Big Fat Greek Party

As the UK's Margaret Thacher famously said, "It (Socialism) works fine until you run out of other people's money."

For years, Greece has been handing out very generous benefits. These benefits easily exceeded their ability to fund. Everyone knew this, but did nothing because "The People Wanted It." (Where have I heard that before ... ?)

Greece has ran out of OPM. (Other Peoples Money). With this in mind, they decided to vote: They voted to continue, as is ... no austerity ... no cut-backs ... no changes. That was pretty gutsy!

Today, they partied like an out-of-control Greek wedding, celebrating "You aren't going to push us around." I believe the party will be very short lived. Likely, within the week, most facilities, banks and stores will be dark, unless they can find more OPM. The hangover from the party will be severe and long-lived.

However, it looks like the Bank of OPM is shut!

The US problem, in one way is like Greece and in another way, very different. Greece is, as of today, part of the European Union. This means their currency is the Euro and they have no way to obtain more Euros, other than through taxes or borrowing. Since they do not control the Euro, they cannot simply print more. Furthermore, the Greeks are not known for their propensity to pay taxes. At this point, little tax revenue is coming in, businesses are shutting down and people will be soon running out of necessities.

Greece has "Flamed-Out" and is on a glide path for a crash landing.

Here in the US, our benefits and operating expenses also are far outstripping our ability to fund them ... with Obama promising even more goodies every day, which we obviously cannot pay for. The Government tells us that a $20 Trillion deficit (OPM) is no problem. That was the same thing the Greek government said. Here in the US, we have the Golden Goose: We can happily print new dollars, to our heart's content. Yes, there is supposed to be a limit, but so far, neither the US nor Fed seem troubled be this illegal excess. (No surprise here. It lately seems very "progressive" to ignore the law.)

We can keep printing money until it gets so obvious that this is not working out very well. Sooner or later, we will not be able to find more suckers to pay higher, taxes, countries to loan us more money or buy our bonds.

By the way: The government fibs to us by saying the deficit is around $20 Trillion, but by some actuaries, the real deficit is closer to $205 Trillion. No one want to talk about this because it is totally catastrophic and would send all financial markets running away with their hair on fire.

Bottom Line: In spending excess, we are like Greece ... maybe even worse. In our ability to harvest money off trees, we are unstoppable ... until we kill the tree. (I see the bark breaking away already ... a sure sign of stress!)