China Says Greek Debt Crisis ‘Tip Of The Iceberg’

26 Mar

From the Sydney Morning Herald:

The euro slumped Thursday to a fresh 10-month low after a senior Chinese central bank official warned that the Greek debt crisis was just the “tip of the iceberg.”

Analysts said the comments, and a debt downgrade for Portugal on Wednesday, suggested the crisis was widening to take in the entire eurozone project.

“The fact that Zhu Min, the deputy governor of the People’s Bank of China, felt compelled … to call the Greek debt crisis ‘the tip of the iceberg,’ is as good an indication as any of how rapidly fundamental concerns are growing about the eurozone,” said analyst Neil Mellor at Bank of New York Mellon.

“Indeed, this comment might well signal the point that we stop talking about a ‘Greek debt crisis’ and start talking about a ‘Eurozone structural crisis’ instead,” Mellor said in a research note to clients.

Please take the time to browse the recent posts on this blog.

Our financial authorities – RBA Governor Glenn Stevens, Treasury Secretary Ken Henry, and the Labor Government – are all convinced that the global financial crisis is ‘over’.

They have publicly declared that Australia is all set for a new, multi-decade mining boom (thanks to China), that will provide us with a “period of unprecedented prosperity”.

They have ridiculed Barnaby Joyce, our only politician with the courage to publicly raise questions about the state of the rest of the world’s economies, and what calamity that might mean for Australia, since last October.

And, all of them (except Barnaby) completely failed to predict the GFC in the first place.

Yet, our media and the public believe that everything is fine.  That the Government can just keep right on borrowing around $2bn a fortnight, to continue squandering on a massive, rushed and bungled “stimulus”.

Barnaby is right.

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