Friday, June 24, 2011

The Daily Note - To Greece or not to Greece

2011-06-23 15:00:21 [Message] Anni -> Trading Room: Greece reaches agreement with EU/IMF inspectors on 5-year austerity plan that's the reason for the bounce here.
Told you all bets off if Greece agreements reached.

So, that fixed everything? Of course not, but it's a relief. In my opinion it's not a good thing either. The EU can keep pretending they were not to blame, along with the IMF complicity. It's easier to cover it up and blame Greece. It's a shell game. It's the same as what happened with housing in the USA. Government forced banks to lend via the CRA and then blamed the banks for their greed, force a bail out and collect good money in return for bad, allowing banks to write off loans for more than what they were worth and viola everyone happy except of course the homeowners, businesses and people who want to work.

Same thing in Europe via the EU who required countries to comply with their idea of a stable economy and bringing their currency to an artificial level in order to keep the EU strong. It basically forced the countries to borrow and to sell their resources to outside corporations, leaving very little margin of safety. With the new found "wealth" eastern nations began rebuilding themselves into the modern age and getting into debt. Same thing as allowing poor families to borrow for a home they can't afford.

The EU forces small countries to comply to their money standards, force them to borrow to do it and then blame them for inflated false prosperity and mismanagement of funds.

Who wins, who loses?

They know that paper money will trigger the good feelings. Just as what is happening with the markets now. Paper money is inflationary because prices rise but value falls. We, traders know it yet we play along because we win that way and follow the trend but we will pay in the end. Devaluation of our buying power already happening. Food prices, clothing, other goods keep rising and people not calling out yet, but they will! We will have our Greece in the markets.

You cannot sustain prosperity when high unemployment is plagueing the nation especially in that most prosperous of states, California. You cannot sustain it at this level of living standard.
You'll live, but you'll be the new Rome, the new Greece, the new Japan.

Ever wonder what happened to the old Greece, the old Rome and yes, Japan? Ever wonder why they can't return to their old "glory"? How much debt can we take on and think we will sustain ours?

Happy Trading, Living and keep on Dancing

The Daily Pick - ES_F

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