A lot of contradictory statements are appearing in the business news about the debt crisis in Greece. The usual suspects blame the Greek people for being lazy tax evading leeches living off the welfare state. In fact per capita economic output is higher in Greece than in several US Red States, at least it was before austerity. Greece does have a problem with tax evasion, basically the rich feel entitled to not pay them, just like in the US. The new so called 'far left' government vows to do something about tax collection and since they aren't in the pockets of the rich they probably will. In the US the rich don't so much evade taxes illegally, they just have tax evasion decriminalized so that they accomplish the same goal.
The Greek government has made it clear that they have no intention of paying their creditors without a deal that reduces their debt payment burden to a manageable level. To some this seems outrageous but Greece didn't have a debt problem until they were set upon by Wall Street banks that drove up the interest rates that they had to pay. The subsequent austerity demands from German banks wrecked their economy making debt management impossible. The so called bailout requires that the entire country of Greece be privatized from ports, railroads, and other infrasture to all public lands including Greek antiquities. During the Bush administration there was a concerted effort to do that in the US and that scam has never really gone away, it's just concentrated in the Red States.
With Germany's outrageous trade surplus the euro is really the deutschmark. The Germans are stuck between two factions. Those that want to make an example of Greece and throw them out of the euro and those who see the rest of Europe following the Greeks out the door making the euro worthless. So far the Germans have been giving ground despite claims in the Conservative media suggesting that Greece is on the ropes.
In more news that contradicts the Conservative media: 'strategists' (what ever that means) that work for the Bank of America Merrill Lynch are saying that this October the International Monetary Fund will add the Chinese yuan to the basket of currencies that make up the "Special Drawing Rights" fund that the IMF uses for its transactions.
Currently there are only four currencies used for this purpose, the USD, euro, British pound and the Japanese yen. This would make the yuan officially one of the world's major currencies. In fact the yuan is already held as a reserve currency by many foreign countries. A reserve currency is used to settle international trade transactions. Most countries used to exchange yuans for USD on each side of the trade, but not so much anymore. The US doesn't have much to sell anymore, so it simply makes sense to do the trade in the currency of the world's dominate economic power.
The ascendency of renminbi (the People's currency) to world domination contradicts the constant drone from the right that China is on the verge of collapse any day now, they've been saying that for 35 years. The other name for China's currency is actually slang, yuan translates as 'round' like coins. The Right likes to say China has moved from Communism to capitalism. The Right used to say that would make China democratic, they don't say that anymore because they don't even pretend to want democracy here, just capitalism.
At least the USD is currently pretty strong and since the typical American consumes a lot of imports that's a good thing. A strong dollar is bad for exports, but we don't make anything anymore, so it's not really a problem. So when a Conservative tells you that Obama is debasing the currency you could point this out. It's not going to make a dent in the Conservatives though, they think the dollar has been debased because an ounce of gold won't buy as many dollars as it did at the height of the Bush Crash. This is of course the opposite of the USD being debased, but Obama is still Black and that's what they really care about.
Twitter @BruceEnberg - where up is still up, and down is still down, no matter what Conservatives say.