The trouble with modern democracy is that it’s too democratic. You give everyone a vote, and then instead of a decision, you get paralysis (although to be fair, this a better result than government activism). The world would be better governed if you had to pass some sort of intelligence/capital asset test in order to vote, or if you had to demonstrate the capacity to exercise authority over others responsibly.
But that is neither here nor there when it comes to Greece. And when it comes to Greece, we are pretty much in the same place today that we were Friday: no Greek government and no closer to knowing if and when the Greeks will leave the euro. So much for the certainty investors were hoping for.
The pro-bailout New Democracy party appears to have won a plurality of the vote. Polls show it with 30.3% of the popular vote. The anti-bailout Syriza party clocked in with 26.31% of the vote. New Democracy will have to form a coalition government with Pasok, the mainstream leftist party, or it will have to conjure something up with the communists and the neo-Nazis.
The US strategist and Air Force pilot John Boyd once said that progress is, ‘Confusion at a higher level.’ If Boyd was right, then Greece has made progress. The two mainstream parties that created the Greek fiscal mess are now in charge of fixing it up. How likely do you think that is to happen?
In any event, the prospect of an immediate and chaotic Greek exit from the euro seems diminished. Instead of a swift and merciful death, the euro experiment will now be drawn out to interminable and mind-numbing lengths. The Greek’s owe €3.9 billion in interest payments on loans made by the European Central Bank. That bill comes due in August. Begin the countdown.
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From the Archives…
The Disconnect Between US Household Wealth and GDP Growth
2012-06-15 – Bill Bonner
Playing The Financial Markets – The Greatest Game of All
2012-06-14 – Greg Canavan
The RBA’s Mortgage Market Denial
2012-06-13 – Dan Denning
Spanish “Assistance” or “Bailout”
2012-06-12 – Satyajit Das
Priming Your Investment Returns
2012-06-11 – Nick Hubble