Scoundrels Disguised as Bankers




For anyone still doubtful of the serious threat the Euroland crisis represents to all including France, here’s compelling evidence of the damage done by scoundrels disguised as bankers: “Greek Debt Crisis-How Goldman Sachs Helped Greece to Mask its True Debt“.

BBC hosted a 2009 a live “Special World Debate” with panelists Economic Historian Niall Ferguson, French Finance Minister Christine Lagarde, Goldman Sachs Jim O’Neill, International Monetary Fund’s Managing Director Dominique Strauss-Kahn and Chairmwoman of Sabanci Holding Guler Sabanci

So diabolical and dodgy are the schemes dreamed up by those who crashed the North Atlantic economies (Canada excluded) in 2007/8 and then sent their tsunami to swamp European sovereigns, that there are fears for the bedrock of severely-stressed democracy in EU states.  What fracking is to those opposed to shale gas explorations, the Wall Street/City of London money mafia has become to those holding euros in Euroland.

In another highly readable post the ever-combative Prof Michael Hudson highlights his concerns that democracy in Europe is being replaced by financial oligarchy where bankers have hijacked policymaking by finance ministers and the taxpayer is made to pay for the vast  banker orgy of debt  dumped on the system since the 2007/8 collapse.

“Using derivatives to engineer Enron-style accounting enabled Greece to mask a debt as a market swap based on foreign currency options, to be unwound over ten to fifteen years. Goldman was paid some $300 million in fees and commissions for its aid orchestrating the 2001 scheme. “A similar deal in 2000 called Ariadne devoured the revenue that the government collected from its national lottery. Greece, however, classified those transactions as sales, not loans.”[1] JP Morgan Chase and other banks helped orchestrate similar deals across Europe, providing “cash upfront in return for government payments in the future, with those liabilities then left off the books.”

The financial sector has an interest in understating the debt burden – first, by using “mark to model” junk accounting, and second, by pretending that the debt burden can be paid without disrupting economic life. Financial spokesmen from Tim Geithner in the United States to Dominique Strauss-Kahn at the IMF claimed that the post-2008 debt crisis is merely a short-term “liquidity problem” (lack of “confidence”), not insolvency reflecting an underlying inability to pay. Banks promise that everything will be all right when the economy “returns to normal” – if only the government will buy their junk mortgages and bad loans (“sound long-term investments”) for ready cash.

The intellectual deception at work

Financial lobbyists seek to distract voters and policy makers from realizing that “normalcy” cannot be restored without wiping out the debts that have made the economy abnormal. The larger the debt burden grows, the more economy-wide austerity is required to pay debts to banks and bondholders instead of investing in capital formation and real growth.”

As the crisis rages on and dissent grows the dilemma for so many worried Euro-residents is where to find a safe haven for savings and where to turn for reasonable income on investment. Answers in an email please!

 

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