Breaking news tonight from Brussels, as the ECB's and IMF's weekend of collusion and conspiracy have resulted in a nearly $1 Trillion total Eurozone bailout operation. The plan to ostensibly backstop the euro stands to leave US taxpayers on the hook for $50,083,000,000 in what will be another massive international transfer of wealth.
This plan is another, separate eurozone-orchestrated bailout operation that is independent of, and in addition to, the Greek bailout adopted on Friday. To recap the Greek bailout, on April 26, I wrote a post detailing the $3.417 Billion planned contribution from US taxpayers to the Greek bondholders on a then €45 Billion ECB-IMF bailout. Before that plan could even be finalized, it was more than doubled to €110 Billion, entailing a $6.834 Billion US-backed contribution, on May 2. This second ( €110 Billion) plan was finally approved by all eurozone nations on Friday, and the IMF cleared the way Saturday for its €30 Billion contribution (of which $6.834 will come from the US).
This €110 Billion Greek bailout, however, was just the tip of the iceburg. We now know that the ECB, the IMF, and the EU and EMU finance ministers have spent the weekend colluding in Brussels to hammer out an even more massive taxpayer-backed bailout. This time the package is not for the salvation a specific eurozone nation, but for the salvation the euro itself. Last week, the euro fell 4.1% against the dollar, the most since the 2008 collapse, including a huge beat-down on Thursday, May 6, during the euro-linked 998 DJIA plunge in New York. Check out this video series to watch the drama unfold.
And now today, Sunday, an announcement has come that the ECB and IMF have concocted an incredible €750 Billion ($962 Billion) plan to backstop the faltering euro currency and its "P-I-I-G-S" bankrupt member nations, even as the "G" (Greece) has already been awarded the €110 Billion. The latest bailout is basically Euro-TARP 2010--but even larger than the $700 Billion TARP plan approved by the US Congress on October 3, 2008. Also, instead of propping up the banks as TARP was supposed to do, this ECB-IMF program is clearly intended to prop up the euro and the eurozone nations themselves. It is, according to the Financial Times, an attempt to "Shock and Awe" the bond markets into confidence in the euro. Bloomberg reported the words of Marco Annunziata, chief economist at UniCredit, as:
“This is Shock and Awe, Part II and in 3-D,” “This truly is overwhelming force, and should be more than sufficient to stabilize markets in the near term, prevent panic and contain the risk of contagion.”
Oh, sure--a central bank just knows everything is going well when it has to "shock and awe" the markets into believing in its competency, its member solvency, and its currency. Confidence in the euro remains solidly mixed. As I write this, the euro has rallied off the latest news of the huge backstop to over $1.29, from a 14-month low of under $1.26 on Thursday. Still, bets against the euro reached yet another record level on Friday, May 7, even after the Greek package was approved. A "bank funding crunch" has meanwhile developed, which is increasing both the cost of interbank lending and the reluctance of banks so to lend. Currently, interbank credit in Europe is the tightest and most fragile it has been since the collapse of Lehman Brothers in September 2008, when the bankruptcy cut the interbank liquidity strings and snapped lending to a standstill. The ECB-IMF plan announced is intended to protect the euro at any cost--starting at about $1 Trillion. From the latest Bloomberg article posted just hours ago:
"European policy makers unveiled an unprecedented loan package worth almost $1 trillion and a program of bond purchases as they spearheaded a global drive to stop a sovereign-debt crisis that threatened to shatter confidence in the euro.
"Jolted into action by last week’s slide in the currency and soaring bond yields in Portugal and Spain, the 16 euro nations agreed to offer financial assistance worth as much as 750 billion euros ($962 billion) to countries under attack from speculators. The European Central Bank will counter “severe tensions” in “certain” markets by purchasing government and private debt.
“The message has gotten through: the euro zone will defend its money,” French Finance Minister Christine Lagarde told reporters in Brussels early today after the 14-hour meeting.
"Under pressure from the U.S. and Asia to stabilize markets, the European governments gambled that the show of financial force would prevent a sovereign-debt crisis and muffle speculation that the 11-year-old euro might break apart."
The $962 Billion plan makes it very clear that the ECB and IMF will take whatever desperate, confiscatory measures necessary to prevent the markets from ripping the euro to shreds, even without the consent or concurrence of the people of the eurozone nations to whom the bill will be addressed. The plan even includes monetizing the debt of member nations through support of bond auctions, and even intervention to the secondary bond markets to control the price of traded debt through the central-bank purchase of debt, if necessary. Considering this last point, you should not be surprised that the Federal Reserve is helping.
US cost, Federal Reserve involvement
Included in the ECB-IMF plan is a staggering €250 Billion ($324 Billion) from the IMF. With a 17% stake, the US contribution to save the euro, monetize debt, and otherwise intervene in the bond markets will therefore be €42.5 Billion, or over $50 Billion (at the current 1.295 conversion rate).
Additionally, the Federal Reserve has re-opened the euro-dollar swap facility. This special facility was created during the crisis to fund the demand for dollars internationally during the crunch, and all lines were closed in February 2010. Now, months later and at the request of the ECB and IMF, the Mr Bernanke has agreed to re-open the swap lines. Euro-dollar swaps are agreements between the Federal Reserve and ECB to exchange currencies with the obligation to reverse the transaction in the future; the ECB then sells the dollars to European banks, and the Federal Reserve either sells the euros or holds them. The agreement entangles the dollar in this euro mess even more than it already is, and is meant to decrease the pressure on euro in dollar terms, as banks can have assured access to dollars through the ECB's swap at a certain price. The agreement will allow the ECB to sell unlimited amounts of US dollars.
The ECB might receive more help from the Federal Reserve--not in the form of more swaps, but in the form of advice. The ECB today announced that it too will pursue the path of monetization of debt, a path well-pounded by the the Federal Reserve. Just as the Federal Reserve has recently (they claim) completed the "buying" at least $300 Billion in US Treasuries from auctions and secondary markets, the ECB will soon embark upon a monetization of euro debt in an attempt to keep the yields low and the price of financing within reach of the over-extended eurozone nations such as Greece, Spain, Italy, Ireland, and Portgual. As last week's routing demonstrated, lenders to these eurozone nations are currently demanding a serious premium in return for buying what the market considers risky debt.
This weekend's developements cast an even more suspicious angle on the market plunge we witnessed on Thursday. Like everyone else, I'm still investigating that day. I've already noticed the similarities between October 1, 2008 and May 6, 2010, as I'm sure you have too. I've noticed the difference is TARP in 2008 and euro in 2010. This $962 Billion bombshell makes these similarities even more suspicious. I wonder if the phrase "martial law" surfaced in Brussells this weekend as it did in Washington in 2008.
I won't be surprised it if did.
Showing posts with label ECB. Show all posts
Showing posts with label ECB. Show all posts
Sunday, May 9, 2010
Sunday, May 2, 2010
Update: US payment to Greek toxic debt-holding banks now doubles; "Unbelievably big support" for German suit to stop bailout
Earlier this week, the original planned bailout of the Swiss, French, and German banks holding billions in toxic Greek debt included contributions from the EU and IMF of €45 Billion and €15 Billion, respectively. This bankster plan entailed a contribution from the US taxpayer (through the IMF) of some $3,417,000,000. This was bad enough--but, amazingly, that amount has since doubled.
The latest EU/IMF bailout packages has risen substantially since earlier this week--substantially meaning that the plan has ballooned from an emergency €45 Billion bridge-loan to a staggering €110 Billion ($146 Billion), multi-year total bailout operation. The IMF contribution has risen from €15 Billion to €30 Billion, and thus the associated US taxpayer contribution has doubled.
The new number for your contribution to the irresponsible Swiss, French, German, Dutch, English, and American bank-rollers of the out-of-control socialist entitlement nation of Greece is:
$6,834,000,000.00.
And to add to this outrage, this is likely just the minimum payment on what will likely be an even larger bailout. Considering that the plan has increased from €60 Billion to €110 Billion in the gap of time from Monday to Friday, it should not be surprising if that €110 Billion skyrockets to €150 Billion, or perhaps €200 Billion in the gap of time from the first payment this month to last scheduled payment in 2012. In fact, an increase is already being reported: today, the Wall Street Journal is reporting that according to unnamed sources of the German newspaper Sueddeutsche Zeitung, Greece will need €150 Billion by the end of 2012--27% more than is currently slated.
Sueddeutsche Zeitung might be on to something, as the Germans are watching their government-sanctioned mugging and transfer-of-wealth very carefully. We US taxpayers should be outraged at the IMF-funneled contribution of $6.834 Billion, but no one even seems to understand that such a transfer is even happening on this side of the Atlantic. Conversely, German taxpayers are well aware of the operation, and are hopping mad that they are made to be on the hook for at least €8.4 Billion ($11.2 Billion) this year alone, and are in for a total of 28% of the total EU contribution. Given the size of the current package, the German contribution equates to €22.4 Billion ($30 Billion). The German people are overwhelming against any bailout of Greek bondholders, but that obviously doesn't mean much to Merkel or the other so-called leaders in the EU. On Friday, the Parliament in Berlin will vote on the measure to grant €22 Billion in aid--which brings us to the second part of my headline.
Germans threaten suit against Greek bailout
While the German and EU leaders are readying to transfer billions from the pockets of their citizens to save the bondholders of Greece, the entire operation is apparently in violation of the euro-zone's founding document, the Maastricht Treaty, in the first place. In fact, a leading German economist and retired professor at Tuebingen University, Joachim Starbatty, declared in mid-April that the entire deal is outright illegal, and he will challenge it.
In his March 28 New York Times editorial piece, Mr Starbatty explained that the euro "began on a grand illusion," and elaborated that:
"Germany and other “euro-optimists” hoped that the introduction of a common currency and the global economic competitiveness it spurred would quickly lead to sweeping economic and societal modernization across the union. But the opposite has occurred. Rather than pulling the lagging countries forward, the low interest rates of the European Central Bank have lured governments and households, especially in the southern part of the euro zone, into frivolous budgetary policies and excessive consumption."
Mr Starbatty continues that "single euro zone economy is false," and warns that, "In short, the euro is headed for collapse." He states that Greece should leave the euro zone, return to the drachma, devalue its currency to increase competitiveness, and allow for re-structuring and re-negotiation of its foreign debt in an "international conference." As Mr Starbatty and others have noted, however, there is no provision within the Treaty that outlines the procedure for exiting the euro zone. But, according to the economist, somebody's gotta go: alternatively, Mr Starbatty states that Germany could leave the euro with the stronger euro zone nations and start their own currency. No where in his article is there any mention of Germany bailing out Greece, and since March, Mr Starbatty's stalwartness against any such measures has only increased with the stakes.
In the case that Friday's up-coming vote in the German Parliament authorizes the extension of €22 Billion in credit to Greece, Mr Starbatty et al have a simple plan:
"We will file a suit at the Constitutional Court against the credit from euro states."
The group not only enjoys considerable support from the outraged German masses, but they are supported--incontrovertibly--by the Masstricht Treaty itself. Read Article 104, paragraph 1 for yourself, and see that the economist is right:
Masstricht Treaty, Article 104, paragraph 1 (pdf, pg 13):
"Overdraft facilities or any other type of credit facility with the ECB or with the central banks of the Member States (hereinafter referred to as ‘national central banks’) in favour of Community institutions or bodies, central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of Member States shall be prohibited, as shall the purchase directly from them by the ECB or national central banks of debt instruments."
Seems pretty clear to me--and to Mr Starbatty, and to millions of Germans. Also on board is former Bundesbank governor Wilhelm Noelling, fellow economist Wilhelm Hankel, and constitutional law expert, Karl Albrecht Schachtschneider. As Mr Starbatty told the Wall Street Journal:
"We will make our lawsuit public once the law has been approved by the upper house," he said. "We can't challenge that Greece wants aid but what the government wants to do isn't in line with the Constitution. For this, we need the law. We will then act immediately."
And so Friday may be the day. As for his predictions on whether the suit will be granted the consideration it deserves, Mr Starbatty told a Czech newspaper on Thursday that, "We expect that the Federal Constitutional Court will not reject our suit, because our initiative has unbelievably big support." The bailout plan, meanwhile, has a mere 16% approval among Germans.
Good luck and best wishes to Mr Starbatty and his coalition of constitutionalists.
Monday, February 15, 2010
Euro in Crisis--Thanks to dopes who buy Greek debt
You might have been watching the euro (EUR) tumble over the last couple months, and especially over the last several weeks as this crisis with Greece's finances really heats up. EUR has moved from around $1.50 in November to as low as $1.35 by the end of last week (3 month chart in USD). EUR is under major pressure, and it appears to be a fundamental pressure that is being stoked by the realization of the euro's fragility, as demonstrated by what a little nation called Greece can do to an entire "economic community."
As you would guess, the weakness in EUR has been matched by a relative strengthening in USD, as people sell those sliding EUR and scoop up USD. Compare this 3 month USDX (USDX is the "US dollar index:" USD versus 6 major currencies, weighted most heavily for EUR), and you'll see that while EUR has been moving down from its recent $1.52 high since November, USD has been moving up since its recent 74 lows in Nov/Dec. Right now, as EUR sits at a 9-month low versus USD, the USD itself is at about an 8-month high (1 year USDX). Now, currencies battle each other all the time, of course--but the question with EUR right now is whether or not this is an external battle with other currencies--like USD--or an internal battle with itself.
As we know, using the USD as a unit of measure against the EUR can be deceiving, but in the case of the recent EUR slide, EUR has lost against all major currencies, not just USD. Check these out 3-month charts: EUR v Canadian Dollar (EURCAD); EUR v Australian Dollar (EURAUD); EUR v Pound (EURGBP); and most importantly EUR v Swiss Franc (EURCHF). All down, down, and down. USD and Swiss Franc (CHF) appear to have been the biggest beneficiaries of money taken out of EUR and placed in USD and CHF.
And its very difficult to gauge EUR because it so artificial and it covers such diverse economies, which is also exactly why its really coming under pressure right now. Of the 27 nations that make up the European Union, there are 16 nations which have adopted the euro as their currency, and these make up the euro zone. These 16 euro zone nations are: Austria, Belgium, Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, Netherlands, Portugal, Slovakia, Slovenia, and Spain, which contain a total population of over 328 million (which is about 20 million more than the US). Some of these nations joined after the introduction of the euro. Over a quarter of these nations--specifically Greece, Spain, Portugal, Italy, and Ireland--are in serious economic and fiscal trouble, and face huge deficits and obligations. The population of these financially troubled nations is 182 million, or over 55% of the total euro zone population.
For a little historical perspective on EUR (and I mean "little" because there's not much history to work with!), EUR was trading at $0.90 back in 2002 when it was introduced as paper (it had be running for a couple years before that as an electronic inter-bank currency). Here's a fabulous chart from the ECB on the EUR v USD. You can move the time-frame back to Jan 1 1999, and you'll see that when EUR was introduced, it was about $1.18. EUR slid for nearly three years, reaching a low of $0.825, then generally rose for seven years to a 2008 high of $1.59, before crashing to $1.26 during the October 2008 fiasco. Since then, things have been mixed--which is to be expected in any currency during this mess, especially when that currency is measured against the wild n’ crazy USD. At any rate, I'm bringing all of this up because for the first time ever, major European bankers themselves are losing confidence in their own brainchild--the euro!
There is an article linked up on infowars that is just remarkable. Here it is, from the Daily Mail, and it's worth reading in full: Collapse of the Euro is "Inevitable:" Bailing out the Greek economy futile, says French banking chief." The article clearly follows the headline: a top strategist from Societe Generale--the mega French bank (and FRS primary dealer, I might add),--Albert Edwards recently declared to Bloomberg and others that the euro is basically doomed, and that "the Greek budget crisis is a symptom of imbalances that will lead to the breakup of the euro region" (Bloomberg's paraphrasing of Edwards). This is remarkable statement to hear from a top strategist, particularly when he's from one of the very banks that helped create the euro in the first place. It is drawing attention to what's happening with the euro and the question of whether the shake-up is a reflection of outside pressure, or some internal, fundamental flaw of the multi-national currency.
Edwards is no lightweight: he was voted second-best European strategist in 2009, and has predicted currency meltdowns before. From the Daily Mail , Edwards says:
"My own view is that there is little "help" that can be offered by the other euro zone nations other than temporary, confidence-giving "sticking plasters" before the ultimate denouement: the break-up of the euro zone."
"Any "help" given to Greece merely delays the inevitable break-up of the euro zone."
Mr Edwards argued that Portugal, Ireland, Greece and Spain are too economically weak to withstand the rigours of eurozone membership. Countries that are highly uncompetitive are normally able to slash interest rates and devalue their currencies to prop up their economies. But this is not possible within the euro, given its one-size-fits-all economic governance. The implication is that weak, peripheral eurozone members will have to suffer years of painful deflation and tumbling living standards, as well as draconian budget cuts, in order to adjust."
And from Bloomberg:
"Southern European countries are trapped in an overvalued currency and suffocated by low competitiveness," top-ranked Edwards wrote in a report today. (Martin) Feldstein, speaking on Bloomberg Radio, said a one-size-fits-all monetary policy has fueled big deficits as countries’ fiscal records differ.
The problem for countries including Portugal, Spain and Greece “is that years of inappropriately low interest rates resulted in overheating and rapid inflation,” Edwards wrote. Even if governments “could slash their fiscal deficits, the lack of competitiveness within the euro zone needs years of relative (and probably given the outlook elsewhere, absolute) deflation. Any help given to Greece merely delays the inevitable breakup of the euro zone.”
As outlined in these two articles, Edwards is saying that the "overvalued currency" and "years of inappropriately low interest rates resulted in overheating and rapid inflation," which can only be remedied temporarily by "years of painful deflation and tumbling living standards, as well as draconian budget cuts, in order to adjust," but admits that even such measures would "merely delay the inevitable breakup of the euro zone." As Edwards sees it, the euro zone is doomed. But what does that mean for the euro itself?
Both articles above mention Martin Feldstein. Feldstein is a very well-known and well-regarded Harvard University economist. According to the articles, Feldstein said the euro zone simply "isn't working," and that this is due at least in part to the fact that while the ECB alone sets interests rates for the euro and thus the 16 nations that use it, the euro zone has "a single monetary policy and yet every country can set its own fiscal and tax policy." He continued that, “there’s too much incentive for countries to run up big deficits as there’s no feedback until a crisis.” A crisis--like Greece.
When Iceland went down (read: “when banksters took down Iceland”), it dragged its own currency (Krona) with it. Now in the euro zone, we have at least five nations--Greece, Spain, and Portugal, and Italy, and Ireland--which are in serious fiscal crisis, and which all share the same currency. It is unprecedented. Milton Friedman himself was not a fan of the euro, and he predicted over a decade ago that the euro currency itself would not survive its first crisis, never mind the euro zone. I remember people on Bloomberg radio in 2009 talking about the fact that apparently Freidman was wrong about the euro, because it has indeed survived, and it was actually stronger than the USD at the time. Well, well, well, now--not so fast. Now we have the #2 European strategist coming out in chorus with Freidman's decade-old prediction, at least in regards to the euro zone part. The next question would be to further consider what the breakup of the euro zone would do to the euro currency itself. The heat is yet to come, and the euro is already getting singed. Of course, like I said above, the major benefactor of this happens to be the USD. There is, of course, all kinds of conspiracy-theory putty there. So, let's just speculate for a second. We will get to what might happen to the euro if the euro zone goes down later, but first, lets consider this: what would the USD look like right now is the EUR wasn't such a mess?
Think about what Edwards and Feldstein said: an "overvalued currency" and "years of inappropriately low interest rates" running up "big deficits" and "no feedback until a crisis"--hum, what other national currency does that remind you of? Obviously, I have no way of determining what USD would like if EUR wasn't so ugly right now, but all things considered, and in my opinion, if USD had any strength, it should right now be shining. Instead, while USD looks "good" compared to the disastrous 10% EUR has lost relative to USD since November, USD itself had lost 15% from the beginning of 2009 to Dec 2009, and is still down 8% from a year ago. That's not exactly "shining." And this with the help of huge amounts of money leaving EUR and rushing to USD. We can only speculate, but image what that change would look like without EUR giving everyone such a reason to leave.
I mentioned above that Milton Freidman thought the euro would not survive its first encounter with serious crisis. I have been finding various euro-death stories, fantasies, and predictions quite often since I started researching it in 2008 (there is apparently an entire underground culture of euro-hating folks who write extensively on the internet, and I manage to find a lot of that stuff, along with the myriad dollar-haters, too!). In the process of researching the report I did on the Euro Currency Standing Committee at the BIS (you remember, the group that's name was changed three weeks after the introduction of the electronic euro to the "Committee on the Global Financial System" which is now trying to possibly centralize data for singular monetary control!), I encountered plenty of historical skepticism of the euro that goes back to well before the currency was even agreed to by treaty. Freidman wrote extensively about the euro, and the problems with it. Many others did too. But fast-forwarding to the current situation, one very interesting article I discovered in mid-2009 is this one here: Euro Doomed to Fail as Governments Pull in Opposite Directions. It was actually written over a year ago (Feb 3 2009), and is worth reading, especially considering what we now are seeing with Greece.
In the article, the author details the problems caused by the euro zone's structure itself, and goes even further than Edwards recently did by speculating about what this possible inadequacy means for the euro currency structure itself (emphasis mine):
"There is admittedly an embedded weakness in the way the European currency union is structured. In the United States, arguably that largest currency union in the world, fiscal transfers between member states allow for the federal government to adjust for variances in economic performances. There is no such mechanism within the euro zone, which explains why the member states are subjected to a number of rules. These rules require for everyone to exercise a high level of economic discipline. The problem is that there is little or no such discipline."
"EU countries outside the euro zone, such as the UK, have also lost out to Germany in recent years, but the UK has been able to play a card which is not at the disposal of the euro zone members. That card is called devaluation. Whether by design or otherwise, the UK has received a massive boost to its competitiveness in recent months as a result of the sharp fall in the value of the pound. Italy used to play this card repeatedly back in the days of the Lira. So did countries like Denmark in the dark days of the 1970s."
"Another issue, which is potentially even more destabilizing for the euro longer term, is the massive liabilities facing Europe as its population ages. We have borrowed table 2 below from Goldman Sachs which makes no secret of the challenges facing a number of European countries. Greece is clearly facing the biggest challenge. Public debt, which currently stands at about 95% of GDP, will grow to a whopping 555% of GDP by 2050 if the current pension and social security programme is left unchanged. The Greek government is painfully aware of this and have been working on several new initiatives. It was the passing of one of those new laws which caused the riots in Athens before Christmas."
This is a nice summary. In the first group, by "fiscal transfers between the member states" of the US, the author is referring to the redistribution of wealth done by the Federal government through our confiscatory federal taxes and Congressional re-allocations (aka, our despicable “American socialism”). For example, California contributes much more income absolutely and per capita to the Federal government than does West Virginia, but West Virginia gets more money per capita than California. Because of the uniform tax policy, the Federal government (again, despicably and unconstitutionally) effectively regulates the fiscal policy of the states, and can coordinate this with monetary policy to the degree that the Federal Reserve will independently "cooperate." In our union, there is a mechanism to centralized regulation, and its called the Creature from Jeckell Island. Likewise, the Federal Reserve can unilaterally utilize the mechanism of devaluation to control prices and exports (ie, Plaza Accord). These mechanisms allow the central bank control of the dollar in a fashion that affects all the states in our union.
In the euro zone, there is no such mechanism available to an individual nation that allows an individual nation to devalue its currency as a strategic advantage, because, of course, no nation has its “own” currency. Any euro-zone nation likewise shares the same currency with its major trading partners—the other euro zone nations--and cannot single-handedly control the value of the currency. Conversely, there is also no mechanism for the ECB that allows for centralized regulation of the member states' fiscal and tax policies--not yet, anyway. At least for a little while still, the member nations have some limited "sovereignty," which is, of course, compromised by their commitment to the European Union and its various treaties. As of right now, they are still permitted by their bankster rulers in Frankfurt and Strasbourgh to have different tax and fiscal plans. The current European Union's tax policy is complex and not currently "harmonised," which creates exactly the reason why the other frugal nations (like Germany) are so mad at Greece, because they and their taxpayers might have to bail those irresponsibly Greeks out!
Of course, the Treaty of Lisbon, which was just ratified fully in December 2009, will vastly change this--it is "harmonisation" on steroids, and authorizes an amazing and insane amount of authority in the new, soon-to-be super strong and utterly supranational EU President and Parliament, which will be able to take whatever it wants from whoever it wants and redistribute as it’s almightiness sees fit. There will soon be a uniform EU tax code (or at least euro zone EU), you can bet on that. But right now under the current Greek situation, the centralized scheme is not yet created or operational. I'm sure that when it is, they will use Greece as an example of their authority--and in fact, they might be doing it to some degree right now.
I say this specifically because it looks like the citizens of other nations in the euro zone may actually have pay up and bail out Greece, and have their money stolen from them and given to the bankster debt-owners holding paper from a country that isn't even their own! As you can imagine, the people are already very mad about this: the idea of bailing out Greece is utterly rejected by the people of Germany and other nations who don't want to pay for Greece's irresponsibility (and more importantly, pay for the banksters' stupidity/arrogance in buying the bad debt in the first place!). This article from Der Spegiel discusses the different scenarios for handling the Greece problem, and it identifies bailing out Greece as a "Worst Case Scenario:"
"One scenario is that it [the ECB] could declare Greece to be an exceptional case and provide bridge loans in order to prevent the bankruptcy. But it would have disastrous consequences. After all, why would weak countries make any effort to balance their budgets if they knew the EU would bail them out in the worst-case scenario.
"If the EU remained firm against Greece, that would certainly be fair to the member states who have practiced balanced budget discipline in the past. But that would also be politically untenable because it would drive investors away from any country that showed even the slightest signs of not being able to service its debt. They would have to continue raising the interest rates on bonds, and eventually the Greek virus would spread further, driving other countries into bankruptcy.
"In this highly theoretical scenario, the euro would, indeed, collapse. The currency could survive the bankruptcy of one member state, but it couldn't sustain a series of them.
"Euro-skeptics have long warned that tension inside the euro zone could destroy the currency one day. They now feel their convictions have been affirmed -- even if the aforementioned scenarios remain far from reality."
That's an interesting analysis--but it was written over a year ago, and the "Greek virus" is still thriving and multiplying. The "highly theoretical scenario" of a Greek default is no longer "far from reality." According to this analysis, the choices are either the "disasterous consequences" of providing a bridge loan to prevent bankruptcy, or the "politically untenable" denial of funds that would lead Greece to an "inability to service its debt" and spark a viral spread across the euro zone which would "drive other countries into bankruptcy" and surely "collapse" the euro. So, apparently, these are the choices: bad or worse.
Greece's spending, lack of tax collection, corruption, and various other irresponsible behaviors have been subsidized and enabled by the euro for a decade. The EU, the ECB, and Greece have all known this for years. Greece was not an original member of the euro zone: it was barred from joining in 1999 because it didn't meet the fiscal requirements. After "promising" reform and changes and whatnot, Greece was allowed in by the ECB two years after the launch, in 2001. And guess what--the "promises" to be good are still pending actualization. Even before it was admitted, people had been worried about what Greece would do to the infant euro. In fact, here's a BBC article from the very day, Jan 1 2001, that Greece adopted the euro—over ten years ago--and it mentions the same concern over Greece's public debt, public spending, and generally whack finances that we are hearing about today. However, the article ends with the statement that Greece's involvement in with the euro will have "little impact" on the currency. How things change in ten years: Greece's impact is hardly so insignificant. And now people from other nations might have to foot the bill to the banksters!
It would be an unprecedented insult of a caliber never before seen if euro-zone taxpayers are forced to bail out the stupid, irresponsible, and reckless banksters who lapped up the obviously toxic Greek paper when it was so blatantly obvious to even the Daily Mail over a decade ago that Greece had no possible way of paying it back! It seems clear that this was the assumption (the plan?) all along: by golly, the banks will not lose one single euro of their numbskull paper investment in the impossibly upside-down Greece, not even if we have to steal money from Germans to settle it! Europeans—wake up! Letting a group of criminal banksters destroy your currencies and feed you back a single, bankster-controlled piece of paper will only continue to lead you to the utter dismantlement of your entire economic and social structure--just ask us, we know!
It is not clear yet what the EU's plan is on Greece. Last week, the EU finance ministers "pledged" to "help" Greece, but gave no specifics on what that meant. A recent poll of Germans showed that people think Greece should be expelled from the euro zone rather than bailed out. Of course, if the EU bails out Greece, who's next? Spain? Portugal? Italy? Ireland? Where does it stop? The EU leaders are meeting again today in Brussels to perhaps hammer something out. It is likely it will be yet another transfer of wealth from the people to the debt-holding banks, probably under the guise that some impending economic collapse would occur if they didn't do "something." But we shall see.
We shall also see what happens with the deteriorating euro zone. If Edwards and others are right, there is no saving it. The next question, then, would necessarily be the euro itself. In the article quoted above (this one), here some of the author's observations:
"..I may disappoint one or two readers..but I firmly believe that the euro will almost certainly survive the current crisis. I am much more worried about some of the member countries."
"There is nothing in the Maastricht treaty [Treaty on European Union, 1992] which prevents a member country from leaving the euro, yet the decision to join is effectively irreversible. There are a number of reasons for this, the most important being economic costs. Take Italy which has a history of compensating for lost competitiveness through regular devaluations. If Berlusconi did the unthinkable tomorrow (sorry – nothing is unthinkable in Berlusconi's world), Italy's borrowing costs would explode. My guess is that bond investors would demand double digit returns on a Lira denominated bond to compensate for the dramatically increased devaluation risk. Already in a precarious fiscal position, Italy could quite simply not afford that."
"So, if any country were to leave the euro, it would more likely be from a position of strength, and only one country possesses enough strength to pull that off in the current environment. That country is Germany. And, although the euro is not particularly popular in Germany, I believe it is extremely unlikely for Germany to make such a move unilaterally. There are several reasons for that – Germany's history in Europe being the most important."
"At the same time, the fact that the euro has saved the bacon of more than one country in recent months - Ireland being the most obvious example - should not be ignored. For this very reason, the euro membership is actually far more likely to grow than to shrink as a result of the financial and economic crisis engulfing the world. The issue the EU has to deal with is whether the new applicants should actually be welcomed. Most of those who would want to join will bring plenty of baggage."
"Another possible outcome, which you hear almost no mention of, is the possibility of a new Transatlantic currency. When I mention this possibility, everyone laughs, but think about it for a second. The economic crisis on both sides of the Atlantic is enormous. Both are resorting to the same formulas – large fiscal stimulus and quantitative easing (a word invented by central bankers because 'printing money' smacks too much of Zimbabwe). There is a real risk that the entire financial and monetary system on either side of the pond needs to be re-designed. If that were to happen, I am pretty confident that the Fed and the ECB would at least sit down and discuss the possibility of a joint currency. That would also allow the UK to join a currency union without too much egg on its battered face."
And of course, that is a possibility--and a dream for globalists. It would also suit the general bankster-government feedback loop: if a program doesn't work, make it bigger, more extensive, and mandatory until it does! Or, Problem-Action-Solution. If the euro zone does not work in 16 nations, make it a transatlantic version that covers 20 nations, and if that doesn't work, make a global version that covers everywhere! It's very interesting that we have the chance to see what is happening right in Greece with euro. This is potentially something that will have long-lasting ramifications, especially if the ECB does not bust a bail out. I think that because of the Lisbon Treaty, it is only a matter of time before the EU is subject to a uniform, totally supranational tax code that will be imposed upon the citizens of the member nations through the unelected Parliamentary officials and unelected President. So if they steal some money from the people now and give it to Greece's creditors, that is just Lisbon-lite. But we shall see what happens, indeed.
As you would guess, the weakness in EUR has been matched by a relative strengthening in USD, as people sell those sliding EUR and scoop up USD. Compare this 3 month USDX (USDX is the "US dollar index:" USD versus 6 major currencies, weighted most heavily for EUR), and you'll see that while EUR has been moving down from its recent $1.52 high since November, USD has been moving up since its recent 74 lows in Nov/Dec. Right now, as EUR sits at a 9-month low versus USD, the USD itself is at about an 8-month high (1 year USDX). Now, currencies battle each other all the time, of course--but the question with EUR right now is whether or not this is an external battle with other currencies--like USD--or an internal battle with itself.
As we know, using the USD as a unit of measure against the EUR can be deceiving, but in the case of the recent EUR slide, EUR has lost against all major currencies, not just USD. Check these out 3-month charts: EUR v Canadian Dollar (EURCAD); EUR v Australian Dollar (EURAUD); EUR v Pound (EURGBP); and most importantly EUR v Swiss Franc (EURCHF). All down, down, and down. USD and Swiss Franc (CHF) appear to have been the biggest beneficiaries of money taken out of EUR and placed in USD and CHF.
And its very difficult to gauge EUR because it so artificial and it covers such diverse economies, which is also exactly why its really coming under pressure right now. Of the 27 nations that make up the European Union, there are 16 nations which have adopted the euro as their currency, and these make up the euro zone. These 16 euro zone nations are: Austria, Belgium, Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, Netherlands, Portugal, Slovakia, Slovenia, and Spain, which contain a total population of over 328 million (which is about 20 million more than the US). Some of these nations joined after the introduction of the euro. Over a quarter of these nations--specifically Greece, Spain, Portugal, Italy, and Ireland--are in serious economic and fiscal trouble, and face huge deficits and obligations. The population of these financially troubled nations is 182 million, or over 55% of the total euro zone population.
For a little historical perspective on EUR (and I mean "little" because there's not much history to work with!), EUR was trading at $0.90 back in 2002 when it was introduced as paper (it had be running for a couple years before that as an electronic inter-bank currency). Here's a fabulous chart from the ECB on the EUR v USD. You can move the time-frame back to Jan 1 1999, and you'll see that when EUR was introduced, it was about $1.18. EUR slid for nearly three years, reaching a low of $0.825, then generally rose for seven years to a 2008 high of $1.59, before crashing to $1.26 during the October 2008 fiasco. Since then, things have been mixed--which is to be expected in any currency during this mess, especially when that currency is measured against the wild n’ crazy USD. At any rate, I'm bringing all of this up because for the first time ever, major European bankers themselves are losing confidence in their own brainchild--the euro!
There is an article linked up on infowars that is just remarkable. Here it is, from the Daily Mail, and it's worth reading in full: Collapse of the Euro is "Inevitable:" Bailing out the Greek economy futile, says French banking chief." The article clearly follows the headline: a top strategist from Societe Generale--the mega French bank (and FRS primary dealer, I might add),--Albert Edwards recently declared to Bloomberg and others that the euro is basically doomed, and that "the Greek budget crisis is a symptom of imbalances that will lead to the breakup of the euro region" (Bloomberg's paraphrasing of Edwards). This is remarkable statement to hear from a top strategist, particularly when he's from one of the very banks that helped create the euro in the first place. It is drawing attention to what's happening with the euro and the question of whether the shake-up is a reflection of outside pressure, or some internal, fundamental flaw of the multi-national currency.
Edwards is no lightweight: he was voted second-best European strategist in 2009, and has predicted currency meltdowns before. From the Daily Mail , Edwards says:
"My own view is that there is little "help" that can be offered by the other euro zone nations other than temporary, confidence-giving "sticking plasters" before the ultimate denouement: the break-up of the euro zone."
"Any "help" given to Greece merely delays the inevitable break-up of the euro zone."
Mr Edwards argued that Portugal, Ireland, Greece and Spain are too economically weak to withstand the rigours of eurozone membership. Countries that are highly uncompetitive are normally able to slash interest rates and devalue their currencies to prop up their economies. But this is not possible within the euro, given its one-size-fits-all economic governance. The implication is that weak, peripheral eurozone members will have to suffer years of painful deflation and tumbling living standards, as well as draconian budget cuts, in order to adjust."
And from Bloomberg:
"Southern European countries are trapped in an overvalued currency and suffocated by low competitiveness," top-ranked Edwards wrote in a report today. (Martin) Feldstein, speaking on Bloomberg Radio, said a one-size-fits-all monetary policy has fueled big deficits as countries’ fiscal records differ.
The problem for countries including Portugal, Spain and Greece “is that years of inappropriately low interest rates resulted in overheating and rapid inflation,” Edwards wrote. Even if governments “could slash their fiscal deficits, the lack of competitiveness within the euro zone needs years of relative (and probably given the outlook elsewhere, absolute) deflation. Any help given to Greece merely delays the inevitable breakup of the euro zone.”
As outlined in these two articles, Edwards is saying that the "overvalued currency" and "years of inappropriately low interest rates resulted in overheating and rapid inflation," which can only be remedied temporarily by "years of painful deflation and tumbling living standards, as well as draconian budget cuts, in order to adjust," but admits that even such measures would "merely delay the inevitable breakup of the euro zone." As Edwards sees it, the euro zone is doomed. But what does that mean for the euro itself?
Both articles above mention Martin Feldstein. Feldstein is a very well-known and well-regarded Harvard University economist. According to the articles, Feldstein said the euro zone simply "isn't working," and that this is due at least in part to the fact that while the ECB alone sets interests rates for the euro and thus the 16 nations that use it, the euro zone has "a single monetary policy and yet every country can set its own fiscal and tax policy." He continued that, “there’s too much incentive for countries to run up big deficits as there’s no feedback until a crisis.” A crisis--like Greece.
When Iceland went down (read: “when banksters took down Iceland”), it dragged its own currency (Krona) with it. Now in the euro zone, we have at least five nations--Greece, Spain, and Portugal, and Italy, and Ireland--which are in serious fiscal crisis, and which all share the same currency. It is unprecedented. Milton Friedman himself was not a fan of the euro, and he predicted over a decade ago that the euro currency itself would not survive its first crisis, never mind the euro zone. I remember people on Bloomberg radio in 2009 talking about the fact that apparently Freidman was wrong about the euro, because it has indeed survived, and it was actually stronger than the USD at the time. Well, well, well, now--not so fast. Now we have the #2 European strategist coming out in chorus with Freidman's decade-old prediction, at least in regards to the euro zone part. The next question would be to further consider what the breakup of the euro zone would do to the euro currency itself. The heat is yet to come, and the euro is already getting singed. Of course, like I said above, the major benefactor of this happens to be the USD. There is, of course, all kinds of conspiracy-theory putty there. So, let's just speculate for a second. We will get to what might happen to the euro if the euro zone goes down later, but first, lets consider this: what would the USD look like right now is the EUR wasn't such a mess?
Think about what Edwards and Feldstein said: an "overvalued currency" and "years of inappropriately low interest rates" running up "big deficits" and "no feedback until a crisis"--hum, what other national currency does that remind you of? Obviously, I have no way of determining what USD would like if EUR wasn't so ugly right now, but all things considered, and in my opinion, if USD had any strength, it should right now be shining. Instead, while USD looks "good" compared to the disastrous 10% EUR has lost relative to USD since November, USD itself had lost 15% from the beginning of 2009 to Dec 2009, and is still down 8% from a year ago. That's not exactly "shining." And this with the help of huge amounts of money leaving EUR and rushing to USD. We can only speculate, but image what that change would look like without EUR giving everyone such a reason to leave.
I mentioned above that Milton Freidman thought the euro would not survive its first encounter with serious crisis. I have been finding various euro-death stories, fantasies, and predictions quite often since I started researching it in 2008 (there is apparently an entire underground culture of euro-hating folks who write extensively on the internet, and I manage to find a lot of that stuff, along with the myriad dollar-haters, too!). In the process of researching the report I did on the Euro Currency Standing Committee at the BIS (you remember, the group that's name was changed three weeks after the introduction of the electronic euro to the "Committee on the Global Financial System" which is now trying to possibly centralize data for singular monetary control!), I encountered plenty of historical skepticism of the euro that goes back to well before the currency was even agreed to by treaty. Freidman wrote extensively about the euro, and the problems with it. Many others did too. But fast-forwarding to the current situation, one very interesting article I discovered in mid-2009 is this one here: Euro Doomed to Fail as Governments Pull in Opposite Directions. It was actually written over a year ago (Feb 3 2009), and is worth reading, especially considering what we now are seeing with Greece.
In the article, the author details the problems caused by the euro zone's structure itself, and goes even further than Edwards recently did by speculating about what this possible inadequacy means for the euro currency structure itself (emphasis mine):
"There is admittedly an embedded weakness in the way the European currency union is structured. In the United States, arguably that largest currency union in the world, fiscal transfers between member states allow for the federal government to adjust for variances in economic performances. There is no such mechanism within the euro zone, which explains why the member states are subjected to a number of rules. These rules require for everyone to exercise a high level of economic discipline. The problem is that there is little or no such discipline."
"EU countries outside the euro zone, such as the UK, have also lost out to Germany in recent years, but the UK has been able to play a card which is not at the disposal of the euro zone members. That card is called devaluation. Whether by design or otherwise, the UK has received a massive boost to its competitiveness in recent months as a result of the sharp fall in the value of the pound. Italy used to play this card repeatedly back in the days of the Lira. So did countries like Denmark in the dark days of the 1970s."
"Another issue, which is potentially even more destabilizing for the euro longer term, is the massive liabilities facing Europe as its population ages. We have borrowed table 2 below from Goldman Sachs which makes no secret of the challenges facing a number of European countries. Greece is clearly facing the biggest challenge. Public debt, which currently stands at about 95% of GDP, will grow to a whopping 555% of GDP by 2050 if the current pension and social security programme is left unchanged. The Greek government is painfully aware of this and have been working on several new initiatives. It was the passing of one of those new laws which caused the riots in Athens before Christmas."
This is a nice summary. In the first group, by "fiscal transfers between the member states" of the US, the author is referring to the redistribution of wealth done by the Federal government through our confiscatory federal taxes and Congressional re-allocations (aka, our despicable “American socialism”). For example, California contributes much more income absolutely and per capita to the Federal government than does West Virginia, but West Virginia gets more money per capita than California. Because of the uniform tax policy, the Federal government (again, despicably and unconstitutionally) effectively regulates the fiscal policy of the states, and can coordinate this with monetary policy to the degree that the Federal Reserve will independently "cooperate." In our union, there is a mechanism to centralized regulation, and its called the Creature from Jeckell Island. Likewise, the Federal Reserve can unilaterally utilize the mechanism of devaluation to control prices and exports (ie, Plaza Accord). These mechanisms allow the central bank control of the dollar in a fashion that affects all the states in our union.
In the euro zone, there is no such mechanism available to an individual nation that allows an individual nation to devalue its currency as a strategic advantage, because, of course, no nation has its “own” currency. Any euro-zone nation likewise shares the same currency with its major trading partners—the other euro zone nations--and cannot single-handedly control the value of the currency. Conversely, there is also no mechanism for the ECB that allows for centralized regulation of the member states' fiscal and tax policies--not yet, anyway. At least for a little while still, the member nations have some limited "sovereignty," which is, of course, compromised by their commitment to the European Union and its various treaties. As of right now, they are still permitted by their bankster rulers in Frankfurt and Strasbourgh to have different tax and fiscal plans. The current European Union's tax policy is complex and not currently "harmonised," which creates exactly the reason why the other frugal nations (like Germany) are so mad at Greece, because they and their taxpayers might have to bail those irresponsibly Greeks out!
Of course, the Treaty of Lisbon, which was just ratified fully in December 2009, will vastly change this--it is "harmonisation" on steroids, and authorizes an amazing and insane amount of authority in the new, soon-to-be super strong and utterly supranational EU President and Parliament, which will be able to take whatever it wants from whoever it wants and redistribute as it’s almightiness sees fit. There will soon be a uniform EU tax code (or at least euro zone EU), you can bet on that. But right now under the current Greek situation, the centralized scheme is not yet created or operational. I'm sure that when it is, they will use Greece as an example of their authority--and in fact, they might be doing it to some degree right now.
I say this specifically because it looks like the citizens of other nations in the euro zone may actually have pay up and bail out Greece, and have their money stolen from them and given to the bankster debt-owners holding paper from a country that isn't even their own! As you can imagine, the people are already very mad about this: the idea of bailing out Greece is utterly rejected by the people of Germany and other nations who don't want to pay for Greece's irresponsibility (and more importantly, pay for the banksters' stupidity/arrogance in buying the bad debt in the first place!). This article from Der Spegiel discusses the different scenarios for handling the Greece problem, and it identifies bailing out Greece as a "Worst Case Scenario:"
"One scenario is that it [the ECB] could declare Greece to be an exceptional case and provide bridge loans in order to prevent the bankruptcy. But it would have disastrous consequences. After all, why would weak countries make any effort to balance their budgets if they knew the EU would bail them out in the worst-case scenario.
"If the EU remained firm against Greece, that would certainly be fair to the member states who have practiced balanced budget discipline in the past. But that would also be politically untenable because it would drive investors away from any country that showed even the slightest signs of not being able to service its debt. They would have to continue raising the interest rates on bonds, and eventually the Greek virus would spread further, driving other countries into bankruptcy.
"In this highly theoretical scenario, the euro would, indeed, collapse. The currency could survive the bankruptcy of one member state, but it couldn't sustain a series of them.
"Euro-skeptics have long warned that tension inside the euro zone could destroy the currency one day. They now feel their convictions have been affirmed -- even if the aforementioned scenarios remain far from reality."
That's an interesting analysis--but it was written over a year ago, and the "Greek virus" is still thriving and multiplying. The "highly theoretical scenario" of a Greek default is no longer "far from reality." According to this analysis, the choices are either the "disasterous consequences" of providing a bridge loan to prevent bankruptcy, or the "politically untenable" denial of funds that would lead Greece to an "inability to service its debt" and spark a viral spread across the euro zone which would "drive other countries into bankruptcy" and surely "collapse" the euro. So, apparently, these are the choices: bad or worse.
Greece's spending, lack of tax collection, corruption, and various other irresponsible behaviors have been subsidized and enabled by the euro for a decade. The EU, the ECB, and Greece have all known this for years. Greece was not an original member of the euro zone: it was barred from joining in 1999 because it didn't meet the fiscal requirements. After "promising" reform and changes and whatnot, Greece was allowed in by the ECB two years after the launch, in 2001. And guess what--the "promises" to be good are still pending actualization. Even before it was admitted, people had been worried about what Greece would do to the infant euro. In fact, here's a BBC article from the very day, Jan 1 2001, that Greece adopted the euro—over ten years ago--and it mentions the same concern over Greece's public debt, public spending, and generally whack finances that we are hearing about today. However, the article ends with the statement that Greece's involvement in with the euro will have "little impact" on the currency. How things change in ten years: Greece's impact is hardly so insignificant. And now people from other nations might have to foot the bill to the banksters!
It would be an unprecedented insult of a caliber never before seen if euro-zone taxpayers are forced to bail out the stupid, irresponsible, and reckless banksters who lapped up the obviously toxic Greek paper when it was so blatantly obvious to even the Daily Mail over a decade ago that Greece had no possible way of paying it back! It seems clear that this was the assumption (the plan?) all along: by golly, the banks will not lose one single euro of their numbskull paper investment in the impossibly upside-down Greece, not even if we have to steal money from Germans to settle it! Europeans—wake up! Letting a group of criminal banksters destroy your currencies and feed you back a single, bankster-controlled piece of paper will only continue to lead you to the utter dismantlement of your entire economic and social structure--just ask us, we know!
It is not clear yet what the EU's plan is on Greece. Last week, the EU finance ministers "pledged" to "help" Greece, but gave no specifics on what that meant. A recent poll of Germans showed that people think Greece should be expelled from the euro zone rather than bailed out. Of course, if the EU bails out Greece, who's next? Spain? Portugal? Italy? Ireland? Where does it stop? The EU leaders are meeting again today in Brussels to perhaps hammer something out. It is likely it will be yet another transfer of wealth from the people to the debt-holding banks, probably under the guise that some impending economic collapse would occur if they didn't do "something." But we shall see.
We shall also see what happens with the deteriorating euro zone. If Edwards and others are right, there is no saving it. The next question, then, would necessarily be the euro itself. In the article quoted above (this one), here some of the author's observations:
"..I may disappoint one or two readers..but I firmly believe that the euro will almost certainly survive the current crisis. I am much more worried about some of the member countries."
"There is nothing in the Maastricht treaty [Treaty on European Union, 1992] which prevents a member country from leaving the euro, yet the decision to join is effectively irreversible. There are a number of reasons for this, the most important being economic costs. Take Italy which has a history of compensating for lost competitiveness through regular devaluations. If Berlusconi did the unthinkable tomorrow (sorry – nothing is unthinkable in Berlusconi's world), Italy's borrowing costs would explode. My guess is that bond investors would demand double digit returns on a Lira denominated bond to compensate for the dramatically increased devaluation risk. Already in a precarious fiscal position, Italy could quite simply not afford that."
"So, if any country were to leave the euro, it would more likely be from a position of strength, and only one country possesses enough strength to pull that off in the current environment. That country is Germany. And, although the euro is not particularly popular in Germany, I believe it is extremely unlikely for Germany to make such a move unilaterally. There are several reasons for that – Germany's history in Europe being the most important."
"At the same time, the fact that the euro has saved the bacon of more than one country in recent months - Ireland being the most obvious example - should not be ignored. For this very reason, the euro membership is actually far more likely to grow than to shrink as a result of the financial and economic crisis engulfing the world. The issue the EU has to deal with is whether the new applicants should actually be welcomed. Most of those who would want to join will bring plenty of baggage."
"Another possible outcome, which you hear almost no mention of, is the possibility of a new Transatlantic currency. When I mention this possibility, everyone laughs, but think about it for a second. The economic crisis on both sides of the Atlantic is enormous. Both are resorting to the same formulas – large fiscal stimulus and quantitative easing (a word invented by central bankers because 'printing money' smacks too much of Zimbabwe). There is a real risk that the entire financial and monetary system on either side of the pond needs to be re-designed. If that were to happen, I am pretty confident that the Fed and the ECB would at least sit down and discuss the possibility of a joint currency. That would also allow the UK to join a currency union without too much egg on its battered face."
And of course, that is a possibility--and a dream for globalists. It would also suit the general bankster-government feedback loop: if a program doesn't work, make it bigger, more extensive, and mandatory until it does! Or, Problem-Action-Solution. If the euro zone does not work in 16 nations, make it a transatlantic version that covers 20 nations, and if that doesn't work, make a global version that covers everywhere! It's very interesting that we have the chance to see what is happening right in Greece with euro. This is potentially something that will have long-lasting ramifications, especially if the ECB does not bust a bail out. I think that because of the Lisbon Treaty, it is only a matter of time before the EU is subject to a uniform, totally supranational tax code that will be imposed upon the citizens of the member nations through the unelected Parliamentary officials and unelected President. So if they steal some money from the people now and give it to Greece's creditors, that is just Lisbon-lite. But we shall see what happens, indeed.
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