Category Archives: Debt

Greek Economic Crisis A Crisis Of GOVERNMENT Debt

Here’s the thing about the situation in Greece: Among those who’ve had their assets frozen, and are prohibited from accessing their bank deposits, are solvent people like you and me. So you know: Once the US gets to Greece’s situation—you and I will have a hard time accessing our own property.

The Greek economic crisis is a crisis of government-debt, euphemized as a “sovereign debt crisis. During the rule of the “right-wing military junta,” Greece was in the black; it ran surpluses. When successive, socialist Greek governments came to power, in 1974, they strove mightily “to bring disenfranchised left-leaning portions of the population into the economic mainstream and so ran large deficits to finance enormous military expenditure, public sector jobs, pensions and other social benefits.”

Give us your votes, and we’ll give you the keys to the treasury. This ought to sound familiar to Americans.

The latest via Investor’s Business Daily:

Eurozone leaders struck a conditional deal with Greece early Monday that would keep the country in the currency union, but at a steep price for a government that just days ago won a mandate from Greek citizens to stand firm.

Greece’s third bailout, worth 86 billion euros ($95 billion), will require that it enact tough measures, including reforms of the pension and tax systems, budget cuts, and privatization of many of its assets. It must also be approved by the Greek parliament and some of its measures written into law by Wednesday. …

Yes, The ‘Banksters’ Are Bad, But So Is Greek Profligacy & Sloth

Debt, Economy, EU, Europe, Federal Reserve Bank, Labor, libertarianism

After midnight, tonight, Greece will turn into a pumpkin. The Eurozone nations won’t be bailing the country out again after the deadline. Or so they say. For the life of me, however, I can’t understand why some ostensibly rational libertarians have joined Max Keiser and Stacy Herbert at RT in shaking the fist at the “banksters,” on behalf of the Greeks robbed.

Because EU manipulations have hurt Greece the most, some libertarians have concluded that Greece is the most victimized. That’s but part of the picture. True, the “apparatchiks of the EU” have aimed to create “one nation under inflation.” The EU superstate is especially bad for the unproductive Greeks. The same can be said for the effects of the European central bank and its beneficiaries: they harm the Greek people most.

But why discount the simpler realities of Greek’s political economy? As even this (unhinged) article concedes, “Greece had been on a steady path toward bankruptcy for 25 years.” Why not Germany, the workhorse of Europe?

Greece is among the least productive and most profligate EU countries. It’s a messy habit of mind that ignores this reality in favor of an analysis of macroeconomics alone. Thus, for example, Greece has a population of about 11 million, close on one million of whom were in the employ of the public sector, in 2009.

Is that 10 percent?????????????????????????????????????????????????????? Do you know what kind of liability that creates in perpetuity in terms of pensions and perks? The sovereign debt crisis has since forced the government to fire some parasites, but you get the drift.

As far as I know, Greeks have not voted to leave the EU and restore their own currency. This would indeed make them more competitive. And the Greek people have elected a socialist government that is resisting cuts to the public pension system, changes in the parasites’ retirement age (ridiculously young), and flexibility in sclerotic labor markets, socialized by the people’s choice. Would the Greeks rather starve than work? It seem so.

More Greece facts: “Greece deal: Seriously, what’s holding it up?”

#PabloPicasso’s Sublime Art And #Inflation

Art, Debt, Economy, Inflation

Picasso’s “Les femmes d’Alger” in French, “The women of Algiers” in English, and “Women of Aljeers” [sic] in CNN “English,” is a sublime piece of art. But as heavenly as this painting is, there is more to the price it fetched this month in auction than the power of Picasso at his best (although I still adore the master’s blue period. See “Blue Nude, 1902 by Pablo Picasso” below). It’s what happens when lots of money chases a one-of-a-kind asset, against the backdrop of low to no interest rates …

The Babbling Brooke (BB), aka Brooke Baldwin of CNN, did a frivolous segment on the work of art that commanded “a cool $179 million.” For information, BB turned to Manhattan art dealer Richard Pleitgen, who has been “in the art business for 57 years.”

The transcription, however, appears inexact. I heard live the explanation given by Pleitgen for the painting’s price. He explained that interest rates were such (so low) that unfathomably wealthy individuals needed to park their money some place.

True to type, Babbling Brooke giggled during what I thought was a lesson—Pleitgen’s—on inflation. Here she was doing a “fun” segment on a Picasso masterpiece and her guest was talking low- to no interest rates (as set by the Fed).

Pleitgen was on the money. If anyone can locate the TV segment, please send it along.

[11:45:06] BALDWIN: Could you be interested in owning an incomparable piece of art? I’m certainly a Picasso fan. I don’t know if I could shell out a cool $179 million, though. This painting by the iconic artist sold for a record-breaking amount at an auction here in New York City. Pablo Picasso’s 1955 canvas, “Women of Aljeers,” part of the series. It was snapped up by an anonymous buyer and was the centerpiece of the event. Last time at auction, it sold for a merely $31.9 million, that was in 1997.

Let me bring in Manhattan art dealer, Richard Pleitgen.

Richard, you were telling me you have been in the art business for 57 years. RICHARD PLEITGEN, MANHATTAN ART DEALER: Yes.

BALDWIN: You were there.

PLEITGEN: Yes.

BALDWIN: Five people were ultimately, over the phone, fighting over this beautiful art, going up incrementally, going up by a million, starting at $120 million. Take me in the room and tell me what it was like.

PLEITGEN: You sort of get hardened to these numbers.

BALDWIN: Did you blink at that amount of money?

PLEITGEN: I didn’t expect to bring that much, but I didn’t blink at it. I was this also when it sold for $32 million in 1997.

BALDWIN: Who was buying — listen, I studied Spanish, loved Picasso, cubism. The idea of spending that kind of money — who has that kind of money? Are we talking actors, celebrities, investment bankers, Warren Buffetts of the world?

PLEITGEN: Well, you know, frankly, to spend that kind of money, $179 million on a painting — imagine what kind of wealth you’ve got to have. A billion dollars would never do it. You’re not going to spend 17 percent of your wealth on a painting. You’re talking about really vast narns are prepared to spend that kind of money. I don’t even know who would spend $105 million on an important on central park that you’re never going to live in. The kind of money that exists out there is prodigious.

BALDWIN: If you were there when it went for $30 million something in the late ’90s and it’s $179 million today, in 50 years, is what will it be worth? He laughs at me. He laughs. He scoffs. Make a guess. Let’s be crazy. Make a wild guess.

PLEITGEN: I don’t know because, you know, if interest rates rise, so people have an alternate place to put money, some of these prices may drop —

BALDWIN: You could get a sale on a Picasso. I was kidding. I was kidding. OK. We’ll see, so in 50 years, if any of us are around to potentially bid on it.

Richard, thank you very much. I appreciate it.

Manhattan art dealer on the Picasso that went for just about $180 million.

Thank you, sir. I appreciate it.

PLEITGEN: You’re welcome.

[SNIP]
Again, I believe the transcript is inexact here.

Spain And Portugal Pumped With Funny Money

Debt, Economy, EU, Europe

“The ingenuity, industry and activity of the ancient Greeks have nothing in common with the stupidity and indolence of the present inhabitants of those regions.” So said philosopher David Hume about modern-day Creeks.

The “land of moussaka, moochers and looters” and their Marxist leaders refuse to cease living on money borrowed from the more productive EU countries (Germany) .

“Greece,” marvels the Wall Street Journal, “has largely based its brinkmanship on an assumption that the eurozone will ultimately capitulate to its demands to prevent chaos spreading across the currency bloc.”

“Both Spain and Portugal are at risk from a Greek eurozone exit, but they have confidence their economies can withstand the shock.”

Yes, pumping funny money into the money markets has a way of inflating confidences.