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“Orderly Default” – Liars lexicon

By David Malone | Golem XIV | June 16, 2011

What is meant by this phrase “orderly default” which is all over the news this morning? It sounds so sensible. I think it is another entry in the liars lexicon.

When the banks and pundits say orderly, they mean orderly for the banks. Not orderly for Greece or the Greeks or the Portuguese or Irish.

Greece is going to default. Everyone finally admits this after denying it vehemently. The simple fact is that the Greek economy is not growing fast enough to have any hope of even keeping pace with their debts and the interest on them. Their debts are accumulating faster than their economy is growing. In fact the Greek economy is hardly growing at all – less than 1% at best.

So the ‘orderly’ plan is to give Greece loans to extend the time before the mathematics of compound interest and a contracting economy catch up with them. In this time the plan is to pay off lumps of the principle by selling organs. Organs of the state; a port here, a phone system there. The fisherman sells his boat and his net to clear his debts. And then what? Well then he is fodder for the wage pool and the loan shark.

But ‘putting off’ the inevitable begs the question – why put it off? Who is benefiting by putting it off? If Greece is going to default why not do it sooner, because in the mean time the Greeks are suffering massive violence to the fabric of their society and for what? Certainly not to avoid default. We already know they are going to. It’s just a question of sooner or later. So why later? Who benefits?

The answer is, the banks. Particularly the banks of France and Germany. They would like default put off in the hope that as time goes by their broader financial circumstances improve so that they would be better able to deal with whatever losses come from an eventual Greek default. Put if off long enough and maybe there won’t be any losses. Which sounds sensible – for the banks. But while the delay buys time, literally, for the Banks to improve their broader situation the exact opposite happens to Greece and the Greek people. The longer they wait to default, the longer they struggle to pay off debts that are crushing them and which they will have to default on eventually, the worse their broader situation gets. So the wait and do it slowly scenario is anything but orderly for the Greek people.

So again, why is this slow, ‘orderly’ torture of Greece being advocated?

I think the answer is that for as long as the ‘orderly default’ plan can be enforced upon the Greeks it provides the banks with the delicious prospect of asset stripping an entire nation.

Because that is exaclty what is going on in Greece . What the ‘orderly’ default provides is a window of opportunity when predatory financial players can strip Greece and in future maybe Portugal and Ireland as well, of everything the banks could never get their hands on in any other circumstance.

If you are a business and you get in trouble you file for bankruptcy protection. That is, you protect your assets from predators while you sort out your debts, defaulting on those you cannot pay, cutting deals to pay some small percentage of each debt and then emerge as a chastened but going concern at the other end. This is precisely what Greece and the Greeks are being denied by their own government. The ‘orderly default’ plan is to keep Greece out of bankruptcy protection, keep them paying, keep the nation in a state of semi-anarchy and panic with seemingly no way out of the mess – except by selling off at fire sale prices whatever their creditors fancy – for as long as possible.

This is very orderly if you are one of the banks. You lose nothing. The tax payers in Greece and in your own nations lose because they pick up the tab of keeping the torture going through endless bail outs. The tax payers are like the torturer’s assistant whose job is to revive the victim with a glass of water, so they can be tortured some more. Bail outs solve nothing for Greece, but do serve admirably for keeping the present ‘open for pillaging’ situation going.

In this defenseless state you can then asset strip the nation for as long as the local government can keep the lid on all-out uprising.

And best of all, at the end of this process, you will have a ruined economy, with impoverished people who will work for nothing, without any labour laws left to protect them – since those pesky things will have been swept aside in the austerity measures – and you will also be the new owners of all the assets the people and their nation once owned.

Not only does that give you a compliant nation and workforce, but having such a cowed and defeated place close to hand will serve wonderfully as a crow bar for uprooting any ‘restrictive’ and ‘inflexible’ labour laws and practices in neighbouring countries. And since that is explicitly what the IMF talked about in their blue print for Europe’s future, it is hard not to see this as at least part of the intention of the ‘orderly default’.

June 16, 2011 Posted by aletho | Deception, Economics, Timeless or most popular | Default (finance), Economy of Greece, Greece, IMF, International Monetary Fund | 3 Comments