KW: When Alexis Tspras came to power on a promise of no more austerity he appointed a very clever man to the Finance portfolio. Yanis Varoufakis repeatedly pointed out to the EU looters in the ECB that Greece was bankrupt but they eventually were so enraged at the thought that Greece can’t repay its’s debts that Tspras fired Varoufakis. However, it doesn’t mean that Varoufakis was wrong

IMF Reports that Greek Finances are Unsustainable… The IMF released two reports noting that Greece won’t be able to pay back its debt in the years to come. The bank also reiterated that it won’t take part in future bailouts unless other creditors forgive some of Greece’s debt.

What it means – Greece is due to receive more bailout money in June and July, but only after it proves that the country is on track with austerity measures. That will be difficult, since the country hasn’t hit a single austerity milestone, as far as I can tell. There’s no doubt that the government has fired public workers and cut pensions, but nowhere near what is required by the bailouts. And you can forget about the public sale of government assets. Per the deal, Greece needs to run a budget surplus of 3% or more so that it can pay down debts. At best, the country is clocking a surplus of 1% to 1.5%.

But what did you expect? This is the same country that repeatedly sues an economist for the “crime” of officially reporting the country’s 2009 deficit using applicable EU laws. Greek politicians label him a traitor who caused the austerity, but every time his case comes to trial he wins… sort of. Every judge has found in favor of the economist, but then allowed more investigation. No one in Greece wants to admit what the rest of the world knows. The country is broke.

Chinese Foreign Currency Reserves Fall Below $3 Trillion… It’s the lowest level in six years.

What it means – Market watchers expected reserves to drop by $1 billion, but instead they fell by $12 billion, taking the total under $3 trillion. The recent decline is small, but it points to a big problem.

Chinese reserves topped $4 trillion in 2015, and so they’ve fallen 25% since then, reflecting the desire of businesses and individuals to get their money out of the mainland. As people trade in their yuan for dollars, yen, and euros, the Chinese government has to use its foreign reserves to make good.

Chinese officials have tried to stem the flow of capital out of the country, but so far all they’ve done is slow it down, not stop it. I think there’s more pain ahead, and the yuan will drop below 7 per U.S. dollar.