How the Greek Soccer Team Can Survive the Sinking of the Gustloff and World War 3


Stuff last week’s supposedly crucial moment for the euro. The Greek elections were nothing compared to this. As you’re reading, the real fate of the euro hangs in the balance.. The Greek soccer team is lining up to face the Germans in Gdansk, Poland for the soccer quarterfinals of the Euro 2012.

You’d hate to be the man with the whistle. He’ll kick off proceedings by tossing the rather symbolic euro in the centre of the pitch. Given the tense symbolism, don’t expect to see some poor child or politician do it, like they do at some games.

No doubt the German team will have to provide the euro for the toss. We’ll be keeping a keen eye on where it ends up. If the referee turns out to be Spanish and Germany loses, we’re going to write a letter to UEFA.

The Germans couldn’t worsen their reputation any further in the eyes of southern Europe, but they continue to try. The German coach was spotted knocking the ball out of a Ukrainian ball boy’s hand during one of the games. The replay was shown during the game, but the incident occurred outside of game time. Still, the football world erupted with scorn.

Germany is bullying eastern Europe again. That led to World War 2 last time. Is this the moment that starts World War 3?

German Coach Joachim Loew Starts a War

German Coach Joachim Loew Starts a War

Source: YouTube

Before we get to the topic of the Gustloff, a gripe. Why on earth is everyone calling Greece’s political party Syriza ‘the anti-bailout party’? They’re just as much in favour of being bailed out as the next politician. Perhaps they aren’t in favour of staying in the euro then? Nope, they want that too. So how is Syriza different? They aren’t.

The Greek political parties think the Germans are bluffing. They think the terms of the bailout aren’t generous enough. They think Gertrude and Hanz will hand over their credit card without attaching any conditions on how it can be used. And so they want to bin Germany’s required austerity measures while keeping the German cash. The question is, are they right? Will the Germans go along with the blackmail?

Why might the Germans be willing to hand Stavros and Andria the cash?

Let’s call it the domino effect. If the Greeks don’t have German backing, nor do the Spanish, or the Portuguese. There’s poetic irony in all this – the kind you’d expect in a Greek tragedy. Everyone is worried that the thrifty Germans might throw one country to the wolves. But the real issue is the exact opposite. Germany’s economy can’t back all the nations of Europe financially. So is it even right to choose some of them? So far, the Greeks, Portuguese and the Irish have one foot inside the lifeboat. Spain has half a toe. Actually, it’s not a lifeboat. It’s more like the Gustloff, which featured in a movie on SBS on Sunday night.

The Gustloff was part of Germany’s KdF propaganda efforts. Kraft durch Freude was a Nazi slogan – strength through pleasure. The idea being that the German worker deserved the occasional break on a rather snazzy cruise ship. It seemed like a good idea at the time to name it after the assassinated Swiss Nazi Party leader. Go figure.

KdF Gustloff

KdF Gustloff

Source: Wikipedia

The Kriegsmarine requisitioned the ship for the war pretty soon after it was built, and it was used to house and train German U-Boat crews up to the point where this story finally becomes relevant.

Assuming SBS’s movie was approximately right, here’s what happened: The Gustloff was moored in Gdynia, about ten kilometres away from where the Greeks will be taking on the Germans this morning. The Russians had encircled the Germans and the Gustloff was the last hope of vast amounts of refugees.

Falling into the hands of the Russians wasn’t terribly desirable (for the Germans at least). The Gustloff’s newly appointed captain decided to allow German refugees to board the ship without authorisation. The U-boat personnel using the ship wanted to escape with just their families and leave the rest of the refugees to the Russians, but the captain decided to open the gates while the U-Boat crews were doing their graduation ceremony. It was a bet by the captain that they wouldn’t stop their formalities to get in the way of the crowd. It worked, and the ship filled with refugees.

Civilian boys weren’t allowed onto the ship, but having a baby increased your chances of being allowed on. One of the mothers depicted in the film dressed her young son as a girl and pretended her long dead and frozen solid baby was still alive.

We stopped watching at that point, but the story ends with the ship being sunk by the Russians and the largest loss of life occurring from a single sinking in recorded maritime history. Half were children, according to the heavily debated ‘guesti-facts’. The debate continues today about whether the ship should have been sunk or not.

Germany is just like the Gustloff. It’s considering saving the refugees of Europe, which is unpopular with the Germans already on board. But appearances are deceiving. Germany is probably doomed, just like the Gustloff was. Germany has its own debt problems. ‘More than 50 per cent of managers polled at an industry conference in Monaco on Tuesday said they expect Bund yields to double within a year,’ the Financial Times reports.

As soon as German interest rates rise, the game will be up. Even the Germans will want the European Central Bank to print money. And that’s the real reason to leave the euro. To avoid the coming inflation. More on that next week.

The refugees of Europe have the chance to avoid the euro’s sinking by going back to their own currencies. Unfortunately, everyone advocating this wants to sink any new currency even more, rather than make it sound or stable.

The point of the Gustloff story is that the last remaining way out can be a death trap. No matter how desperate you might be, it’s still not a good idea to get on board. Especially when just about everyone is clamouring to get on too.

And beware of the heroes – the ones who open the floodgates to the refugees. If the Germans open their bank vaults, that’s a step towards dooming their own fiscal position. Even more doomed than it already is.

Then again, hell hath no fury like a borrower spurned. A Greek borrower spurned. Maybe the Germans would rather go down with the rest of Europe to avoid any awkward moments. Fat chance that will happen at the soccer game though.

So this week’s trading recommendation is to take a punt on the Germans thrashing the Greeks! It’s probably arrived in your inbox hours too late…

Until next week,

Nickolai Hubble.
The Daily Reckoning Weekend Edition

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Nick Hubble
Nick Hubble is a feature editor of The Daily Reckoning and editor of The Money for Life Letter. Having gained degrees in Finance, Economics and Law from the prestigious Bond University, Nick completed an internship at probably the most famous investment bank in the world, where he discovered what the financial world was really like. He then brought his youthful enthusiasm and energy to Port Phillip Publishing, where, instead of telling everyone about The Daily Reckoning, he started writing for it. To follow Nick's financial world view more closely you can you can subscribe to The Daily Reckoning for free here. If you’re already a Daily Reckoning subscriber, then we recommend you also join him on Google+. It's where he shares investment research, commentary and ideas that he can't always fit into his regular Daily Reckoning emails.

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Henry Piggots
Henry Piggots
4 years 3 months ago
Actually there are various existing theories providing evidence that the pyramids were useful. For example the theory postulated by Richard A. Proctor in his book The Great Pyramid Observatory, Tomb and Temple, states that there is evidence to support the theory that the pyramids could have been astronomical observatories. There are also other theories such as Kurt Mendelssohn’s, which states that the pyramids were built with “the desire to transform an agricultural village community into a centralized form of society.” (“Pyramid Technology,” Bibliotheca Orientalis 30 [1973], pp. 349-355) There are also various other theories, thereby discrediting your statement that the… Read more »
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