Yitzhak's house

Today is Thursday, tomorrow is Friday, the day after tomorrow is Saturday, and on Sunday, the leaders of the European Union, in their reunion in Brussels, are supposed to find the miraculous solution which would end the sovereign debt crisis - the Greek metastasis and the poliomyelitis (that is, a single word for weakness and contagion risk) of the European banks - , but yesterday it was a Wednesday and the day before that, on Tuesday, Standard&Poor"s downgraded 20 Italian banks and Moody"s warned against a potential downgrade of France and downgraded Spain, even as the doctors in charge, (French president Nicolas Sarkozy, and German chancellor, Angela Merkel) are arguing over the cure.

And that"s because each of them wants a solution that would favor their own country.

Angela Merkel wants a 50-60% haircut on Greek bonds (50-60%), at the expense of the bondholders, but the main holders are the French banks (which aren"t doing so hot anyway), so Nicolas Sarkozy would "prefer" (but he"s rather adamant about it), for some "technical adjustments" to the preliminary agreement of July, where they had agreed with private bondholders to only have a 21% haircut on the Greek bonds.

Sarkozy"s alternative expects Greece to rely mostly on the second payout of the European Financial Stability Fund (which was initially stipulated to be 110 billion Euros), to which Germany is the largest contributor.

Of course, the French want to have their cake and eat it, considering that the more money they give the Greeks, the more frigates the latter buy from them.

You didn"t know?!, Greece is getting ready for war!, by buying four French warships, at a total price of 1.2 billion Euros, and 400 American tanks - that"s sure going to help their current money problems (what could be their target?, Turkey?, or its own protesters?).

On the other hand, the Germans have a different problem: sources from the government coalition yesterday said that Germany would lower its economic growth estimate for next year, from 1.8% to 1%, by confirming the recent forecasts of the most important local institutes, which had expected the estimate to be revised to 0.8%.

The news shook the entire world, because the world"s financial system is hanging above the abyss, by one hand, from the stump of the growth of the German economy, which is at the mercy of China, which through its demand for German products, supported its good economic evolution last year.

Of course, the legislative package drafted by the Americans, against what they claim is the "artificial depreciation" of the yuan, used by the Chinese government, to flood the American market with Chinese products, will automatically result in reduced Chinese demand for German products, meaning that the German"s revised economic growth estimates are quite realistic.

You got that?, it"s a domino:

1) Statistically, Americans are getting rich, but less statistically, they are occupying Wall Street, with protesters complaining that the earnings only go to a few individuals, while the economy is left to rot, which leaves them predisposed to buy cheap Chinese stuff, while their administration is borrowing from China, which finances the American public services, and in doing so, the Chinese are subsidizing their own exports to the USA;

2) The Americans have suddenly developed persecutory delusions against the Chinese - ever since several billion dollars disappeared from the Treasury, which scenario makers suspect are the first payouts to the "yellow race", on account of the American treasury notes they own, worth over 3 trillion dollars, which China owns - so they get mad at their main lender and are taking steps against it (But why?!, it was such a nice trade!...);

3) the Chinese (who have been keeping their yuan at low levels, for decades, - which helps their exports -, aren"t too concerned with the living standard of their own people, considering that the biggest dream of a peasant in the North is to get hired in a factory, where he could make as much as the fabulous amount of 80 dollars a month), are now changing their strategy to prioritize Europe, and instead of importing goods from them, are now looking to buy ports, airports and railway stations ("The yellow race will rule the world?", or, simply, the Chinese want to cheapen their transportation services, by taking them over?);

4) without the prospects of exports, the German locomotive is puffing in whatever train station the Chinese want it to, and goes back on its promise to help Greece with money;

5) France is seeing itself cornered on its own banking turf (I wouldn"t be surprised if discussions arose around Alsace and Lorraine);

6) so, at a time like this, a war between the Greeks and the Turks (they are both members of a troubled NATO) around the hydrocarbon deposits which Cyprus leased to the Americans (who have the backing of Israel), would be just peachy, especially since it might spill over into the Middle East, where the Arab world is in full "battle for democracy" (the Islamic type!);

7) in some of the Arab states, "democracy" has already won, but the fighting isn"t over, meaning that its turning against Israel for example, would fill out the domino set with its penultimate piece;

8) the last piece of course, is the American and Russian intervention (ah, I was forgetting the Russians" interest in energy domination, with their presence in Austria, bringing Germany to its knees, and taking the shape of a submarine, which may or may not be nuclear, traveling under the Aegean Sea).

There was that joke about how Yitzhak"s house suddenly became a lot bigger, after he removed the cow, the pig, the dog and the geese which he had crammed in it, upon the advice of the rabbi; this article is a bit like that joke -don"t the downgrades of Spain and of the 20 Italian banks seem far more peaceful and less significant compared to the scenarios above?

Which means I"ve reached my goal.

Have a good day!