Alexis Tsipras, leader of the communist-rooted Syriza party, immediately promised to end the “five years of humiliation and pain” that Greece has endured since an international bailout saved it from bankruptcy in 2010.
Mr Tsipras won on promises to demand debt forgiveness and renegotiate the terms of Greece’s 240 billion-euro ($270 billion) bailout. In his victory address, he made the following points:
- GREEK PEOPLE HAVE WRITTEN HISTORY
- GREECE IS TURNING PAGE, LEAVING AUSTERITY BEHIND
- BAILOUT AGREEMENTS HAVE ENDED FOR GREECE
- TROIKA ERA IS OVER FOR GREECE
- SYRIZA GOVT READY TO NEGOTIATE ON DEBT
- OLIGARCHS, ELITES IN GREECE HAVE BEEN DEFEATED
- SYRIZA VICTORY IS VICTORY FOR PEOPLES OF EUROPE
European leaders and bankers will not likely sleep well tonight.
Greece’s economy has slowed considerably and unemployment has spiked above 25 percent, while average incomes are down 30% or more.
How then, can Greece be expected to pay off hundreds of billions of Euros with onerous interest attached? The banks knew they would struggle, so they are likely going after Greek resources, gold reserves, political influence and future tax revenue from the newly-enslaved Greek citizens. They offer a solution of more loans with higher interest in order to service past loans, which just digs the nation and people deeper into debt.
Rightfully so, the Greek people do not want to repay the bankers under the currently exploitative terms and have little interest left in the European Union. The faster they default and run for the exits, the better.
Yet hedge fund managers have come away from meetings with the Tsipras economic team using the word “pragmatic” and concluding that a Greek exit from the common currency is unlikely. They are buying Greek debt for the high returns and assurances that it will be repaid.
I’m not quite as convinced. And I won’t shed a tear for the hedge funds that face massive losses from leveraged exposures to Greek debt, nor the ECB, private banks or IMF that will be on the hook. Then again, I’m sure they will find a way to pass the burden onto taxpayers that will take the losses from a gamble in which they had no stake in the winnings.
My advice to the Greek people and their new leader… follow Iceland’s model of dealing with a corrupt banking system that is trying to enslave you. But take it one step further: declare default, jail the bankers, kick out the IMF and other debt-peddlers, withdraw from the Eurozone and rebuild your country. Don’t give up your resources for a fraction of their true value in order to pay off an imaginary debt entered as blips on a computer screen by bankers. Austerity? Well yes, balance your budget and live within your means. But not for the benefit of the banking elite that are already swimming in wealth while you suffer.
Lastly, you might want to repatriate the half of your 40 million ounces of gold reserves held with the Federal Reserve. We’ve already seen their inability or reluctance to return Germany’s gold. It will be a game of musical chairs when other nations start doing the same and you will want your gold in hand when the music stops.
Speaking of which, I had expected precious metals to correct this week due to profit taking. However, the increased likelihood of Greece defaulting on its debt or exiting the Euro may push gold and silver higher this week as investors scramble for a safe haven. In early trading, we are already seeing prices spike modestly higher.