We can all see where this is going.
Democracy is designed to make decisions inefficiently. And the harder the decision, the greater the inefficiency. Under normal conditions that inefficiency is a blessing. Its a guarantee that everyone will at least get to voice their objections to what's going on. But in a situation like this, it's clear that it isn't helping.
The Greek government is about to collapse which will throw the 'bailout' deal which the European cognoscenti were touting last week, into limbo. We could end up with a full year of elections while the Greeks figure how (if it's possible at all) they can put together a provisional coalition government. But in the meantime, people will need to be paid and there will be no money delivered to pay them. It's not outside possibility, that the entire country collapses into chaos.
This whole 'European bailout' thing has really been a battle between those who believe that politics should always trump reality, and those who see it as the opposite. Time is on "reality's" side. Let's see how the Greeks feel about it when they are trying to feed their kids 'political' bread, and 'political' milk.
%%%%%%%%%%%%UPDATE%%%%%%%%%%%%%%%
Greek Debt now offering a 200% yield.
I don't know what that is, but I know what it isn't.... and it isn't a bond.
HT Zerohedge.
2 comments:
A few years back I was involved in a political discussion at a get together. I threw out the following predictions that within five or six years the following would happen:
1. The European welfare states would be in a state of collapse, chaos, and / or under military dictatorship.
2. China's paper dragon economy would be in flames as the mother of all property bubbles popped.
3. At least one State (by bet is Illinois) would be in default. First to outside vendors and soon afterwards on its pension and insurance obligation.
4. Iran will test a nuke which will be followed by an attack by the IDF (which may not be limited to conventional weapons).
I was told I was full of shit..
Looks like #1, and #2 are in progress.
http://blogs.wsj.com/chinarealtime/2011/10/25/shanghai-homeowners-smash-showroom-in-protest-over-falling-prices/
"I told you so" is becoming a popular refrain among this readership. I concur with Hell...Newark. Nice timing and coverage by RFNJ. I can set my watch by this blog. If the states start defaulting and Israel hits Iran our self-congratulatory prescience will be the least of our foibles.
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