Here’s what we’re told:<\/p>\n
Greece’s economy blew apart because a bunch of olive-spitting, ouzo-guzzling, lazy-ass Greeks refuse to put in a full day’s work, retire while they’re still teenagers, pocket pensions fit for a\u00a0pasha; and they’ve gone on a social-services spending spree using borrowed money. Now that the bill has come due and the Greeks have to pay with higher taxes and cuts in their big fat\u00a0welfare state, they run riot, screaming in the streets, busting windows and burning banks.<\/p>\n
I don’t buy it.\u00a0\u00a0I don’t buy it because of the document in my hand marked, “RESTRICTED DISTRIBUTION.”<\/p>\n
I’ll cut to the indictment: \u00a0Greece is a crime scene<\/strong>. \u00a0The people are victims of a fraud, a scam, a hustle and a flim-flam. \u00a0 And\u2013\u2013cover the children’s ears when I say this\u2013\u2013a bank named Goldman Sachs is holding the\u00a0smoking gun.<\/p>\n In 2002, Goldman Sachs secretly bought up \u20ac2.3 billion in Greek government debt, converted it all into yen and dollars, then immediately sold it back to Greece.<\/p>\n Goldman took a huge loss on the trade.<\/p>\n Is Goldman that stupid?<\/p>\n Goldman is stupid\u2014like a fox. The deal was a con, with Goldman making up a phony-baloney exchange rate for the transaction. \u00a0 Why?<\/p>\n Goldman had cut a secret deal with the Greek government in power then.\u00a0\u00a0Their game:\u00a0\u00a0to conceal a massive budget deficit. \u00a0Goldman’s fake loss was the Greek government’s fake gain.<\/p>\n Goldman would get repayment of its \u201closs\u201d from the government at loan-shark rates.<\/p>\n The point is, through this crazy and costly legerdemain, Greece’s right-wing free-market government was able to pretend its deficits never exceeded 3 percent of GDP.<\/p>\n Cool. Fraudulent but cool.<\/p>\n But flim-flam isn\u2019t cheap these days: On top of murderous interest payments, Goldman charged the Greeks over a quarter billion dollars in fees.<\/p>\n When the new Socialist government of George Papandreou came into office, they opened up the books and Goldman’s bats flew out. \u00a0Investors’ went berserk, demanding monster interest\u00a0rates to lend more money to roll over this debt.<\/p>\n Greece’s panicked bondholders rushed to buy insurance against the nation going bankrupt.\u00a0\u00a0The price of the bond-bust insurance, called a\u00a0credit default swap<\/em> (or CDS), also shot through the\u00a0roof. \u00a0Who made a big pile selling the CDS insurance? \u00a0Goldman.<\/p>\n And those rotting bags of CDS’s sold by Goldman and others? Didn’t they know they were handing their customers gold-painted turds?<\/p>\n That’s Goldman’s specialty.\u00a0\u00a0In 2007, at the same time banks were selling suspect CDS’s and CDOs (packaged sub-prime mortgage securities), Goldman held a \u201cnet short\u201d position against these securities. That is, Goldman was betting their financial “products” would end up in the toilet. Goldman picked up\u00a0another half a billion dollars on their “net short” scam.<\/p>\n But, instead of cuffing Goldman’s CEO Lloyd Blankfein and parading him in a cage through the streets of Athens, we have the victims of the frauds, the Greek people, blamed.\u00a0\u00a0Blamed and soaked for the cost of it.\u00a0\u00a0The “spread” on Greek bonds (the term used for the risk premium paid on Greece’s corrupted debt) has now risen to \u2014 get ready for this\u2013\u2013$14,000 per family per year<\/em>.<\/p>\n __________________<\/p>\n Greg Palast is the author of <\/em>Vultures’ Picnic<\/a>: In Pursuit of Petroleum Pigs, Power Pirates and High-Finance Carnivores, which will be released on November 14 by Penguin USA.<\/em><\/p>\n