July 10, 2013

Those Who Cannot Remember the Past are Condemned to Repeat it

Greece is hiring Goldman Sachs to sell-off two of its banks. Expect Greece to be underpaid and Goldman to profit as the Troika further erodes Greek national interests.

"Those who cannot remember the past, are condemned to repeat it"- G.Santayana
Greece has been in the headlines for all the wrong reasons over the past 5 years. The first country to require an ECB/IMF/EC (Troika) bailout, Greece has been rocked to its foundations since almost defaulting on its government debt back in 2009/10. Bailout money was only provided conditional on savage austerity measures that have raised unemployment, decimated the national economy and left the government in constant turmoil fuelled by regular riots and demonstrations.

As the Greek economy began to unravel in 2009/10 it was revealed that Greece was manipulating official statistics and engaging in creative accounting, courtesy of help from Goldman Sachs. For a sturdy fee, Goldman helped the Greek government take on more debt without disclosing it as an additional debt. They effectively helped Greece to create money out of nothing purely for short-term gain and without consideration for the future.

This sounds eerily reminiscent of current Fed policy but leaving that aside for the time being..... It is now known that the currency swaps responsible for the billions in additional liabilities will cost Greece much more in real terms than previously thought. Goldman's fee will equal what was previously thought and rise in proportion with any factors Goldman finds appropriate to stipulate.

The banking cartel is growing in size, liabilities and influence but falling in terms of transparency, accountability and legitimacy. In recent years, there has been widespread talk of additional regulation, better capital adequacy, less leverage, less risk taking etc - all that has been rhetoric and illusion. The reality is that the agenda being enacted by colluding G20 governments goes much deeper than economics or trading.

A single Banking Union is the priority for EU officials. Stable growth and inflation are distractions which are more likely than not, also fabricated when required. It's taboo to say that 7.5% unemployment in the United States is a manufactured myth but if given some thought; how can unemployment be only 7.5% when almost 48 million people (15% of total population, 23% of adult population) rely on food stamps each month? Don't try to make sense of it because it makes no sense i.e. the employment statistics are skewed, warped, modified, adjusted, recalculated, re-estimated - whatever it takes to ensure the status quo rolls on.

So its without much surprise that we see Goldman once again being at the sharp end of assistance to the Greek state. What's becoming increasingly clear is that the financial crisis has only made the culprits (banks, central bankers, policymakers, regulators, ratings agencies) even more influential and immune while the victims (homeowners, borrowers, consumers, SME's,) even more victimised.

The greed and exuberance that created the financial crisis have only strengthened and reinforced each other, contrary to what the mainstream media is reporting.

Commissioned by Think Forex