Economics · Modern Times

The Debt Game.

Greece is back in the news, and the half truths along with it. Greece will be “negotiating with its creditors as quickly as possible to avoid another crisis
Seen on allotment gardens in Germany. They’re proud enough to fly their nation’s flags; they’re happy enough to garden together.
Greeks in Germany will produce roughly the same GDP as Greece will itself.
But they have to pay their taxes in Germany!!!

Greece is back in the news, and the half truths along with it. Greece will be “negotiating with its creditors as quickly as possible to avoid another crisis rocking the eurozone” [Daily Telegraph, “EU urges Greeks and creditors to hammer out a deal quickly”]. It has to be remembered here that such crises start on Wall Street and in London where derivatives are traded as though they were the commodity they were tracking. But this is the weird dystopian world of modern finance where illusory numbers on paper are as real than the product they represent.

Well, they are if you’re allowed to rock the markets with their paper. And the only reason to rock a market is to make money… knowing this you’ll not need to worry about the Eurozone itself, that’s just the kind of scare tactic that journalists use. The banks in the US and UK know that these are just messages for a concerted effort in one direction or another. But as usual, I’ve already strayed off topic… I promise to follow this up with a post about how the banks use derivatives.

Instead of doing their job.

Oh, and the poorly regulated countries where they’re still allowed to do this.

Because it’s all about paper instead of people. And yes, we are talking debt now. As mentioned in my post about banks, lending requires intelligence – if you’re not intelligent and all you can do is follow through a process, lending is no longer something that is certain. Lending has become a lottery because nobody’s bright enough to know which people were intelligent enough to use the money wisely, and which not (1). This single element will reduce the banks’ bad debts substantially.

But that’s banks for you.

Now, as you know by now, the American banks had a problem. Actually, it was a problem of their own making, but that’s how American banks work. They’re allowed to do all these stupid things, and they were stupid enough to think it was a good idea (2).

Getting Greece Into The Eurozone.

Greece got itself into the Eurozone with a little help from Goldman Sachs. These guys never do anything for free, so they are usually being paid by some poor sucker who is being duped to buy into the Goldman boys’ latest scam. On this occasion the sucker was Greece. They paid an enormous sum for Goldman to deal with its debt problems – wait a moment, these are a different kind of debt problem than the one I wish to discuss here, my apologies. Greece is not the kind of place to do serious business. Good wine, good food, great beaches and farms, yes. Business is another matter altogether. Never mind, the numpties in the Greek government wanted to be part of the prestigious Eurozone, and were willing to pay for this.

And boy, did they pay for it!

Goldman charged them $300,000.

Thus the Greek obligations to her creditors vanished and the numpties in Brussels – well that’s another untold story (3). Suffice it to say, Greece looked great on paper and everybody was happy. Especially the Goldman boys who had torpedoed the Eurozone before it was even launched. But, like the American aircraft carriers that are shadowed by Chinese submarines, nobody knew about it, so there isn’t any danger (4).

So Greece was able to borrow money at rates more applicable to Germany and the industrialized north of Europe… than the south. Which was wonderful for the bankers! They could lend anything to anybody… and did. As to the bridges that Greece didn’t build, they’d have (not) been built whether the Greeks were in or out of the Eurozone (5). The point being that at some point in the future, the Greeks, individuals or governments, will have to pay these debts.

Oh, that wasn’t something that was mentioned by the American controlled European Union, was it?


But then, American banks wanted to profit. And boy, did they profit.

The Crash Of 2007.

We all know where this emanated from, and it was the Ponzi-scheme that the Americans had applied to their housing market. When it ran out of road as these things inevitably will, someone had to pay. Being Americans, and in particular, bankers, it wasn’t going to be their asses that got whipped. No: they perpetrated another fraud: they reneged on the contracts that they had signed in all bad – sorry, silly me! – good faith. Why do I consistently get these things wrong? Is it because I know honest business makes money? That dishonest people actually undermine their own future??? Because the Americans defrauded everybody else by saying that they weren’t going to abide by the terms and conditions of the contracts that they’d signed.

The problem now was that the Wall St hedge funds had their toys taken away.

Never mind: they’d hidden some under the carpet where the numpties would only trip over them but take no notice. The Hedgies unveiled a whole raft of derivatives that now tracked the fortunes of the peripheral countries of the Eurozone. These shadowed the insurances that were paid by governments on their debts. During the “good times” there wasn’t much to be made from these.

Now, with the cat out of the bag, as it were, the fun could begin! The Hedge Funds sold their derivatives as profit making investments – which they were – and as a result, the interest rates of certain currencies span out of control. This was a nice twist to the Eurozone: whilst there was one currency, there was no centrally planned interest rate!


Greece and the rest of them fell into penury. The Hedge Funds bought more champagne.

The money flowing into Brussels and the European Central Bank all but stopped and the brain dead numpties cried foul, threw their rattles out of their pram and wanted their money back.

It was all working perfectly to plan…

Greece Has To Default.

The history of the Greek economy is one of limping from one default to the next. The cycle takes roughly a century; only now the Greeks have handcuffed themselves to Brussels.

AKA the banks. American ones at that.

The Greek economy is squealing fit to burst and the American banks are loving it. A default would sort-of sort things out – but defaults in economics are not as clear cut as a Jubilee. We are talking about modern times here, times where people do not know how to do business. Greeks or Americans.

Or Germans, come to that…

The Banks Get Into Trouble.

With the effects of the crash still warm and smelly, after all, what America did was the economic equivalent of doing a dump on European bankers’ heads. The Europeans were seriously humiliated, the Americans overjoyed.

Now, under international law, a bank must have a certain amount of ‘AAA’ rated equities. These are considered to be ‘gold plated’ and thus stable. That one of the few AAA rated equities left in the government world is the US Treasury, the American debt. (Rolls Eyes). Banks have to have them, or something like them. The Chinese, who have their own rules, have been dumping Treasuries for years. And buying gold (6).

The Europeans do, because the rules that emanate out of Brussels favour the Americans. :sigh:

Thus the Greek government bonds were offloaded because they were no longer ‘AAA’ rated (or even close). What once appeared valuable is now junk. The European banks had a fire sale and the American Hedge Funds (and a few in London, too, no doubt) snapped these up at a penny in the pound.

Playing The Debt Game.

Under the law of contract, these debts still bear their face value, irrespective of how much it cost to buy them. Americans can play this game both ways! The Brussels numpties who know zilch about debts and manipulation, leave alone extortion. They took this in their stride.

So: Greece has to pay its debts!

The Eurozone countries step up to the plate – this is an American institution, remember – and stand behind poor Greece.

A deal is agreed: Greece’s debts will be cut to 40% of their value. Everybody, especially the journalists who have been primed on the basics of debt rescheduling, are elated. Oh, nobody told them about the fire sale… this is how Americans defraud others. Sorry, I’m being silly again! It’s how the nice Americans like to portray things. There, that’s in accord with the story the Americans want to peddle. Oh, dear. When will I get the idea that Americans are the nice guys???

So Greece now only has to pay out on 40% of its debt to its creditors. Corks are popping in Wall Street and London: the Hedge Funds have made themselves a fucking fortune. Instead of one cent in the dollar that they paid, they’ll get 40 cents. That’s – well, I’m not going to calculate the profit, let’s just say that it’s big.

They made a STACK.

And it all goes to making the American economy look as if it is actually still alive. Rather than one that died three decades ago, but where the lungs are still being inflated and deflated by a pump. The banks, the heart of the economy, are now rigid and can only make a profit by playing the stock market with their derivatives (1).

Well, that’s how account book economics works. It doesn’t matter if the economy’s dead, what matters is that the parasites that haven’t yet left the body are able to keep themselves alive by sucking the blood of others and so generate the numbers.

An Afterthought.

In a world where the average Greek doesn’t trust his government, and thus doesn’t want to pay his taxes, someone has to pay for them instead (7). In the main, it’s the German government that is paying the largest slice of this money. Money that goes not to Greece (as all the journalists willingly believe) but goes to pay off Greece’s debts. Thus money goes via a circuitous route from the German treasury to the American Hedge Funds (8).

It’s one way to make it look as though America still has an economy. And still the Germans are portrayed as the bad guys! It’s all part of the game…


Please Note that no Bankers, Economists or Greek citizens were hurt during the writing of this post. Only the CIA chief is begging to be whipped again. Sometimes withholding a pain is the more painful. Those who pull the strings know all about pain!


(1) My post, ‘What Is A Bank’ deals with this element of how banks manage to fuck up their account books. My upcoming post ‘What Is A Derivative’ will look at how the banks manage to fuck things up even more. But that’s banks for you… They remind me of Woody Allen when he said he likes making love, and practises a lot on his own. The American banks are so deluded that they can fuck things up without any women around… (click here to read the post.)

(2) For a forthcoming post on the US housing crisis; the Germans avoided this through implementing a totally different strategy. This has made people think I’m a fan of the Germans. Well, that’s how the British think; never mind that. It’s as much a matter that the Germans did something that worked. Not only did it work, it used the banks for the economic need that they should fulfil. The Americans did everything the banks wanted, not what the economy needed. The Germans worked for their economy and it really did work. See ‘The German Stadtsanierung’. Note: If you can get your head around this concept, I’ll give you a medal, okay? (Terms and conditions apply). (click here to read the post.)

(3) Why the CIA chose Brussels as their centre of operations in Europe is a story worth telling. But you do need to know a little about the cultures involved and how they approach the decisions they make. This will keep you quiet for a while: it’s a story about how my dear and imaginary uncle, Professor James Moriarty, defrauds – oh, I am so sorry, how he provides the necessary evidence for the Brussels numpties to make the decision the CIA want them to make. Put better, the people who take the CIA by the scruff of the neck and blow tobacco breath into their face until they’re faint and will do as they’re told. Either that or a little waterboarding or just a good whipping. Probably the latter as it’s always pleasurable for this kind of person to whip some high ranking figure. (Click here for the story).

(4) See my post on this, ‘It’s Not Fair Play.’

(5) Anybody remember the story about the Portuguese bridge that was only one lane wide? It should have been two lanes wide, but the mayor had a beautiful house built for himself. Nobody noticed, because nobody was doing any noticing. Brussels bureaucrats are notable for their ignorance of what is actually done in their name. They imagine that because it’s been written down, it has been executed to the letter. Well, that’s Brussels for you. The Greek part of the tale speaks of a bridge that isn’t there and the Greek mayor has a bright and very new palace. Well, perhaps this is why Greeks don’t like paying their taxes? Oh, but I shouldn’t be saying this because in the media, the Greeks are the good guys. Silly me! Only Germans are bad in the upside-down and inside-out world of the American controlled media… the problem here is that the Americans blame the Germans for doing things that only an American would… :sigh:

(6) See my post on how America manipulates the price of gold, ‘Gold On Paper’. Will the Americans EVER give up on their frauds???? These guys are clinically psychotic.

(7) The German accounting regulations are so strong that even Starbucks would have to pay taxes. Well, it would if it hadn’t paid a few million to a clever lawyer who came up with a scam…

(8) Okay, so there’s a tiny bit that goes ot the Greek government. Enough to let them know what idiots they were for getting themselves into the Eurozone. America’s bankers really did do a fine job dump on Greece!


10 thoughts on “The Debt Game.

  1. Hi Gemma – enjoyed that !
    As was then, so is now.
    Are you sure about “Goldman charged them $300,000.”? Missing order of magnitude in respect of the Goldman-Barrow-Boys’ fees, shurely?


  2. G,
    A couple of thoughts:
    Given their reputation I’ve absolutely no idea why any self-respecting organisation or government would want to do business with GS.

    As I posted on another blog a couple of days ago this presentation, albeit promoting gold, includes a great analysis of why US debt has been allowed to top $20 Trillion. Well worth the time viewing.

    Lastly the ad from HSBC at the bottom of your piece:
    “Join us for an exciting career in the heart of UK banking” Surely this should be in the BMJ under Cardio-vascular jobs?

    Liked by 1 person

    1. “I’ve absolutely no idea why any self-respecting organisation or government would want to do business with GS.”

      Well, the chap on the video’s stopped waffling about the fluctuations in the price of gold and is entering the shark infested waters of why America is failing. Now: he’ll not get any sensible answers unless he’s nailed his psychology of the subconscious. Everything else is mere speculation.

      But isn’t this the answer to your thought that I’ve emphasized??

      They don’t know how people manipulate things…

      … and I do.

      That doesn’t mean they’ll listen to me, though.

      I think the main point here is that most people do not know that they’re dealing with GS. They think they’re dealing with an honest trader who’s selling them some gold in a vault. When in fact…

      … and with 300x as many derivatives around as there is gold in existence, that means a market that isn’t just rigged, it is being pushed and pulled to allow the likes of GS to make a few pennies on the dollar.

      Now please can we re-run this video and show what happens to the price of gold when the derivatives are taken out of the market, say in late 2017, and all there is to sell on the Comex is real gold???

      China, India and Russia aren’t stupid.


    2. This man’s views on Japan are all from the GS textbook. He says (17m50s)

      “One of the reasons for Japan’s continued failure to get the stiumulus right is perhaps the fact that what the government promises they don’t always deliver on. In many cases the amount delivered was considerably less than the amount pledged.

      Broken government promises, well I never. “

      Few if any Americans speak Japanese, fewer know the society and only a rare one knows how they think. Since Americans are best, it’s obvious that they know what Japan is up to… because their trader is well dressed and honest. That the Japanese know this and wrap the American journalists around their little finger (if they still have one, that is). Half of what you hear from Japan is baloney; the other half is dubious.

      That doesn’t mean the Japanese government is breaking its promises: it does mean that the American controlled media is being led up the garden path.

      I reached the end of the video, and he spoke of the scarcity value… strictly speaking, it’s durability. Either way, the treasury has none of this and the paper derivatives of gold are equally volatile. Get it? That’s for an upcoming post, by the way.

      PS Use an ad-blocker. You don’t need the crap people push, thinking it’s what advertising is all about. Not one of them has ever heard of Claude Hopkins.


      1. Now! Right on cue… when you said “I’ve absolutely no idea why any self-respecting organisation or government would want to do business with GS.”

        Here’s Greece getting muddy up to their noses again…

        “As concerns over Greece and its debt mount, Athens has reportedly decided to call in Rothschild, one of the oldest financial firms in the world, to navigate the country’s long-running creditor stand-off and avert default.”

        First the Greeks vote to default and are squashed under the foot of the IMF, now they are hiring the same people to get them out of trouble! You can’t invent this stuff.


  3. Leaving aside all the gold promotion, for me the most interesting thing in the video (from memory around the 19 minute mark) was the description of the non-petro-dollar trade in oil developing between Russia and China, and Iran and China and the concurrent reduction in US Treasury holdings. Its no wonder our friends in the US see Iran, Russia and China as bogeymen – Light blue touch paper and retire to Mars?

    Liked by 1 person

    1. So Iran, Russia and China are bogeymen because they aren’t behaving in a way that the US can exploit for their own ends? In a way that the US gets to profiteer from whilst adding no value to the deal whatsoever??

      The problems the US have go deep, not in terms of their ‘deep state’ but in terms of their one-sided psychology. They want to have their cake and eat it, whilst burning the candle at both ends.

      The Russians and Chinese know this and are ready.


  4. I’ve often thought about designing and marketing a U shaped candle that the buyer could burn at both ends….

    …but what really concerns me is that although the non-petrodollar oil trades are being developed in full view the MSM seem to be ignoring it completely or are completely ignorant of the potential lethal consequences if or when the SHTF…….


    1. I thought the entire point of the mainstream media was to ignore difficult subjects… and provide tittilation and stimulation for the weak minded and limp dick.

      The potential “lethal consequences” are ignored when semi-fake news about VW diesel engines is purveyed far and wide. That was a nice little earner for the US and it trashed a zero off of Germany’s exports too. That won’t alter the fact that servicing the US debt is going to get very painful very soon.

      Remember too that the UK’s debt is now £3.5 trillion. Up 115% on 2014… and the UK’s deficit is now running well over 7%.

      And what’s in the news?

      It’s all about Greece!!!


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