Concluding Paragraphs in this section
Theodore
Pelagidis, an economics professor at the University of Piraeus, put it this way: "This is part of the death spiral of the
recession as a result of austerity measures.
People realize that contagion has come to banks and they are very afraid
of losing their deposits. On average around 4bn-5bn euros in capital
flees the banking system every month."
It's not just the super-rich behind the flight of funds.
It's now
"game over" for Greece. The
market is "predicting' a nearly 100% chance of default on Greek bonds even as
the bankers and Eurocrats squabble over the prospect of raising the haircut on
Greek debt from 20% to 50% (i.e. reducing the value of Greek bonds by up to
50%).
The ECB is
interfering heavily in the bond markets of various countries in their attempts
to keep things going. But they've apparently
tossed in the towel on Greece, as evidenced by the Greek bond yields above.
However, when we note the ways in which the Spanish, Irish, and Italian debts have come down off their highs, can we make sense of why the ECB focused their efforts there? Sure, that's easy, and the BBC has put together an extraordinarily helpful interactive chart to make it all crystal clear. That interactive chart can be found here. (Scroll down.)
To begin
with, what the chart is showing by the
width of the arrows is how much money each country owes to the banks of
other countries -- the larger the width of the arrow, the greater the
amount.
Of
particular interest are the charts for the UK and the US, which make clear why
these two countries could never be allowed to fail, for fear of the worldwide
economic catastrophe it would cause.
The main
point that these charts graphically and beautifully demonstrate is that every
country owes hundreds of billions to banks in every other country. And like the leeches they are, the banksters
will continue to bleed us for as long as they can, collecting interest due
them, until the entire system comes down.
And when our house-of-cards economy finally collapses (assuming we let
that happen), they will snatch up its pieces at bargain prices, and build a new
economy, leading to a world in which their wealth and power is even greater
than before, while all the rest of us in the 99% will be every so much poorer
and desperate.
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