke economies who haven’t got any money, because they can’t pay back the money the broke economy lent to the other broke economy and shouldn’t have lent it to them in the first place because the broke economy can’t pay it back?”

Clarke and Dawe – The Greek Economy

“Nico Nomist” Originally aired on ABC TV’s 7.30: 14/07/2011 www.twitter.com www.facebook.com

“Let me put it this way: If it were a private company there would be a fire there on Saturday at about four o’clock in the morning.”

 

Jokes or just the facts?

GREEKS PROTEST AUSTERITY CUTS

As funny as Clarke and Dawe are, lo and behold, a year later from the date those skits were produced, that’s just what’s happened, isn’t it?

Right about now, in February 2012, Athens is burning, literally and figuratively, under the pressure and blowback of economic intervention, crisis, and imposed reforms.

In the news

Greece Default Has a Set Date?

www.mises.ca2/19/12

James E. Miller holds a BS in public administration with a minor in business from Shippensburg University, PA. He is a former staff columnist to the…

Daily Digest 2/18 – March 23 For Greece Default, Al. To Close

www.chrismartenson.com2/18/12

Greece “Officially Defaults” March 23, Banks Close Alabama Plans to Close Most Hospitals for Mentally Ill Interference Seen in Philadelphia Papers After MF Global, Traders Hold Tight To Excess Collateral Beware Of A

Who runs Greece? — RT

rt.com2/14/12

Who will benefit from the new set of Greek austerity measures, which got a violent response from the crowd on Sunday? Author and consultant Adrian Salbuchi says it’s the bankers, who are responsible for the economic

Greek protesters hurl Molotov cocktails at police [Video] – latimes.com

latimesblogs.latimes.com2/10/12

Greece, austerity, riots, European Union, economy: Protesters hurl Molotov cocktails and stones at Greek riot police Friday in this video from news channel Russia Today. Ten people were injured, including eight officers, the

The Google Plus connection

I caught Christa Laser on Google Plus, engaging her circles of intellectuals, ordinary folks and professionals, to start on conversation on how the heck this sort of thing can happen.

Her question was how can something happen in the local economy effect disaster in the whole Eurozone? And how come it wasn’t happening here? Was it trade policy, was it our monetrary system? I gave a long rant about the EU and their relationships with members.

It felt good to get a long thoughtful comment in there. But looking back, I didn’t need to. We now know Greece effects Europe because there hardly is a thing their government did as a matter of policy, that other countries did not do.

And when you really drill into it, you end up finding Greece and New York are not so different in this story of high risk adventures in the financial markets. Except of course, how we’re reporting it to we, the people, and our collective responses. The Greek police just aren’t as afraid to deal with those Molotovs as the NYPD are.

The Unemployment Issue

No trabajas aquí

Ask Greece and see they’ve got a 20% unemployment problem and rising. Youth unemployment (ages 18-24) is a crazy 48%. That’s about 1 in 2 to 5 people. That means you could throw a rock in the street, like the Athenian protesters are doing now, and you’ll likely hit a person with no job.

In New York City, that number is suspected to be hovering around 18% in low income areas. But officially, the governments says NYC unemployment is right around par with national unemployment, around 9%.

New York City’s Jobless Rate Rises as Nation’s Falls – NYTimes.com

cityroom.blogs.nytimes.com1/19/12

But the latest report on jobs and unemployment in New York, released on Thursday, tells a different story. According to the State Labor Department, New York City’s unemployment rate edged up to 9 percent in December, from

If you live here in the city and didn’t purchase your apartment for cash, you kind of get the impression that the job market is not that great. There’s people out here thinking their not good enough just for a gig washing dishes.

And if you told them employment was getting better, they’d just nod their head. In their hearts, they wouldn’t believe it. What if they had good reason for such a gut reaction?

What if that national number is wrong?

Maybe somehow, they know, things aren’t exactly like what the labor stats report to you about the job market. By my numbers, the job market is in as much need of repair as the MTA train tracks. And all these stats managers touting a rosier picture, I have three words … Occupy Fact Checking.

Others are reporting the same observation:

Jobs revival myth?

On Friday the unemployment rate dropped to 8.3 percent. According to some reports, 243000 new jobs were added in the month of January. This is has been the fifth consecutive month that the unemployment rate has fallen …

There actually people out there who are finding out the truth and presenting the evidence, that the situation with unemployment here is a lot closer to what’s going in Greece. And when you consider the evidence of the type of overspending policies, the cheap money adventures, and the headlines of intervention and impacts, somehow it just feels right.

Don’t Be Fooled, The Obama Unemployment Rate Is 11% – Record-Searchlight

news.google.com

Don’t Be Fooled, The Obama Unemployment Rate Is 11%Record-Searchlight (blog)When it was announced that the unemployment rate had suddenly dropped my first reaction was, NO WAY!!! As time passed, it became clearer that it was just another case of …

Three Official Lies About Jobs! Two Official Lies About Housing! Plus, the … – Jutia Group

news.google.com

Jutia Group Three Official Lies About Jobs! Two Official Lies About Housing! … Well, thanks largely to John Williams of www.shadowstats.com, we can prove it. 

This last expert actually pegs true unemployment at 22%. And if that’s too negative for you to swallow, he’ll point you to an official number that pegs it at 15%.

Although that official number (U-6) is published, it’s not used at all in any single news report you get about unemployment. In fact, if you check, they tell you which one they do use instead (U-3).

I know what you’re thinking, by now. It’s not a conspiracy. I love the famous line from Jim Straw’s daddy, “there aint no secrets, just stuff you don’t know yet” . So here I am reporting to you links to show you why what’s happening in Athens isn’t staying in Athens. Because it’s happening all over the world.

Evidence of fuzzy numbers here and abroad

Alan Grayson: Is Anyone Minding the Store at the Federal Reserve?

Rep. Alan Grayson asks the Federal Reserve Inspector General about the trillions of dollars lent or spent by the Federal Reserve and where it went …

If you ask the investigators who are responsible for minding the central banks in the United States, it seems more of a case of fuzzy or selective memory with respect to actions taken by the Federal Reserve.

But it also extends to the situation in Greece. Surely, the Secretary of the Treasury can enlighten us about why taxpayer rescued Goldman Sachs was intervening in European economies …

Goldman-Sachs Role in Greece’s Financial Crisis

At a Financial Services Subcommittee hearing with the Secretary of the Treasury, Timothy Geithner, Congressman Kirk discusses Greece’s financial crisis, particularly the role of US financial institutions.

“I wont comment specifically on anything we’ve done specifically but I just will draw your attention to the statements made by the Chairman of the Federal Reserve Board and the SEC … they are the competent authorities in this case …”

In either case, for whatever reason, the people closest to the action don’t seem to be giving us the real report. And by proxy, the reporters aren’t even reporting the real report. That goes for the debt crisis here and abroad.

But that doesn’t seem to be so surprising according to this very useful debt crisis course video. In fact, it’s just history:

Crash Course: Chapter 16 – Fuzzy Numbers by Chris Martenson

Chapter 16 (Fuzzy Numbers): Dr. Martenson explores how inflation and GDP are measured, how their measurement has changed over years, and what that means concerning the integrity of these government statistics. Substitution, Weighting, Imputations …

(Note: Did you notice the “anchor” concept introduced one minute in the video? That’s merchant code right there)

The Takeaway

Well towards the end there, it seemed we were spiraling out of control with debt crisis information. And that’s sort of the point. This situation is way out of hand. You can tell that things are complicated because they have been made complicated. The story goes on and on and you sail the world more than once, picking up one piece after the other. So I chose a trends expert to top off the page because he represents the expertise of connecting the dots using what’s in plain sight, and we went from there.

If you want to know the bottomless line of the debt crisis, from New York to Greece, the story is essentially the same where ever you go. I would use this page and just cross check it with what’s going on in your neck of the planet. Don’t take anything the experts say for granted, use them as guideposts and be careful out there on the seas of commerce. Keep it simple and stay informed, and think for yourself.

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