By Greg Palast for In These Times
November 08, 2011 "Information Clearing House" -- Here's
what we're told:Greece's economy blew apart because a bunch of
olive-spitting, ouzo-guzzling, lazy-ass Greeks refuse to put in a full
day's work, retire while they're still teenagers, pocket pensions fit
for a pasha; and they've gone on a social-services spending spree using
borrowed money. Now that the bill has come due and the Greeks have to
pay with higher taxes and cuts in their big fat welfare state, they run
riot, screaming in the streets, busting windows and burning banks.
I don't buy it. I don't buy it because of the document in my hand marked, "RESTRICTED DISTRIBUTION."
I'll cut to the indictment: Greece is a crime scene.
The people are victims of a fraud, a scam, a hustle and a flim-flam.
And––cover the children's ears when I say this––a bank named Goldman
Sachs is holding the smoking gun.
Goldman Sachs secretly bought up €2.3 billion in Greek government debt,
converted it all into yen and dollars, then immediately sold it back to
Goldman took a huge loss on the trade.
Is Goldman that stupid?
is stupid—like a fox. The deal was a con, with Goldman making up a
phony-baloney exchange rate for the transaction. Why?
had cut a secret deal with the Greek government in power then. Their
game: to conceal a massive budget deficit. Goldman's fake loss was the
Greek government's fake gain.
Goldman would get repayment of its “loss” from the government at loan-shark rates.
is, through this crazy and costly legerdemain, Greece's right-wing
free-market government was able to pretend its deficits never exceeded 3
percent of GDP.
Cool. Fraudulent but cool.
flim-flam isn’t cheap these days: On top of murderous interest payments,
Goldman charged the Greeks over a quarter billion dollars in fees.
new Socialist government of George Papandreou came into office, they
opened up the books and Goldman's bats flew out. Investors' went
berserk, demanding monster interest rates to lend more money to roll
over this debt.
panicked bondholders rushed to buy insurance against the nation going
bankrupt. The price of the bond-bust insurance, called a credit default swap (or CDS), also shot through the roof. Who made a big pile selling the CDS insurance? Goldman.
rotting bags of CDS's sold by Goldman and others? Didn't they know they
were handing their customers gold-painted turds?
Goldman's specialty. In 2007, at the same time banks were selling
suspect CDS's and CDOs (packaged sub-prime mortgage securities), Goldman
held a “net short” position against these securities. That is, Goldman
was betting their financial "products" would end up in the toilet.
Goldman picked up another half a billion dollars on their "net short"
instead of cuffing Goldman's CEO Lloyd Blankfein and parading him in a
cage through the streets of Athens, we have the victims of the frauds,
the Greek people, blamed. Blamed and soaked for the cost of it. The
"spread" on Greek bonds (the term used for the risk premium paid on
Greece's corrupted debt) has now risen to — get ready for this––$14,000 per family per year.
Greg Palast is the author of Vultures' Picnic: In Pursuit of Petroleum Pigs, Power Pirates and High-Finance Carnivores, which will be released on November 14 by Penguin USA.
USuncutMN says: Tax the corporations! Tax the rich! Stop the cuts, fight for social justice for all. Standing in solidarity with http://www.usuncut.org/ and other Uncutters worldwide. FIGHT for a Foreclosure Moratorium! Foreclosure = homelessness. Resist the American Legislative Exchange Council, Grover Norquist and Citizen's United. #Austerity for the wheeler dealers, NOT the people.
USuncutMN supports #occupyWallStreet, #occupyDC, the XL Pipeline resistance Yes, We, the People, are going to put democracy in all its forms up front and center. Open mic, diversity, nonviolent tactics .. Social media, economic democracy, repeal Citizen's United, single-payer healthcare, State Bank, Operation Feed the Homeless, anti-racism, homophobia, sexISM, war budgetting, lack of transparency, et al. Once we identify who we are and what we've lost, We can move forward.