Greece and beyond

(Source: BBC, Bloomberg, Der Spiegel)Greek Prime Minister George Papandreou won approval for his 78 billion euro ($113 billion) package of budget cuts and asset sales aimed at meeting European aid requirements and will face a second vote on the implementation of the plan today. Data today may show European consumer prices climbed in June, fueling the prospects of an interest-rate increase next week, while South Korea said industrial production rebounded from a seven-month low.

Reuters is publishing pictures of police clashing with protesters during an anti-austerity rally in Athens, as protesters attempt to block streets leading to the parliament.

A new plan by French banks could lead to a breakthrough in efforts to create a second bailout for debt-stricken Greece after German banks also signaled their willingness to participate. German Finance Minister Wolfgang Schäuble has reportedly scheduled meetings with the country's top bankers to discuss the scheme.

This is what happened and what will happen. In a nutshell.

The banks gave money to the Greek politicians.

The Greek politicians gave the money to the citizens and used it for their pet projects.

The Greeks forgot that they had to pay the interest on the money given to them by the German, French, .... banks.

They went to the beach drinking ouzo and having fun.

Now they are asked to give the money they spent and do not have anymore....so they protest in the streets.

Who is at fault? Everybody! The banks because they lent money to a country that could not pay them back. They knew that.

The politicians because they gave to the people benefits that they could not afford. But they gave them to be re-elected.

The people because they asked for benefits that did not make any economic sense.

Who is going to pay? The people, of course. They will be taxed and benefits will be cut. And they will feel much poorer because all the money they received was fake money anyway.

The result? The banks will own Greece.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.