Re-post from iflizwerequeen

One thing is certain: where there are people to be had and money to be taken, the  Goldman Sachs Vampire Squid leaps at the opportunity and the Greek crisis is no exception.  But you won’t read too much about Goldman Sachs’ role in this mess in the mainstream USA media.  One of my favorite sources for financial news in depth is Der Spiegel.

For example, in Der Spiegel you will learn that Goldman Sachs helped the Greek government to mask the true extent of its deficit with the help of a derivatives deal that legally circumvented the EU Maastricht deficit rules. At some point the so-called cross currency swaps will mature, and swell the country’s already bloated deficit.–and this you would have learned over a year ago.  But if you don’t know and would like to know, it’s never to late to learn.  Here are two great articles on the topic from Der Spiegel.

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Greek Debt Crisis: How Goldman Sachs Helped Greece to Mask its True Debt
SPIEGEL Online International – 08.02.2010Goldman Sachs helped the Greek government to mask the true extent of its deficit with the help of a derivatives deal that legally circumvented the EU Maastricht deficit rules. At some point the so-called cross currency swaps will mature, and swell the country’s already bloated deficit.

Betting on Default: Hedge Funds Speculate on Greek Debt
SPIEGEL Online International – 01.02.2010Greece’s debt problems are attracting hedge funds which are betting that the country will default. Meanwhile a leading German economist has argued that the European Central Bank should allow inflation to rise in a bid to avoid a costly and unpopular bailout for Greece.

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iflizwerequeen Comment

I remember being amazed and shocked almost four years ago when I stumbled across a PDF titled Of the World’s 100 Largest Economic Entities, 51 are now Corporations and 49 are Countries.  That is still a mind-boggling consideration for me–that a company’s wealth can be larger than that of a nation.  The List was compiled by Sarah Anderson and John Cavanagh of the Institute for Policy Studies and was released in December 2000.  If would be interesting to see if there is a more current list out there.  I revisited this source tonight and see that TEPCO is listed as #96 on the list.  I’ll bet they are not on the list any more–but who knows?  Goldman Sachs is not on this list, but they may be now.

Hey!  Whatever happen to enforcing the antitrust laws?  Whatever happened to usury laws?  Did the rich decide that such legislation interfered with their “god-given” freedom to rip off anyone who is not a member of their club?  It would seem so.

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AND HOW IT IS THAT THE GREEK SITUATION IS SO LIKE THE USA ECONOMIC SITUATION

Both countries elected a leader of their nation that they thought was going to represent them. Now,  to their chagrin, they realize that their leader tends to the needs of the wealthy investors–instead of those of the majority.

Instead of making cuts on the wealthy.  Instead of putting a few of them in jail for tax evasion, what both leaders are doing is putting a squeeze on the majority of the people in their respective countries.

Once again let us remember:  There are many other paths and solutions to putting the necessary money into the tax coffers for running the country without squeezing the very ones who are already hard-pressed.

Like many countries, the Greek government relies on borrowed money to balance its books. The recession has made this harder to achieve, because tax revenues are falling just as welfare payments start to rise. It doesn’t help that, in Greece, tax evasion is commonplace.

In the USA tax evasion added $3 trillion to the deficit over the past decade alone, an average of $300 billion a year, according to IRS data. This isn’t revenue lost from legal tax write-offs, like the mortgage interest deduction. It’s not even, as the IRS notes, “taxes that should have been paid on income from the illegal sector of the economy.” That $300 billion represents the amount of revenue lost from people deliberately cheating on their taxes every year. This includes underreporting income, hidden offshore bank accounts, sham trusts, and other ways to illegally stiff the IRS.

 

Liz Berry

Liz Berry

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