VANCOUVER ( Silver Gold Bull) -- One of the difficulties in attempting to cover developments in the global economy is that often there are flurries of news items at any one time, making it impossible to deal with all these events as they occur.
That's why it is only now I am commenting on an
by the European Central Bank on July 20 that Greek government bonds would no longer be "eligible as collateral."
There are many interesting points. To begin with, we see yet another example of these con men using a slippery euphemism to hide the fact their paper empire of fraud is collapsing around us. But there are also many nuances to this announcement.
To place this announcement into some context, it's first worth noting this is the second time this year the bankers have "suspended eligibility" of Greece's bonds, the last time being literally days before it defaulted on 75% of that debt.
With that additional background, we now can fully understand what the ECB actually meant with its euphemism: Greek bonds are worthless.
In turn, this directly implies an even more dire reality: Greece has been declared bankrupt for the second time in six months.
Understand that there is only one small but significant step separating an "insolvent debtor" from a "bankrupt debtor." While bankruptcy is often inevitable for insolvent debtors, what makes such debtors merely insolvent is creditors will continue to extend them additional credit.
Conversely, once the debtor is cut off credit and unable to pay its bills, then bankruptcy is instantaneous/automatic. Thus, we have a cabal of private bankers simply decreeing all Greek bonds are worthless and, as an inevitable consequence, Greece as a nation is bankrupt.
Am I the only person who sees a problem with this?
Once upon a time, Western nations enjoyed a concept called "sovereignty." By no coincidence, we enjoyed our sovereignty during a period of history when we practiced a concept known as "the gold standard."
With any nation practicing a gold standard, no cabal of foreign bankers can simply decree that a nation's bonds were worthless, because they would be backed by gold. Thus no cabal of foreign bankers could decree that your nation was bankrupt.