What happens when you can’t pay your debts?
Well, normally you simply go bankrupt. Greece has discovered that since it joined the Euro the game of not being able to pay your debts is played in a slightly different way. The last time this happened, the ECB decided it didn’t really want Greece to go bankrupt because they would be left with an enormous debt on their books. There were other complications too. If Greece could get out of paying its debts by declaring bankruptcy then chances are, other countries like Spain, Cyprus, Portugal and Ireland would all follow suit.
Greek debt – the paper money fiasco continues
When you’ve managed to con everyone into thinking that a common currency, the Euro, can solve all of Europe’s problems you really don’t want the whole thing to unravel in front of you. So the ECB did what central banks always do, they bailed Greece out with a bigger loan by simply printing more money. Shame they didn’t read my newsletter. I’ve just gone through my members list and you know what? I can’t see a single member who works at any of the central banks. That’s a real shame because I keep telling everyone:
“You cannot solve a debt problem with more debt”.
The Greek debt is no different to any other debt. It’s not that I’m being clever here – we all know this is true. It’s just that the banks are stupid enough to think they can keep getting away with it and let’s be honest, they’ve been getting away with it far longer than anyone would have ever thought possible.
Few people seem aware of the fact that very little of the money from the last round of lending to Greece ever found it’s way to the Greeks. Over 92% of the 284 billion dollars lent to Greece went straight back to the banks in interest repayments. The Greeks have realised that they will never be able to pay back what it owes. I suspect they have known for some time.
Soon everyone will realise they can never pay back the huge sums they have borrowed. Isn’t it a banker’s job to realise long before anyone else?
Greek debt – who will pay?
Officially the smelly stuff hits the fan on the 28th February but, with the usual delays in the system, today is really the last day to realistically sort it out before the Greek banks run out of money. It’s the last day for the ECB to try and fudge the loan for another six month OR accept the fact that the Greeks are bankrupt and cannot pay back the money they owe.
Meanwhile the silly game of politics continues. What a farce. The Greek debt symbolises everything that is wrong with fiat currencies and the central banks that control them.