Financial breakdown in EU moves much closer

This morning as I moved into the day I checked my email and news as usual.

The first thing was a return email from Mike Ruppert in response to a question about engaging with politicians.  His response was basically: "Things happening too fast now to invest much time here. We're out of time altogether... the global state of emergency has just gone out of control"

Checking on the news desk of Collapse Net and then papers like the Guardian and the Independant the following headline might possibly capture the moment

Cardiac arrest; Italy and Spain close to the abyss

http://globaleconomicanalysis.blogspot.com/2011/07/cardiac-arrest-italy-and-spain-close-to.html

Basically the news for this morning is that The EU have done an about-turn on their stance on Greece; they are now recommending an actual default with bondholders taking a 'haircut".  Once that door is open, and with Italy, Spain and Portugal on the brink there will no doubt be a lot of 'disorder'.


Meanwhile in the United States, August 2 is the date to keep fixed in your mind - that is the deadline for the US government to pay the next installment on their huge debt.  At the moment there is no agreement on raising the debt ceiling.


Basically the world is on the edge of financial chaos and yet I look in vain for any signs of coverage (let alone analysis) in the New Zealand media.


Personally I think that it is time to people to be prepared as they best can for a financial meltdown - possibly in August.  It is of course possible that the EU can limp through this for a while and the US can put off the evil day for a little while longer - but it is looking less likely with each day.


One Greek economist said recently - socialism died in 1991; capitalism died in 2008; what we have now is bankruptocracy. The higher the debt of the bank or  government the more they able to set the agenda.


Here are the rest of the day's headlines:

EU Stance Shifts on Greece Default

http://www.cnbc.com//id/43707609

European leaders are for the first time prepared to accept that Athens should default on some of its bonds as part of a new bail-out plan for Greece that would put the country's overall debt levels on a sustainable footing.

The new strategy, to be discussed at a Brussels meeting of eurozone finance ministers on Monday, could also include new concessions by Greece's European lenders to reduce Athens' debt, such as further lowering interest rates on bail-out loans and a broad-based bond buyback programme.

It also marks the possible abandonment of a French-backed plan for banks to roll-over their Greek debt.

Greece set to default on massive debt burden, European leaders concede

• Bailout fund may be used to buy back Greek debt

• Markets in turmoil amid escalating anxiety

http://www.guardian.co.uk/business/2011/jul/12/greece-set-to-default-massive-debt-burden

European leaders bowed to the inevitable and conceded that Greece is likely to default on its massive debt burden, which would be a first among the 17 countries using the euro.

They also abruptly shifted tack in the eurozone debt crisis by raising the possibility of using the eurozone's bailout fund to buy back Greek debt on the markets, meaning sizeable losses for Greece's private investors and reduced debt levels for Athens.

Following 12 hours of fraught negotiations in Brussels haunted by the risks of contagion in the eurozone spreading to Italy, now being targeted by the financial markets for the first time in the 18-month crisis, the 17 governments of the eurozone pointedly failed to rule out a sovereign debt default by Greece.