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21-Jul-11 World View -- Merkel and Sarkozy agree on plan for Greece

Bitter Turkey/Greece divide over Cyprus threatens Turkey-EU relations


** 21-Jul-11 World View -- Merkel and Sarkozy agree on plan for Greece
** http://www.generationaldynamics.com/cgi ... 21#e110721



Contents:
"World View"
"Merkel and Sarkozy agree on plan for Greece after seven hours"
"Posturing continues in Washington"
"Syria threatens French and U.S. ambassadors with expulsion"
"Turkey continues to threaten Syria with military intervention"
"Bitter Turkey/Greece divide over Cyprus threatens Turkey-EU relations"
"Turkey's PM Erdogan threatens to visit Gaza unless Israel apologizes"
"Borders bookstores will close forever"

Keys:
Generational Dynamics, Angela Merkel, Nicolas Sarkozy,
Greece debt, Syria, France, Robert Ford, Eric Chevallier,
Recep Tayyip Erdogan, Cyprus, Gaza, Freedom Flotilla,
Borders bookstores

SeekingAlpha has a rational comment on all the Greek "plans", which they made back in April. To actually presume Greece could somehow fix this issue would require two things, that oil prices suddenly become stable or drop, and that investors would suddenly decide to accept interest rates of 6% or below for Greek debt. The GDP of Greece is simply not high enough to sustain these high interest rates and high oil prices.

http://seekingalpha.com/instablog/62086 ... il-imports
Combining the funds outflow from the high interest rates and for oil, that requires Greece to somehow magically overcome a 12% current account deficit before it does anything else.

The Wikipedia article on Greece is also illuminating:
http://en.wikipedia.org/wiki/Economy_of_Greece

The public sector accounts for about 40 percent of GDP. The service sector contributes 78.5 percent of total GDP, industry 17.6 percent, and agriculture 4 percent.

All this stuff about rescuing Greece is just noise, similar to the noise made by the homeowner when he hears something in the night and hopes to scare away a burglar.

Washington doesn't want to pay any attention to Turkey, and that's probably a mistake. Turkey is going to place Washington squarely in the crosshairs of a dilemma, support Turkey or take the other side and risk the dissolution of NATO.

And I totally agree with your feelings on the budget talks in DC. Republicans insist that a new round of tax cuts will fix it all, coupled with some of the craziest figures I've ever had the misfortune to attempt to unravel, Democrats insist that nothing need be done but hold the course, whatever that means and increase taxes. The only thing both seem to agree on is that bonds held by SSA should never be redeemed.

The passage of a bill by the House that everyone knew would be destined to die in the Senate was just maddening to me. Apparently it's far more important to push Obama out of office than to try to act for the country. This mess is what voting for "pure" candidates accomplishes, total gridlock. But that's the battle cry we hear at elections now, every candidate must have voted with the party 100% of the time or they are not pure enough to pass muster.

Even now, this situation is not irreversible, but it's getting there rapidly. The US needs both budget cuts and tax increases, and enough of both to show some real movement towards responsible budgeting. This "guns and butter" approach to two wars, coupled with monetary policy that was intended to create new bubbles to cause faux prosperity just won't cut it any more. Ever since Johnson, the US has put its wars on the tab, and the problem with that is that we've run out of tab.