By Bill Tatro, Special for USDR
Angela Merkel’s most recent comment about Greece’s exit from the European Union reminds me of Carl Spackler’s (Bill Murray) comment in the classic movie Caddyshack when he found the Baby Ruth at the bottom of the pool, ate it, and said “NO BIG DEAL”.
Madam Merkel’s rationalization at the exit of Greece from the “great experiment” is acceptable if Germany and Greece existed in a vacuum. Unfortunately that is not the case.
As bail-in’s have become the template for failed banks around the world (think Cypress), so too will the Greek snap election become the model for Spain, Italy and even France.
Not only Germany but also the top 1% of each European member have become the winners in the failed experiment.
Those, the 1%, who have been able to benefit from artificial asset appreciation continued to believe that the Keynesian/debt model will exist forever. Didn’t Marie Antoinette once say “let them eat cake”.
The reality is, however, that the lack of jobs, food, shelter and increased potential of war will ultimately take its toll on the 99% and changes will occur.
The first change will come from voters moving to the so-called extreme parties. Syriza in Greece and Marine Le Pen’s National Front in France are prime examples. The expectations will be that once in office a new program will be initiated. The 2014 U.S. elections weren’t any different than what is occurring all across Europe. The voters repudiated the country’s direction.
New elections, new politicians and the same old new promises. This time, however, should the people’s expectations not be realized, and if history is any guide, the continent could be engulfed in flames.
Should Greece leave the Union the 1% could see a dramatic reversal of fortunes. Big leveraged bets have been made on both the stock and bond markets under the belief that Mario Draghi’s promise of “whatever it takes” will be sufficient to keep things together.
Now that reality is taking hold Angela has taken the reins and declared “NO BIG DEAL” simply denying the reality.
In this circumstance I think Carl Spackler had a better grasp on reality than the head of Germany.
A Baby Ruth is NO BIG DEAL but Greece leaving the European Union is certainly A VERY BIG DEAL.