One of my good friends writes this email to me and I believe he is correct. I am not sure if Greece will leave first or will Germany but the result is the same. He wishes to share his thoughts with you but remain nameless:
“Greece has privately made its wish to leave the EuroZone known to the French and the Germans. This is why no deal can or will be reached. I understand that there some real concerns with both Spain and Portugal about what to do as both are unprepared and do not get the whole picture as of yet. Italy sadly has it’s head in the sand believing that it will blow over and no idea of what to do so it will be status quo in Italian style.
Greece will leave the Euro, and reintroduce the Drachma. It is a short time before this occurs. The haircut on debt is likely 60-80% when it is all said and done. Banks are desperately printing new bonds. One can assume it is the only way to kick the can far enough down the road to survive.
Greece is weary of interference in what it considers its internal affairs and knows that no EuroZone-brokered solution to its sovereign debt problem will work, without turning the country into third world status and igniting a revolution or military coup. Current strikes and strive have made their impression. Old professions like prostitution, drugs and theft are the only growing businesses.
Latvia and the Baltic States (Romania not far behind) have come to similar views about their own situations. And we will see that in the news in weeks to come.
As I have told you, Germany is currently in the middle of advanced arrangements to return to the Deutschmark. The French are besides themselves, they are losers in the new deal being spawned between Germany and Russia. Look for France to be downgraded.
Merkel has also been actively pursuing an Ostpolitik with Russia which was originally initiated by Willy Brandt in the 1960s. New times for the former Russian block countries maybe better than the memories. Watch for the Ukraine to fall further behind towards third world status first before being uplifted.
It is felt that a Russian/German-led Eurasian Union could be in place by 2015 or sooner depending on events that have not yet occurred. This actually could be a good thing for both of them. Talk about the geopolitical fallout for the US. China is apparently on board, which makes sense as it protects their export market. The agreement on developing Siberia fits well for both Russia and China. The game is to buy time for an orderly retreat from the Euro knowing that losses will be taken. Only time will tell whether the markets will cooperate. The short term fallout is liquidity in terms of bank credit and bank solvency. There is intra bank contraction in lines of credit.
The real financial fallout will be in the credit default swaps which no doubt will have an north American impact. There is some chatter that perhaps they should be outlawed before hits are taken to lessen the blows.. Tallies are being made as to who benefits and who loses.. Tough love on a sinking ship.
This may explain the reluctance that all of our banks have regarding European assets at the moment.
What is clear that the events taking place are becoming more and more global in fallout with new alliances being molded out of necessity.”
Date: October 26, 2011
Source: Greek Prime Minister’s website, http://primeminister.gr/
Date: June 20, 2011
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