The squeals of indignation as the politicians meet reality.
Compounding the trauma, Christine Lagarde, the French finance minister turned IMF chief – and one of the few key players who appeared to be enjoying herself in her new headmistress-like role – issued a grim warning to her former European peers.
The IMF would no longer be willing to pick up a third of the total bill for rescuing Greece, a contribution worth €73 billion, unless European banks were prepared to write off 50 per cent of Greek debt.
\”It was grim. The worst mood I have ever seen, a complete mess,\” said one eurozone finance minister.
There just isn\’t any way out of a Greek default and yes that does mean that banks who hold Greek paper are going to have to take a loss.
And one of the reasons this is all getting so dangerous is that it\’s taken the politicians 18 months to recognise this reality.
“unless European banks were prepared to write off 50 per cent of Greek debt.”
If they haven’t already, the directors really do need to be jailed. Now.
Why the (or just) the directors?
Remember, the Greek govt was not , how can one say it?, full, frank and transparent over the amount of debt they had?
If anyone is to be at the head of the queue for imprisonment, it should be those who borrowed, not those who lent.
I think what is interesting there is the dime that Christine Lagarde has turned on. A few short weeks ago, she was one of the piggies squealing so loudly. Now she is the one twisting their curly little tails.
Something has happened. I assume she is briefed by her own Sherpas. But what do they know that her former Sherpas now briefing the French government do not? She has been captured by the interests of her new job so fast? I guess a certain moral and intellectual flexibility was always a priority for politicians. As well as a vacuum as far as actual belief goes. It is rare to see it so brutally displayed.
The interesting thing for me about this whole crisis is that it has become inescapably apparent that all but an error-margin prpoportion of politicians and nearly as many people in the banking industry do not understand the theory of money, or banking, or economics in general. It is like watching public health officials trying to deal with a plague, who do not know the germ theory and believe in astrological causes. Quite fascinating, and very frightening as well.
It seems to me that the problem is that a vast amount has been written on economics, and it is very complicated and mind-boggling, such that most people give up believeing they can ever really understand it, even bankers and public officials and economists, but virtually all of that which has been written is simply wrong and can be ignored, and really it’s all rather simple.
As another analogy, it is like the trillions of words of theological theory and debate and discourse. It is all very complicated and you could spend a lifetime trying to grasp it all. But it’s all actually wrong; there are no gods. You can throw away all of theology.
These people don’t know what they are doing. They don’t understand money, and they don’t understand the banking system they themselves operate. That is why they cannot begin to find a way out of the current disaster. As I said, both fascinating and frightening.