“Grexit” is how Greece leaving the Eurozone is called. (Momentarily introducing a fake currency as California did with “IOU”s, when it had a severe deficit, would not be “Grexit”; California has now a surplus.)
The IMF just recognized having been bone-headed about Greece “Too much austerity” induced:. Notable failures.”
The IMF enforces monetary orthodoxy, the Eurozone follows. What the IMF is now saying is that monetary orthodoxy is unbalanced. In other words, conventional economists, so far in command, are lunatics.
So what does Paul Krugman conclude? Yes, you guessed it right, the Euro is uglier than ugly. Here is what he said:
“you have to wonder whether it was worth trying to keep Greece in the euro at all. “Grexit” would have been ugly, and will still be ugly if it eventually happens. But compared with what has actually taken place?”
Paul knows a bone when he sees one. He does not like the idea of the Euro, as an equal to the Dollar, and rarely miss an opportunity to make his feelings known. OK, maybe if I had a cushy life because of the USA supremacy system as explicitly as he does, I would not like the Euro either. The more Euro, the less Dollar, looking forward. A serious thing. After all, Euro preference is why Saddam was eradicated. Saudis are paid in Dollars. If they were paid in Euros, Washington would break down (not true in the close future, because of USA fracking is changing everything!).
Let me make the honorable Paul notice this: the I in IMF is for:”International”, like in “International Monetary Fund“. The IMF is what dominates the debate here, not whether Greece is in the Eurozone or not.
Dear Paul, please go back to the Greek civil war (after World War Two). This happened, thanks, in part to heavy Anglo-American military intervention. Number of dead around 800,000. That is proportionally three times more than the American Civil War.
Next, please go back to the dictatorship of the Colonels in the 1960s, also propped by American interests plutocracy.
The Euro is a political answer to such horrors. These are the horrors one is really talking about.
Property rights are a huge problem in Greece: often nobody has any idea who owns what (this makes honest investors shrink at the possibilities). Plutocrats are a huge problem in Greece: they, be they rich ship magnates or the church, pay no taxes. Tax evasion is giant: Greek fortunes are sitting in Swiss bank accounts , etc.
These are huge problems, indeed. However, they were not caused by the Euro, quite the opposite.
The Greek problems having to do with plutocracy, kleptocracy, and a dearth of State of Law, can be traced back to the manu militari intervention of the USA on behalf of its natural allies there, the friendly plutocrats. Those friendly plutocrats, in exchange, just as with the Saudi family, took care of the interests of the USA. (One of them would even marry the widow of the president of the USA, just to show who was the boss.)
To enter the European Union, Greece was forced to democratize (democracy is a culture imposed on those who enter the EU). it was a gift. So was the well intentioned gift of letting Greece enter by overvaluing the Drachma by 100% (that, plus the Olympic Games, somehow backfired, as Greece, as a nation, splurged!).
In the rest of Europe, Greece has the huge and somewhat benevolent friend to help solve the problems left by 23 centuries of foreign, sometimes even alien, and definitively plutocratic, domination by the ugly.
The rest of Europe will help solve the Greek problems, all the more as it somewhat also has them. To put it crudely, Germans have interest that rich Greeks keep on buying Porsches (that means no revolution, but, also, no starvation). Greeks have to decide, democratically, to squeeze their hyper wealthy. Belgium just decided to tax its Royal family, after ludicrous excesses (except for the reigning queen and king).
Having European stakeholders helping out is better than having some autocrat propped by Washington doing so in his own special way (which is what “Grexit” would mean, in practice!).
Such autocrats are no view of the mind, looking at the past: the Egyptian military is an example, one of many. The Egyptian military is completely infeodated to Washington. Yet, plenty of foreign NGO officers got five years in jail in Cairo this week from proceedings started under. Mubarak. (Most of these professional do-gooders had already fled Egypt.)
Problem in Egypt? The Muslim Brotherhood. It had a long love-hate dependency upon both the Saudis, and Washington.
Why not to focus instead of the horror that is Saudi Arabia, and the little arrangements with Washington allowing it to be so (9/11, or the Mali invasion being details of that picture)? These arrangements are fundamentally economic and financial. They are not pretty. They are intrinsically entangled with the nature of the currency of the USA, and its financial potentates.
And how did the dollar start? As the greenback, to pay Federal troops during the Secession War. The central bank was created half a century later.
Ultimately, all state dependent currencies reflect the might of the state behind it. Or the might of a confederation of states: the Imperium Francorum, de facto behaved more as a confederacy as anything else, especially when, having been renamed the “Roman empire“, it got diluted in hundreds of states.
Speaking of that, where did the word “Dollar” come from? From the “Thaler“. Or more exactly its Czech version: “Tolar”. The Americans are Czechs, and never knew it! The Thaler was a silver based currency used throughout much of Europe for 400 years. It replaced various coins whose real value was about 5% of their nominative value (inviting forgery). Notice that this transnational currency lasted three times longer than the Dollar.
The questions of currency, debt, structural deficits, rogue bankers, politicians doing exactly what plutocrats told them to do (“rescue our banks, and let us do exactly what we did before!”) are not the same. By confusing all the issues in a conceptual soup, economists end up playing in the hands of the plutocrats.
It’s particularly telling that American economists obsess about Greece. What’s in it for them? Did Greece organize 9/11? No, Greece did not organize 9/11. 15 out of 19 highjackers in 9/11 were Saudis (and 2 from the UAE). It is the Saudi system, the system that allows a family to own a country, that instigated 9/11. And guess what? That has to do with economics. With the Wall Street induced economic system.
Now, that, is a perspective worth gaining. Instead of moaning of Greece and the Euro, lamenting, fundamentally, that Greece left the orbit of the binary system Washington-Wall Street.
So why do American economists lament about Greece? Because therein their daily bread, pleasing their masters, whether they realize it, or not . Lots of bread, as I explained in Euro Derangement Syndrome. Europe breaking in World War Two gave us the satisfaction of the American Century.
Now the American Century is breaking down, mostly because of the rise of China and Europe, and all the other critters using that tectonic opening (see the Argentinean president above, a butt of hostility for the IMF, for daring to discard the old IMF). Paradoxically global plutocracy is stronger than ever. But it is lacking in dictators anxious to please, and behind whom it could hide.
Thus it would be so much nicer, for Wall Street dependent economists, to see a financial and economic catastrophe in Greece. If “Grexit” happened, Greece would collapse, and, surely, a Washington supported dictator emerge, no doubt a great hope for all sorts of plutocrats and plutophiles.
However, I doubt Europe will not see the peril this time of succumbing to American sirens. Europeans are coming to slowly realize how alien the system in the USA is becoming. They observe, aghast, the great democratic hope Obama going to sleep within homes of countless billionaires, guns all over, millions incarcerated, the security state, spying all over, and, insult added to injuries, the USA being the only advanced country without any mandated paid vacation. Among other things.
And that’s why the right wing temptation has been resisted throughout Europe (even Hungary). So far. Differently from the 1930s, the sort of American plutocracy supported civil war that occurred in Germany in 1932 (10,000 dead, thanks to smuggled USA weapons such as those made by conspiring Browning) will not be tolerated this time. Nor should any ideological drift conducive to European break-up.
Japan itself is drawing the same conclusion: PM Abe, although he has perfect credentials as a right wing politician, broke with Washington diktat. He is devaluating the Yen massively, and engaged in an economic program, with massive structural investments, that true progressives approve. Damn the 240% debt/GDP. To save the world, please default!