Posts Tagged ‘Ireland’

Not Just Greece

Wednesday, July 22nd, 2015

Via ZeroHedge comes renewed information of a point I’ve hit home again and again: Thogh Greece is an extreme outlier on unsustainable welfare state spending in Europe, it’s also the canary in the coal mine, as toxic debt continues to rise all across Europe, with several countries exceeding a debt-to-GDP ratios of over 100%, including “Greece (168.8%), Italy (135.1%) and Portugal (129.6%).” Post-bailout (and bail-in) Cyprus is still over 100% as well, as is Ireland, though Eurostat didn’t have Irish DGP numbers, though supposedly the ratio should be trending down. And Spain and France are hovering just under 100%.

To my mind the great mystery is how Belgium’s debt-to-GDP ratio now tops 111% with such a fat cushion of Brussels Eurocrats to sit on.

The problem is not Greece’s only. The problem is that the western liberal welfare state, as currently constituted, is economically and demographically unsustainable.

I’m sure I’ve driven this point home to regular readers of this blog, but I’ll continue driving it home until our leadership class is actually willing to do something about it…

LinkSwarm for March 10, 2014

Monday, March 10th, 2014

Time for another LinkSwarm, sweeping up all the news that was happening while I was churning out Texas primary news:

  • “The uninsured just aren’t buying ObamaCare.”
  • A not-so-short compendium of all the people Harry Reid is calling a liar.
  • ObamaCare will slash wages by as much as $5 an hour for hospitality workers.
  • ObamaCare helps states transfer medical costs for imprisoned felons to Medicaid.
  • In Sean Trende’s latest senate simulation, Democrats are more likely to lose 14 seats than 0 seats.
  • Among those in trouble: Mo Udall. (Hat tip: Shall Not Be Questioned.)
  • Even Obama is worried that Democrats will get “walloped.” (Hat tip: Instapundit.)
  • This week’s Democrat caught beating his wife: Rep. Alan Grayson of Florida
  • Senate to Obama’s cop killer fan nominee: REJECTED!
  • But evidently Mary Landrieu and Kay Hagan are just fine with cop-killer supporters.
  • New York City’s new mayor is perfectly willing to screw poor black kids attending a charter school because it’s a non-union school run by his “political nemesis.”
  • Speaking of cities run by Democrats: woman’s mummified remains found in foreclosed Detroit house.
  • A great list of things Obama won’t even consider to stop Putin.
  • Time magazine continues its record of unrivaled prognostication: “No, Russia Will Not Intervene in Ukraine.”
  • “If economic success is all but criminal in France these days, why not depart for places that reward it instead?”
  • Israel intercepts more Iranian freedom missiles and happiness rockets in route to Hamas.
  • Nigerian Muslim defends daughter’s conversion to Christianity, pleads for multiculturalism and tolerance. Ha, just kidding! He hacked her to death with a machete.
  • “What Nigerian scams are to your grandfather, Bitcoin exchanges are to the 20-30 semi-tech-savvy libertarian demographic.”

    “The exchanges are based on layers upon layers of bad software, run by shady characters,” he writes. “The Bitcoin masses, judging by their behavior on forums, have no actual interest in science, technology or even objective reality when it interferes with their market position. They believe that holding a Bitcoin somehow makes them an active participant in a bold new future, even as they passively get fleeced in the bolder current present.”

  • The bigger the cushion, the sweeter the pushin’…
  • Can anyone derail the juggernaut that is Biden 2016?
  • Vaunted liberal tolerance rears its head in Ireland:

  • We have an early winner for “stupidest Critical Race Theory race-baiting essay” from Salon (natch): “Why I can’t stand white belly dancers.”
  • Meanwhile, National Review is celebrating Chinese classical musicians. Now remind me again: Which side is racist?
  • More on Critical Race Theorist/Social Justice Warrior types: “These people don’t listen to things like “logic” and “reason” when they are in one of their social justice tizzies. It’s not even worth trying to be kind or polite to them.”
  • Winners and Losers from the Texas primaries.
  • Greek Voting, Grexit, Spanic: Another EuroDebt Crises Roundup

    Friday, June 15th, 2012

    So Greeks head off to the polls this weekend to (theoretically) choose whether to muddle along with a “right” (for Greece) government that will actually attempt to carry out something vaguely resembling austerity, or for Alexis Tsipras’ far-left Syriza party, who intends to re-enact Clevon Little’s scene from Blazing Saddles: “Drop the austerity demands, or I’ll drop out of the Euro and refuse to let Germany bail us out anymore!” “Do what he says, do what he says, that Greek’s crazy!” It’s anybody’s guess whether Greece will opt to keep the farce going for another few months, or finally set the whole house of cards tumbling down.

    My guess is that there are still enough insiders who can benefits from dumping PIIGS bonds onto various sets of European taxpayers, so I expect that, one way or another, the Eurocrats will find a way to keep the charade up for another two or three months.

    In light of that, here’s a roundup of Euro debt news:

  • Forget grexit. The new hotness is Spexit and Spanic.
  • Which is why the EU just gave Spain a €100 billion life preserver. That should be good for, what, three months?
  • Which is why Fitch and Moody’s downgraded Spanish banks and debt.
  • Which is why Spanish borrowing costs have soared.
  • And Spain’s deal? Ireland wants some of that. And given the way Irish taxpayers were made to eat Anglo Irish Bank’s debts, I can’t say that I blame them.
  • And did I mention that Italy’s debt market might collapse?
  • Which explains why Italy is making noises about actual budget cuts and selling off state owned assets. Naturally, Italian unions are threaten to strike.
  • “By any objective criteria the Euro has failed, and in fact there is a looming, impending disaster.”
  • Tsipras has all but flipped Merkel off.
  • And Merkel fliped him off back.
  • Europe prepares for an influx of Greek refugees. And by “prepares,” I mean “prepares to keep them out.”
  • France and Spain want to dig faster.
  • Obama is boned because Europe is boned.
  • How the Euro will end: “Greece will simply run out of cash. Then Spain’s real-estate bubble will ruin an economy that really matters.”
  • Still not completely depressed about Europe’s prospects for escaping the trap created by their bankrupt cradle-to-grave welfare states? Well then, here’s some Mark Steyn to cruelly stomp on those last flickering embers of hope.
  • Have a happy weekend!

    EuroDoom for a Weekend in June

    Friday, June 1st, 2012

    How about a nice slice of EuroDoom to ease you into the weekend?

    With all the post-primary news, the European Debt Crises news has been chugging along for a while now. let’s look at some, shall we?

  • Heh. “The Euro cannot be destroyed by any craft that we here possess. It was made in the fires of Frankfurt. Only there can it be unmade. It must be taken deep into the heart of the European Central Bank, and cast back into the fiery chasm from whence it came!”
  • If the Leftists win the next round of voting in Greece, they promise to cancel the EU-sponsored bail-out and re-nationalize banks and companies. Way to calm the markets, dude! Not to mention reenacting Clevon Little’s famous scene from Blazing Saddles. “Experience is a dear teacher, but fools will learn from no other.”
  • “It is no longer a question of if, but how, Greece will leave the euro.”
  • The money flight from Greek banks continues.
  • And there’s this: “I can see only one mechanism that could force a collapse of the eurozone: a generalised bank run in several countries.”
  • In the showdown between Greece and the IMF, both sides deserve to lose.
  • NEIN! “Almost 80% of Germans reject eurobonds and 60% are against Greece remaining in the euro.”
  • Germany and Greece play chicken over the euro. That’s like a Mercedes playing chicken with a [ERROR: NO GREEK AUTOMAKER FOUND. ANALOGY ABORTED.]
  • Ireland votes yes on the Fiscal treaty, and then turns around with an implied “Now fork it over, Otto.”
  • Why Germany is great and Spain is totally screwed.

    It’s a winner-take-all world. Countries that do well have to do a few things extremely well. Germany makes the world’s best machine tools, some of the best heavy engineering equipment, not to mention autos. German manufacturing dominates innumerable key niches. The Spanish don’t do anything well. They haven’t done anything well since the Spanish Empire outsourced its manufacturing to Flanders in the 16th century.

  • And Spain is really screwed.
  • Which is why the Germans seem inclined to let them have more rope.
  • Though at least one source says reports of Spanish bank runs are exaggerated.
  • But even Germans are getting nervous. Also this:

    As a journalist told me yesterday, he worries whether the money in his pocket will be worth anything a year from now. Others worry about Germany’s increasingly negative image among recession-hit southern and eastern Europeans. Americans will understand this feeling well: you pay and pay to help others, only to have them turn on you in hatred and wrath, accusing you of horrible hidden motives and denouncing your selfishness.

  • Eurobills instead of Eurobonds?
  • EuroDoom Weekend Update

    Saturday, May 19th, 2012

    Good evening. I’m not Chevy Chase, and you’re not either. (Unless the real Chevy Chase is reading this, in which case: 1. Loved you on the original SNL, and 2. Stop being such a total dick.)

    The EuroZone crises has now reached the stage where European media is doing live updates.

    Take a look at this update: “German Chancellor Angela Merkel has mooted the idea that Greece should hold a referendum on the euro alongside its second round of elections next month.” Well, no use even pretending that the Greeks have a say in their own future, is there?

    The Zuckermutterobergroupenführer has spoken!

    In other EuroDoom news:

  • Paul Krugman is hardly a fat lady, but when even he says the Euro may end “in months, not years,” then maybe maybe the Euro’s opera bouffe is finally nearing the curtain. And just think: This Nobel Prize-winning economist is only two years behind Mark Steyn (not to mention myself).
  • The G8 leaders are trying to be more generous with Germany’s money.
  • The Wall Street Journal staff cover endgame scenarios.
  • Bank runs continue in Greece
  • and in Spain.
  • While the European Central Bank has cut off loans to four (unnamed) Greek banks because they’re insolvent. The only wonder is that any Greek banks are considered solvent.
  • No wonder Moodys is downgrading Spanish banks.
  • How bad will the Euro-collapse be? “This type of shock could produce instability at least as extensive as the aftermath of the collapse of Lehman Brothers.”
  • Why the Euro is doomed to fall apart. Besides all the obvious reasons.
  • Der Spiegel goes all Amityville Horror on Greece: GET OUT.
  • Speaking of prominent German media outlets slamming Greece (insert your own Cartman’s Mother joke here), can anyone tell me why the Greek finance ministry offices look like an episode of Hoarders? My German is a bit rusty to watch a 45 minute documentary, but what are in the garbage bags? Tax returns?
  • Spain is going to miss its deficit targets Also, unemployment is going to top 25%.
  • The difference between America and Spain.
  • Spain’s housing bubble gets compared to Ireland’s housing bubble, including how it’s getting ready to drag down the banking sector. Actually, it also sounds an awful lot like Japan’s housing bubble. But Spain’s economy isn’t nearly as strong as Japan’s…
  • One of the many ways France screws growing businesses.
  • No matter what Greece does, “the country faces years of austerity after years of mismanagement, whatever the election result. Even at the height of the global financial crisis, it was obvious the museum-piece economies of Europe, weighed down by bulging public payrolls, entrenched welfare state systems and archaic work practices, faced greater upheavals and decades of poorer living standards than the US.”
  • Record shorting against the Euro.
  • Obama wants Europe to keep digging. After all, the longer they can keep up the charade, the brighter his already-dimming re-election chances…
  • And given how much America is spending under Obama, we’re in no position to cast stones.
  • EuroDoom Roundup for January 11, 2012

    Wednesday, January 11th, 2012

    The race to a Euro-crackup seems to have slowed down to merely a jaunty saunter this week. Maybe once everyone made it to the New Year without a sovereign default, the Eurocrats might have breathed a sigh, confident that there’s still a few miles yet before they went over the falls

  • In The Wall Street Journal, Robert Barro provides a credible exit strategy for the Euro:

    Germany could create a parallel currency—a new D-Mark, pegged at 1.0 to the euro. The German government would guarantee that holders of German government bonds could convert euro securities to new-D-mark instruments on a one-to-one basis up to some designated date, perhaps two years in the future. Private German contracts expressed in euros would switch to new-D-mark claims over the same period. The transition would likely feature a period in which the euro and new D-mark circulate as parallel currencies.

    Other countries could follow a path toward reintroduction of their own currencies over a two-year period. For example, Italy could have a new lira at 1.0 to the euro. If all the euro-zone countries followed this course, the vanishing of the euro currency in 2014 would come to resemble the disappearance of the 11 separate European moneys in 2001.

    Of course, this would mean that any bonds from the PIIGS with a maturity date more than two years in the future would trade at a heavy discount, but that’s far preferable to the looming Euro crash. But a bigger problem to this proposal actually being implemented is that it reverses the drive to centralize European bureaucracy, and Eurocrats will never stand for that.

  • Speaking of PIIGS bonds, there are more downgrades coming.
  • Could Spain be the next of the PIIGS to go bust?
  • There’s a good chance that Germany will let the Euro die this year.
  • Also, Germany’s economy is shrinking.
  • Denmark says no thanks to the new financial transaction tax.
  • For some reason, Greece is still able to sell six month bonds
  • …despite continuing bank runs. “All faith in the country’s banks has now been lost and Greece is officially a zombie economy.”
  • Hell, Greece can’t even afford asprin.
  • The government might have a bit more money if they didn’t subsidize pedophiles.
  • The strange conversion of Irish Euro-skeptic Declan Ganley to proposing a “United States of Europe”.
  • (Hat tips: Insta, Ace (most of the Greek stories), and Sundry.)

    European Union to Become SuperDuper European Union

    Friday, December 9th, 2011

    Let me see if I can get this straight:

    UK Prime Minister David Cameron, objecting to the Deutschland Uber Alles renegotiation of the Maastricht Treaty, is now causing the creation of a new SuperDuper Europe, with Germany reoccupying the Rhineland taking leadership of the whole shebang, finally erasing the rest of the continent’s reluctance at receiving orders from Berlin?

    I mean, when even the Europhillic New York Times says that “Twenty years after the Maastricht Treaty, which was designed not just to integrate Europe but to contain the might of a united Germany, Berlin had effectively united Europe under its control,” maybe the citizens of those stodgy old entities we used to call “countries” should consider the possibility that they might may be making a mistake. I am especially surprised that the non-Euro-using generalgouvernement Poland gave in so readily, as their previous experiences with rule from Berlin have been less than exemplary.

    But what’s sacrificing the last of your country’s vestigially sovereignty compared to the glorious dream of saving the Euro?

    Assuming, of course, that forging this Pact of Steel (including a 500 billion Euro bailout fund) actually saves the Euro, which is a dubious proposition at best. And at least one U.S. general says we should be prepared for civil unrest if Euro ends up exploding anyway.

    The irony, of course, is that David Cameron, the wetest Tory Wet PM since Neville Chamberlain, refused to give in to another Eurotreaty British citizens wouldn’t get a chance to vote on less than two months after refusing to allow a vote on the previous EU treaty British citizens were not allowed to vote on. It would be ironic if Cameron actually ended up pulling the UK out of the EU because, in a moment of weakness, he actually exhibited rare and uncharacteristic streaks of firm principle and common sense.

    Will the citizens of Europe actually get a chance to vote on this Reich closer European integration? Doubtful. Ireland’s Taoiseach is being “cagey” about a vote. (Translation: Fark no, you peasants won’t get a vote.) I doubt any of his brothers in Europe’s Permanent Ruling Class will feel any less “cagey.”

    Through a thousand small steps, from committees and working groups and consultations and emergency decrees, Eurocrats have done their very best to remove power for all important decisions from the hands of the people and entrust it into their own well-greased palms. And also, not so coincidentally, to avoid taking the blame for the ruin their cradle-to-grave welfare states, and the huge and ever-growing debts necessary to pay for them, have made of Europe’s once free nations and productive economies.

    Other Eurozone news, some possibly stale and out of date:

  • Jim DeMint says the best way for us to help Europe is not to help Europe.
  • Portugal’s economy is shrinking.
  • Moody’s downgrades French banks.
  • Problem: Possibility of sovereign debt default means bond downgrades. Solution: Create a bailout fund. problem: Downgrade of bailout fund. Solution: ?????
  • Europe’s Coming Inflation:

    For years, Europeans loved to lecture Americans on the both the safety and soundness of the continent’s banking system as opposed to our own, and how their economic system worked so much better than ours. Well, one lesson of the 2011 financial crisis is that many of their banks are probably in worse shape than the US banks were in 2008.

    At least our banks’ troubled investments were tied to real estate, which may rebound once our economy improves. Their banks are holding debt tied to some of the world’s least productive, no-growth countries.

    Why so underproductive? Most of the evidence points to the failure of the European welfare state.

    Europeans loved to lecture Americans on how government-run health-care and cradle-to-grave entitlements provided such safety and comfort for the masses. People supposedly didn’t mind paying higher taxes because it enhanced their standard of living.

    Until, of course, it didn’t enhance anything — and Greece, Italy, Spain and Portugal face the collapse of their safety nets because they can’t borrow to pay for them anymore, even as unemployment is rampant. (Meanwhile, France is not far behind.)

  • Ten Days to a EuroZone Collapse?

    Monday, November 28th, 2011

    So says a piece in the Financial Times, here excerpted from behind the paywall.

    Things are moving very fast indeed on the Euro front:

  • U.S. banks stop lending to European governments. While this is good news, the possibility that the Fed may rescue Europe is very, very bad news. Our own life raft is barely treading water, and now liberals want us to invite a dying elephant to climb aboard.
  • And not the Fed, then the IMF, which America also funds to a large extent.
  • This article from Der Spiegel is a good roundup on consensus wisdom, which boils down to the rest of Europe wondering why Angela Merkel won’t just give in and pay their bills.
  • There’s word she might even do it, but only if she can get France, Finland, the Netherlands, Luxembourg and Austria to join Germany in issuing “elite” Eurobonds. I mean, what’s another trillion in taxpayer equity flushed down the toilet in comparison to the beautiful dream of European integration?
  • Even Poland wants Germany to take a more active role, something that has not traditionally brought Poland tidings of comfort and joy.
  • Daniel Hannan at NRO provides a nice summary of the state of play:

    From the beginning, the Brussels elites made it clear that, to adapt Abraham Lincoln, their paramount object was to save the Union. Never mind if that meant imposing epochal poverty and emigration on the southern members, and unprecedented tax rises on the northern. Never mind if it meant toppling the elected prime ministers of Italy and Greece and replacing them with Eurocrats (respectively a former European Commissioner and a former vice president of the European Central Bank — two perfect specimens of the people who caused the crisis in the first place). They were prepared to pay any price to keep the euro together — or, more precisely, to expect their peoples to pay, since EU employees are generally exempt from national taxation.

  • How expensive will a Euro bank bailout be? Keep in mind that at one point during the 2008 meltdown, Morgan Stanley owed Uncle Sam $107 billion. With a B. For one bank.
  • In the mid-1990s, Bulgaria got a good look at a currency meltdown first-hand. They only recovered by adopting a currency board for the Lev (which is exactly what Steve H. Hanke and Kurt Schuler had suggested in 1991.)
  • The British Foreign office is already planning for a Euro collapse.
  • A general strike shuts down Portugal.
  • Finally, one Irish commentator puts things in purely mercenary terms:

    The only beneficiaries of the State’s assumption of [Anglo Irish Bank]’s liabilities are taxpayers in the countries whose banks were the reckless lenders to Anglo. Anglo, for all the guff at the time of the bank guarantee, had no systemic importance to the Irish economy. Irish taxpayers had no moral or other liability for its debts.

    The sole reason for saving it was the ECB’s insistence that no euro zone bank should fail. Had Anglo failed, the costs would have been borne primarily by European banks and consequently by European taxpayers.

    So the undertaking by the Irish State to stump up €47 billion to pay those private debts is an act of extreme (if extremely demented) euro-altruism. We are Europe’s ragged-trousered philanthropists, bailing out the euro with money we don’t have and that our European partners are kindly lending us at penal interest rates.

    And this single act of insane generosity wipes out every red cent we’ve got from Europe since 1973.


    And for what? For less than nothing. For a moment of panic, a daft notion, a stupid indulgence in bluster and bravado. Some bleary-eyed fools decided, in the middle of the night, that they could bluff the markets by throwing all the chips we might ever have on to the table. It didn’t take long for the markets to realise that their hand contained nothing better than a pair of deuces.

    But the gamble failed for Europe too. There might be some kind of (very expensive) pride in being able to say that little Ireland took the hit to save the euro zone, like the starry-eyed gal who takes a bullet for the outlaw in a corny western. But we saved nothing. All we managed to do was to buy the euro zone leaders more time in which to delude themselves that there was no real crisis.

  • More Greek Default Rumblings

    Sunday, September 25th, 2011

    Actually, less rumblings than the roar of an approaching train. And since I temporarily seem to be ahead of the latest Ace of Spades Doom roundup, I’m going to try and give you a nice clear view of the coming crash.

    “No longer a question of if, but when – that is the tone of discussions over Greece which has dominated the summit of finance ministers in Washington over the weekend.” Former Britain’s former finance minister Alistair Darling agrees, calling default “only a matter of time.”

    The talk now is of how to put in a “firewall” to prevent the contagion of an inevitable Greek default from spreading throughout the European banking system.

    The Euroskeptics have been completely vindicated:

    Very rarely in political history has any faction or movement enjoyed such a complete and crushing victory as the Conservative Eurosceptics. The field is theirs. They were not merely right about the single currency, the greatest economic issue of our age — they were right for the right reasons. They foresaw with lucid, prophetic accuracy exactly how and why the euro would bring with it financial devastation and social collapse.

    I think at this point UK residents should be feeling vrey glad indeed that they didn’t abandon the Pound for the Euro.

    Bret Stephens talks about the long line of deceit and fraud that lead Europe to the current crises. “What is now happening in Europe isn’t so much a crisis as it is an exposure: a Madoff-type event rather than a Lehman one.”

    Mark Steyn, using the ever popular music and political metaphor gambit, compares the breakup of the Eurozone with the breakup of R.E.M. while bringing the usual Steyn goodness: “Attempting to postpone the Club Med welfare junkies’ rendezvous with self-extinction will destabilize internal German politics (which always adds to the gaiety of nations).” And this:

    As its own contribution to the end of the world as we know it, the Obama administration has just released a document called “Living Within Our Means and Investing in the Future: The President’s Plan for Economic Growth and Deficit Reduction.” If you’re curious about the first part of the title — “Living Within Our Means” — Veronique de Rugy pointed out at National Review that under this plan debt held by the public will grow from just over $10 trillion to $17.7 trillion by 2021. In other words, the president’s definition of “Living Within Our Means” is to burn through the equivalent of the entire German, French, and British economies in new debt between now and the end of the decade. You can try this yourself next time your bank manager politely suggests you should try “living within your means”: Tell him you’ve got an ingenious plan to get your spending under control by near doubling your present debt in the course of a mere decade. He’s sure to be impressed.

    Germany is near the limit of their willingness to bail out Greece.

    There may even be a taxpayer revolt brewing in the Aegean.

    And if the other PIIGS are doing better than Greece, it is only a matter of degrees: “Italy is the new Lebanon, Portugal the new Venezuela, Spain the new Vietnam, Ireland the new Argentina and nothing is more risky than Greece, according to today’s credit default swap market.”

    But it’s not just Greece and Europe that are hitting the wall. China’s housing bubble may finally be bursting. Worse still: “growth in China may be zero [and] China has ‘European kind of numbers’ when it comes to debt.”

    And the Chinese housing bubble isn’t just affecting China. It’s also affecting Canada.

    And at least one observer has drawn parallels to a certain hopemonger currently residing in the White House:

    Obama has no intention of really solving the debt crisis. And that brings us back to Greece. That government has been doing the same thing for a decade and the chickens have now come home to roost. Greece’s debt is 150 percent of its Gross Domestic Product. Our debt has just reached 100 percent of GDP and the debt is accumulating faster than it ever has. If we were looking out the windshield down the road, we could see the crash that’s just up around the bend.

    But rather than put on the brakes, the president has chosen to pick a fight with the other passengers in the car he is driving. Talk about distracted driving! He is gambling that this fight will convince the passengers to let him stay behind the wheel for another four years. But we certainly can’t wait that long. He’s turned up the radio in hopes we won’t hear the ambulance sirens.

    It looks like its going to be another rough week for world markets…

    Update on the Coming Euro Collapse (and Our Own)

    Monday, June 6th, 2011

    Andrew Lilico in the Telegraph (via McArdle, via Insta) has a sobering look at what will happen when Greece defaults (“It is when, not if”). It starts out:

  • Every bank in Greece will instantly go insolvent.
  • The Greek government will nationalise every bank in Greece.
  • The Greek government will forbid withdrawals from Greek banks.

  • And then gets even less pleasant, including martial law and the European Central Bank going insolvent. The real European crisis hasn’t happened yet, and when it does, it will probably be much worse than the current U.S. recession.

    Meanwhile, Greeks continue to protest long-overdue austerity measures. I am doubtful Greece is willing to actually implement real austerity. After all, the Greek government only recently decided that it might want to stop paying pensions to the dead. instead of solving the problem of an out-of-control welfare state, the ECB and the IMF have decided to let Greek slip even further into debt in exchange for implementing reforms and austerity they’ve shown no signs at all of being willing to implement; in other words, to kick the can down the road and hope that gives the other PIGS time to get their respective houses in order before the Euro collapses.

    Meanwhile, Ireland’s crisis is so severe that not only are they going to start taxing private pension funds, they’re actually going to start fining trustees that don’t hand over pensioner’s money. “Threatening scheme trustees with huge fines that are not covered by trustee indemnity insurance if they refuse to or cannot collect the levy, is a guaranteed way to stop anyone coming forward to be a trustee. I expect the other consequence of the Finance Bill (no 2) 2011 will be the resignation, post-haste of hundreds of scheme trustees.”

    The chances that various transnational and euro bureaucrats will succeed in rescuing all the PIGS (and thus the Euro) is slim to none: “The ‘troika’ [ECB, IMF, EU] is doubling down on its losing bet in Greece and is playing with the dice loaded against them.”

    How bad is it going to get?

    Austerity is going to mean hellishly bad deflation, high and rising employment, and depression in the indebted countries.

    There is $600 trillion in derivatives now loose in the world. Who knows which banks have written them and to whom? Who are the counterparties? We did not fix this with the last political fix. The next crisis has the potential to be just as bad or worse than 2008, which is why I think Europe’s leaders are so dead set on avoiding a day of reckoning. If you look under the hood, as they most assuredly have, it must be frightening. And with pushback from voters?

    Contagion, thy name is Europe. And with the US economy slowing down, it might not take much to push us over the edge

    And that’s the best case scenario, the one where the PIGS actually bite the bullet and implement austerity. It’s entirely possible that one or more of them will reject austerity measures and, in doing so, set off a run on the Euro.

    Also via Insta comes news that China has divested itself of 97% of its holdings in Treasury Bills. As Mark Steyn has pointed out, where Greece is now is where Obama wants to take us, with ObamaCare as just the down-payment on a full-blown European welfare state. We’re not nearly as far along as Greece is to financial collapse, but our debt is already starting to look like a bad bet.

    Certainly we’re not so far along that we can’t turn back, but the Paul Ryan Roadmap is probably the minimum we need to be doing to get our debt under control. Less than that and we’re asking for serious trouble. It’s already looking like Carter era stagflation is here.

    As the recent Texas legislative session showed, it is in fact possible to actually shrink the size of government, not just slow the rate of increase. Or at least it’s possible when you have Republican Supermajorities in the House, Senate, and Executive branch. By contrast, the Obama administration and Harry Reid’s Senate have shown no sign of being willing to address the problem, or even to admit it exists. They too want to kick the can down the road and keep piling blocks of debt onto the backs of your children. But, as the Euro crises shows, such actions have a way of catching up with you sooner rather than later.

    You can only kick the can down the road so far before you run out of road.