[americandream]

.
It's not a question of winning , it's a question of minimizing losses
big banks were stupid and short sighted enough to be exposed to massive losses on Greek government and private bonds
the EU , good girl , stepped in to take 50% of the tab ,the rest was the haircut
the financial institutions walked away with as much cash as they could hope for ,
after all their losses are tax deductible !
now Greece own the EU countries , with not a chance in hell to get repaid this decade
some governments objected to throwing good credit at a rather unimpressive bunch of demagogues
the German government is pushing for a deal ,
but insist it will be a harsher deal than the one the Greeks foolishly refused .

welcome to the land of the fools ,
now Alexis Tsipras will have to convince his people that they mush accept a worst deal that what he told them was unacceptable last week
some negotiator !!

Capital prioritises its momentum checkpoints. The tapped out Western consumer is not worth the risk it poses to accumulation in austerity measures when momentum is gathering pace via the globalisation mechanism elsewhere.

Your problem is that you view yourself as central in accumulation whereas accumulation is dispassionately indifferent as to its sources. You think subjectively as regards forces that are driven objectively.

[Strummer]

I think it is instructive to look at how the US built its potent economy. I will try and make this brief. First US built up its manufacturing base. In doing so it began to export products which allowed it's companies to become stronger as well as the currency. Then with many people employed the US government stimulated economic growth with subsidies of different kinds ie. New Deal.

You forgot the biggest subsidy of them all, World War II. That's what created modern America.

[phaster]

Another interpretation might well be that the Greeks were leading quite a contented modest lifestyle off their little plots and bartering systems as they had for eons until John Smith of London Limited came along offering them credit to purchase the Audi from Heinrich Wolfsons Berlin car yard. There was the promise of modernity in all its forms, from Japanese tvs to American holidays in the offing, all at low rates.

modern society w/ all the new consumer products (which includes the concept of "credit/debt") is IMHO essentially the old story of pandora's box

that is because if one does not ponder the consequences of mis-management of "credit/debt" its going to sting

http://myths.e2bn.org/mythsandlegends/t ... s-box.html

Since you mentioned Germany, Japan and the USA, consider at one time all these nations were global economic backwaters

Germany prior to the 20th century was a bunch of tribes and inward looking, ditto for Japan

It was only after WWII when Germany and Japan which were beaten to a pulp did they become manufacturing global centers

The USA also just after WWII was a period when manufacturing of consumer products really grew exponentially (which is the bench mark/myth societies all around the world look to emulate)

Americas Distribution Of Wealth (1955)
https://www.youtube.com/watch?v=9Jy2qdTCs0g

Communism: A 1952 Anti Soviet Propaganda Short Film From The Cold War Era
https://www.youtube.com/watch?v=_4yjAb6eoCw

IMHO there is a perfect storm brewing (that is going to hit the economic realm) given that life style that many want strive for is to be a "rich consumer" no matter if that person is a citizen of the USA, Germany, Japan, Greece, etc.

The unrealistic/unsustainable public pensions of the Greeks are visible today (and causing problems w/ the economy), but from all the data I've looked at, IMHO it is only a matter of time till the same unrealistic/unsustainable public pensions are going to cause problems advanced economies like the USA, Germany and Japan

http://peakoil.com/publicpolicy/greece- ... a-tomorrow

In other words the debt Greece has is un-re-payable

https://www.youtube.com/watch?v=i9fPrSMlkn0

and IMHO the same concept apples to the USA, Germany and Japan (IN THE LONG RUN)

[Strummer]

Germany prior to the 20th century was a bunch of tribes and inward looking

Nonsense. Germany underwent a period of rapid industrialization in the second half of the 19th century, and for example (from wikipedia):

Based on its leadership in chemical research in the universities and industrial laboratories, Germany became dominant in the world's chemical industry in the late 19th century. Big businesses such as BASF and Bayer led the way in their production and distribution of artificial dyes and pharmaceuticals during the Wilhelmine era, leading to the German monopolisation of the global chemicals market at 90 percent of the entire share of international volumes of trade in chemical products by 1914.

and

By 1913 American and German exports dominated the world steel market, as Britain slipped to third place.

[phaster]

my bad, about throwing out a general 20th century period wrt germany

what I was trying to get across is the period just before the industrial revolution really took off in Germany

read something awhile ago that germany wasn't always a manufacturing power house it took them a while to get there

same w/ Japan, it was deming who went to help rebuild the economy post WWII

https://en.wikipedia.org/wiki/W._Edwards_Deming

[Cid_Yama]

Phaster, you are wrong about Germany. Ever heard of the Hanseatic League? Founded in the city of Lübeck in 1356, Lübeck became the central trading hub of the League.

In the late Middle Ages, maritime trade in the Baltic developed under the aegis of the German Hanse. The origins of this League lie in the loose associations of long-distance merchants, notably from northern Germany and Westphalia, who succeeded in securing trading privileges abroad to the benefit of all subjects of the Holy Roman Empire. It was, however, Lübeck and the Wend towns along the northern German coasts that built the core of the urban League as it started to take shape in the final decades of the twelfth century. During its heydays (c. 1370-1474), the League comprised 200 towns, which cooperated in a rather loose fashion and covered an area stretching from Reval (Tallinn) in the east to Kampen on the Zuiderzee coast in the west.

The successful linkage of sea, river and land routes is one of the reasons for the prolonged existence of the Hanseatic trading system. Northern Europe's main rivers and roads served the vast Prussian and Russian hinterlands and connected Germany's urban markets and production centres to the Baltic ports. Lübeck served in many ways as the starting point of this system. Already in the 1160s, its merchant families started to settle in the Wend nuclei along the Pomeranian coast (Wismar, Stralsund, Rostock, Stettin (Szczecin) and Greifswald). Northern Germans were also involved in the founding or refounding of cities like Riga, Danzig (Gdansk) and Reval. From there they opened up the Prussian and Russian hinterlands, bringing the southern Baltic ports within the orbit of the western markets. These cities comprised the core of the Hanseatic trading system in the Baltic, whilst Hamburg and Bremen were the main ports on the North Sea. On the western flank of the Hanseatic region, Cologne emerged as the Hanse's main trading partner with England and with it the satellites (Kampen, Deventer) along the Zuiderzee coasts came into being.

The trading network of the Hanse merchants was based on a system of staple markets and foreign offices (Kontoren), in Bruges, London, Bergen (Norway) and Novgorod (Russia). Since all foreign Hanseatic trade was supposed to be concentrated in these Kontors and the adjacent staple markets, they represented an indispensable instrument in the League's efforts to dominate the few trading routes that connected the eastern Baltic to the west. Because of its strategic position on the Trave River, Lübeck maneged to direct all major trading flows in the Baltic and from the North Sea to its port and staple market. In this way, the town controlled all trans-shipments at the Elbe, Stecknitz and Trave estuaries.

Merchants from Lübeck and the Wend towns made their fortune by exchanging the western rich trades (e.g. high-quality cloth, spices and wines) for the minerals and the agrarian and sylvan products of the north and the east. Among these were bulk commodities such as Prussian and Livonian hard dusk grains, hemp and flax, as well as unprocessed timber, deal boards, masts and klapholz, which was used for barrel making. Farmers exploiting the vast Livonian, Russian and Scandinavian forests produced tar, pitch destined for the shipbuilding industries and potash for glass making. Bar iron and copper were produced in the mines in Sweden and south of Krakow. The Finnish and Russian hinterlands were the main providers of such high-value products as wax, furs, leather and skins. On top of this, the League was engaged in the Baltic herring and beer trade, and Lübeck had a monopoly on the exports of Lüneburg salt.

Lübeck's position as the largest entrepôt in the Baltic system was reflected in its leading position in the Kontors. There, members of its rich merchant families maintained contact with their trading partners abroad, fostered intense diplomatic contacts with foreign powers and carefully guarded the trading interests of the Hanse merchants and the abundant privileges that had clipped the wings of potential competitors. The Hanse Kontors and the merchant settlements around these acted as entrepôts for the commodities over which the Hanse had established a quasi monopoly. These were furs and wax from Novgorod, dried cod from Bergen, wool and cloth from London and Boston (on England's west coast), and high-quality cloth from Flanders, Brabant and Holland, which was exported through the staple market of Bruges.

Underlying this long-distance network, a range of trading routes developed between the staple markets on the northern and southern Baltic coasts. Most Hanseatic cities were engaged in triangle trade between their home markets, Lübeck, and Sweden, Finland or Novgorod. Stockholm — Sweden's main port for iron and copper — had a substantial number of Hanseatic merchants among its inhabitants. Åbo (Turku) and Viborg were the important staple markets for Finnish timber and tar, whilst Narva and Novgorod were the main gateways to the Russian hinterland. Shipping on the Livonian coasts was concentrated at Reval, Riga, Dorpat (Tartu) and Pernau (Pärnu), the main suppliers of grain, hemp, flax and naval stores. Already in the fourteenth century, attempts to protect the trade with the Livonian and Russian hinterlands led to prolonged rivalry with merchants from Lübeck and the Wend towns, who tried to evade the local markets in order to cut transaction costs. The ports of Danzig, Königsberg (Kaliningrad) and Elbing were the main outlets for Prussian grain and timber, which lay at the root of their trade on the Swedish and Finnish coasts.

link

As for modern manufacturing, Krupp steel formed the foundation of the Industrial Revolution in Europe in the mid-19th Century, And Krupp cannons armed Europe's Armies.

[americandream]

The core point stands. Both the US and England enjoy the role of the worlds money market managers, manufacturing in essence being secondary despite nostalgia. Manufacturing prowess in essence plays second fiddle to the managers of money in our system.

[Cog]

As I stated when this panic started over a possible Greek default and Euroexit, it simply wasn't going to happen. All the players, including the Greeks didn't want it.

Buy on the dip, sell on upswing.

[SeaGypsy]

They will stay in the Euro, while they sack the government, vote in an even further pixieland lefty one, rinse & repeat.

The idea the IMF starts dictating 30 year debt freezes, woot wooh! Anyone with any real growth going on gets a steroid boost to current equity flood ... Like watching a magician. Last week there was nowhere to go from zero interest. Now the IMF genius have found how. phuck the debt now, but we will be extracting your grand children's blood forever.

[americandream]

They will stay in the Euro, while they sack the government, vote in an even further pixieland lefty one, rinse & repeat.

The idea the IMF starts dictating 30 year debt freezes, woot wooh! Anyone with any real growth going on gets a steroid boost to current equity flood ... Like watching a magician. Last week there was nowhere to go from zero interest. Now the IMF genius have found how. phuck the debt now, but we will be extracting your grand children's blood forever.

If by lefty you mean circular social economists, wrong. These guys are career politicians not ideologically driven. Having said that, they are the best we have at present (we could do a lot worse had we lacked the cerebral capacity to enlarge our awareness of experience, causes and their effects) whilst a new intellegensia arise to kick start the Enlightenment.

[SeaGypsy]

No I meant what I said, pixieland lefty as defined as the adolescent level of leftist populism which determines there is plenty of everything but for need of magnanimous government. Where I believe you are coming from AD is there is plenty for the community which engages & organises itself in a manner to meet it's own needs; a very different kettle of fish.

[americandream]

No I meant what I said, pixieland lefty as defined as the adolescent level of leftist populism which determines there is plenty of everything but for need of magnanimous government. Where I believe you are coming from AD is there is plenty for the community which engages & organises itself in a manner to meet it's own needs; a very different kettle of fish.

I guess that works as the left label is a populist tag anyways and an indifferent fish. Nice distinction BTW.

[Outcast_Searcher]

Well, it looks like Greece is set to open its banks Monday, with capital controls still tightly in place, but allowing the lines to be smaller with a weekly limit of cash withdrawals vs. strict daily.

So, though this doesn't mean much overall, but it could help stem the panic for (for example) Greek retirees who don't have an ATM card, etc. (It looks like the move to try and kick that can down the road ONE MORE TIME continues).

http://www.reuters.com/article/2015/07/ ... 9W20150718

The first action of the new cabinet was to sign off on a decree to reopen banks on Monday with slightly more flexible withdrawal limits that allow a maximum of 420 euros a week in place of the strict limit of 60 euros a day currently in place.

But restrictions on transfers abroad and other capital controls remain in place.

[onlooker]

They will stay in the Euro, while they sack the government, vote in an even further pixieland lefty one, rinse & repeat.

The idea the IMF starts dictating 30 year debt freezes, woot wooh! Anyone with any real growth going on gets a steroid boost to current equity flood ... Like watching a magician. Last week there was nowhere to go from zero interest. Now the IMF genius have found how. phuck the debt now, but we will be extracting your grand children's blood forever.

It is the nature of the beast. The whole debt regime is draining the West of whatever vitality it had. It is bankrupt and kept afloat by this exploitative regime. If their is any comfort it is that I find it hard to believe this can go on much longer. Who is willing to lend to bankrupt entities?

[C8]

It seems to me that what Greece really needs is total overhaul of their culture. They are too accustomed to not paying taxes but receiving govt. jobs and benefits. There is no type of econ system (socialism, capitalism, etc.) where you can do this.

Culture change is almost impossible- even under the best of circumstances. But with left wing groups promising prosperity if they leave the Euro and disrupting daily life, I don't see that the deal- let alone culture change- has any hope.

[Outcast_Searcher]

Who is willing to lend to bankrupt entities?

Um, based on what goes on in the financial world -- whether on a national level (Greece, Japan, and the U.S. as prime examples), or the individual level (high interest loans to consumers "one broken refrigerator away from bankruptcy" -- over much of the first world) -- apparently ... almost everyone.

I'll give you an example from my own experience as a "financially stable / responsible" person who doesn't like owning bonds. I owned some GE stock before the 2008-2009 meltdown. I thought I owned a global technological/manufacturing company which had a branch (GE Capital) which made consumer appliance loans. LITTLE DID I KNOW that GE capital was such a MESS, including being involved in real estate derivatives, to the extent that GE nearly went bankrupt.

So I have to admit I was such a lender, even though I thought I had nothing to do with the unfolding real estate fiasco (owning no homes, REITs, banks, etc).

Since none of us has time to (for example) read all the footnotes in all the financial disclosures of everything we own (and hire a lawyer to translate them AND be sure the lawyer is competent and the disclosures are complete and honest) -- I'll opine that virtually EVERYONE with any meaningful financial investments (like a retirement portfolio) is part of this "lending to bankrupt entities" -- even if we think we're not. (Oh, and if you think your bank accounts are "risk free", just look at Greece).

[Quinny]

I tend to think the 'culture' issue is pretty much put forwards to set people against each other. Greeks have the 2nd highest working hours in the EU behind Austria. The problem is that the troika instigated austerity has accelerated the economic decline?

Most of the 'bailout' was to save German and French banks and the Greek citizens saw very little of it!

Anyone who wants to post on the PIIGS situation should watch the video by German journalist Harold Schumann

https://www.youtube.com/watch?v=xu5sTyAXyAo

The Trail of the Troika is a good follow up with some excellent interviews. Its only recently the IMF has 'seen the light' and published the report saying that debt relief is necessary. Interestingly only after the recent knee capping of the Greek government and it being revealed that it was suppressed allegedly by the EU.

Maybe they realise the pitchforks are being sharpened!

[onlooker]

Great post Quinny which describes the situation in Greece and you can say it many places around the world. Now in reference to what you stated Outcast yes to some degree that is true. The playing fast and loose with the money of someone else or entities money is the latest manifestation of the lending regime. Also, if I recall lenders were much more wary of lending some 20 to 30 years back lets say. I think this is a reflection of the desperate attempts to infuse life into the economy and not something good. After all when you lend to a bankrupt entity what are your chances of being paid back especially in full.