Greece is falling to pieces

Mish reports on capital flight from Greek banks in the midst of new rounds of protest.  Mauldin describes the situation as A Random Walk Through The Minefield.  Both of their posts are well worth the time to read.  Mauldin's even lists a potential sequence of events that could occur in case of default.  By the way, all talk of "muddle through" is now history with Mauldin.  Now he only refers to "end games" and "mine fields".  He's realized finally that no soft landing is possible this time.  The con can only be perpetuated for so long.  When a certain critical mass of the people are negatively affected, the con is on its last legs.  We are well past that point for several of the PIIGS.

The quick summary of their posts is that Greece is going to default on their debt (was there ever any doubt?  Really?  REALLY??).  The only question is how.  "When" is always a question too.  It's like this: Germany and France (and others) lent a lot of money to Greece so that it could buy their products (vendor finance get rich quick scheme at the sovereign level).  Now that it's clear that Greece could never afford their overpriced products in the first place, Germany and France want the next generation of Greek youth to submit to being life time debt slaves in order to pay for the sins of their parents.  If Greece defaults then not only are Germany and France out a lot of money that they are owed, they also lose a lot of future foreign sales.  Given that they have become accustomed to revenues from these fraudulent sales, the loss of them is going to sting.  The collapse of foreign debt also has knock on effects in their own economies (think businesses going bankrupt and unemployment rising and civil unrest aimed at the central mismanagement).  Also, any default will cause a chain of defaults.  If Greeks refuse to pay, will the Irish pay?  Will the Spaniards?  No.  They will look at the herd next door and they will model their behavior by what they see.

Until now, Germany and France have been suggesting that the situation be handled by Greeks tightening their belts, consuming less and working harder so that the output of their labor can pay the interest on the debt.  They will never pay the debt off and that is not even the goal of the debt owners.  The goal is to keep their economic serfs in perpetual debt - a constant source of revenue for the slave masters.  At this point it is clear that belt-tightening has had unintended consequences including riots and fire bombs.  Confidence in the leaders has been lost.  Greeks realize that their elected officials are con men who are in it for themselves, everyone else be damned (Americans haven't come to this realization yet - we are still foolishly arguing Dem vs. GOP - but we will do so when Greek style problems hit us in the future).

Worse yet, the herd is starting to self-organize in unison against the con men.  The elite fear self-organized people more than anything else.  They count on the herd not being able to self organize!  Organization is what the elite claim they bring to the table.  It's their supposed value add. If people are self organizing outside of the control of the elite then the elite will be cut out of the pie.  They will not be able to control things or to parasitically steal from the people which is their only means of subsistence.  The elite also know that if the herd gets all moving in the same direction at the same time that they feed on each other's energies.  This makes it very difficult to divide and conquer them.   Self-organizing slaves have always been a danger to the slave owners.

Unfortunately for the con men, the Greeks are no longer feeding off just their own herd energy.  Mish's article has the following:

"This is the fifth day of protests in Syntagma Square and this time they have been joined by a Spanish group who wanted to express solidarity with the merger."
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"People were outraged, but needed motivation to express themselves. The Spanish have given us that motivation," said Argyrou Iphigenia, an insurance agent, told Reuters. "We're not asleep. We are awake. The IMF must go."
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"The demonstration has been called through social networks, as well as in Spain, and the participants cited the movement as a reference 15M."
So the people of the region are now feeding off the herding energy of neighboring sovereigns.  Just when the con men think they have gotten the herd to sleep, some new commotion puts them all back on the hoof again.  Yes, that is really what is happening.  The herd is also leveraging social networks, Youtube, streaming cameras and other high tech ways to get their message out quickly.  The solidarity formed through this sort of rapid ideology propagation is powerful.  By the way, the reference to 15M above is 15 May - the day that Spaniards began their big sleep over protests in public squares.  15M is now young person code for "damn the man" (credit: Empire Records).  They are building something to rally around, something that is theirs and which they control.  Something that is not the property of their overlords.  The great herd awakening is spreading like wildfire and the pace is increasing.  There will be fireworks in Euroland this summer and it will not be related to the celebration of US independence.