How Goldman Sachs May Provoke Yet Another Major Financial Crisis

[xchrom]

http://www.alternet.org/economy/how-goldman-sachs-may-provoke-yet-another-major-financial-crisis

Greece and the troika (the International Monetary Fund, the EU, and the European Central Bank) are in a dangerous game of chicken. The Greeks have been threatened with a “Cyprus-Style prolonged bank holiday”if they “vote wrong.” But they have been bullied for too long and are saying “no more.”

A return to the polls was triggered in December, when the Parliament rejected Prime Minister Antonis Samaras’ pro-austerity candidate for president. In a general election, now set for January 25th, the EU-skeptic, anti-austerity, leftist Syriza party is likely to prevail. Syriza captured a 3% lead in the polls following mass public discontent over the harsh austerity measures Athens was forced to accept in return for a €240 billion bailout.

Austerity has plunged the economy into conditions worse than in the Great Depression. As Professor Bill Black observes, the question is not why the Greek people are rising up to reject the barbarous measures but what took them so long.

Ireland was similarly forced into an EU bailout with painful austerity measures attached. A series of letters has recently come to light showing that the Irish government was effectively blackmailed into it, with the threat that the ECB would otherwise cut off liquidity funding to Ireland’s banks. The same sort of threat has been leveled at the Greeks, but this time they are not taking the bait.

[DetlefK]

1. I don't get it. It's unfair to reveal that the banking-system isn't built on money?

Banks handle huge amounts of money, but most of it is virtual. If you borrow a certain amount of money from a bank, that IS NOT BACKED UP by some value that the bank owns. The bank creates new value out of nothing and gives it to you. One strike of a pen and there is money where no money was before. Only a few percent of the money a bank gives out are actually backed up by real-world value.

But that's no problem:
- It hardly ever happens that so many depositors demand their money back that the bank runs out of it.
- And even if that happens, it can always borrow money from another bank. That other bank creates virtual money and gives it to the first bank as virtual money. YOU DON'T SEE ANY MONEY TRANSPORTERS DRIVING AROUND WHEN ONE BANK LENDS MONEY TO ANOTHER BANK. Because it's all money that the banks have mutually agreed on that it exists.

The banking-system is built on a lie, on money that doesn't exist, and everyone has agreed that this is a lie we can live with.

And now the EU is the bad guy for demanding that the greek banks live without the lie.

I get it: NO MAJOR BANK ANYWHERE IN THE WORLD could comply with this demand of honesty. But the split into good and evil is not that clear-cut. Is the EU evil for daring to point out that we actually live in an illusion that we made and that we pretend to be reality?

[daleanime]

2. So your OK with thousands of people.....

gaming the system for their own benefit at the expense of the rest of us?

[DetlefK]

3. No, I'm not. I just don't get why the EU is demonized for revealing the illusion.

"I want the truth."
"You can't handle the truth."
The banking-system is built on and held aloft by virtual money that the banking-system created. There is more money bound in the derivative-market alone than the world-economy is worth. And nobody cares because the system works as long as there are no crises.

Yes, the threats of the EU are real and dangerous to Greece. I just find it odd that nobody asks why the consequences would be so grave, why the international banking-system is so inherently geared away from stability and towards speculation.

[rhett o rick]

5. The problem as I see it, is that all banking is built on the "illusion". And in

capitalism, if you can make the other guy go bankrupt, you win. So the big banks are picking off the little banks (countries).

It's all a bubble that can burst any time. The banksters have learned that they can use the threat of bursting the bubble, especially for a specific country, as a means of extortion.

[Octafish]

4. Euro Goverment by Goldman

http://www.independent.co.uk/news/business/analysis-and-features/what-price-the-new-democracy-goldman-sachs-conquers-europe-6264091.html

[rhett o rick]

6. All the more reason to elect the team of Clinton/Goldman-Sachs. We want on their good side. nm

[marmar]

7. K/R