Posted on 04/25/2010 7:41:20 PM PDT by blam
The Greeks Are About To Be Sacrificed At Europe's Altar
Joe Weisenthal
Apr. 25, 2010, 9:03 PM
Ambrose Evans-Pritchard at The Telegraph has some characteristically sober observations about the state of Greece and the EU as a whole.
The nut of the piece is that typically an IMF bailout wouldn't be devastating, but when an IMF bailout comes under EU rules -- strictly speaking the Maastricht treaty with its no bailouts rules -- the effects will be quite rough.
The EU-IMF "therapy" of deflation for Greece repeats the catastrophic errors of Chancellor Heinrich Bruning in the early 1930s and must lead to a depression, he said.
Yet that is what IMF chief Dominique Strauss-Kahn is preparing for Greece, against the better judgment of his own experts. "Greek citizens shouldn't fear the IMF; we are there to try to help them," he said over the weekend. Yet a week ago he told Greece that devaluation and default are non-starters. "The only effective remedy that remains is deflation. That will be painful. That means falling wages, and falling prices. There is no other way."
[snip]
(Excerpt) Read more at businessinsider.com ...
The Reds in Greece brought this on themselves.
Soros doesn’t help others.
Thank you for your thotful reply. It makes sense, but how does this PPI increase figure in...just saw this thread:
Hidden In The PPI Data Was The Largest Food Price Spike In 26 Years....
http://www.freerepublic.com/focus/f-news/2498579/posts
Agreed that you cannot get to land bridge if in middle of the herd....so what exactly is North? Forgive me maybe I am just tired after driving 16 hours over the weekend, but an ...I am not getting what North is saying...inflation or deflation?
FORT LEE, N.J., April 22 /PRNewswire/ -- The National Inflation Association today issued the following food inflation alert to its http://inflation.us members:
The Bureau of Labor Statistics (BLS) today released their Producer Price Index (PPI) report for March 2010 and the latest numbers are shocking. Food prices for the month rose by 2.4%, its sixth consecutive monthly increase and the largest jump in over 26 years. NIA believes that a major breakout in food inflation could be imminent, similar to what is currently being experienced in India.
Some of the startling food price increases on a year-over-year basis include, fresh and dry vegetables up 56.1%, fresh fruits and melons up 28.8%, eggs for fresh use up 33.6%, pork up 19.1%, beef and veal up 10.7% and dairy products up 9.7%. On October 30th, 2009, NIA predicted that inflation would appear next in food and agriculture, but we never anticipated that it would spiral so far out of control this quickly.
[snip]
Greece sacrificed itself to socialism - - the kind of socialism Ubanga and the rats want for America.
hmmm so...some sectors are inflating such as food, others such as real estate are deflating?
"I am in the camp of the inflationists. I regard today's stable consumer prices as the joint product of central bank monetary inflation to save Fannie Mae and Freddie Mac and thereby save the largest banks, coupled with the individual, uncoordinated decisions of commercial bankers to deposit their banks' excess money with the Federal Reserve, thereby sterilizing the more than doubled monetary base."
Nor, per Article 125 of the Maastricht Treaty, is there any way for other EU member nations to bail Greece's butt out of their debt hole.
Fudged bailout or no, it's going to get very ugly in Wonderland (my private name for the Eurozone) very quickly. Wait until Portugal wants a bailout (less than 90 days, btw); THEN we'll be having some fun!
If they don't, the muzzies will be sure to oblige.
The Greeks deserve it, good and hard - never mind, buy real gold stocks to survive the present inflation.
As the Austrian economist von Mises said: “There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion or later as a final and total catastrophe of the currency involved.”
Oil is at $85 a barrel. Food is more expensive. Rents are up. These are the things that you need to maintain your lifestyle.
Gold is near it's all time high, over $1100 an oz.
For one thing the CPI index is nonsense. It has been continually manipulated to make prices seem lower than they are. Are you familiar with ShadowStats.com? That website uses the formulas there were in place up until Clinton and tells you what the real (non-manipulated) stats are. Inflation is higher. Unemployment is higher.
This article, in my opinion, does a good job of explaining why it appears there is deflation, when in fact inflation is the present and hyper-inflation is the future. Hyperinflation Looms – The Dollar Arrives at Its ‘Havenstein Moment’
Hotels, commercial property, which are yet more classes of real estate, overall wages paid into hands of consumers, decreasing credit demand from consumers and small businesses, as well as reduced credit availability to small businesses are some of the indicators that are still showing deflation.
Here’s some overview of the contribution of housing prices on core CPI:
http://www.frbsf.org/publications/economics/letter/2010/el2010-11.html
As your gut is telling you, housing is the 800lb gorilla in the living room, so to speak.
But there are monetary indicators out of the banking system which show that the amount of money in the hands of consumers is still contracting, overall. Wages certainly aren’t going up, credit isn’t increasing, etc.
The Fed publishes a circulars which are simply filled with chart porn:
The economy and the banking system:
http://research.stlouisfed.org/publications/mt/20100501/mtpub.pdf
The “real” economy, with more attention to price increases/decreases by the private sector:
http://research.stlouisfed.org/publications/net/20100401/netpub.pdf
NB charts in the one above like CPI and PPI, core (ex food/fuel) vs overall CPI/PPI - and you see that the increase in prices you’re seeing are from “food and fuel” - and the increase in food prices is mostly due to fuel, not farmers getting higher commodity prices.
Then check out “employment cost and compensation per hour” — showing the downwards trend.
Debt service payments (p12) shows the downwards trend in consumer debt, which might be leveling out, or it might be a false uptick based on recent transfer payments making some people feel flush enough to put some stuff on their credit cards. The next three months will tell us.
The rise in interest rates is a result of the Fed stopping their QE programs. With real interest rates below zero there for awhile, there was no place for rates to go up. The Fed instituted their QE program because they couldn’t push rates down any other way (eg, by offering zero or near-zero funds rates targets), so they used the brute-force hammer of QE to force rates lower than the market would have set them.
Still, at this point, believe me when I say that the Fed has to be scared witless of a rapid rise in interest rates; the Fed has put itself in the unenviable position of being one of the biggest holders of sloppy debt paper in the world, and who stands to suffer huge losses if interest rates go up while they’re still holding the paper.
When the government workers strike and march on Washington, you will know the the end is near... It has come close at times but will probably come sooner that you would expect (since changes are going to happen soon).
If Washington does NOT cut their stupid spending soon, those marching will not be government workers but those that are taxed to support those government workers.
There is change coming - just not really sure of the end result...
So do wage and price controls.
Again, concerning food, we just had the coldest winter in the last century or so. That does affect the cost of food.
Greece did the same what we are doeing. They’ve spent more then they can afford. The greec balance of trade looks familiar to ours. We do huge import on chinese credit, they do huge imports on german credit. We lack exports (except tabasco and grain), they lack exports (except Metaxa and oliv oil).
Have a close look on what’s happening to them now. We’re going to get a similar experience soon.
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