It looks like Europe blinked first this time. The Greeks have defaulted, but will remain in the EU nonetheless.
Strange… Greece owes 300 billion euros and is not willing to pay a fraction of it, but German Chancellor Angela Markel – instead of wishing Greece all the best with its drachma – has convened a summit to arrange for a new program for it to pay off its debt. Why? Why don’t the Europeans just tell the Greeks they’ve had enough?
The answer is that the euro – and the dollar – are inflated balloons. Nobody knows when the balloon will burst, but Western leaders choose to keep inflating it instead of dealing with the Greek thorn. The balloon will surely burst, but preferably not on their watch…
The rampage on the banks in Spain and Portugal revealed just how fragile the system really is. A default on a debt of 300 billion euros can start the domino effect that even the German economy (which is also in trouble) will not be able to survive.
The method for creating money using interest-bearing debt (the banks produce most of the money today via loans) combined with a consumer culture (that also stems from this method: Why save money when the printing presses rob me of my income?) has enslaved humanity to the business tycoons (and production methods) and governments.
The method promises that, paradoxically, the more that productivity rises (and it is rising), the more hours of work one needs to put in just to make ends meet. Industrious nations, focused on success, manage to hang on for longer. But the gaping hole that first swallows the lazy will reach them as well. It is already coming.
I have no doubt that, sooner or later, we will witness Greece-style bank closures almost everywhere in the world. Israel will be less hurt because it is not part of the European bloc and because, in the meantime, its economy (largely thanks to Netanyahu) is keeping pace with developments.
For the past twenty years, Israel has paid a sum about equal to the Greek debt (approximately one trillion NIS) for the Oslo Accords. And it continues to pay. Every family in Israel has paid approximately 600,000 NIS for the infamous handshakes of Rabin and Netanyahu with Arafat.
In order to safely navigate the approaching economic storm, Israel must do the following:
- Immediately nullify the Oslo Accords, stop transferring truckloads of cash to Gaza, stop free electricity to Gaza, and stop all the other insane concessions that Israel still unilaterally makes to Gaza while the other side has long ago stopped fulfilling its end of the Accords.
- Throw the keys to the Israel Land Authority into the sea and divide the entire Land of Israel by lottery to its children. Allow Jews to build homes on their land.
- Drastically reduce the security budget (most of it is necessitated by the Oslo Accords).
- Allow Israelis to choose between paying social security and private insurance. Today, more than half of Israelis’ social security payments are paid out to another nation whose leaders were on the flotilla to Gaza and whose payments into the Social Security fund are miniscule. This is another weight that Rabin added to the shoulders of the Jews in Israel when he nullified the Army Veterans payments.
- Cease the budget-funded pensions and truly drain the swamps of corruption, such as the Sarel Medical Company.
- Understand that the future is not in the markets of the West and energetically pursue commerce with the Eastern market. This is already taking place and must continue and expand.
- Rid ourselves of the billions of dollars that current Vice Chair of the Federal Reserve and former Governor of the Bank of Israel, Stanley Fischer, bought “for us.” The American Titanic is sinking, and it is a mistake to tie ourselves to it.
- Repeal the VAT on gold (a unique Israeli patent) and make it a legal currency. Every Greek would prefer to have gold over cash, which is now locked up behind closed doors, anyway. Allow for competition between the convenience of using the shekel and the security in the true shekel, which in Hebrew means the weight of silver or gold. This will safeguard the printing presses of the Bank of Israel from the insidious robbery euphemistically called the “inflation target.” It will provide a safe anchor in the face of the false security of the printing presses of the world.
- The Zohar tells us that in the days of Mashiach, all the gold in the world will flow to the Land of Israel. Let us allow that process to begin now.
“As a professor of economics, I do not have the right to express my opinion any more than any person on the street.” That brave comment was made by Israel Prize recipient Professor Ariel Rubinstein. This is my answer to all those who will ask what I understand about economics. Economics is not an exact science. It is a number of fundamental principles mixed with a healthy portion of psychology, history, culture, values – and a bit of healthy logic, as well.