The arrangements for Greece’s return to the Drachma.

The following is presented in the Fullermoney newsletter as an academic appraisal of how the Eurozone might be downsized.

Essentially it outlines of how Greece’s imminent return to the Drachma should be handled.

It seems to be more than a theoretical plan, as the first bullet point seems to have already been put in place, because the second bullet point about printing new Drachma notes is, according to one report, already well under way.

This proposal is that the Drachma would begin as parity with the Euro, before finally setting at about 60% of its original value.

My interpretation of this, especially in view of the last bullet point, is that if you are a tourist try to avoid buying Greek Euro’s or Drachma until absolutely needed.

If you are a Greek, you’re not going to be allowed to take your cash out of the country and should turn your cash into Gold or some other commodity that will hold its value. In domestic terms its value, in Drachma, will shoot up.

The reason for avoiding panic is simply that someone has to lose out and the powers-that- be would rather it was you.

• It will not be possible to be open about preparations to leave for more than a very short period of time without precipitating damaging outflows of money which could cause a banking collapse. Accordingly, preparations must be made in secret by a small group of officials and then acted on more or less straightaway.  

• Given the short time from announcement to implementation, it will not be possible to have new notes and coins available immediately when a country exits the euro. This is unfortunate, but it is not as serious as is often imagined. The authorities should allow euro notes and coins to continue to be used for small transactions. But straight after the decision to leave the euro has been announced, they should commission new notes and coins to be produced as soon as possible.  

• In order to facilitate the convenient use of euro notes and coins, to help to maintain price transparency and to boost confidence in the new regime, we recommend that the new currency, say the drachma, is introduced at parity with the euro. Accordingly, where a price used to be 1.35 euros, it would now be 1.35 drachmas. Of course, the drachma would be free to fall on the foreign exchange markets and indeed it is vital that it should do so.  

• We reckon that if any or all of the weaker members of the euro-zone left, their currencies would depreciate by something like 30-50%. This would probably add about 10% to consumer prices, which, spread over two years, would cause the annual rate of inflation to rise by roughly half this figure. But international experience suggests that such a spike can be short-lived and inflation can then return to something like its previous level.  

• Just before departure, some form of capital controls will be essential, including at least closure of the banks. But after departure, capital controls should be avoided and, if used, should be withdrawn as soon as possible.

WEP: Privatisation of the Royal Mail is case of when, not if. #occupy

A letter in the Wigan Observer where councillor bemoans up-coming privatisation of Royal Mail, prompted this email respoonse from myself:

Coun Michael McLoughlin. is whistling in the wind. It has been international policy, since the ’80’s, to sell off (privatise) all public assets and services to the private sector.

What should, or should not, happen is not for us to decide.  

It’s for the people, who the “occupy” campaigner’s refer to as the 1%.  

The present never-ending Eurozone crisis has been a boon for such measures, with Greece unable to find anything else left to sell off.

Euro-crisis is successfully pauperising European citizens. #Occupy #NHS #Unions

Fullermoney reported that the CEB had sold a load of Eurobonds ( Gov’t speak for IOU’s) at 0% to SIG (Spain Italy and Greece).

These immediately sold their own bonds at ~6% to the banks (e.g. Goldman-Sachs).

So banks were effectively getting German backed IOU’s with SIG paying them interest at a high rate.

The only beneficiaries were the banks (e.g. Goldman-Sachs).

The losers (beside the German workers) were  the SIG electorate, who had to lose State assets, their own pension rights and chunks of state backed services, such as Health and Education, just to pay the interest on these loans.

Now the B.o.E. has announced £50 billion of Quantitative Easing (total now £325 billion), which essentially means that the Government has devalued the Pound again.

This acts against the UK people in three ways.

First their spending power is reduced, as the pound buys less.

Second the bank  interest rate is kept low, so pension funds actually lose value.

This occurs because the banks (e.g. Goldman-Sachs) hold the pension funds and charge a service fee for doing so.

Meantime, a doubling of iniquity, they are using those funds to buy bonds etc., knowing that if the bonds (remember they are actually I.O.U’s) aren’t honoured. then it’s not their money that is lost, it’s the pensioners money.

Third, The banks (e.g. Goldman-Sachs) hand over assets to cover this gift.

As these assets are undoubtedly SIG bonds, which could default, the Gov’t has effectively bought the equivalent of “sub-prime mortgages” with our money, which is based on our own bonds, for which we have had wholesale cuts in State assets, our own pension rights and chunks of state backed services, such as Health and Education.

All those who have been sacked from such services, can take comfort that they have enriched bankers.

In short, it seems that the Euro crisis is designed to provide a money-go-round, which at each stage is used as a mechanism to pauperise European citizens for the benefit of the Capitalists, who back the banks.

That’s presumably why they need such big bonuses for their troops. It’s to ease the consciences of those who understand what they are doing.

 

 

“There are those with their hands on the financial reins and too many of them are sociopaths”.

money is power and power corrupts.

Big problem is absolute power corrupts absolutely and as we are seeing worldwide, since the collapse of Communism, that Capitalism has got greedy again. “Not just what’s yours is mine and mine’s my own”, but “Dickensian, Victorian, Scrooge,Child Labour, Company Store,Tolpuddle martyrs, hanged for stealing a loaf of bread” greedy.

The West has “Occupy campaigns” protesting at the fact that Democracy is being stolen by those with the money to buy our politicians.

Countries such as Greece have even had unelected puppet rulers foisted on them to extort money from the populace by raiding their pension funds and selling off all State assets. Such behaviour has led to strikes, which may eventually turn violent.

Russia has had blatantly rigged elections to support an ex-KGB, turned Gangster leader, and its people are out calling for new elections.

In North Africa, we hgave the Arab Spring, where corrupt despots are being ousted and external powers ( CIA, Al Quaeda Russian Maffia) are trying to seize control to usurp the people’s attempt to achieve democracy .

Meanwhile in the Horn of Africa, the people have been completely subdued and are starving because of unfettered bandits masquerading as a Government.

In China, we are seeing the worst version of Victorian corruption and pollution, with cases of adulterated food killing people, moneylenders destroying businesses and Smog in Beijing, China, so bad that Flights have had to be cancelled (this is just news that has managed to leak out).

In Mexico and neighbouring countries, people are being killed, without let, by drug cartels that have bribed or intimidated the organs of the official Government.

I daresay that there are other stories out there, all saying the same thing. “There are those with their hands on the financial reins and too many of them are sociopaths”.

Question Time summary: Sod off, we run the country.

I’ve only just watched my tape of Question Time but my summary seems to be that on the EU referendum, the public was not (?)really interested and anyway the manifesto’s of all three parties might have sounded as though they would let us have a referendum but they didn’t and so it didn’t matter which of the three main parties we might have voted for, we weren’t really given that option.

So even though the polls showed a majority in favour of a referendum, we weren’t going to get one, because we wouldn’t give the right answer and the lesson of the Irish referendum was that it would cost too much, holding referenda until we got it right.

This was immediately followed by the discussion on Protests, where it was generally agreed by the politicians that we should be allowed to protest, in a Democracy, but not where it would attract attention, or force politicians to take notice.

Best would be to let the politicians get on with the business of selling off the country, as their counterparts in Greece are doing, and where, apparently, they are selling off whole islands to whomsoever can afford one at a bargain basement price.

It’s not clear, whether that’s with vacant possession, or whether those living there will now become serfs, again.

Of course it won’t be so bad here, as the Enclosures Act, dispossessed the peasants ages ago and all the land is now owned, most by a small group e.g. Duke Westminster, The Queen, The Churches.

I almost forgot MOD land that was seized for WWII; that could be sold off.

It’d be ironic if Germans bought it.

 

Asset stripping Europe.

I can not see how the bail-out of Greece will work.
How can they repay this “loan”, even if it was at zero percent interest rate?
Greece has effectively sold off all its state assets through the process of privatisation (aka asset stripping, beloved of maggie’s beloved entrepreneurs) and has little in the way of Family Silver remaining.
Its only real wealth production are via EEC-subsidised olive oil,its Maritime Fleet and  Tourism.
Its customers are mainly the other European countries, who are lending it the money and whose citizens are also having to curb their spending.

If Greece finds that it can’t raise prices and it can’t produce more, then it has to cut costs.
That means reducing wages and State provided services, much as we are doing.
However; as we are finding, that is self-defeating. Cutting State services means putting more people on the dole.
Cutting benefits to the unemployed means that they have to cut their costs but benefits are meant to only cover essentials such as food and shelter, so how effective can that be?
This might seem feasible in Sunny Greece but they still have harsh Winters, so sleeping in tents and feeding off the land are not really options, any more than in our colder Northern Winters.

Cutting wages is not a very effective solution.
Those who are overpaid, such as politicians, will not include themselves in this solution (our own MP’s being a perfect example) and those who are low paid will find that price rises and fuel costs (especially if they have an eco-friendly Minister like our own dear Mr. Huhne) will rapidly eat up the slight advantage in pay over state benefits.
With the majority having less to spend in the shops, Businesses will fold, as they are doing here, and the economy and its derived tax revenues will plummet.
Greece is not a profit making enterprise. It is a money pit and the rest of the signatories of The Lisbon Treaty seem doomed to be sucked in.

Public sector cuts are not “FAIR”, Cameron

How can David Cameron call the Public Sector cuts “fair”.

 They may be necessary to pay off the banks.

They may be necessary to pay for PFI’s

They may be necessary to make donations to Spain, Ireland and Greece.

They may be necessary to support the Euro.

They may be necessary to pay for membership of Europe.

They may be necessary to maintain overseas aid

They may be necessary to bribe Pakistan etc.

They may be necessary to wage uncalled for wars.

They can in no way be called “fair”. 

Even the fact that private sector employees have been mugged by their employers and by Gordon Brown does not make it fair for Government to act in the same manner towards their employees.

David Cameron is demanding that some work  on for eight years longer than they contracted to do, when they signed contracts at the beginning of their working  lives.

He is demanding that they pay more towards their pension and that this pension will be half of what was agreed.

If a mortgage company tried this on, their offices would be burned down and most would call it justified.

These proposals are equivalent, in financial terms, to huge pay cuts.

The argument about people living longer is specious.

The Government has a huge army of highly skilled people compiling statistics and creating actuarial tables. Ministers would have been told decades ago, if the books weren’t balancing.

In practical terms, living longer doesn’t equate to maintaining the same efficacy as an employee.

Consider a fireman at sixty-eight. Will he still be strong enough to rescue you from a burning building?  Will he be quick-witted enough to tell when a roof is about to collapse?

Most 68 year-old male employees will be taking medications for heart, prostate and various other ailments, which will render them unfit for their duties.

The only benefit for the Government will be that they might cut their present £70 billion interest payments to, perhaps, a mere £60 billion.  

 (Figures: 750,000 to strike on a 32.4% turnout means we’re talking about 2.25 million. Suppose their average salaries are £20,000 p.a.  and you cut into that for an extra £4,000 “pension” funding. You get £9 billion)

 It’s my generation (the baby boomers, children of the heroes returned from the Second World War) that is being victimised here. But don’t worry, we will have turned our toes up by 2030, even if we do live longer than we are entitled to. It might even be sooner, if the NHS reforms go ahead.

Greece to default… hoooray

Published in Daily Express.

Great news about Greece being likely to default on its debts.
If the Greeks do default, then we won’t have to hand over any money to bail them out.
Furthermore, this could mean the end of the Euro, possibly saving some of the cash earmarked for shoring up Spain etc. It would certainly save the money to be set aside for further issues, where cracks in the Euro need some papering over.
We could even use some of the money saved to restore weekly bin collections.
We could dream of the day, when we leave Europe, extricate ourselves from Libya, re-equip the Armed Services, restore the NHS and start locking up criminals.

 

Greek resistance could rescue us from Europe.

sent to expresss 8/6/11

Discussions in on-line forums seem to indicate that ordinary Greeks are showing increasing resistance to attempts to implement austerity measures and feel that the problem is not of their making.

If this results in such measures being rejected then Greece may have to pull out of the Eurozone, returning to the Drachma, and possibly out of The European Superstate. 

Possibly we may end up giving our billions to Greece, unconditionally, in order to save the Euro-dream.

More likely, a queue would form behind Greece, and apparently Spain, and lead to the collapse of this political Frankenstein.

Fingers crossed that The Greek and Spanish people prove as perverse as they are being portrayed to be.

They may yet prove our saviours. (at the very least we might keep our cash)

collapse of the Euro

Superinjunctions and royal weddings/visits may be the focus at present but The Lisbon Treaty and the bailouts of Greece, Spain, Ireland etc. are still hanging over us.
The only bright aspect is that the protests in Spain will probably re-ignite Greek protests, forcing France and Germany to raise taxes on the rest of us.
We, Brits, will probably take the hit but the German and French people may not.
This could lead to the downfall of the Euro and allow us to escape from further federalisation. Fingers crossed.