AFTER THE MASSIVE (QUANTITATIVE EASING) CASH INJECTION INTO THE MARKETS,
WHY DOES THE EURO HIT AN ELEVEN-YEAR LOW ON LITTLE GREECE A FEW DAYS LATER?So, no sooner had the new ''extreme leftist'' Alexis Tsipras been declared winner of the Greek election, than the Euro fell to an 11 year-low.
So, why are the markets jittery? Why is this euro currency diarrhearing like a harsh punctured balloon, at the advent of a leftist to the top in some small off-pace economy on the outskirts of Europe?
Greece has a GDP hardly the equivalent of the
Munich metropolitan area in Bavaria Germany. Greece is small change,
her 10M people can fit in the Berlin metropolitan area. If the once mighty Euro is so nervous about a miniscule Athens, what would that say about her other bail-out candidates, say the war-like
Ukraine @50m people!? bigger than Spain, (even after you hive away Novorussia and the Crimea).
So I think the explanation lies elsewhere, in the
realm of politics. This is a rebellion by the people.
A rebellion against bankers and the corrupt politicians in their pockets pushing the orthodoxy of austerity to further line their pockets. For really, how did Greece get this far? Was it not more-or-less an evil conglomerate of corruption, involving banks, rotten Greek bureaucrats and politicians themselves, Greek oligarchic business class and a sheepish, uncritical population, mentally away on siesta as their country burned.
Greece occasionally cut the picture of a banana republic. The best anecdote was this Greek islands where, reputedly,
there were more bureaucrats at the municipal hall, than inhabitants to be served; more teachers than students, etc etc, 30 years long!
That is the kind of story which, seen from Germany, creates a loathing and prejudiced disdain. But it was also the kind of lazy indiscipline which, to greedy Northern bankers, sure
the risks would be covered
eu-wide, smelled of a scene to a kill. They gave the Greeks the rope to hang themselves or, otherwise said, the free credit-card to bankrupt themselves. It was a dangerous game which cut both ways. The bankruptcy of Greece would be the bankruptcy of several big French, German and Dutch Banks too. Bailing out Greece, was merely bailing out these banks.
It took the Greek electorate some cycles to realise this. And vote the anti-austerity party. That is the dangerous precedent. this waking up, this consciousness. The message could catch up with the other sacrificial lambs, the other tax-payers in the other countries who, too, have been ripped to pay the bail-out for banks, only for the bankers to further increase their bonuses without reforming the rot in the system.
The Greek rebellion could, in the worst case scenario, become contagious and develop into a full-fledged rebellion against the status-quo in Brussels, where the eurocracy is docile to bankers.
It is the fear of the deligitimation of their puppets in Brussels and the various European capitals, these marketeers and bankers who speculate and control the currency and the policies around it, which is registering on the Euro, making the currency nervous.
Think of it this way: just a few days before the Greek election, the financial markets were in a state of euphoria: why? Because Mario Draghi, chair of the ECB, rushing headlong into a policy called quantitative easing, had opened the floodgates of cash on the banking system.Why would tiny Greece prick the bubble? Send the spirits of the market into a dark depression that fast?
What a wishy-washy market! What a nervous wreck! A schizophrenic junkie at best!
Money is not the problem. Repaying debt is not the problem. Methinks the problem is politics. The threat of radical change. Some kind of haunting sceptre.
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Actually I rather do this at the
eurozone deathwatch thread.
