Today we are having something similar to a general strike here in Greece. Here in Nafpaktos the local business council decided to participate so all stores are closed today. I am not sure what all this will amount to I do know however some other interesting factors. Greece borows 126 billion euros a year or more. A big chunk of that goes to servicing the debt. Like most civilized nations Greece had lied about the size of its debt so as not to hurt her image and to be able to borow at a reasonable rate. Coming clean on the debt, telling the truth that is, has meant a jump, spread, in interest on loans, of 4-5 points. That means that loans of 3% last year will be close to 8% this year or more simply an extra fifty to one hundred million euros in interest. The big question for us is will we be able to keep paying these payments in the future. Maybe it is time to see what others have done about it.
Argentina accepted all terms set by the IMF and watched its economy shrink by 22% in one year. Argentina was unable to service her debt and one day all deposits were cancelled. Wow talk about wipeout. No savings, no pensions no benefits and of course no food no shelter and so forth. The people of Argentina did not like this but hey what can you do?
Iceland held a plebiscite and decided not to support this faulted system anymore.
Letonia accepted the IMFs terms and his headed down that Argentinian path...
Turkey refused to apply any of the IMFs terms and kicked them out searching for money elsewhere. Turkey has now a rather healthy economy and is enjoying fiscal growth.
