Some months ago I tried to explain that the crisis in Greece concerned the entire globe directly and that what was happening to my country was nothing short of an economic coup d’état. Naturally, I was accused of doom-mongering and over-dramatising. It pains me to have been proven absolutely right on both points.
If we are to learn lessons from the events of the last three years, it is vital to challenge dominant and convenient narratives on the issue. They range from, at worst, malicious propaganda and, at best, distracting fairy-tales.
The first of those is the idea that the current crisis is made in Greece. It is not. It is the inevitable fallout of the global crisis experienced in 2008. But do not take my word for it. Here is what Angela Merkel had to say on the matter in February 2010, when the “Greek problem” started to rear its head, as reported by Bloomberg:
Irrespective of what one thinks, it is the Germans running project Europe. Sarkozy and Monti might say a phrase or two, but it is the Pokerface Merkel that is running the show. After the “failed” German bond auction, markets decided to rip higher, with the help of the central planners. We posted the second best week since that 666 March 09 bottom. Merkel is the one dictating what the rest of the Europe should do. With increasing frustration among the other countries, both with the Economy and German dominance, we are looking forward to interesting times ahead, especially considering that Merkel might take Europe down the wrong path. Bloomberg Business Week on Merkel;
It was Thanksgiving Day in the U.S., but just another tension-filled Thursday in Strasbourg, part-time home to the European Parliament and thus the fulcrum upon which the world’s financial future teeters. Angela Merkel arrived uncharacteristically late, keeping Nicolas Sarkozy and Mario Monti waiting. No matter. The press conference couldn’t start without Merkel any more than a performance of Hamlet could begin without the prince.
The day before, the debt crisis that’s been spreading for two years singed Germany, as investors shied away from an auction of 10-year government bonds. By the market close, Germany’s 10-year borrowing costs stood at 2.2 percent a year, three-tenths of a percentage point higher than those of the wastrel U.S. For Merkel, it seemed like a moment of truth. Germany is the sole country in a position to prevent a collapse of the euro currency—an event that could trigger a financial crisis and perhaps another global recession. It’s only a slight exaggeration to say that the fate of the world is in one woman’s hands. Yet to the frustration, bewilderment, and mounting anger of leaders from Paris to Beijing to Washington, Merkel repeatedly has refused to act.
Ten minutes into the news conference, as Merkel’s turn to speak arrived, markets and fellow politicians were parsing her German for a sign that the Chancellor was ready to quell the panic by finally agreeing to issue euro bonds, perhaps, or supporting unlimited bond purchases by the European Central Bank. Or something.
Merkel yielded not a millimeter.
Guest Post by World of Finance.
The day went by as planned. It was a typical NFP day. Open high go lower, type of day. It created a hollow red bar or reversal bar. It does not mean indexes will go south from here on Monday. It just indicates that a top of some kind is close. Also, if you see the full stochastic and RSI, they are at the top of the range, turning down.