• News
  • Celebrities
  • Finance
  • Crypto
  • Travel
  • Entertainment
  • Health
  • Others

Is the Greco-European Financial Crisis Goldman’s Fault, Too?

The Greek debt crisis — which is threatening to spread to Spain, Portugal, Italy and Ireland and force the Germans to bail out the Greek government with German taxpayer dollars — is all the rage right now, with people trying to figure out how to stop the contagion and halt the default that might well trigger the next nadir in the nascent world economic recovery. Der Spiegel now reports that Goldman Sachs’ tricky derivatives trades may have masked the Greek debt just long enough to screw us all over yet again.

Under Eurozone rules, countries are required to keep total government debt to 60 percent of GDP and government budget deficits to 3 percent, in order to maintain the value of the euro, Eurozone-wide interest rates and general stability. Greece, it turns out, was always fudging its budget deficit numbers by “mistakenly” leaving things out — meaning that its budget deficits were inevitably above 3 percent and, in 2009, closer to 12 percent.

But even those figures aren’t accurate, because the Greeks used complex financial transactions, designed by Goldman Sachs, to kick the debt can down the road even further. Goldman had the Greeks issue bonds, valued in dollars, in yen in exchange for bonds that paid out in euros. But rather than receiving the euro-denominated bonds at market prices, Goldman made up an exchange rate that allowed the Greeks to look as though they were only engaging in a currency swap when, in effect, they were getting more than a billion more than they should have from the trades in credit. The credit wasn’t counted against their debt or deficit limits — though it will be, when the bonds they began issuing in 2002 begin maturing in 2012 and 2017.

It’s likely that Goldman made a killing on the commissions for the swaps, and then sold the swaps to a Greek bank for even higher profits.

The swaps, and the non-disclosure of them, are both perfectly acceptable within the Eurozone reporting rules. But what’s legal, as the United States already found out, isn’t the same as what is good for the economy. The Greek debt — which Goldman not only enabled but expanded — may throw Greece, if not the Eurozone, into a financial tailspin if the crisis isn’t resolved. That crisis is expected to trickle back to the United States, where our economy has only barely started down the road to recovery. And Goldman, with its $13 billion profit in 2009, will still be sitting pretty.

Discussion & Comments (0)

    Recent Articles

    • Things You Should Know about North America

      Things You Should Know about North America

      Get to know more about North America.

    • Eurovision 2010 Paula Seling Unpredictable Contest

      Eurovision 2010 Paula Seling Unpredictable Contest

      Paula Seling's experience on the Eurovision stage led her to declare that "Eurovision is an unpredictable contest". Which may explain the success of the young Lena from Germany, about whom the predictions before the event did not offer much chances for victory.

    • VIPRow.me - The Best Sports Streaming Website Today

      VIPRow.me - The Best Sports Streaming Website Today

      Have you ever contemplated creating a user-friendly site dedicated to sports-related free live streaming channels?

    • Learn How To Download, Install, And Use The Xnxubd 2022 Frame App

      Learn How To Download, Install, And Use The Xnxubd 2022 Frame App

      XNXUBD 2022 Nvidia users are able to watch thousands of videos and other contents online. XNXUBD 2022 Nvidia New is a piece of software that enables people to watch videos online without having to pay for memberships. On a graphics card, the XNXubd also provides some of the best gaming and virtual reality experiences.

    • Xvideostudio Video Editor Apk Free Download For Pc Full Version In 2022

      Xvideostudio Video Editor Apk Free Download For Pc Full Version In 2022

      A new edition of the Video Editor Apk for xVideostudio.Video Studio has all the latest features, including support for multiple video download formats in HD, FHD, and even 4K resolutions.

    • 9 Best Lotion For Masturbation - Popular Choice For 2022

      9 Best Lotion For Masturbation - Popular Choice For 2022

      Masturbation is a common activity for men and women. It's a natural and risk-free way to explore your body, experience pleasure, and release sexual tension.

    • Reasons Why You Need To Stop Watching Movies From Sflix

      Reasons Why You Need To Stop Watching Movies From Sflix

      Without having to sign up or pay anything, you can watch movies online for free with SFlix. It has more than 10,000 movies and television shows.

    • Coi Leray Mom And Dad's Family History & Wife, Explained

      Coi Leray Mom And Dad's Family History & Wife, Explained

      Coi Leray Collins (born May 11, 1997) is a rapper from the United States. Leray started publishing songs to SoundCloud in 2014, and in 2018 she released her breakthrough track "Huddy" as well as her first mixtape, Everythingcoz.

    • Listen And Download Music On MyFreeMP3 For Free

      Listen And Download Music On MyFreeMP3 For Free

      Are you in a bind and looking for a place to obtain free mp3 songs? Never again will you need to bother, since this article has everything necessary to obtain your solution. Download free music from MyfreeMP3.com, one of the world's most popular websites.