Zerohedge highlighted a very tragic, but important documentary telling the story of Greece since they joined the Euro in 2001. Its in German, but the video is pretty self-explanatory for much of the time.
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| The Terminal Decline of an EU state |
*a poster 'Day of the Tentacle' in the original ZH posting did a translation - scroll down the comments, you'll see a thread of posts summing up what is said.
This
direct link should work for most of you
ZDF video link
Where Greece goes, the rest of the EU is also headed
I rarely talk about macro-economics here - despite it being listed in my main site title, hey, I'm more of an economist than a trader anyway. Yet, I'll try to keep this short.
Greece - like much of the EU, Japan, and even much of the USA, entered a severe recession in late 2007...and contrary to the mainstream view, we never actually left. Sure, the GDP numbers appeared to show a recovery, but underlying the 'headline numbers' on the various clown channels, the economy of much of the western nations never recovered. Jobless numbers never really fell, and are still rising across many nations. Youth unemployment in Spain is over 50%, how is that not already an 'end of the world financial depression'?
Worse of all, due to the sheer idiocy and still near complete denial of the western cultures, they are unable to face the reality, make severe life style changes, and start to re-build for what will be some difficult decades ahead. Instead, we've seen endless short term political gimmicks since the 2008 collapse wave, property subsidies, 'cash for clunkers'...etc etc. I almost don't blame the politicians though, they are merely doing (well, most of them) what the ignorant masses continue to requests.
Spend..spend...and keep spending.
So, we have the ECB, Japan, and the Federal Reserve all printing in periodic bouts of QE, to fund the Govt' deficits to support the excessive spending. I suppose its possible it'll end in complete hyperinflation - despite the underlying deflation in some asset classes, but..regardless of whether that happens, the real problem is that of the gross societal denial. How many are we talking about here? 50% ? 90? Considering the voting in elections, I'd guess barely 2 or 3% of the culture are have even a childlike understanding of what has happened since the property bubble blew up in 2006, and most important of all, the 'why'.
Yet, many - even those on Zerohedge, talk of 'an awakening' in the population, err, no. A few percent awake is not going to be enough. Anyway, history never ends with Disney-style endings. Almost always, the end is bloody, revolutionary...and can take many decades to eventually get back to some semblance of normalcy.
Its this denial across mainstream society that makes any 'real economic growth' impossible now. The Bernanke could issue a 1000 trillion of QE, it won't make any difference to the productivity of 'real' goods. The only thing that changes would be the numbers in the periodic econ-data reports.
Who is next to fall after Greece?
How long until other EU nations start to implode like Greece? Spain is not far behind, that's absolutely clear. Italy is also chronically overspending. The other PIIG nations of Ireland and Portugal, they are also suffering badly. I suppose Ireland might be able to cope - they sure are battle-hardened after centuries of problems, yet...even they remain largely in denial.
What remains especially tragic is that Greece is seemingly going to be 'let go', and then the remaining nations will likely being to play a new game - trying to never speak of 'that ex' member' again. It will become almost a taboo amongst the political leaderships of the various EU member states.
Eventually, a majority of the society will wake up, but based on many past instances, that will probably take decades.
Anyway, watch the video at some point this week. I highly recommend the video, its 43 minutes, and despite being in German, with the ZH translation summary, it is still very much worth watching.
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