Saturday, May 19, 2012

Greece at the brink

Things are happening in Greece right now which are going to affect everyone on earth, so it would be a good idea to pay attention to these events.

The Greeks, for decades, have had an unusually generous Socialist mindset and entitlement mentality. Much like the Los Angeles political situation, they had a large voting bloc of Socialist public employees who kept voting themselves higher and higher social benefits packages at the expense of their fellow Greeks. Public workers in Greece wanted to retire at 52 years old. They wanted to be paid more money in retirement than they did when they were working.

The problem with this is that it is mathematically impossible for their fellow Greeks to carry that economic burden. Far too much of their economy was being siphoned off by these looters disguised as public employees. It is a lot like the situation here in Los Angeles, where Democrats keep voting themselves higher and higher benefits, as more and more businesses pack up and leave town. Eventually, the system will collapse.

It was one thing for the Greeks to be doing this when they had their own currency, the drachma. But when they entered the European Union, they started using the Euro as their currency, and it was the French and Germans who controlled how much of that currency was printed and distributed. Eventually, Greece ran itself into an enormous hole. Greece couldn't just print up more drachmas anymore.

The math is clear ....Greece cannot recover.

What will happen next will affect world markets. Greece will exit the Euro and their economy will collapse. The drachma will literally be worth nothing because it is the vague promise of a bankrupt nation. Greece will stabilize 5-10 years down the road, but their will be massive civil unrest in that time period.

Greece imploding will trigger runs on banks, and the implosion of Spain, Portugal and Ireland. Eventually, the entire European Union will collapse. The Euro will cease to exist and the various countries will all suffer as they return to devalued local currencies.

All of this is happening because of large, overpowering Socialist governments who buy votes with taxpayer money. Sure, it is easy to buy votes with taxpayer money when you can actually deliver the goodies, but when the coffee can is empty, it will prove that this type of "government by organized crime" is unsustainable and should not be attempted again in the future.

The solution here is to privatize everything and stop letting government be in charge of their citizens money.