Euro brinkmanship escalates as ECB shuts door on Greek bail-out – Telegraph

Jurgen Stark, the ECB’s chief economist to Greece: “Let them eat baklava”

“The country has not kept public accounts under control, nor worked to improve competitiveness. Greece is in a very difficult situation.”

via Euro brinkmanship escalates as ECB shuts door on Greek bail-out – Telegraph.

Clearly this isn’t the time to get long on the Euro.

Meanwhile, this statement by Greek finance minister George Papaconstantinou ranks right up there with ones made by Ken Skilling, Ken Lay, and Andy Fastow about how great Enron was in ’00 & ’01:

“Frankly we don’t need that clarification. We don’t expect to be bailed out by anybody as, I think, it is perfectly clear we’re doing what needs to be done to bring the deficit down and control public debt.”

Really? You’re doing what needs to be done? And just what is that, exactly?

Defaulting on payments to Swiss pharma companies?

Private placements of sovereign debt?

What you should be doing is making real fiscal reform which involves restructuring government programs (possibly privatizing them as well – oh the horror), restructuring the tax code, and begin the process of transforming the investing climate to allow for freer flows of capital.

Nothing like this is even being discussed, much less implemented.

But if it does come to pass, maybe – just maybe – we will see what the result is of profligate, ineffective, wasteful public spending and get our own fiscal house in order.

If we don’t, we’ll be praying to be the Wiemar Republic or Zimbabwe. Because we could end up as something worse.

Making payments in wheat, rice, crude oil, gold, silver, or precious/semi-precious gems. Wouldn’t that be something? Congratulations, your car now costs a 5 carat, D color, VS2, princess cut, diamond. Or the equivalent in rice. And you have to have it all with you at the time of purchase. Because a crisis of confidence for a fiat currency is not hyperinflation.

It’s bartering.

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Filed under finance, government, International, macro, Way Forward

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