Similarities Between Detroit and Greece

                       From The Ramparts

                     Junious Ricardo Stanton

       Similarities Between Detroit and Greece

ECB century’s new mode of warfare. It is as devastating as military war in its effect on population: rising suicide rates, shorter life spans, and emigration of the age-cohort that always have been the major casualties of war, young adults. Instead of being drafted into the army to fight foreign foes, they are driven from their homes to find work abroad. What used to be a rural exodus from the land to the cities from the 17^th century onward is now a “debtor exodus” from countries whose governments owe unpayably high sums to creditor governments and to the banks and bondholders on whose behalf they impose their policy.” The Financial Attack on Greece: Where Do We Go From Here? Michael Hudson http://www.counterpunch.org/2015/07/08/71809/

The corporate mind control apparatus is painting the recent Greek referendum as an anomaly like the crazy leftist Greeks have reneged on their debt obligations and they are trying to Welch on their creditors. The corporate disinformation campaign’s goal is to make the Greek people look bad, obfuscate the real causes of the Greek financial implosion and distract us from realizing the international banksters who looted Greece are doing the same thing here in the US of A.

The precarious fiscal situations in Greece and the other “PIIGS nations” (Portugal, Italy, Ireland and Spain)  are not the result of mismanagement and poor fiscal judgment on the part of government officials; rather they are the consequences of massive fraud, mischievous corruption, loan sharking and intimidation that make the Mafia look like choirboys. Plus the banksters have the backing of a compliant media that suppresses the truth about what is really going on.

I suggest you read his books or go Online and view lectures by John Perkins the author of Confessions of an Economic Hitman . He explains exactly how the IMF, World Bank and USAID pressure countries into taking loans the lenders know they cannot repay so they can get them in the death grip of debt peonage. You can see one of his lectures at www.youtube.com/watch?v=y-a6jzU0YgQ.  This is very similar to what the banksters did to the American people with the housing and mortgage bubbles in the early 2000’s.

            Once the particular country is induced into onerous debt by people like John Perkins, the International Monetary Fund (an international entity funded in part by US taxpayers) and World Bank go gangster on them. They force the country’s leaders into what they call their Structural Adjustment Program, a form of international extortion. They force the country to sell off valuable assets like utilities, mineral and natural resource rights, enter into one sided, monopoly commerce and trade agreements with IMF’s corporate cronies, instigate policies of austerity to lower the country’s standard of living, raise taxes to pay the interest on the debt (not the principle just the interest) and implement policies that destroy the host country’s economy.

“Many developing nations are in debt and poverty partly due to the policies of international institutions such as the International Monetary Fund (IMF) and the World Bank. Their programs have been heavily criticized for many years for resulting in poverty. In addition, for developing or third world countries, there has been an increased dependency on the richer nations. This is despite the IMF and World Bank’s claim that they will reduce poverty. Following an ideology known as neoliberalism, and spearheaded by these and other institutions known as the ‘Washington Consensus’ (for being based in Washington D.C.), Structural Adjustment Policies (SAPs) have been imposed to ensure debt repayment and economic restructuring. But the way it has happened has required poor countries to reduce spending on things like health, education and development, while debt repayment and other economic policies have been made the priority. In effect, the IMF and World Bank have demanded that poor nations lower the standard of living of their people.” Structural Adjustment A Major Cause of Poverty Anup Shah http://www.globalissues.org/article/3/structural-adjustment-a-major-cause-of-poverty

            This is what is really happening in Greece. Only its not just the IMF and World Bank, the US “too big to fail” mega banks are also involved selling their casino style Ponzi schemes and demanding the Greek citizens pay off the massive losses from their scams, their third party default swaps and derivative bets. “Put simply, with the help of Goldman Sachs and JP Morgan Chase, Greece was able to hide its debt in the future by transferring it into derivatives. A large deal was signed with Goldman Sachs in 2002 involving derivatives, specifically, cross-currency swaps, ‘in which government debt issued in dollars and yen was swapped for euro debt for a certain period — to be exchanged back into the original currencies at a later date.’ The banks helped Greece devise a cross-currency swap scheme in which they used fictional exchange rates, allowing Greece to swap currencies and debt for an additional credit of $1 billion. Disguised as a ‘swap,’ this credit did not show up in the government’s debt statistics. As one German derivatives dealer has stated, ‘The Maastricht rules can be circumvented quite legally through swaps.’” The Great Global Debt Depression: It’s All Greek to Me. Andrew Gavin Marshall. http://andrewgavinmarshall.com/2011/07/15/167/

            One reason we need to pay attention to what is happening in Greece, aside from the fact it will eventually happen to the other PIIG nations as well is because it is already happening here in the US and it will get worse. The same IMF, Work Bank “too big to fail” loan sharking model that’s destroying Greece is being played out here in the US in Detroit and other cities. Only here it’s not the IMF or World Bank but the “too big to fail banks” that are gutting Detroit. The big six banks are insolvent and their situation is compounded by risky credit default swaps, derivative side bets and out and out fraud.

            “The City of Detroit’s bankruptcy was driven by a severe decline in revenues (and, importantly, not an increase in obligations to fund pensions). Depopulation and long-term unemployment caused Detroit’s property and income tax revenues to plummet. The state of Michigan exacerbated the problems by slashing revenue it shared with the city. The city’s overall expenses have declined over the last five years, although its financial expenses have increased. In addition, Wall Street sold risky financial instruments to the city, which now threaten the resolution of this crisis. To return Detroit to long-term fiscal health, the city must increase revenue and extract itself from the financial transactions that threaten to drain its budget even further… Detroit’s financial expenses have increased significantly, and that is a direct result of the complex financial deals Wall Street banks urged on the city over the last several years, even though its precarious cash flow position meant these deals posed a great threat to the city. The biggest contributing factor to the increase in Detroit’s legacy expenses is a series of complex deals it entered into in 2005 and 2006 to assume $1.6 billion in debt. Instead of issuing plain vanilla general obligation bonds, the city financed the debt using certificates of participation (COPs), which is a financial structure that municipalities often use to get around debt restrictions. Eight hundred million dollars of these COPs carried a variable interest rate, which the city synthetically converted to a fixed rate using interest rate swaps. These swaps carried hidden risks, and these risks increased after the Federal Reserve drove down interest rates to near zero in response to the financial crisis. The deals included provisions that would allow the banks to terminate the swaps under specified conditions and collect termination payments, which would entitle the banks to immediate payment of all projected future value of the swaps to the bank counterparties. Such conditions included a credit rating downgrade of the city to a level below ‘investment grade,’ appointment of an emergency manager to run the city and failure of the city to make timely payments. Projected future value balloons in low, short-term rate conditions. This is because the difference between the fixed swap payments made by the city and the floating swap payments projected to be paid by the banks increases. Because all of these events have occurred, the banks are now demanding upwards of $250-350 million in swap termination payments.” The Detroit Bankruptcy by Wallace Turbeville http://www.demos.org/publication/detroit-bankruptcy

            Based upon this information, we can see a common thread in the Greek situation; the Detroit bankruptcy and the 2008 global financial implosion, the big banks who ropa-doped the governments into risky financial deals and loans just like John Perkins explained in his book. Detroit recently came out of bankruptcy hearings and is attempting to reinvent itself. Pensioners took a hit, the city had to give up its art collection to a private entity and other “reforms” were mandated. The banksters didn’t get everything they hoped they would but they still got over.  

“For city retirees and workers, the final deal is far better than what observers anticipated last fall and a significant improvement over what the city’s lawyers initially offered. Large financial companies with significant claims on the destitute city are walking away with less to show for their investments than they had hoped. In that sense, then, working people got a better deal from the city than faceless financial firms. But detaching the outcomes from those initial expectations produces a starker picture: big companies that made some shifty deals with corrupt former civic leaders are walking away with cash and property holdings in the city, and thousands of people who worked their whole lives on behalf of Detroit are having their retirement income trimmed to address financial problems they did not cause… One of the most important of those other deals came when retirees agreed to pension and health care cuts. Three-quarters of retirees and workers who voted on the bankruptcy voted in favor of the pension and health care cuts. Over 12,000 ‘yes’ votes were cast out of about 15,600 total ballots submitted. While that means half of the roughly 32,000 current and retired city workers who were eligible didn’t bother voting, it also means that the cuts have political legitimacy after being approved by those affected. Emergency personnel will not have their pension amounts cut, but their annual cost-of-living adjustments are reduced from 2.25 percent to 1 percent, meaning their pensions are likely to erode in value due to inflation in the coming years. Civil service retirees will receive no annual COLA whatsoever, and face a 4.5 percent cut to their base pensions to boot. The city’s opening offer would have cut emergency worker pensions by up to 10 percent and every else’s by up to 34 percent. The Grand Bargain funds were a key ingredient in shrinking the cuts retirees face. Both groups face significant increases in out-of-pocket expenses for health care as the city’s insurance system for retirees is being replaced with a voucher system for younger retirees and Medicare for those 65 and older. Workers like former firefighter Brendan Milewski and retired librarian Gwendolyn Beasley have told ThinkProgress that they may face choices between health care and other necessities like food and rent.”  Everything You Need To Know About Detroit’s Bankruptcy Settlement  by Alan Pyke http://thinkprogress.org/economy/2014/11/08/3590576/detroit-bankruptcy-conclusion-numbers/ To make matters worse Detroit is shutting off the water on hundreds of homeowners!

Keep your eyes on what happens in Greece. The recent Greek referendum was a good thing. It is sending shock waves throughout the international banking community. The Greeks rejected the notion they are responsible for the odious debt the banksters are pushing on them. Unions and pensioners fought the same fight in Detroit but they did not win a total victory.

There are international laws against odious debt, we need to familiarize ourselves with them because this is the crux of our problem, how to decouple ourselves from the machinations, schemes, scams and fraud of the too big to fail loan sharks.

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