Rich On Money

Map Of Greece

If you detect a note of sarcasm in the title of this posting, it is meant to be. I look at Greece whose government and financial structure is failing and I understand exactly what is going on. The analogy is like this. I am in a casino in Vegas 20 years ago, doing a corporate finance deal. There is nothing more profitable than a casino, and so I love Vegas deals. I am in the casino and as I walk through a fellow I know for years but haven’t run into lately, stops me and asks me for a loan. What are you going to do with money I inquire.

He says, “ what are you kidding. School is starting in September, the kids need shoes, clothing, new books, I need a loan. I say, ”But you are in Vegas what are you going to gamble with?” He comes back at me, “Oh I got gambling money.”

Now let’s take Greece which is one of the countries that is economically threatening to take down Europe. How big is Greece, well it’s a country of 11 million people. That’s a couple of million people bigger than New York City, that’s all. How big is Greece? The whole thing is slightly bigger than the state of Mississippi, and slightly smaller than Louisiana, and it’s threatening to bring down Europe.

Here’s what I don’t understand. How does a country with a population like New York City find that it has any business buying two submarines from Germany for a billion dollars? How does this same country find it necessary to want to buy six frigates and 15 search and rescue helicopters from France? A couple of years ago, they bought 2 dozen F16 fight jets from America. The bill was about $1.2 billion.

Who are Greece’s enemies militarily that they need to spend money like its water. This same country with 11 million people is the largest importer of conventional weapons in Europe. They buy more weapons than Germany, France, and England. To go one better, they rank fifth in the world for arms importation. They come in behind China, India, the United Arab Emirates, and South Korea.

The Greek navy currently has a fleet of eight submarines. At the same time, the government is cutting the pensions of those who have retired. They have even cut the wages of public sector employees. The Greeks have also played games with their accounting systems, something all governments love to do. How is it possible that the Greek deficit in 2003 was 1.7% and then in 2004, it went to 4.6% as Greece entered the European Common Market. They did it by backdating contracts already signed and put them further into the past, and then forward dating contracts for other goods to the date of delivery as opposed to the date of contract signature. What a country.