Monday, June 15, 2015

State of Emergency

Negotiation tactics designed to stir the pot towards a fear-based resolution won't change the fact that Greece is broke. Preservation of austerity to save the minority only contracts economic activity at the expense of the majority. History defines this as a bad setup.

Greece's debt window is slowly closing. Smart money has no interest buying long-term Greek debt backed by an economy shacked by austerity and socialism. Greece remains locked in a vicious cycle in which austerity reduces economic activity and future tax revenues to support repayment. This will raise social tensions not only in Greece but also EU members providing a bailout to a sinking ship.

While the Euro and U.S. dollar react violently to this to the daily drama, their long-term bearish (mark down) and bullish (mark up) trends remain in tact. These trends will reassert themselves when the invisible hand is ready.

Headline: Prepare for Greek 'state of emergency', says German EU commissioner

BERLIN (Reuters) - The European Union needs to start making plans for a "state of emergency" in Greece from July 1 if Athens fails to reach an agreement with its creditors, Germany's EU Commissioner Guenther Oettinger said on Monday in Berlin.

In remarks to reporters before a meeting of Chancellor Angela Merkel's Christian Democratic party (CDU), Oettinger said it was time to make concrete preparations for a crisis in Greece if no deal is reached, Greece defaults and exits the euro zone.



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