There is something rotten in the state of Greece. Also in Ireland, Portugal, Spain, and Italy.

Europe is patting itself on the back as they supposedly work out a fix for Greece. Basically, Greece will get billions more Euros in exchange for spending cuts. As a result, Greek interest rates fell slightly, though they are still very very high.

Greece 10-year interest rate:

Greece 2-year interest rate:

Great job Greece and Europe! The 10-year interest rate in Greece is now only 16.81%. And the 2-year rate is down to 29.38%. A job well done, indeed!

But wait a second there Europe. Don’t drink your champagne just yet. What about the rest of Europe?

Ireland 10-year interest rate:

Portugal 10-year interest rate:

Spain 10-year interest rate:

Italy 10-year interest rate:

Very puzzling. Why are those interest rates rising to record highs if you solved the problem? I’m starting to think you don’t know what you’re doing.

6 responses to “There is something rotten in the state of Greece. Also in Ireland, Portugal, Spain, and Italy.

  1. Thanks for another of your wise and entertaining blogs, Michael.

    I appreciate your dry wit – as it is obvious that you are one of the few who are not “in on the game” who is fully aware of what is going on here.

    Have you come across HG Wells amazing Dream Book “The Shape of Things to Come” ??

    Wells wrote this in 1933, some 35 years after he wrote his sci-fi classic “The Time Machine”. It contains eerie predictions and unpleasant prophesies of the rising of a New World Government. He predicted the Hitlerite Empire starting World War 2 by marching into Poland (though he was 6 months out). He predicted Wikipedia (by 2012, so 10 years out). He didn’t predict Wikileaks though, or cyber-wars or info-wars, which is interesting.

    Wells did predict wars being carried out in currency and financial markets (not a novel prediction since many of the pre20th century European wars were of course “Pelham One Two Three” type events – gaming events, like those you show in your graph ??

    As Well’s comments of the “Age of Frustration” chapters of The Shape of Things to Come we live in “an age of increasing mental uneasiness, of forced beliefs, hypocrisy, cynicism, abandon and impatience..”

    Mind I’m not sure whether we live in an “Age of Frustration” still or are already in the “Age of the New World Government” as Wells stratified them. My best guess is that we have fluid combinations of elements of both, in different concentrations, in different parts of the globe.

    Australia, well we have Tasmania, the ACT, the Northern Territory, to a lesser extent South Australia, which in our Australian USSR [united socialist workers commonwealth, a USWC = a USSR]. These 2 States are very much socialist governments without economies (mighty public services with no private sectors attached), and our marginally healthier States (Victoria, Queensland, South Australia and New South Wales) are pretty far down the path to that kind of tyranny as well.

    So I leave you with 2 predictions. The first is that Australia is probably the prototype of a united nations style One World Government (Note our small size, our physical and technological isolation, and our centuries of (mostly falsified) history as a social laboratory of the Northern Hemisphere – we started out as a little open prison colony – a cheaper British alternative to Jeremy Bentham’s panopticon prison idea, or the leaking prison hulks on Thames).

    The second prediction is that sooner rather than later, if we were economically significant enough in world terms as Greece, Ireland, Portugal, Spain and Italy, you could easily add an Australian bond yields graph to this blog, and express equal puzzlement.

    Keep the good blogs coming. I look forward to reading Angry Mobs and Founding Fathers soon (and wondering why, still, we’ve had none of neither, to write about in 224 years of White Australian History).

    James Johnson
    Independent Federal Candidate for Lalor
    Constitutional Human Rights Advocate
    Solicitor and Barrister of the High Court of Australia
    (Celebrating 20 Years of Legal Practice 1990 – 2010)

    • A brief reply to your long comment:

      Australia does have a major advantage over Greece, Ireland, Portugal, Spain, and Italy. Australia has abundant natural resources whereas those nations have little. In fact, I struggle to think of what some of those European countries actually produce except for welfare.

      Of course, having natural resources does not protect you from stupid government policies, but it gives you a margin of error.

      The United States has the largest margin of error, of course, but we will be heading in that same direction if our government continues to grow (currently around 42% of GDP) and our debt keeps rising (currently about 80% and rising by about 7 percentage points per year, though that excludes unfunded liabilities).

  2. Have to keep the bankers happy, Michael. Does anyone really be that Greece will ever pay back these loans? Not a chance in hell. So the US through its participation in the IMF will be out a few more billions of dollars. On top of that, many of the European banks that are holding Greek bonds have bought credit swaps from US banks as insurance. So when Greece takes its final swan dive, our TBTF banks will be looking to our taxpayers to bail them out again. I hate banksters.

    • Few believe that Greece will pay out in full. That’s why they are paying 27% interest rates.

      When the EU/IMF bails out Greece, again, focus will simply shift to Portugal as the next to need a bailout. Portugal, like Greece, is small potatoes. Now if a larger country, like Spain or Italy, needs bailing out, that’s when we start getting into real pain.

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