I’m sure by now you’ve heard about the Greek bank holiday which went into effect today June 29, 2015. Greek citizens are only allowed to withdraw 60 Euros a day, and capital controls have been enforced. The Dow J fell -350.33 points today, but I wouldn’t be the least bit surprised if the Dow made the loss back in a month. The S&P was down -43.85, and the NASDAQ was down -122.04. In other negative market related news; Chinese stocks have taken a hit in the past few days, and are in the midst of a bear market, and Puerto Rico has just informed the U.S. they are calling for bankruptcy.
It’s not all bad news however, because in the midst of the crisis in Greece, the almighty dollar has risen in strength. My cynical side understands it’s all relative because the cash printers here in the USA will continue to run through the night to devalue our dollar, but keep the illusion.
It’s in Greece’s best interest to leave the Euro and bring back the drachma. I’m not sure if anyone wants to loan them money to paper over the problem for a few more months, and I think it’s pretty clear that Greece will not be able to pay back any loan which the IMF offers. I don’t think the IMF cares whether the Greeks accept a new loan, but the Greeks had better care. The IMF is like the drug pusher, and Greece is the addict. Sure, one more fix will make you feel good and get everything on track, but in a few more months the Greeks will be at the door begging on their knees for another hit.
The Greeks are better off strapping themselves to the bed and going cold turkey. They will have to deal with the cold sweats of civil unrest, and the shakes of food shortages that are sure to come, but there is no avoiding the situation. Despite strong words from Greek finance minister, Yanis Varoufakis, Greece is basically screwed.
The bankers can and will keep the world economy going for as long as they wish, so don’t go jumping off buildings 1920’s style thinking it’s the end of the world. Greece will most likely have to accept default and suffer the austerity. I feel bad for Greek people, because it’s going to very, very hard on them. Though we still live comfortably here within the American Empire, we should recognize Greece’s suffering, and take the lesson to heart.
In the fields of observation chance favors only the prepared mind
~ Louis Pasteur