As Greek 1 Year Bonds Rise to 88%…

…the Eurozone dimwits prescribe “more of the same”.  From the New York Times:

…As Europe struggles to contain its government debt crisis, the greatest fear is that one of the Continent’s major banks may fail, setting off a financial panic like the one sparked by Lehman’s bankruptcy in September 2008.

European policy makers, determined to avoid such a catastrophe, are prepared to use hundreds of billions of euros of bailout money to prevent any major bank from failing…

It is getting rocky for Europe’s banks, to be sure – it is getting harder and harder to secure those short term loans banks need to keep operating.  If any one of the major European banks fails to obtain the necessary operating capital, then that will be the end of the global financial system.  Given this, you can understand why the bureaucrats and banksters want to do something…the problem is that they are planning on doing what has already been done, and failed.   Most people were suckered by the bailout of the “too big to fail” banks in 2008 and 2009 – we bought the story that if we just did this, all would be made well.  Turns out it didn’t work…so now we’re back to square one in 2011 but with much higher debt and greatly devalued currencies.  To try it a second time is asinine…but not trying it means default, and that scares the Ruling Class.

And it mostly scares them not because of the loss of wealth (someone who is worth millions or billions and loses 50% of his wealth is still pretty darn rich, after all) but because it could spark political revolutions all across the world…it won’t be a matter of a financial shark like Soros or Buffett taking a hit on the balance sheet, but of the whole political-economic structure being overturned…and thus our financial sharks will lose their power to influence government.  That is what scares them – that is what is making them attempt what they know will fail, but which just may keep the global economy out of recession until late 2012 or 2013…by which time they hope that something else will come up to preserve them in power.

Personally, I don’t think they’ll be able to pull it off – a round of printing money (which is the only way they can keep the insolvent banks afloat) would so increase inflation that it would kill off whatever economic activity we currently have.  People would be forced to spend an ever increasing part of their income on necessities, thus leaving ever less for the frills…more money on food, less money on electronic gadgets.  Gadget makers feel the pinch and start laying people off (mostly because that is the corporate drill..profits down?  Lay people off…never even think about using them more efficiently; that would take effort and some basic, human decency).  It spirals down from there.  Whatever “puff” they can put in to the economy by another round of bail outs will be so damaging that the net result would be worse than if they let things just crash…including “worse” in the Ruling Class sense, as people are on to the scam and another round of it leading to even worse times will just make the revolution burn hotter.

And, “burn, baby, burn”, is all I have to say…I’m heartily sick of things as they are and a little revolution, now and then, is a good thing.



7 thoughts on “As Greek 1 Year Bonds Rise to 88%…

  1. Green Mountain Boy September 7, 2011 / 12:07 am

    Just a couple of days ago I read that greek bonds had just went up to 72% interest. How does this work? I will admit to ignorance on issues like this. My religiuos beliefs forbid barrowing money or lending for interest.

    Are these bonds traded amoung the money people like the stock exchange?

    • Mark Edward Noonan September 7, 2011 / 12:24 am


      Boiled down, governments sell bonds to finance themselves…the interest rate is what the government offers you as an enticement to buy. The more safe a bond is perceived the be, the lower will be the interest rate on it. US 1 year bonds are at nearly zero percent…in other words, anyone who wishes to loan us money for 1 year is so confident they will get their principal back that they are essentially earning no interest on it (some would want to do this just as a safe place to park the money…unsure of what is going to happen and not wanting to stuff it under a mattress, they at least want to put it somewhere that will return the principal a year later). Greek 1 year bonds being at 88% indicates that everyone expects Greece to default over the next year…this means a “haircut” for investors; getting something like 50 cents (or less) on the dollar lent to Greece…as this is a very real risk, you want a fantastic payoff for gambling on Greek bonds….so, 88% (and probably soon to be 100%, unless Greece defaults sooner).

      • Green Mountain Boy September 7, 2011 / 12:28 am

        So the 88% are for new bonds? Any old bonds would be at the interest rate that was in effect when the bonds were sold?

      • Mark Edward Noonan September 7, 2011 / 1:29 am


        Yep, but if someone bought a bond a year ago and wants to roll it over, Greece will now need to pay him 88% instead of the 6% or so for the old bond…this is just impossible; Greece can never pay that…default is inevitable.

      • Green Mountain Boy September 7, 2011 / 1:33 am

        Thanks Mark. That makes things clearer to me. Who in thier right mind would take that risk? Without the gurantee of having those bonds propped up with taxpayer money, they are not worth whatever paper they are printed on.

        I guess europe will keep marching on while they have a compliant base of tax payers.

  2. Ryan Murphy September 7, 2011 / 6:44 am

    It almost sounds like you are accepting a leftist proposition,

    ** Gadget makers feel the pinch and start laying people off (mostly because that is the corporate drill..profits down? Lay people off…never even think about using them more efficiently; that would take effort and some basic, human decency). **

    Is the JOB of a corporation to make profits of be a jobs program?

    • neocon1 September 7, 2011 / 4:49 pm

      Business 101
      the REASON and the ONLY reason to be in business is provide a profit for the stock holders through a product or a service.
      Employees become the beneficiaries of that goal when things are good, or sometimes have to leave if those goals are not accomplished.

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