Elites Deterrence is Dead
By: Ashvin Pandurangi
May 19, 2012
With Greece potentially on the brink of exit from the Eurozone before year’s end, a lot of analysis out there has turned to what the consequences of such an event would be, and, specifically, what punishment Greece would receive from the EU and other international organizations, such as the IMF and perhaps even NATO. The general line of thinking here is that Europe will make such a devastating example out of Greece that no one else will dare to question the status quo setup ever again. While Greece is dragged down the Green Mile in shackles to its final destination, all the other prisoners will watch with an unmistakable sense of dread, and the ceiling lights will ominously flicker as the “juice” is turned on, electro-frying Greece into a crispy black corpse.
In a recent Telegraph article by Ambrose Evans-Pritchard, the views of analysts at Bank of America and HSBC are outlined, and they just so happen to fit in very nicely with the above narrative (one that will only become more common in the coming weeks). First, they say that global markets will rally on a Greek exit due to the massive response it precipitates by the ECB, Fed, BOJ, EU and other Eurozone governments – coordinated currency swaps, ECB interest rate cuts, ECB QE, Fed QE, SMP purchases of Spanish and Italian bonds, capital injections into Euro area banks and a “pan-European system of deposit guarantees”, among other things.
They are relying on the quite cliched argument that BAD = GOOD in this market system, since the centralized authorities will unleash every tool at their disposal when the going gets rough. The other critical part of this bankster-floated narrative is that the Euro area will become better, faster and stronger once Greek is thrown overboard and left as chum for the sharks. Not only will the central institutions manage to prevent systemic contagion via the tools listed above, but the remaining member states will be scared shitless and will therefore do whatever they are told to do in exchange for remaining shackled to the new and improved Eurozone.
Here is a short passage from the Evans-Pritchard article (he is referencing the views of David Bloom, currency chief at HSBC):