Tuesday 21st February
It looks as if the latest crisis has just about been avoided, or should we say postponed. For how long is anyone’s guess, but the consensus is that the sand is fast running out of the hourglass. The main problem is really that the medicine administered so far is in danger of killing the patient. This is all being dictated by Germany who perceive the Greeks as lazy and overspending, unlike the thrifty and hardworking Germans of course. The Greek economy is going backwards so fast that it is almost in freefall, and the unemployment and cuts in wages are feeding on themselves in an ever decreasing downward spiral. In the same way that the arguments against increased immigration where the idea that there are only so many jobs to go around is demolished by the simple fact that the more people who are working, the more money they have and the more taxes they pay simply creates more work for everyone else; the reverse is also true, if you make people unemployed and cut even the minimum wage, everyone is poorer, has less money to spend, pays less tax and even more people are unemployed. So, Mr. Osborne watch carefully and make sure we don’t fall into the same trap. As part of the jigsaw current holders of Greek debt will have to accept a swap of much longer term debt of about thirty percent of the value of the bonds they currently hold. This is called a Greek haircut. Well, if the bond holders are having a Greek haircut, all I can conclude is that the Greeks themselves are having a German scalping.