We are seeing the end days in Greece. The Greek people, having voted earlier this year for a new prime minister, Alex Tsipras, whose unholy alliance of Marxist–Leninists, Maoists, Trotskyites, Eurocommunists, Luxemburgists and environmentalists known as Syriza stood on a platform of not paying back their loans, are now seeing the consequences of their decision. The weaselly Tsipras had a cunning plan of calling a referendum a week after Greece's final deadline for a major loan repayment to their creditors, assuming the witless European Central Bank would extend the country further credit (what's another week, after all?). But he miscalculated - the ECB in Frankfurt told the Greek prime minister they've finally run out of patience (although, more precisely, they've run out of political capital with the only net creditors on the continent - the German people).
The effect of this severe miscalculation by Tsipras and the ECB is now being seen. Greek banks are closed to avoid a massive run on deposits, ATMs are running out of cash despite a €60 per day limit on withdrawals, and many people don't even have enough cash to pay their rent and buy groceries. But in spite of this awful but entirely predictable outcome for the Greek people, Tsipras is not backing down, urging them to vote 'no' to the referendum question and thumbing his nose at the latest ultimatum from the acronymic troika of the EC, ECB and IMF.
The Greek people cannot claim they are ignorant dupes in this matter. For more than 10 years they have benefited from their governments' duplicitousness, down-right lies and reneging on successive bailout arrangements. The Greeks have enjoyed a standard of living they have not earned because of the willingness of European central bankers and private institutions to lend them more and more money. They expected, perhaps understandably, the largesse to continue ad infinitum and were disbelieving and aggrieved when the ECB called 'last drinks'.
One cannot solely blame the Greek people. The real villains in the piece are all the governments around the world who subscribe to the fantastical Keynesian economic theory of creating money out of thin air to lend to banks to drive economic growth. The reality is that so-called quantitative easing only drives asset price bubbles and does little for real economic growth (which is a factor of the increasingly efficient use of capital, not of an increase in the price of assets). That's why real estate and stock markets have reached record highs during the period of nil or low economic growth in Western economies since 2007.
Asset price bubbles inevitably burst, then everything comes crashing down. Watch this space.