I’m no economist but I am very interested in the big picture. A lot of people who are economists are painting a picture of the direction the world economy is going and it does not look good. Combined with a host of other fields, patterns and trends, I am putting my money on what is happening in Greece being the beginning of an unprecedented economic disaster that will drastically alter the world economic system.
The Greek economy has ground to a near halt as a devastating loss of confidence in the banking system has triggered panic hoarding, and paralysed the supply of goods and services on the eve of a bitterly lineball referendum.
Cash reserves in the Greek banking system are down to €500 million ($736m) and ATMs are only able to distribute €50 to queues of bewildered Greeks because €20 notes have run out.
Athens Chamber of Commerce and Industry president Constantine Michalos told London’s The Telegraph newspaperthat the banks were quickly running out of money.
The huge crash in confidence came after the European Central Bank refused to inject more liquidity into the Greek banks, having already pumped in €89 billion.
“We are reliably informed that the cash reserves of the banks are down to €500m,’’ Mr Michalos said. “Anybody who thinks the banks are going to open again on Tuesday is daydreaming. The cash would not last an hour.
“We are in an extremely dangerous situation.’’
In central Athens a middle-aged man was refused life-saving heart medication because the Syntagma Square pharmacist wouldn’t accept the usual insurance papers that covers the cost of the prescription.
The pharmacist said he could sell the medicine, sitting on his shelves, because people were panic buying and warned that medicines would soon run out with no further supplies if the “no” vote was carried in tomorrow’s referendum.
Greek television stations are predicting Armageddon, warning of severe food and petrol rationing if people don’t vote “yes” to accepting the EU’s terms for continuing austerity.
Beer supplies to inner-city tavernas have already been shut off because distributors don’t have the cash to pay suppliers. Shops have had to lay off staff because they don’t have the cash to pay their wages. International concerts have been cancelled and some outlying cinemas have closed their doors.
Amid the grimness, many Greeks shrug their shoulders, comment how “nothing will change’’ and resort to some black humour. One joke about the hapless restrictions on withdrawals doing the rounds is: “I finally got paid — the company transferred the money into my bank account today.’’
Adding to the severe economic distress, the government’s hold on parliament has begun to disintegrate. Four of the 13 members of the right-wing Independent Greeks, who are in the ruling coalition with the far-left Syriza party, have urged a “yes” vote, at odds with Prime Minister Alexis Tsipras, who is likely to stand down and call for new elections if the no vote fails.
Independent Greek MP Costas Damavolitis said he feared a “no” vote would mean leaving the eurozone. “Though these measures are painful — I don’t even know if Greeks can bear them — a ‘no’ will lead to the drachma, which means the immediate destruction of the country, something that I don’t want to consent to,” he said.
Finance Minister Yanis Varoufakis, who has vowed to resign if the country accepts the EU conditions for further austerity in tomorrow’s referendum, said yesterday: “We are on a war footing in this country.’’
Mr Tsipras tried to bring calm, saying yesterday that a deal to end the crisis could be struck within 48 hours after the referendum.
“Our efforts are focused on overcoming the crisis as fast as possible — with a solution that preserves the dignity and sovereignty of our people,” he said.
Once again, he argued that a strong “no” vote would strengthen the hand of Greece in the negotiations with Europe so that the €320bn debt was sustainable.
The IMF appeared to back his position, with a delayed report warning that Greece would need additional debt relief of €50bn until 2018 to stabilise the economy.
Some basic underlying ideas and assumptions that have brought me to this conclusion include but not limited to the following barest summarised points:
- What’s happening in Greece is not the beginning at all. Rather, it’s a logical consequence and getting to Greece (not to mention Puerto Rico, China, and the U.S.!!!) has been a long journey that can only be understood by studying and understanding history.
- History can only be accurately interpreted through the lens of the biblical worldview as described in the biblical scriptures, which make it clear that God has enemy who is building an empire that enslaves and corrupts humanity and human institutions, including the economy. At a designated time, the antichrist will arise as the leader of that empire and a massive part of that empire’s power base will be economic: Also it causes all, both small and great, both rich and poor, both free and slave, to be marked on the right hand or the forehead, so that no one can buy or sell unless he has the mark, that is, the name of the beast or the number of its name. (Revelation 13:16-17 ESV).
- Both history and the bible clearly demonstrate that nations come and go and so do world reserve currencies. God …changes times and seasons; he removes kings and sets up kings; (Daniel 2:21 ESV). The U.S. has been the number one world power for a while now and many of their contributions have become increasingly relativistic and immoral – especially their economics.
- The world economy, powered by the United States of America, is filled with corruption in ways most of us economic laymen can only begin to understand. U.S. Debt levels are catastrophic at 18,000,000,000,000 dollars (yes, eighteen trillion!) and running massive budget deficits is the new normal in Western economies. Yet, it’s what’s going on behind these already troubling scenes in the shadow banking world that is ensuring this coming economic disaster. Banks and financial institutions exist in a high risk world of gambling known as ‘exposure to derivatives.’ Simply, it pays off when predictions are successful but when they fail, the losses end being called funny euphemisms like ‘the GFC’.
There are certainly other reasons and indications that make the most serious finically collapse the world has seen a near certainty.
And now that we officially have a ‘no’ vote in the Greek referendum, we can be sure trouble has fully arrived.
We haven’t even got to China’s bear market yet!