The Global Debt Crisis Is the New Cold War

The Bank of Greece in Athens

The Bank of Greece in Athens

From New York Magazine:

The news from Greece today is … well, it’s not good. Greek citizens are angry, European politicians are testy, equity investors worldwide are getting nervous, and the headlines are getting increasingly hysterical. This morning, things even took a dip into surreality when Greece’s Deputy Prime Minister Theodoros Pangalos, frustrated by Germany’s criticism of his country’s accounting skills, actually whipped out the Hitler card.

“They [the Nazis] took away the Greek gold that was in the Bank of Greece, they took away the Greek money and they never gave it back,” he said. “I don’t say they have to give back the money necessarily,” he remarked to the BBC. “But they have to say thanks.”

Compared to that, the Times sounded like the voice of reason with their story pinning blame on our old friend credit default swaps, which prompted Fed Chairman Ben Bernanke to announce he would investigate Goldman Sachs and financial institutions that might use instruments “in a way that intentionally destabilizes” the country. But is the rising price of insuring for risky assets, like Greek bonds, really driven by dastardly speculation, or just common sense? Remember, you can only bet against Greece if you find someone willing to bet for Greece.

Meanwhile, in Nature magazine, Jared Diamond, an esteemed scholar of societal collapse, has cited a parallel between the current crisis and the one suffered by Greece in, yes, the Bronze Age, when an advanced society was plunged into 400 years of illiteracy. This made us feel a bit better, actually. Because we strongly suspect that ain’t gonna happen this time. (Three hundred years, maybe.)

What we do think will happen is that the Greek debt crisis will, before too long, go the way of the Dubai debt crisis. Which is to say, this is a problem that we’ll soon stop having to worry about, because it will get superseded by other problems, such as fiscal crises in Portugal, Spain, Italy, Ireland, Japan, the Baltics, or — can’t wait! — here.

Or we can just worry about where the next earthquake is going to strike

[continues in New York Magazine]


Majestic is gadfly emeritus.

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4 Comments on "The Global Debt Crisis Is the New Cold War"

  1. tonyviner | Feb 27, 2010 at 4:38 pm |

    The next earthquake will strike in Chile.

  2. Great story and an amazing site. Thanks for posting.

  3. Great story and an amazing site. Thanks for posting.

  4. Great story and an amazing site. Thanks for posting.

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