HEART OF EUROPE? ARE GREEKS EVEN EUROPEAN?

With the rhetoric flying during crunch time in the Greek Bonds Crisis, one phrase struck me — "Greece is at the heart of Europe." Geographically, I know that isn't true. Depending on method of measurement, the geographical midpoint of Europe is either the village of Purnuškes near Vilnius, Lithuania, or the village of Mõnnuste, on Saaremaa island in western Estonia.

"Heart of Europe European" (left), "Greek" (right)

So thinking further upon that deceptive rhetoric — "Greece is at the heart of Europe" — I began to wonder, are Greeks even European? As well, what does being European even mean?

A site titled Eupedia lists the haplogroups of Y-chromosome DNA for the various people of Europe. A haplogroup consists of haplotypes that have a common ancestor.

Males have Y-chromosomes. Females do not. No amount of cross-dressing or getting breast implants or other surgeries can turn males into females.

Males of the same Y-chromosome DNA haplogroup have a common ancestral father.

Looking at the Eupedia data, there are a few kinds of Greeks — northern, central / Aegean Islander, southern, Cypriot, Cretin. 

The central Greek / Aegean Islander Greek is much the same as an Albanian.

The southern Greek is much the same as a Kosovoan.

Cretins are much the same as Anatolian Turks.

Cypriot males and Cretin males share quite a bit in common with some so-called Middle Easterners — Azerbaijani, Kurds from Iraq, and Lebanese.

What defines a European? Are Moldovians, Slovakians, Slovenians, Ukrainians, Czechs, Poles, Latvians or Russians?

The Moldovians, Slovakians, Slovenians and Ukrainians are much alike. The Belarusans are their close cousins. 

Likewise, the Czechs and the Poles are alike. The Hungarians are their close cousins. 

Though they might not like it, the Latvians and the Russians are much alike. 

The Estonians, Lithuanians and Maris in Russia are the same people. These are the people living in the geographic heart of Europe. Are the Estonians, the Lithuanians and the Maris the heart of Europe?

The Bosnian Serbs and the Serbs from Serbia are the same people.

Both Serbs are much alike to the Macedonians and the Montenegrans.

The Bosniaks, Bosnian Croats, the Croatians, and Romanians are the same people.

Except for the Russians who have big population, none of the aforementioned peoples comprise a big population. And these days, no one living in Europe much like the Russians. So the Russians could not comprise the heart of Europe.

The Danes and the Swedes are more or less the same people.

And their geographical neighbors, the Norwegians are mirror images of them.

There are quite of few so-called Europeans who have a common ancestor.

The French from the - Midi-Pyrénées along with the Italians from Central Italy, South Italy and Sicily as well as the Spaniards from Andalusia are the same people.

The Tuscan Italians and the Spaniards from Castile-La-Mancha are the same people.

The Corsicans, the Aragons from Spain and the Spaniards from Basque country are the same people.

The supposed French from Auvergne and the supposed Spaniards from Asturias and Cantabria are much alike.

The French from IIle-de-France and from Provence are much alike with the Italians from North Italy, the Spaniards from Castile and Leon, Catalonia, Extremadura, Galicia and Valencia along with all of the Portuguese. 

The Belgians, the French from Flanders-Artois, the French from Normandy and the Welsh are the same people.

The Austrians overall, the Deutsch from North Germany and the Deutsch from East Germany are the same people.

The Tyrolians from Austria, the French from the Rhône-Alpes, Deutsch from West Germany, and Deutsch from South Germany are the same people as well as Icelanders, Norwegians and Scots. All of these people share the same ancestor.

Though they might not want to acknowledge it, the English and the Irish are the same people. They're the same people along with the French Bretons, the Dutch and the Swiss.

So does anyone constitute the heart of Europe? Are there Europeans? Maybe these people do.

In short, Greeks are a mash-up of a Balkan people with Middle Eastern people.
Without doubt, the Greeks do not constitute the heart of Europe. The Greeks seem far on the edges of everything these days. 

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GREXIT IS NO EXIT.

For the Greeks, Hell is not other people. Hell is themselves. Yet, many believe the Greeks need to ditch Euro zone Europeans and return to the drachma so Greeks can escape an eternity of poverty hell.

"Greece will continue to endure its long Calvary until somebody has the courage to tell the Greek people – and to keep telling them until the truth sinks in – that the drachma is their best hope of economic renewal." ~ Ambrose Evans-Pritchard, The Telegraph UK, 16 Jul 2015

A popular mainstream media propagandist, Ambrose Evans-Pritchard has called for the Greeks to ditch the Euro and exit their monetary union with Europeans. In, Greece should seize Germany's botched offer of a velvet Grexit, Pritchard wrote, "There is not the slightest chance that Greece will be able stabilize its debt and return to viability..." Meanwhile, Pritchard fails to provide any document, say a spreadsheet, which he has worked out the debt rollover requirements over a 10 to 12 year period.

As I have pointed out, Greek law givers never have been asked to pay back €330 billion. Instead, Greek law givers had been working a remedy plan of paying €6.5 billion a year over 10 years, enough to pay down their debt to 110% of GDP, that is until the communists of SYRIZA led by Alexis Tsipras and his game theory, cycle-riding buddy, Yanis Varoufakis fouled up everything.

Before anyone accepts propaganda from jokers like Pritchard, all must ask themselves who will want the drachma? Who will take drachma for oil, natural gas, cars, trucks, semiconductors, precision machinery, pharmaceuticals and millions of products Greeks don't make and lack the capacity — mostly brains — to make?

For those who take drachma, what will they buy? Will they buy feta cheese, olive oil, belly dances, hotel room rentals? How much supply of olive oil does it take to pay for a bulldozer?

What would happen to Greeks if only they stiffed their creditors, subverted the European project and fired up the printing presses so their banks could run on drachma? What would happen to the €7.5 billion they receive in EU subsidies each year? How could Greeks pay for exports they now receive?

Let's compare Greeks to the Nigerians.

• Greek exports: Exports €27.2 billion (-1.3%; 2014 est.)
• Nigerian exports: $93.01 billion (2014 est.) = €84.45 billion.
• Nigerians import US$52.79 billion (2014 est.), which is €47.94 billion
• Greeks import US$39.45 (€35.82).

Nigerians export 3.1 times much as Greeks but only import 1.34 times as much as the Greeks. Nigerians earn much more from foreigners than Greeks earn, but buy much less from foreigners than Greeks buy.

Now let's see where the Nigerian Naira stacks up to the US dollar. One USD buys 198.95 Nigerian Naira.

So how do the Nigerians live? The average yearly salary in Nigeria is $3,308.99 (658,324 NGN).

And what about the Greeks? The average yearly salary in Greece is $13,265.45 (€12,048).

Greeks income on average is four times that of the Nigerians yet the Nigerians export three times as much.

So what would happen to the Greeks should they revert to the drachma? Greek incomes would fall and fall hard. Greek incomes would approach incomes of Nigerians. In short, Greeks would impose real austerity upon themselves.

Many believe that with a cheap drachma, tourists will flock to Greece, presumably even more than now because exchange rates will favor foreigners under a drachma.

And yet, it can be shown where there is great favor in exchange rates for foreigners relative to many places, tourists don't flock to those places. How many European tourists flock to Sudan every holiday?

The problem for the Greeks is the same problem everywhere. The Greeks don't live by capitalism.

As I have shown in CAPITALISM. BECAUSE WITHOUT IT, YOU WOULD BE LIVING AS A BARE SUBSISTENCE SAVAGE and SOPHIE'S CHOICE OF CAPITAL OR LABOR. A FREE-MARKETS LIBERTARIAN BECOMES AN ANTI-CAPITALIST AND PERPETUATES AN ECONOMICS MYTH. Wages and capital are interlinked.

Wages come from returns to capital. Without capital there can be no wages. Without positive returns to capital, no one would put property to use as capital.

Greeks have been living on ever-greater largess of Greek law givers as well as EU law givers since joining the European Union and later, the Euro zone. In turn, Greek law givers have relied on floating ever more bonds to pay for their largess.

Spending doesn't bring return to capital. Realizing on expected profits in the future does.

Always, the problem for Greeks has been spending, spending that comes from borrowing and a lack of production from capital.

Wages come from returns to capital. Without capital there can be no wages. Without positive returns to capital, no one would put property to use as capital.

Giving government workers wages paid by borrowed funds is a kind of welfare. Those wages aren't really wages at all. Those wages haven't come from returns to capital.

Politicians, socialists and the greedy never will understand this and thus they will never understand reality. They will go cradle to grave in earthly hell. Who knows what will happen beyond. For sure, there is no exit from reality.

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ANTI-BANKING PITCHFORK POPULIST BLOGGER BLOWS IT ON GREECE, BIG-TIME.

Mike Shedlock is a prolific blogger. Becoming popular has let Shedlock appear through television to espouse his views on economies, politicians, stocks and bonds.

His 5.9 million yearly page views are impressive, although not as impressive as during his peak readership years of 2009 through 2012, which peaked at 22 million. Since his peak viewership, his unique page views have fallen -73.7%!

Shedlock has written quite a bit about the Greek Legislature Public Finances Crisis. Read standalone, any one of the stories written by Shedlock about the crisis seems plausible. Yet, if you were to read all of the stories in succession, giving yourself context, you would see that Shedlock writes much of nothing.

In brief, Shedlock hailed the ascension of Greek communist Alexis Tsipras to job of prime minister of Greece. Then Shedlock hammered on the idea of Tsipras telling the "nannycrats of the Trokia" to "shove it."

After the disastrous snap referendum called by Tsipras (Bizarro Theater: Greeks Vote for Grecocide), which Tsipras called on Greeks to reject a bailout proposal from Eurogroup ministers, Shedlock hailed Tsipras as a genius, more or less, the guy dictating to the Eurogroup ministers — the finance ministers of the respective countries of the Euro zone banking system.

Then when Tsipras struck a deal, contrary to his purported analysis, in seemingly mindless reaction, Shedlock called Tsipras to resign, "If Tsipras had an ounce of decency left, he would resign, put forth a new referendum, and let the people decide." Of course, if Shedlock understood what side held the winning hands, Shedlock would not find himself shocked and on the wrong side of his many predictions.

For your amusement, I've cherry-picked relevant quotes attributable to Shedlock from the flurry of stories written by him on the Greek Legislature Public Finances Crisis.

"Tsipras Trades Royal Flush for Draw at Inside Straight...Tsipras won the game. He had the backing of Greek citizens no matter what he did...Tsipras traded all that away for nothing!...Did the US bribe Tsprias with a secret account worth millions?...Is someone holding his kids hostage?" ~ Mike Shedlock, July 13, 2015

"Is Grexit what Alexis Tsipras, the Greek prime minister, really wanted all along? If so, and assuming that's what happens, he played his hand masterfully." ~ Mike Shedlock, July 08, 2015

"Does either side really want a deal? ...  both sides would be happy with Grexit as long as they can blame the other party. Let's hope so." ~ Mike Shedlock, July 08, 2015

 "Yet, the nannycrats in Brussels and Berlin still don't get it. The odds of contagion are very high. Next up: Spain, Portugal, or Italy." ~ Mike Shedlock, July 06, 2015

 "...the eurozone officials are also electioneering, so perhaps they simply feel trapped and have no idea what to do or say about Tsipras' moves." ~ Mike Shedlock, July 01, 2015

"One may or may not like the result, but this was a triumph of democracy over technocrats and nannycrat puppets...The big shock will come when Spain marches down the same path."  ~ Mike Shedlock, June 29, 2015

"ECB Cries Uncle..." ~ Mike Shedlock, June 28, 2015

"If anyone has blinked, it now appears to be Germany and France, rather than Greece." ~ Mike Shedlock, June 26, 2015

"Greece has nothing to lose by defaulting." ~ Mike Shedlock, June 14, 2015

"Tsipras Won't Agree to Irrational Proposals" ~ Mish Shedlock, June 5, 2015

"Ever since Alexis Tsipras won the Greek election and appointed finance minister Yanis Varoufakis, an expert who wrote a book on game theory, it's been extremely difficult to determine who is bluffing and who isn't... Heck, it's very difficult to determine what most of the players really want." ~ Mike Shedlock, June 5, 2015

"Greek prime minister Alexis Tsipras keeps hinting that a "deal is close" while publicly trashing every deal offer...One seriously has to wonder if this is purposeful gamesmanship." ~ Mish Shedlock, June 5, 2015

"What cannot be paid back, won't. And anyone with any bit of common sense knew four years ago." ~ Mike Shedlock, May 31, 2015

"I have read countless articles over the past few week stating a belief that Syriza party leader Alexis Tsipras is bluffing in his threat to stay in the euro but default in debts...I suggest his positions are carefully crafted." "I have read countless articles over the past few week stating a belief that Syriza party leader Alexis Tsipras is bluffing in his threat to stay in the euro but default in debts...I suggest his positions are carefully crafted." ~ Mike Shedlock, May 25, 2015

"Tsipras has nothing to lose and everything to gain and the Troika knows it." ~ Mike Shedlock, May 25, 2015

"Given that no changes are acceptable to the Troika, Greece's days in the Eurozone are numbered. It will be a good thing for Greece ... once they finally get the nerve to tell the Troika to go to hell." ~ Mike Shedlock, May 9, 2015

"I am convinced that Syriza will not agree to another bailout adding still more debt on top of the already unsustainable €323 billion pile...All this extension did was give both sides more time to come up with an exit strategy." ~ Mike Shedlock, April 04, 2015

"On Friday German finance minister Wolfgang Schäuble rubbed Greek capitulation in Tsipras' face with his comment, "The Greeks certainly will have a difficult time to explain the deal to their voters. As long as the programme isn’t successfully completed, there will be no payout."...Let's see what happens four months from now...With roles reversed and Schäuble playing the witch, I envision Tsipras' silently saying "All in good time my little pretty, in good time". ~ Mike Shedlock, February 22, 2015

"Tsipras' claim that he wants Greece to stay on the euro...If not, then unless he gets nearly everything he wants, Grexit is all but assured." ~ Mike Shedlock, January 30, 2015

"Greece Will Not Accept Bailout Extension or Deal With "Rottenly Constructed" Troika; Mish's Game Theory Math... the Troika has its hands full with Yanis Varoufakis, an expert who wrote a Book on Game Theory...I suspect prime minister Alexis Tsipras picked Varoufakis precisely because of his skills at game theory." ~ Mike Shedlock, January 30, 2015

"A simple economic truism is that what cannot be paid back, won't be paid back." ~ Mike Shedlock, January 29, 2015

"I suggest it is pretty clear Greece cannot possibly pay back €256 billion even at 0% interest. " ~ Mike Shedlock,  January 27, 2015

"Eventually, there will come a time when a populist office-seeker will stand before the voters, hold up a copy of the EU treaty and (correctly) declare all the "bail out" debt foisted on their country to be null and void. That person will be elected...Possibilities...Greece: Alexis Tsipras - Syriza (Radical Left)"  ~ Mike Shedlock, January 03, 2015

The latter three comments reveal Shedlock's persuasion-in-propaganda strategy. Shedlock likes to create simple mantras that he repeats to his readers, hammering away at them for weeks on end. This results in his readers parroting the mantras in the comments they write on Shedlock's blog.

Such a technique is typical in cult formation. Having jargon and mantras leads to group cohesion.

Shedlock seemed especially fond of this mantra — what can't be paid back, won't. Shedlock would invoke the mantra while deciving his readers to believe that Greeks law givers needed to pay €256 billion, then €330 billion, and then later €400 billion. Before SYRIZA, Greek law givers had been asked and agreed to pay back something closer to €65 billion over 10 years. That is closer to one-fifth of what Shedlock claims.

Shedlock revealed himself to be horribly wrong about the whole Greek Legislature Finances Crises throughout the ordeal. Yet, that didn't stop Shedlock from writing.

For my view of what happened, check out MY BIG FAT GREEK STUPIDITY. THE TSIPRAS AND VAROUFAKIS GREEK COMEDY SHOW WRAPS UP. That work contains links to the rest of my writing on what truly happened with the Greek law givers.

Since 2008, Mike Shedlock has become one of the most popular bloggers who tries to write about economies, economics and politics. A civil engineer by training and historically, a computer analyst by vocation, though working today as a "a registered investment advisor representative" like many, Shedlock took to blogging when he found himself unemployed. You can read bits and pieces of Shedlock's personal story here and even more so, here.

This bit that Shedlock says of himself is quite revealing:

I started a blog in 2005 hoping to be discovered as an economic writer. Given there are millions of blogs the success of which are near-zero, one might even think such a chance would be impossible since I had no background in either economics or investing.

Shedlock has claimed to be an adherent of the so-called Austrian School of Neoclassical Economics. Shedlock claims to have become one after having read a couple of books.

Its last-known major disciple was a guy named Ludwig von Mises. Von Mises based his beliefs on the interest rate theory of a guy name Eugen Böhm-Bawerk. The Austrian School's founder, Carl Menger, had this to say about that theory:

“The time will come when people will realize that Böhm-Bawerk’s theory is one of the greatest errors ever committed.”

Von Mises  time preference theory of interest is quite wrong.
In INTEREST, CAPITALISTS AND FUTURISTIC TIME COPS, I explained how interest comes about.

Time preference is illusory. Persons buy something now — a reckoned belief in the share of the profits. There is no time preference. There are only buying preferences now.

When someone sells cash for bank credits recorded in a checking account, he or she does so to buy banking services now. That one is not being compensated so as to buy something later.

If the world operated as falsely as the Miseans believe, then why do people deposit cash in a bank when bankers aren't paying interest? According to Miseans, bankers must pay interest right now to induce people to forgo present consumption. Yet, at peak credit, deposits were $324.2 billon and today at much lower interest rate, deposits are much higher.

More so, as interest is an kind of income, it must adhere to the same law for all kinds of incomes — copyrights, annunities, wages, and the like. If interest needs one theory to explain it and other kinds of income have another theory, then either theory must be wrong or both must be. There can be only one theory that explains every phenomena of a class of phenomena.

Von Mises spawned his own school that mistakenly gets called the Austrian School. Von Mises biggest disciple was a man named Murray N. Rothbard.

Rothbard was born in the Bronx borough of NYC to Russian-Polish immigrant Jews. Rothbard's thesis advisors were Joseph Dorfman and Arthur F. Burns, the latter who went on the chair the Federal Reserve. It's a massive stretch to call Rothbard an Austrian economist.

I like Rothbard's Conceived in Liberty. He wrote excellent work about the political side of things. Rothbard was a superb champion of liberty and an incredible historian.

However, stupidly, Rothbard claimed  there exists double claims of ownership on deposits. Under commercial law, deposits get bought by bankers and they sell credit, which gives depositors rights of action. Likewise, depositors sell their cash and buy bank credits.

Shedlock believes commercial banking is fraudulent because Shedlock believes in a fallacy perpetrated by Austrian the now-dead Rothbard.

Brushing aside that no one uses money — coined metal by weight and fineness — but instead, all use cash, which is bank credit in circulation, here is what Shedlock claims in his Idiot's Guide to Austrian Economics:

If I give money to a bank and it promises my money will be available on demand, and the next moment it lends a large portion of it out, my property rights are clearly violated. What happens in such instances is twofold. I own my money. Someone else owns my money too.
Logically that is impossible. And that is precisely why it's fraudulent.

That is the basis of Shedlock's thinking and Shedlock's thinking is quite wrong. In short, Shedlock doesn't understand how commercial banking works.

This is why Shedlock opposes commercial banking.  Shedlock is quick to reference Rothbard's works What Has Government Done to Our Money along with Case Against The Fed to support his diatribes against commercial banking, especially what many call fractional reserve lending, which is more like multiple of reserves lending.

As it seems Shedlock holds this view, he believes bankers are evil as he has expressed as much on his blog. Likely, this is why he has sided with the Greeks.

Anyone who knows about Commercial Law knows that a banker is a trader who buys cash and debt by selling bank credits. In a purchase and sale, a customer, known as a depositor sells property in cash or receivables to a banker and buys property in bank credits.

With property in bank credits, the bank customer has a right of action to demand an amount of cash from his banker at a future date. Evidences of such right includes checking account bank statements and passbook savings books.

Bankers become owners of said cash, bank credits from other bankers and debt bought in a purchase and sale from depositors.

In commercial banking law, a deposit isn't a depositum, but truly a mutuum in law of a purchase and sale of cash for deposits.

A banker is a trader whose business consists in buying cash and debts by creating other debts. While the grocer buys food for resale, the banker buys cash or debt and sells credit. A banker sells credits payable on demand as cash.

More so, no one is saving his cash with a banker. In a purchase and sale, selling cash or perhaps other bank credits and buying an interest-bearing account, a bank customer is a capitalist who buys a share of future bank profits, which gets called interest.

Bankers and other capitalists deal in property with confidence in forthcoming profits, transmuting property that lacks saleability into property that does, enabling the adventurer-entrepreneur to transmute property as capital of production into property as wealth for trade.

In spite of the title of his blog publication, Global Economic Trend Analysis, Shedlock doesn't provide any kind of trend analysis. Instead, Shedlock writes up opinions rooted in fear-mongering to appeal to his conspiracy theory susceptible readers, readers who have formed a cult around him.

To let you know, I have pasted many links on Shedlock's popularly read blog referencing my works for his readers mostly to stop typing the same words in comments that I've written already. To my understanding, that is how the Internet of sharing is supposed to work. I've done so on Forbes and many other sites.

Here are my Disqus comments on Mike Shedlock's Global Economic Analysis.

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MY BIG FAT GREEK STUPIDITY. THE TSIPRAS AND VAROUFAKIS GREEK COMEDY SHOW WRAPS UP.

Well, it looks like shooting almost has wrapped up for the new comedy, My Big Fat Greek Stupidity starring Alex Tsipras and Angie Merkel, co-starring Yanny Varoufakis, Wolfie Schäuble, Donnie Tusk, Mario Draghi and many more!



First, if you are shocked by the outcome between Alexis Tsipras, the prime minister of Greece and the Eurogroup ministers, who are the finance ministers of the Euro zone, you should not be. Had you been a consistent reader of mine, you would have known all along what was happening between the Greeks and the leaders of the Euro zone, the EU and the IMF.

• REALITY SMACKS GREEKS. WHAT MUST BE PAID BACK WILL BE PAID BACK (Thursday, July 9, 2015)
• GREEKS HAVE BEEN SERVED A BIG CUP OF ELLINIKOS KAFES FOR THEIR COLD AUSTERITY WINTER AHEAD (Wednesday, July 8, 2015)
• GREEKS VOTE FOR GRECOCIDE (Sunday, July 5, 2015)
• GREEKS ARE SET TO VOTE TO SEND JINGLE MAIL TO THE IMF, EFSM AND THE EU (Monday, June 29, 2015)
• TSIPRAS AND VAROUFAKIS, THE GREEK DUMB AND DUMBER SEEK TO FORCE GREEKS TO DRINK HEMLOCK (Monday, June 15, 2015)

In these works, I shared with you reckless spending of Greek law givers compared to other countries with alike economies — the Czech Republic and Portugal. I shared with you what the Greeks needed to do — cut per capita spending a paltry 4.4% down to $3,913.33 so Greek law givers could pay a mere €6.36 billion a year of debt, roughly 1.9% of total debt owed and 2.6% of GDP, without GDP growth. I shared with you that Greek law givers had to pay €63.58 billion worth of debt over ten years  that Greek law givers borrowed to pay generously, for salaries and pensions of government workers and not €330 billion falsely cited by the ill-informed in effort to reduce total debt-to-GDP to 110%.

I shared with you why Greeks held no cards — Greece GDP is a rounding error — 1.84% of the total Euro zone GDP less the Greek GDP. That is like throwing two cents on the ground for every Euro in your pocket.

I shared with you that Greek law givers lost any leverage when the ECB shuttered ECB-aligned banks. Since Greek banks have much of their reserves tied to bonds of Greek law givers, the acts of Tsipras and Varoufakis-led SYRIZA impaired those reserves. Impaired reserves required emergency liquidity assistance (ELA) from the European Central Bank (ECB).

When the ECB cut off ELA to Greek banks, Greek bankers were forced to close. Closing the banks effectively cut off the metaphorical water supply to Greeks.  Litiming ATM withdrawals to €60 a day with no other banking services seized up the machinery known as commerce.

As well, I shared with you the big bomb that is going to drop on July 20. Greek law givers owe €3.5 billion (US$3.9 billion) to the ECB. That date marks the final call in this poker game.

Many have called for the Greeks to stiff their European partners and have their banking system return to the drachma.  In effect, many wanted to see the Greeks betray the European project. 

Why would the Greeks seek to exit the Euro zone and return to the drachma? If the Greeks have their own banking system with its own cash, how would that change anything for the Greeks? Greeks make very little their trade partners want to buy. 

The top export for Greeks consists of refined petroleum products. For the latest year (2012) available, Greeks exported $11.812 billion worth of refined petroleum products, which comprised 34.9% of all Greek exports.
  

The top importers of Greek products are near-penniless Italians (7.96%), penniless Cypriots (4.75%), penniless Spaniards (2.65%), near-penniless Frenchmen (2.56%) and penniless Russians (1.93%). 

Yet fools believe it is the Eurogroup ministers who are betraying the European project. In spite of what neither politician nor businessman but lifetime academician Paul Krugman has claimed, the Greeks have been the ones betraying Europeans.

In a show of generous unity by those leading the European project, the Greeks were bailed out not once, but twice, in 2010 and 2012. The socialist-communist SYRIZA came to power and reneged on those bailout deals. As well, since 2010, Greek law givers have failed to meet conditions they agreed upon to get Greeks and their economy in line with the European project.

Greeks have been living under the delusion of a massive credit bubble, one fostered not by bankers in Greece, but by Greek legislators. That bubble needs to be popped, permanently.

For years, since socialist party leader, Andreas Papandreou, the Greeks had been betraying the European project. Papandreou engaged in despotic-like spending, hiring supporters to government jobs. In so doing, Papandreou created a massive spoils system built around government using funds from the EU to pay for this system. And when the opposition party came to power, they grew the system even bigger.

This is why are the Greeks in trouble. For decades, Greek law givers created a bubble economy. Instead of the bubble economy being blown ever bigger by private-sector inflation — bankers' credit — Greek law givers created their bubble economy through public-sector credit.

By creating government jobs that ought not to exist and by overpaying for those jobs, Greek law givers kept their credit bubble inflated.

Varoufakis along with Tsipras and the rest of the jokers from SYRIZA are like all other law givers. They seized power by promises of more spending — ending austerity.

Varoufakis, Tsipras and all of the SYRIZA jokers wanted to spend beyond their will to tax. That is why they have been begging for five months to get more bailout cash and not pay on debt already accrued for law givers' spending largess.

Tsipras lost. Tsipras and his game-playing, cycle-riding sidekick lacked leverage. The ascension of SYRIZA to power was the first referendum and only one that should have been held. 

Tsipras worst move was holding and encouraging a No-Vote referendum to reject a new deal being offered by Eurogroup ministers. A yes-vote win would have forced Tsipras to cave into demands. 

The actual no-vote win forced Tsipras to present his plan. The Eurogroup ministers called him on it. In short, the no-vote meant no more delay tactics could be played.

The fix for Greeks is deflation. Greek law givers need to stop trying to create a phony economy through borrowing. 

Greeks need to devalue. They have needed to devalue for a long time. 

Their prices are too high. Their prices are too high because law givers borrow to spend on wages and pensions for government workers. All should know that wage rates are prices.

The Euro isn't going to fall much relative to the cash of other banking systems such as the U.S. dollar, the British pound, the Norwegian krone or the Swiss Franc. So to devalue, prices need to fall. Prices won't fall until Greek law givers cut the sum of credit they introduce into the Greek economy.

And so, to remain part of the European project, Greek law givers must give up their spoils system and bring Greeks into the 21st century.

Part of the new deal, Greek law givers must do these acts by Wednesday:

• make standard their VAT tax rates
• increase the retirement age for law-givers provided pensions to 67 by 2022
• legalize automatic spending cuts of Greek law givers try to abandon budget targets
• end the spoils system

If Greek law givers can do these acts, then formal talks can begin between Tsipras and the Eurogroup ministers for a new, permanent bailout deal of €86 billion.

Greek law givers must cut their per capita spending. That is what they have been asked to do. If Greek law givers do so, they will get their deal reworked. 

If Greek law givers agree, Greece will strengthen and the Euro gets better. If Greek law givers reject, Greece will exit and the Euro will strengthen. Either outcome is good for the Euro. Only one outcome is good for the Greeks — staying in the Euro, cutting Greek law givers' power.

The problem for Greeks is the same problem everyone suffers the earth over. Over many years bad law givers have leveraged doling welfare to gain power and keep it. With power, law givers have then created a horrible culture — codified law — of bad design, which unsurprisingly has led them to their final destination of failure. 

Greek law givers let their debt grow beyond their ability to service the interest payments. Their poor decisions led to exponential growth of debt. Per capita spending by Greek law givers is well beyond the size of Greek economy compared to other EU states of alike-sized economies as measured by GDP.

And in spite of what Krugman and others like him wrongly claim, the Eurogroup ministers strive to keep the European project going. They are trying to come up with a plan for short-term financing to help Greek law givers over the next few weeks.

Even if SYRIZA Greek law givers reject this final deal, Greek law givers are on the hook for all kinds of bonds floated in jurisdiction that is not Greece. No matter what, Greeks will be paying taxes to their law givers for those bonds. Greek law givers will pay on those foreign bonds.

In life, when adults have the power to decide, they don't get what they want always, but always, they get what they deserve.

For an up-to-the minute timeline for the SYRIZA-caused crisis, check out the Guardian UK. Be wary about what you believe published there.

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REALITY SMACKS GREEKS. WHAT MUST BE PAID BACK WILL BE PAID BACK.

I've taken heat for stating what all should should have known all along about the so-called Greek crisis, which Greek legislators brought upon all Greeks over many years: What must be paid back will be paid back.

Populist fools everywhere want Greeks to be their Hercules heroes. They want the Greeks to default and stiff the bankers because they have been indoctrinated to believe bankers are evil swindlers who somehow by the very nature of the banking, cheat everyone.

If Greek law givers want to stay in the Euro zone, they must pay back enough of the outstanding debt apportioned over time to reduce cumulative debt-to-GDP to 110%. However much debt that Eurogroup ministers say Greek law givers have up to the full amount will be the sum apportioned.

If Greek law givers don't want to stay in the Euro zone, they won't pay back anything, at least not on bonds sold in Greece under Greek jurisdiction. If that is what Tsipras and his cronies decide, Greeks won't have much of an economy though.

As I have said repeatedly, should the Greeks return to the Drachma, the real austerity will begin. If Tsipras doesn't do as told and if Greek law givers don't do as told, they can enjoy crushing third world poverty under their Drachma.

With a return to the Drachma, voluntarily Greeks will turn their country into a Submerging Market™.

If Greeks don't want to become Argentinians, Venezuelans, Iranians, North Koreans and the like, Greek law givers are going to play ball. Greek law givers will be on the hook for bonds sold outside of Greece and falling under jurisdiction elsewhere. Those obligations are not going away.

Many have heralded Alexis Tsipras, the Greek Prime Minister as a negotiating genius, someone who has played the Eurogroup ministers as if they were fools. That belief is the belief of fools.

Tspiras called for a snap referendum, politicking for a no-vote. Greeks gave him what he wanted, a no-vote. Only in fantasy land did self-confused pundits claim Tsipras would be emboldened with a no-vote, being empowered to dictate terms and conditions to the Eurogroup ministers.

To any clear-minded thinker, it was obvious, with a no-vote, Tsipras straightaway had to put forth his plan. The Eurogroup ministers called him on it. In short, the no-vote meant no more delay tactics could be played.

If Tsipras wanted the Greek banking system out of the Euro, why didn't he announce so on the day of winning election and SYRIZA taking power? Why didn't SYRIZA pass a law the next day to swap Drachma for Euro?

If Tsipras has wanted the Greek banking system out of the Euro all along, why go back to the Eurogroup ministers over five months, becoming a street beggar each time, panhandling for another bailout?

Greek law givers lost any leverage when the ECB shuttered ECB-aligned banks. €60 Euro a day ATM withdrawals with no other banking services seized up the machinery known as commerce.

By cutting off emergency liquidity assistance (ELA) to Greek banks, Greek bankers were forced to close. Closing the banks effectively cut off the metaphorical water supply to Greeks.

Greek banks have much of their reserves tied to Greek law givers. With impaired reserves, Greek bankers relied upon the ELA. Those reserves deteriorated worse precisely because of the Tsipras-led SYRIZA.

Also, there is no way for the leaders of Estonia, Latvia and Lithuania along with Slovakia and Slovenia, leaders who helped their peoples financially atone for the sins of communism, to sell to their citizens that Greeks must stay in the Euro and to do that, they must let the Greeks off the hook for all of their profligate spending.

In an interview with Radio Free Europe's Rikard Jozwiak, Sandra Kalniete, the former Latvian foreign minister and current member of European Parliament had stern words to say about Tsipras and the Greeks.

I would say that, of course, Europe has to show solidarity, but that means that Greece has to go forward with [a] very precise and concrete reform program not only on paper but they have to convince Europeans that they are going to implement it. Because I consider that this isn't fair that countries like Ireland, Spain, Portugal, and Latvia -- we went through [a] reform program. Our people made such sacrifices, and now there comes a nation which received much more from the European Union and international society in credit, and now they are saying that they are not able to reform Greece to make it sustainable. I simply cannot accept it.

I believe the euro can survive without Greece. Greece cannot survive without the euro, that's the dilemma. Of course, every European [is] conscious [of] the geopolitical importance of Greece in an environment which is rather difficult to manage and in front of migration waves which are coming from Syria and Libya, and they are also reaching Greece.  ~ Sandra Kalniete, member of the European Parliament and former Latvian foreign minister

Only a day or so ago, Tsipras foolishly said that a "clash with Europe ... will take ... the euro zone down." Greece GDP is a rounding error — 1.84% of the total Euro zone GDP less the Greek GDP. That is like throwing two cents on the ground for every Euro in your pocket.

On July 20, Greek law makers owe US$3.9 billion. That date marked the final call in this poker game anyway. As it is, the deadbeat socialist-communist SYRIZA legislature already missed a major payment owed to generous creditors.

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TSIPRAS AND VAROUFAKIS, THE GREEK DUMB AND DUMBER SEEK TO FORCE GREEKS TO DRINK HEMLOCK

According to The Telegraph UK, Prime Minister Alexis Tsipras walked out of talks with leaders of the creditors of the Greek legislature, the IMF and the European Financial Stability Facility, in a scant 45 minutes. It appears as if the Greeks want to default on their debts.

First, here is some perspective. The population of Greece runs a bit more than 11 million Greeks. The population of New York City and the city of Chicago combined run to 11.125 million.

The combined spending of the city councils of New York and Chicago runs to $82.2 billion. The last four quarters of spending by the Greek legislature runs to $45.184 billion.

Spending for each resident for a combined New York and Chicago is $7,388.76. Spending for each Greek comes to $4,092.54.

And now, here is the kicker. While spending per capita for a combined New York and Chicago is 1.81 times spending per capita by the Greek legislature, the GDP of a combined New York and Chicago is 8.12 times bigger than the GDP of Greece.

Compared to a combined New York and Chicago, Greek legislature spending ought to be closer to $909.95 each Greek or $10.037 billion in total. So what does that mean?

Greek legislature spending needs to fall -77.8% for their spending to fall within reasonable ratio to world class cities like New York and Chicago! 

As it is, neither city is known as being cities where politicians exercise fiscal restraint.

For even more perspective, there are about as many Czechs living in the Czech Republic and Portuguese living Portugal as there are Greeks living in Greece, 10.538 million and 10.478 million respectively. Yet, Czech legislature spending per capita of $3,188.76 is only 77.9% of that by the Greeks. Portuguese legislature spending per capita of $3,510.49 is only 85.8% of that by the Greeks. Said another way, Greek legislators spend 1.17 times more than Portuguese legislators and 1.28 times more than Czech legislators.

At $242.26 billion, Greece GDP is slightly larger (1.066 times) than Portugal GDP at $227.3 billion and 1.16 times larger Czech Republic GDP at $208.8 billion. However, for Greek spending to get in line with the Portuguese legislature spending relative to Portuguese GDP, Greek legislature spending per capita would need to be cut -8.6% to $3,742.18. To get in line with the Czech legislature spending relative to Czech GDP, Greek legislature spending per capita would need to be cut -9.6% to $3,698.96. 

Seriously, the representatives of the IMF have asked the Greek legislature to cut pensions by $2.02 billion and raise taxes by $2.02 billion. The spending cut would drop per capita spending a paltry 4.4% down to $3,913.33 and yet Greek negotiators believe the request is unreasonable!

Should Tsipras and Varoufakis lead Greek legislators to default, Tsipras and Varoufakis will go down in history known forever as Dumb and Dumber. The Greeks will be far poorer in Europe within a decade, much so.

Greeks have been living under a delusion, a delusion of legislators' credit flowing into the economy, which elevated prices and created a phony, unsustainable living standard. The European Financial Stability Facility has kept the charade going since 2008.

For Greeks, prices need to fall at least 220% maybe and that includes wages as wage rates are merely prices. Yet, Tsipras and Varoufakis don't want to let prices fall.

That is what those who side with the Greeks don't get. The Greeks have been living by the largest credit bubble in history of Greeks, albeit a public finance bubble. Tsipras and Varoufakis refuse a controlled-deflation of that bubble.

Printing what would be near-worthless Drachma won't let Greeks buy anything from anyone of the world. With near-worthless Drachma, Greeks will be lucky to buy from other Greeks.

How will Greeks pay for high-end, precision German-made machinery? What will a handful of German factory owners get for all of the Drachma presented to them as payment, 100 years worth of ouzo, 1,000 years worth of belly dances?

How will Greeks pay for oil? How will Greeks pay for natural gas? How will Greeks pay for pharmaceuticals? How will Greeks pay for steel? How will Greeks pay for semiconductors?

Greek law givers overspend relative to their private-sector economy. Their overspending cannot be maintained.

Greeks need to realize they're much poorer than they believe. Spending by Greek law givers needs to get in line more with the Portuguese or the Czechs.

SYRIZA, Tsipras and Varoufakis are the wrong Greeks in power. They are leading Greeks into disaster. What is being asked of Greeks isn't unreasonable, a -4.4% cut in spending that pushes Greeks closer to legislator spending in line with what the economy can sustain.

Those who champion a default by Greek legislators will be on the wrong side of history. Ask the Venezuelans how life is working out for them and their phony banking system's cash.

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