Federal Reserve vs ECB

 Martin Armstrong

This now brings us to the primary question about central banks. They are simply

NOT all the same! There is a substantial difference between the Federal Reserve and the European Central Bank (ECB). The accounting at the Fed allows for it to CREATE money as needed and thus Ron Paul’s attempt to get into the books of the Fed created a firestorm. The Fed did not wish to open its books to allow the world to see how it is actually run. Now the fiat crowd will argue that the Fed can just create money in a very ELASTIC money supply. This is true and it was intended from the very outset that when economic declines appeared, the leverage within the system would implode and thus to ease that contraction, more money had to be injected to slow the collapse.

Banking began after the Dark Ages as simply a place to store your money. You paid a fee and they held it. The banks figured out that they could lend money and make a profit while it was just sitting there. This scam became the norm and then we ended up creating fractional reserves meaning if a bank held 6% of the funds on deposit it was enough to operate normally meeting the demands for people to withdraw their funds when all things remained equal.

In time of crisis, confidence in the banks collapsed and more people now wanted to withdraw their money that exceeded 6%.

The banks

BORROW short-term on a DEMAND basis and lend the money out long-term such as mortgages. During a crisis, if more people than the 6% wanted their money, the bank failed and thus created a “run” on the bank.

Bank runs still happen today as they have always taken place historically. Pictured here is a bank run from the Great Depression and an English bank run from 2007 in Birmingham. It is always the same event

– a collapse in confidence. This takes place because the fundamental structure of banks has been built upon this idea that they borrow short-term paying a lower rate of interest and lend long-term charging a higher rate. The structure is built upon this notion of a normal yield spread with the profit being long minus short-term rates.

The purpose of an

ELASTIC MONEY SUPPLY is to allow the quantity of money to increase when there is effectively a run on the banks. This was designed to prevent a depression where banks fail and their assets (loans outstanding) are sold for pennies on the dollar causing real estate to collapse in value as the leverage within the entire system implodes and collapses. If money supply were ELASTIC, it could then expand during such periods and contract as confidence returns and the panic subsides.

Because the Fed was designed with this ability to increase the money supply on an

ELASTIC basis, this has helped to ease the bank failures that would otherwise take place. The problem is not so much with this theory and design as it is with the political ineptitude of understanding what this mechanism true does and what are its limitations? Because of the fiat crowd ranting and raving about the Fed, they are only adding to the whole confusion about the design adopting the same mistakes made by the politicians who also clearly do not understand what the Fed was all about. This original ELASTIC MONEY SUPPLY idea was NEVER intended to be a permanent practice. The politicians assumed the Fed was designed to FIX the economy somehow (the details escaping them), and this has migrated transforming the Fed into now taking over institutions “too big” to fail and is somehow supposed to sterilize whatever bad effects may be created by the politicians spending more than they should. The ELASTIC MONEY SUPPLY was a good intension that if left alone meant TEMPORARY and that the expansion would then contract back to normal once the crisis was over. If it were restricted to that role, it would be helpful in easing economic contractions. But as politics goes, they never can leave anything alone for very long.

So how does this contrast with the

ECB? Here in lies the problem. The ECB is NOT authorized to create an ELASTIC MONEY SUPPLY. Consequently, the ECB cannot continue to just buy-in sovereign debt of member states as the market forces come down upon them. The ECB, unlike the Fed, will run out of money and then there will be a very public crisis whereby the ECB will have to be recapitalized. Now the fiat money crowd will argue that is the way it should be. The problem then becomes PUBLIC and now we introduce politics into the equation. This warns that the CONFIDENCE in the entire banking system in Europe may collapse because there is no automatic ELASTIC MONEY SUPPLY so bank failures and sovereign debt collapses cannot be dealt with immediately behind the scenes.

The fiat money crowd is fixed on this issue of money. That is

NEVER the problem. In the west, precious metals became a medium of exchange based upon their intrinsic value. In Lydia (Turkey), coinage began as a means of to solve a convenience. Instead of having to test and weigh the metal over and over again, the idea emerged where the city intervened and produced a standardized weight and imprinted the badge of the city (lion). This idea of money being intrinsic was pre-coinage. Once government began to get involved, the value rose relative to the actual cost to manufacture the coinage and like today, politicians always spent more than they had so they debased the coinage to make it spread out going further. Merely because the coinage was gold or silver did NOT stop the same process of fiscal mismanagement then as compared to today.

The problem is spending and debt, not what we call money. To solve the problem is to directly attack the issue. Imposing a gold standard and hoping somehow this will restrain government is wishful dreaming. It is like fining your wife because she failed to get you to take out the trash. We have to outlaw government borrowing except in times of war and then

ONLY if attacked! Anything shy of that is just not going to work; so right church – wrong pew.

This issue of how a central bank functions and the purpose of an

ELASTIC MONEY SUPPLY will come to the forefront next year. The ECB will have to be restructured since the European politicians refuse to address the structural problems in Europe and its almost single currency. Either the monetary system is revised, of the ECB will have to be recapitalized. Something will have to give in Europe.

European banks are now being forced to pay insurers and pension funds to take over their illiquid sovereign bonds in exchange for better quality ones because the ECB lacks this ability to create an

ELASTIC MONEY SUPPLY. European banks are desperate to secure much-needed cash and are having to turn away from the ECB. The ECB has now become the main provider of short-term funding in Europe as lending between banks is mostly shut down as everyone fears this debt game of musical chairs. They are scare to death what happens when the music stops. The European debt crisis is entering a new phase as banks are now running out of the good quality collateral to secure the short-term money.

The banks are now turning to the swaps market with institutional investors. But the

ECB is not a bottomless pit because of its structure and we may see the next crisis that will shock the hell out of everyone when the ECB requires recapitalization. This will give the impression Europe has completely FAILED, but it is a structural problem that would not have been an issue had the politicians simply consolidated the debt creating a single European debt cutting string that binds them together relegating all member states thereafter to whatever they issued would no longer be acceptable as reserves for banks. But no! The politicians have to bring down the whole damn financial system because they are stubborn and outright brain-dead when it comes to economics. So now we will have an ECB crisis and that will create the IMPRESSION Europe has failed and we could see wholesale bank runs throughout Europe.

The question becomes who long can these liquidity swaps continue? Will this cause a run on institutional investors if the European public understand what is going on behind the curtain this time? This is now no longer a REPO transaction that is a 24 hour swap market. We are now extending REPO in a quasi-central bank function. The

ECB is being marginalized because of its structure.

The major Italian banks met with the ECB officials in Frankfurt pleading with them to increase access to its borrowing for Italian banks. This is all a concern that goes to the problem of having to recapitalize the ECB. The emergence of this new market for liquidity swaps has led to the UK's Financial Services Authority (FSA), to issue a report last July pointing out the new risks in this development. Spreading the problem around, some U.S. banks are jumping into the market entering into these liquidity swaps with European banks in the tens of billions of dollars. In Europe, unsecured borrowing among banks was virtually non-existent. We are on the edge here of a very serious economic implosion and it is ALL driven by politicians ignorant of the risks who pray at the foot of their bed at night to just make it go magically away. They are ALL betting on just growing our way out AND THERE IS NO PLAN B!

ECB- not lender of last resort

The Infection Of Europe Is Now Complete

Joe Weisenthal

The big shocker from Europe today: A 10-year bond auction in Germany failed to draw the expected volume of bids.
Most European governments are experiencing some sort of funding tension right now, but this was a big deal because Germany has always been a safe haven. Now that's seemingly changed.
Now actually, this kind of "failed" auction happens in time from time to time in Germany. In itself is not that big of a deal. Yield wise, Germany is still borrowing money dirt-cheap interest rates.
What's really more startling though is the direction of yields on a day that's so decisively risk off: They're going higher.
Seeing Germany not catch this flight-to-quality bid is a major break in the pattern. And when it's combined with the lack of interest at the auction, then it hits you: Germany is more like Greece than the US in the sense that neither it nor Greece has a central bank as a lender of last resort.
Anyway, here's the German 10-year yield. That's a big one-day move.

"Government Sachs"

Martin Armstrong

http://www.lemonde.fr/europe/article/2011/11/14/goldman-sachs-le-trait-d-union-entre-mario-draghi-mario-monti-et-lucas-papademos_1603675_3214.html#ens_id=1603680

auto translation : "London correspondent - have in common Mario Draghi, Mario Monti, and Lucas Papademos? The new president of the European Central Bank, the Chairman of the Board appointed the new Italian and Greek Prime Minister belong to varying degrees to the "Government Sachs" European. The U.S. investment bank has indeed woven in Europe a unique network of influence for ages sedimented through a dense network, such as underground public. In any contest, you need a hierarchy. The first prize went to Mario Draghi, of course, vice-chairman of Goldman Sachs in Europe between 2002 and 2005. Named a partner, he is responsible "companies and sovereign." As such, one of the missions is to sell the financial product "swap" to conceal part of sovereign debt, which helped disguise the Greek accounts. Then Mario Monti, the international advisor since 2005. Came third Lucas Papademos, who has been appointed Prime Minister of Greece, who was Governor of the Central Bank Hellenic between 1994 and 2002, who participated in this respect to the operation of faking accounts perpetrated by GS. The manager of the Greek debt is also a Petros Christodoulos, a former trader for the firm. Two other trucks take the upper hand in the defenestration of the euro, Otmar Issing, former president of the Bundesbank and Jim O'Neill, the inventor of the concept of BRICS, the acronym for emerging markets with high potential growth (Brazil, Russia, India, China and South Africa). Former president of Goldman Sachs International where he remained a director, Irishman Peter Sutherland has played a key role in the rescue of Ireland. Finally, Paul Deighton, who spent 22 years at Goldman Sachs, is executive director of the organizing committee of the London Olympics in 2012. The red lantern because everyone knows that sport is like friendship standout. Yet, beyond appearances, the network of influence that has made its power before or during the political turmoil in financial 2008 has lost its effectiveness. Indeed, the old accomplices maintained by the former senior central bankers mobilized to pull the strings appear to be less useful against politicians sensitive to the unpopularity of financial professionals held responsible for the crisis. Where Goldman Sachs could easily exercise their talents, a series of cases - Greece, speculation against the euro, the Abacus scandal which was involved the French goldmanien Tourre - put it back the public. The address book is useful but not sufficient by itself a complex and technical financial world and facing a new generation of industrial least steeped in respect for the establishment. The European managers set out to conquer the world have emancipated the Crusaders of high finance style Goldman Sachs. The quest for value of the shareholder, the requirements of transparency of accounts and the imperatives of foreign expansion blunt the "network effect". Finally, become more demanding about the quality and independence of business consulting, European customers, but not limited to requiring compliance with a minimum of ethics. And that's where the rub about Goldman Sachs. Because the bank likes to put his men never to drop the mask. That is why his henchmen hide this relationship when they give an interview or conduct an official mission (as was the case of Monti was awarded in 2010 a study on the single European market by the President of the Commission, Jose Manuel Barroso). Mario Draghi asserts that took office in 2002, it had nothing to do with the makeup of the Greek accounts orchestrated two years earlier by the bank. And resigned in 2005, one year before Goldman Sachs sell part of the "swap" in question at the National Bank of Greece, the first commercial bank in the country, headed by a former Goldmanien, Petros Christodoulos today head of the agency managing the Greek debt...."

"Euro Break" Dance

Reuters

"France and Germany have had intense consultations on this issue over the last months, at all levels," a senior EU official in Brussels told Reuters, speaking on condition of anonymity because of the sensitivity of the discussions.
"We need to move very cautiously, but the truth is that we need to establish exactly the list of those who don't want to be part of the club and those who simply cannot be part," the official said.
The change has been discussed on an "intellectual" level but had not moved to operational or technical discussions, the EU official said.
A French finance ministry spokesman denied there was any project in the works to reduce the currency bloc's membership.
"There have been no conversations between French and German authorities at any level on decreasing the size of the euro zone," the spokesman said.
A radical overhaul of the European Union would be opposed by many members.
"This will unravel everything our forebears have painstakingly built up and repudiate all that they stood for in the past sixty years," one EU diplomat told Reuters."This will redraw the map geopolitically and give rise to new tensions. It could truly be the end of Europe as we know it."

Rome burning

John Taylor

Because the European elite can not conceive of defeat, life in Europe will change dramatically in the coming years. Economic and psychological reality has already changed dramatically for a small percentage of euro-citizens, and most of those know – no matter how ordinary they might be – that the ground under their feet is unsteady and is likely to shift again. Financial and political reality will be deteriorating as well. Seventeen countries and thousands of political actors make it an adventure to forecast the twists and turns ahead, but several clear trends are already visible. The democratic process, not too strong in Europe at anytime, will give way to more and more authoritarian tendencies.

As the citizens see the benefits of the euro-process turning into liabilities, they will get more boisterous and obstreperous, demanding domestic responses to “foreign” euro-policies. It is hard to tell a Greek that Brussels demands that he loses his government job, when there are no other jobs in sight, and that the Troika has ordered that his property taxes are collected through his electric bill. It will be a cold and hungry winter in Athens. The local politicians must be fortified in their euro-ness by threats from Germany, France and Brussels, and as the pressures increase the commands will too. The strategy of the politicians is to kick the can, don’t let anyone give up, and pray that growth will reappear. If things don’t work out, the politicians know that they will lose their jobs and their reputations. As none of their strategies foster growth and a recession is coming, the debts will grow in relation to the underlying economies, so their prayers will go unanswered. Every year that this situation goes on the quality of life

will deteriorate for the average citizen, but it also means that the economic reality after the euro will be meaner.

Petrol prices hikes in India

N K Gupta

 

Apropos your editorial on 5^th Nov, ‘Dump Political Pricing’, I beg to have different views. I would like to express my solidarity with Kerala High Court which has questioned the balance sheets of the Oil Refining/ Marketing Companies who are behind increase in fuel prices for the 10^th time in as many months. Like various other public sector companies, these companies (HPCL, BPCL, IOCL etc) have lot of leakages, pilferages and weaknesses which result in losses (compare their refining margins with Singapore based companies) and not just International crude oil prices. The story is no different from Electricity Boards where power tariff is hiked to compensate for the rampant corruption resulting in steep losses or where middle men (hand in gloves with people in power) eat up all the gains of good monsoon and jack up the food price inflation. The entire population is then made to shell out from their hard earned savings to pay for these. Prime Minister says prosperity of people is causing the inflationary trend. He may be partially correct, but the extent of rise is alarming. He has to enforce better administrative controls on the entities stated above rather than find an easy excuse. Nation is watchful and will slam the congress party at the next opportunity whenever, if Government’s lethargy continues.

 

Communism dead. Collapse of socialism ?

Martin Armstrong

It is time for a serious reflection upon the thinking of European leaders. They are hell-bent on creating a civil war and rising social unrest all to keep the dent game going and the bankers happy. Europe is on the verge of a death spiral of spending cuts and tax increases as socialism collapses and there is desperate attempts going on to retain political power at the expense of society. Greece is in deep trouble thanks to the economic crisis set in motion by New York CDS products that has manifested in an economic contraction that appears to be headed for at least a 7 year contraction coupled with escalating debt

Interest rates to go up 'coz of CDS wriggle out fraud

Marin Armstrong

Jon Corzine, who ran Goldman Sachs Group Inc from 1994 to 1999, has demonstrated when you do not have the political game rigged; merely working at GS does not mean you are smarter than the rest and immune to market swings. This is yet another example of how corrupt things are in New York. Name one scandal that the SEC or CFTC have EVER prevented? I can think of none. All of a sudden it now comes out that hundreds of millions of dollars are missing because the firm FAILED to segregate their own funds from those of their clients. You see, this is PRECISELY what was done to me by Republic National Bank; they used funds for their own benefit and NEVER entered any entries in the records to show they were tapping into the funds. How is it possible that the SEC and CFTC NEVER manage to ever find this stuff in the New York banks that they regulate? Are they being paid off? Are any funds in a NY bank really safe?

As always, there is more to the story. We are also watching the collapse of the CDS market – those things that cost $700 billion to bailout. The NY Banks are wiggling out of paying off on sovereign debt issues on Greece. The clever issuers are reneging on the Greek CDS be saying a 50% haircut is not a DEFAULT and thus is not covered. What is now taking place is the CDS prices are collapsing for you cannot trust the banks that issued them. Yields are now rising even on Italy and a new phase of the Sovereign Debt Crisis seems to be unfolding.

Speaking to institutions that bought the CDS to protect their investments, the most likely result is you just have to sell and get out. Thus, yields on the sovereign debt are rising even in the face of ECB intervention that has failed in the case of Italy. The CDSs are collapsing and smart guys are selling them while they can. So do NOT watch the CDS prices as any indicator of what is really going on. The CDS gave false insurance relief, but now when people expected to cash in, the banks change the rules. And you think you can sue their ass in New York? Good luck !

Euro solution -another day another googly

Looks like with the Greek referendum out of question, the markets have decided to possibly trend higher from here.
Conclusions? Search me !

Europe map according to Greeks

The defence boondoggle

Bill Bonner

Here’s how it works: money from the federal government is handed out to military contractors, who then recycle some of it back into the political process. Campaign funds, lobbying, pimping by retired generals and admirals...the money gets around. A general, for example, might insist that the Pentagon needs a new weapons system. Then, in retirement, he might find that he is a valuable consultant to the company that makes it. He might earn far more than his military pension. Likewise, a congressional flunkey might help push through a new weapons system...and then find his services in demand in the defense industry, where he is regarded as a key “political expert.”

Start up troubles in bribe land

A lecture on capitalism

Bill Bonner

We begin another look at Zombieland with this editorial from Martin Wolf in The Financial Times:

Why did it take so long? It is over four years since the financial crisis began. Yet only now are anti-capitalist protests emerging, including at St Paul’s Cathedral. So is this the beginning of a resurgent leftwing politics? I doubt it. Are the protesters raising some big questions? Yes, they are.

Socialism failed as a way of running economies. It did, however, succeed in establishing welfare states. Socialism is a conservative force, dedicated to defending entitlements built up over a century. Meanwhile, organised labour is only strongly entrenched in the public sector. This gives it the same conservative agenda: defending the welfare state. Strikes by UK public sector workers against the fiscal cuts will demonstrate this.

We have promoted an insider form of capitalism which exploits and indeed creates subsidies and tax loopholes on which the insiders prosper. The need to rescue banks was horrifying. The role of money in politics is disturbing. The danger is that we are moving from what the Nobel laureate economic historian, Douglass North, calls an “open-access order” to its opposite, a system in which political influence is decisive.

The era of bail-outs must end.

We rarely agree with Mr. Wolf. But he is right...so far. Later in his editorial he proceeds to fall into gross and obvious error — arguing that “we” need to find solutions to capitalism’s inherent excesses.

Humans seem prone to self-fulfilling waves of optimism and pessimism. Ways of mitigating the extent and the consequences of such instability always need to be found.

We see no reason to mitigate the instability of free markets. That’s what makes them so much fun!

But when The Financial Times undertakes to encourage its readers to fix capitalism, you realize how few real friends that disagreeable creed must have.

Few people really like capitalism — even people who call themselves capitalists. The feds could probably round them all up and gun them down in an afternoon. Capitalism is too chancy...too unpredictable...and too uncontrollable. No wonder so few people are fond of it; capitalism is a poor friend. It is disloyal. It is mischievous and willful. It is hard to get along with.

Capitalism offers is no sure route to success. You can be smart, work hard, and go to the best schools. There is still no guarantee that you will succeed.

Nor, once you’ve succeeded, is there any sure way to maintain your wealth, power and status. Wealth has no fidelity, neither to any one person, group, or family. It goes where it wants. It is fickle and unreliable.

Nor does it go necessarily to the strongest, fastest, or smartest. As it says of the race in Ecclesiastes, time and chance play a big roll. Neither can be made to stay put. Once you have made a lot of money, the same wheel of fortune that brought it to you can take it away from you. It never stops turning.

The rich tend to be even bigger anti-capitalists than the poor. As soon as they get some wealth they try to put the brakes on. They set up tests and hurdles...designed to keep the hoi polloi off their tennis courts and out of their businesses. They use every means possible to separate themselves from the masses — language, education, dress, customs, geography. They tend to speak differently...sometimes even using a completely different language. Probably the most recent and best known example comes from Britain, where the upper classes still speak a heavily Latinized version of English, called “RP” for ‘received pronunciation,’ while the lower classes speak a more Germanic, more archaic version. A thousand years earlier, the upper classes actually spoke a different language all together — French.

In France itself, the development of “French” was itself a long process; until the 19th century the language was foreign to most people who lived in France. It, and Latin before it, was used almost exclusively by the rich, the powerful, and the well-educated.

Education is another common means of helping the rich to hold onto their money. Special schools typically cater only to the upper classes, teach the right accents and attitudes, and help young people make the sort of connections that will keep them, and their money, in the same group. These schools were rarely hermetic, however. They usually allowed a few particularly bright people from the lower orders to enter into the moneyed classes. This had three beneficial effects. It nourished the gene pool of the rich. It provided them with the top talent they needed to stay rich. And it drew in ambitious and able young people who might otherwise compete against them.

Of course, the rich — especially if they are a coherent cultural group — tend to live together, socialize together, and do business together. These things too help to keep money “in the family” and out of the hands of strangers.

Nor do the rich typically stop at honest means. They also avail themselves of the police power of the state. Many laws, edits, and rules have been announced to regulate everything from the professions people must practice to the clothes they wear. “Serfs” were shackled to their farms, masters, and their station in life by law as well as by custom. Sumptuary laws forbade new money from imitating the fine dress of old money. Licensing requirements, tariffs, and regulations generally make it more difficult to enter into a profitable trade or business, thereby protecting those who are already in it.

The rich are not above using the tax code either. In pre- revolutionary France, for example, the aristocracy and the clergy were exempt from taxes. Even today, most taxes are taxes on getting rich, not on being rich. Governments tax income, not wealth. France is an exception with a wealth tax. But it is a relatively modest one — never exceeding 2% of assets. Compare that to the top marginal rate on income. Combined with social charges, it rises to more than 71%.

Warren Buffett has famously pointed this out, indirectly. He claimed that he paid a lower tax rate than his secretary. That was because his taxes were paid at rates levied on people who were already rich — capital gains and dividends — rather than income. The poor secretary had to pay taxes on the fruits of her own labors.

Does that mean the rich like government? Yes, of course they do. The state is a rich man’s best friend. The rich return the friendship, in cash.

As Bill Gross reported in January of 2010, what is amazing is not that politicians can be bought, but that they can be bought so cheaply. He wrote that “public records show that combined labor, insurance, big pharma and related corporate interests spent just under $500 million last year on healthcare lobbying (not much of which went to politicians) for what is likely to be a $50-100 billion annual return.”

But while hardly anyone actually likes capitalism, there’s a problem with the alternative. Efforts made to hinder, tame, and put a ball and chain on it always make things worse. They lead to zombification.

What’s that?

Here is the foundation of our General Theory of Zombieism:

1. All (or almost all) people want wealth, power and status.
2. They want to get it in the easiest way possible.
3. The easiest way to get wealth is to steal it, which is why all groups turn to the government, the only institution which gets to steal lawfully.
4. Over time, more and more groups are able to use the system for their own ends.

If they are poor, they implore the government to ‘tax the rich’ and give the money to the poor. If they are rich, they want the government to protect their wealth and status — with every means available to them. Democratic governments generally do both. They support the poor with loud attacks on the rich combined with whimpers of money (for the poor can generally be bought — vote for vote — much cheaper than the rich). As for the rich, their support is more subtle and underhanded. There are tax credits and loopholes for anyone who can afford them; sugar-laden contracts for the insiders and plenty of jobs for well-credentialized blowhards.

The rich complain about the poor. The poor complain about the rich. Both complain about the government. And everybody hates capitalism

George Papandreou's referendum- All The Right Moves

http://www.youtube.com/watch?v=qrOeGCJdZe4
All The Right Moves Lyrics
All the right friends in all the wrong places
So yeah, we're going down
All They got all the right moves in all the right faces
So yeah, we're going down

Just paint the picture of a perfect place
They got it better than what anyone's told you
They'll be the King of Hearts, and you're the Queen of Spades
Then we'll fight for you like we were your soldiers

I know we've got it good
But they got it made
And the grass is getting greener each day
I know things are looking up
But soon they'll take us down,
before anybody's knowing our name.

They got all the right friends in all the wrong places
So yeah, we're going down
We've got all the wrong moves and all the wrong faces
So yeah, we're going down
They said, everybody knows, everybody knows where we're going
Yeah, we're going down
All They said, everybody knows, everybody knows where we're going
Yeah, we're going down

Do you think I'm special?
Do you think I'm nice?
Am I bright enough to shine in your spaces?
Between the noise you hear
And the sound you like
Are we just sinking in an ocean of faces?

It can be possible that rain can fall,
Only when it's over our heads
The sun is shining everyday, but it's far away
Over the world is death.
--------------------------------------------------------------
Finally the right moves-
1. Debt write offs
2. Exit euro, adopt drachma
3. Screw Goldman Sachs fradulent instruments hand in glove with the Greek governments
4. Screw China
5. Screw Germany
6. Screw the banks. Let them take a haircut. Send a thank you card to Goldman.
7. Limited Greek austerity. Fewer jobs losses.

Let them restart their lives with a market determined currency. Let them maintain independence.