Or, How Goldman Sacked Greece
by Greg Palast for In These Times
Sunday, November 6, 2011
Here's what we're told:
Greece's economy blew apart because a bunch of olive-spitting, ouzo-guzzling, lazy-ass Greeks refuse to put in a full day's work, retire while they're still teenagers, pocket pensions fit for a pasha; and they've gone on a social-services spending spree using borrowed money. Now that the bill has come due and the Greeks have to pay with higher taxes and cuts in their big fat welfare state, they run riot, screaming in the streets, busting windows and burning banks.
I don't buy it. I don't buy it because of the document in my hand marked, "RESTRICTED DISTRIBUTION."
I'll cut to the indictment: Greece is a crime scene. The people are victims of a fraud, a scam, a hustle and a flim-flam. And--cover the children's ears when I say this--a bank named Goldman Sachs is holding the smoking gun.
This is an adaptation of an excerpt from Vultures' Picnic , Greg Palast's new book, out next week, an investigator's pursuit of petroleum pigs, power pirates and high-finance fraudsters. Read the first chapter or just get the book here.
In 2002, Goldman Sachs secretly bought up 2.3 billion euro in Greek government debt, converted it all into yen and dollars, then immediately sold it back to Greece.
Goldman took a huge loss on the trade.
Is Goldman that stupid?
Goldman is stupid--like a fox. The deal was a con, with Goldman making up a phony-baloney exchange rate for the transaction. Why?
Goldman had cut a secret deal with the Greek government in power then. Their game: to conceal a massive budget deficit. Goldman's fake loss was the Greek government's fake gain.
Goldman would get repayment of its "loss" from the government at loan-shark rates.