Sand gets in your eyes

‘Russia’s economy ministry said GDP had fallen by 0.5pc in the year to November, the latest sign that the country is heading for recession. The worse-than-expected figures sent the rouble tumbling on Monday. After staging a slight recovery in recent weeks, it fell to trade at around 56 to the dollar.’ So wrote James Titcomb (aptly named) yesterday in the Daily Barclaygraph.

The narrow inaccuracy of that opening paragraph sums up the Torynaff these days. Russia is heading for recession because (as I began writing three years ago) its economy is always going to be damaged by a world recession (which we already have) and that problem has been exacerbated by Americans and Saudis effing about with oil prices and production levels. The Ruble didn’t stage a recovery ‘in recent weeks’: in recent weeks, it has been dropping like a stone. But it did stabilise last week once China forcefully vowed to support it come what may.

The dollar transactional alternative now emerging has yet to be covered by the Telegraph. Yesterday, Round 3 of the Greek Presidential elections produced exactly the same result as in Round 2. The result was known by 11 am GMT, but the paper’s site didn’t print the story until 6 pm….and only then on a minor page within ‘World’.

The Greek story – in my view, bigger than any other on display, because it concerns the fate of the EU – referred to Syriza twice during the first three paragraphs of Bruno Waterfield’s piece as “a far Left Party”. It went on to focus entirely on the likelihood of ‘dangers’, and opined that Greek elections are ‘expected to leave the country without a stable government for at least three months’. The achievements of the current stable government get a mention in the very last paragraph: ‘Youth unemployment is still at more than 50 per cent, with overall joblessness at 26 per cent, while the country’s sovereign debt remains more or less unchanged at 174 per cent of Greek GDP’. So much for stability.

At ten past seven last night, Android Evan-Elpus weighed in with a piece referring to Greece’s largest Party as ‘the anti-Troika rebels’. The rejection of Samaras, he said, had caused ten year debt yields to ‘surge’ to 11.9% as a result of the ‘Hard-Left’ Syriza being in the lead in the polls. There then followed a stream of ridiculous scare stories about what Germany, the ECB and hedge funds might do to ‘strangle Greece in an instant’. AEP reported in horror that one hedge fund had called the Syriza plan ‘communist’. Most people inside and outside Greece see the austerity programme as completely insane, but that didn’t come up.

I go to the DT these days purely to see what the Stepford Wives are up to. I’m at a loss to understand any more WTF the paper wants to happen in general, or indeed where AEP stands any more. But it still saddens me to see a newspaper crammed with intelligent writers unable to grasp the degree to which its entire thrust seems to be the protection of a system which is steadily undermining the democratic rule of law – and has brought almost every economy on the planet to its knees.

Abolutely classic in that context was the fact that the markets were “taken by surprise” when the Round 3 result was announced, according to Bloomberg. Right there you have the problem with bourse capitalism

Wolfgang Schäuble and his Wheelchair Wehrmacht need no encouragement from the Anglo-saxon press to get stuck into the Greeks. Despite his disability (which is looking increasingly well-deserved) Unser kleine Wolfie was first out of the blocks to remark that “Fresh elections won’t change Greece’s debt. Each new government must fulfil the contractual obligations of its predecessors. If Greece chooses another way, it’s going to be tough”. Fresh elections won’t change the debt, he’s right: but then again they won’t increase it by 30%…which is what his policy did. Only determined politicians will change things for the better…and that’s why nobody in the élite wants Alexis Tsipras to win.

Across the continent yesterday afternoon, however, there was a growing consensus that dealing with Tsipras (but not in the mafiosa sense) is now inevitable. In Berlin and Brussels, there was a general sense that Syriza’s leader would mellow and a deal would be done. And as always, the line was trotted out that “a Greek exit no longer worries us”.

That, of course, is complete bollocks. Virtually none of Greece’s outstanding debt is owned by private bondholders now…and a third of it is funny-money invented by fractional reserve banking. It would cost the EC (aka Germany) roughly €120bn to wipe the debt out: that’s far less than the bank-whipped clowns have poured in already, but this time – for the first time – we would be talking about real money coming out of real budgets.

There are two problems with this. First, it would force Merkel to break her election promise made to the German people last year; and second, most of Europe (let alone the ECB) couldn’t afford yet another hole in their budgets – not France, not Spain, and especially not Italy and Portugal

All of which neatly segues into why the “We can handle it” line is so much cobblers. First, whatever deal is done with Greece, all the other peripheral States would demand the same deal for them. Second, Italy is now so far gone, there is a very real chance that some time before next summer, they will simply leave the euro anyway: so a Greek default/standoff followed by Italy’s departure cannot be contemplated. The idea of ‘zero contagion’ is complete nonsense, and Brussels-am-Berlin knows it. Finally, France isn’t going to take kindly to being told in March that it has to cough up its budget shortfall “or else” – whatever that means any more – and then either immediately before or afterwards that it must also put hands in pockets to give the Greeks a €40bn lifeline.

Furthemore, any fantasist harbouring silly ideas about the IMF so much as crossing the French border clearly isn’t up to date with French contemporary politics, or the long history of Gallic truculence. That would hand 3 million votes to Marine Le Pen overnight, and evoke at the very least widespread strike action. Anyone living here must realise by now that French enthusiasm for the European Union has waned in direct proportion to the number of lax rules and free money on offer.

No – the truth is, Germany and Frankfurt are on the line here…and they know it.

Thus, although I may be ascribing far too much common sense to the EUnatics, I think it highly unlikely that Washington, Berlin and Brussels are incapable of working out that the election of a Syriza-led coalition means the likely demise of the euro becomes a racing certainty. So I fully expect leaks, threats, flying visits, high-levels speeches and every other foul weapon of anti-democratic corporatism to be thrown at the Hellenic Republic in the coming weeks. Plus, at another level, we can be certain that every false flag one can imagine will be fluttering gaily in the breeze….albeit run up the flagpole by hidden hands.

Recently at The Slog: Fear and loathing among the main currency holders