Archive for the ‘Debt’ Category

Troika’s Greece Incorporated To Doug Casey’s Africa Incorporated.

20 August 2015
Greece is to receive today it’s first tranche of 3rd bailout, which will quickly go to pay off 2nd bailout repayment due also today to ECB along with past missed repayments to IMF and ECB. 
That is a “neat” arrangement indeed. Greece is given money by ECB, mind you only a book entry or rather a digital click, to only pay back to ECB and IMF, another digital click, with Greece getting almost nothing in the bargain save except more indebtedness.
That is to say: The 3rd bailout money would pay off “obligations” of the 2nd bailout that was arranged to pay off the “obligations” of the first bailout. Meanwhile Greece debts keep on piling all the time to ensure that Greeks owe more and more to the creditors and owe less and less of their own country.
This loss of Sovereignty or selling family silver to pay creditors has a sweet sounding name: “Hellenic Republic Asset Development Fund/Plan“. 
Those who want piece of the Greek Nation would have plenty of choices before them from Airports, Seaports, State owned Oil Refining, Motorways, Power and Electricity utilities, to Postal service to even Water and Sewerage systems. What usually is accomplished through wars and occupation, just as USA/NATO did in Iraq and Libya, has been accomplished in a bloodless coup by EMU and ECB wherein Greek’s ruling establishment is complicit too. Ordinary Greeks are shellshocked to comprehend how this daylight robbery is defrauding them right under their noses. Greek Referendum that Alexis Tsipras held and hoped to lose,but won overwhelmingly, rejected the earlier bailout proposal from EU/ECB, which was less grasping than what Tsipras has now led Greece into. Was Tsipras a Trojan Horse of the EU all along to fell Greece?
Creation of Eurozone out of economic-unequals was a German-Franco project into which elites of weaker countries like Greece, Portugal, Spain, Italy bought with   prospects of cheap money [Euro], but was doomed from the very beginning. To create a zone where nations had independent fiscal policies but a common currency and a supranational European Central Bank that would set the monetary policy was an economic freak [Economist Bernard Connolly pointed this out in 1995 while working with EU and got fired for his labours]. Elites helped themselves to easy money from rich members like Germany to run fancy schemes  [giant malls, luxury condos, etc.] in the era of 2000-2008 when financial industry too skyrocketed with all kinds of Ponzi products. The financial crisis that struck with failures of big nameplate investment banks in USA sucked out liquidity from markets and the economies went into tailspin. The fancy schemes that looked in pink of health suddenly started looking sickly emaciated as investor interest  and risk appetite plummeted. Had there been national sovereign currencies of these weaker EU countries, then fancy schemes wouldn’t have taken off on that scale and financial crisis would have weakened their currencies to make exports cheap and imports costly. This would have counteracted the systemic issues of economic inefficiencies and lower capital/labour productivity in these countries. Alas, common currency, Euro, on the back of much larger and strong German economy, did not weaken or did not weaken to the extent needed when it did. Since external currency devaluation did not happen, internal “devaluation” had to take place through wage cuts, pension cuts, social sector cuts, longer working hours, costlier utilities, and so on. This is precisely what TROIKA [EU/ECB/IMF] ordered in 2010 -the so called Austerity Program- to “bailout” ostensibly Greece, but to actually bailout the oligarchs, who had merrily borrowed during the “happy years” and far more importantly their European creditors -notably the German and French Banks/Institutions. Thus, while the profits of earlier “happy years” went into the coffers of Oligarchs and Banksters [Aren’t the lenders equally or solely responsible when lending money to very risky projects?] , the costs of profligacy were to be borne by ordinary Greeks through belt-tighening and more work. This painful medicine was administered to the patient with the promise that health would be restored soon after the initial couple of years of suffering. However, just two years down the line, the patient became worse, not better. The austerity was supposed to reduce Debt to GDP ratio, but the GDP kept on declining making the debt unsustainable. A second bailout was prescribed with more of the same bitter medicine. That too has not worked and Greece is further down the sinkhole. Even the prognosis of the third bailout is absolutely no different. It won’t work. But, it would nevertheless claim a major chunk of Greek pie as the sweet sounding “Asset Development Fund/Plan” shows. Even IMF, the pro-establishment bulldog, had to tell EU that there is no alternative to Bail-In or Debt write-off to some extent.
It has taken Troika patient work of years to realise Greece Incorporated. However, another roving investor, Doug casey, has come up with a “brilliant plan” to convert sovereign states of say Mauritania or Senegal into Mauritania Incorporated or Senegal Incorporated. Here is his plan in his words. This is serious stuff.
Tom Woods: What a pleasure and a delight it is to welcome back to the show Doug Casey.
Doug is a libertarian economist, best-selling financial author, international investor, entrepreneur, and the founder and chairman of Casey Research.
Doug, welcome back to the show.
Doug Casey: Thanks, Tom. It is my pleasure.
Tom: You’ve been up to some interesting activity in Africa that I’d like to ask you about. Let’s start off by telling us what you’ve been busy doing there.
Doug: Well, the last two weeks, I’ve been visiting the Islamic Republic of Mauritania with a short side trip to Senegal. I’ve been pursuing my hobby, which is to propose to a backward country a plan for complete and total free marketization… including taking the country itself public on a major stock exchange and distributing most of the shares directly to the people who theoretically own the government assets. I felt like I had Maria Muldaur’s “Midnight at the Oasis” playing in the back of my mind the whole time I was there.
Tom: Suppose you got everything you wanted, what would the outcome look like?
Doug: Well, 100% of all government assets, land, state-owned companies – everything – initially go into a corporation and we distribute the shares.
Let’s say, 70% pro-rata to every man, woman, and child in the country, so they don’t just theoretically own the government, now they actually do. 15% would be put it in trust for the next unborn generation to defuse that time bomb. 10% would be distributed to people who, let’s say, are of significant help to making this happen, and people who are important, whose rice bowls would be broken, and 5% to take public in major stock markets to raise some capital. Then we get rid of all duties, taxes, and regulations.
Dubai was absolutely nothing in 1980. You know what Dubai is now. If we go back further, in 1960, Hong Kong and Singapore both were very poor and look what has happened to them. So I think in today’s world if somebody is daring enough to want to do this, I think it could be of world historic importance. So I’m looking for the right guy.
Tom: I’d like to get a glimpse inside of a meeting like this. If you’re sitting down with the president, you’re sitting down with top officials, how do you make that case, especially when the response is going to be, “What’s in it for me”?
Doug: Well, that’s always the first question, of course. I start my presentation with three things I can do for you, Mr. President. It’s always a question of the benefit to the buyer.
Number one, this plan will make you legitimately a multibillionaire. That always goes down very smoothly, because they know that doing what Mobutu and Mugabe did doesn’t work quite as well now as it did in the past. So it gets their attention.
Number two, the people will love you and treat you as the new George Washington. That sounds pretty good too. Half the time in these places most of the population wants to kill them.
And number three, we will put you on the front cover of all the world’s magazines in a favorable light for the next decade. Now that sounds good, because these people, if they are even known to exist, are considered pariahs.
So they always listen to the rest of presentation. Of course then things start to go wrong… usually from people under the president. It’s the people under the president who are usually making the big money, not so much the president himself. So they are often the problem.
It always makes for a fun adventure and interesting cocktail party stories that I can tell and retell to people for hours. But it’s my hobby. It’s not an occupation. I haven’t made any money on it yet, although I always have a plan B when I go to these countries: look for mining concessions and so forth.
Tom: Suppose you had to do it all over again. Let’s say you turned 18 in 2015. Have conditions changed to the point where you would take a different path, and incidentally would you go to college?
Doug: I would definitely not go to college. Even then, I only did it because everybody from my socioeconomic class was going to college, so there was no thought involved on my part. It was just like going from eighth grade into high school. I counsel students against it today. College serves no useful purpose unless you want to learn a trade like doctoring or lawyering or you need a piece of paper to practice a particular occupation, or there is a formal discipline, like a hard science or engineering.
You will pick up lots of bad ideas. You will spend a huge amount of money, get yourself under a huge financial rock that will take you years to dig yourself out from under. What I suggest people do instead is lay out what the most intelligent thing to do with that four years of time and probably $200,000 of capital. I like the idea of traveling. The place that I would put first and foremost on my travel list today for economic reasons is Africa. Go someplace where you can be a big fish in a small pond quickly.
Tom: Back in the ’50s and ’60s in the wake of decolonization in Africa, you had a bunch of Western educated semi-Marxist political leaders who were nationalizing property and confiscating assets from rich people and so on, you wouldn’t touch Africa with a ten foot pole. What has changed since then?
Doug: Well, politics always draws the worst kinds of people of course. Most of the presidents of Africa even today are ex-generals or ex-colonels or something like that. It has economically improved a lot. The population has exploded and it’s going to explode more in the years to come. It’s chaotic. But if you can bring order to chaos, that’s opportunity.
If you go to the Orient, there are a lot of rich, smart people there. You are not going to have much of a competitive advantage. That’s true to a lesser extent in South America too. Africa is actually the place, I think, you want to go.
Tom: Do you have any particular parts of Africa? I’ve heard good things about Botswana. Do you have any place in particular that attracts you?
Doug: Other than South Africa, I’d say Botswana is the most developed country in Southern Africa for sure. But where would I go now? Well, of course, the nice thing about Africa is that it’s divided basically into three parts, Anglophone Africa, Francophone Africa, and Lusophone Africa, and my French is still adequately conversational. I lived in France and Switzerland for a year during college. My Spanish is functional. The language thing is a consideration of course. But on the other hand, most of the educated people in most countries of the world speak English, which is the world’s lingua franca today.
Where would I go? There are around 50 countries in Africa. I like small, obscure ones. Maybe Ghana is too developed. Look at Benin or Togo or maybe the Ivory Coast. Mauritania, where I just was, is actually quite interesting. Guinea-Bissau, Guinea-Conakry, you’ve got lots of choices. Somebody should get on a plane and just take a look. Then when they get into a country, a capital city, which is always where the action happens, get on the telephone to local lawyers and real estate agents and businessmen to set up appointments and see who you can get along with. One thing will lead to another.
I wouldn’t go to Africa as a lifestyle choice. I would go there for economic reasons and for the adventure that it would yield. I’d say as a lifestyle choice, it comes down to South America or the Orient. I lived in the Orient for years and I loved it.
Tom: What about the language barrier?
Doug: Well, I lived in Hong Kong and when I was there it was much more English. Of course everybody in China is learning English today, everybody, everywhere that you basically would want to talk to. I’m not trying to be elitist but the educated people – put it that way – all speak English today as a second language. This is one of the things that will slow down your progress on learning the local language, is that they all want to speak English to you. So that’s a double edged sword… but it’s really an advantage. No, don’t worry about the language problem.
Tom: Well, I sure appreciate your time, Doug Casey. You are the International Man himself, and we are always grateful for your time.
Doug: Well, thank you Tom. It is a pleasure to talk to you under any circumstances.
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