Even a default , bank bankruptcies and a return to original currencies would
be only a temporary relief for the economies of the countries of Europe. The rot
would continue because the monetary system that has been in place since 1971 is
unworkable in the long run. By this I mean the issuance by central banks of
irredeemable digital "money" as debt allied with fractional reserve banking and
a macroeconomic theory that justifies the price fixing of the rental of this
"money" which comprises one half of every transaction. For the most part, most
countries got what they wanted from the Euro, initially at least. The PIIGS (and
Belgium) gained a stronger currency, easy access to the capital markets and an
ability to borrow - unchecked - France checked Germany and Germany both moved to
the center of Europe and her exporters benefited from a currency devalued by
30-40%. Now the party is over, but there are still now there are no discernable,
serious voices in Europe's major democracies that wish to leave the
Euro...Indeed, it's difficult to see what the process would be that leads to a
Euro unwind. I'm not sure that Frau Merkel has the political mandate to start
writing checks to individual countries without further surrender of sovereignty
by those countries to the EU/EC, so I don't think that there is much point in
brow-beating her over it. .... In short, her hands are tied: the paradox here being that the [German]
political system that produces weak coalition governments incapable of making
decisions was part of the post WW2 settlement for Germany. What the world needs
is to recognize that this "big picture" thinking is delusional. It is all a
dream of perpetual prosperity that has turned into a nightmare. We must as soon
as practicable introduce competing currencies with sound money, traditionally
gold and silver, free banking, removal of legal tender laws and abolition of
fractional reserve banking. This can be accompanied by the re-introduction of
real bills trading with 91 day maturities into gold or silver on commodities in
most urgent demand. This market was closed during WWI and not re-opened because
it would have given Germany the opportunity to recover quickly through fluid
multi-lateral trade. It provides the wage fund without which we descended into
the Great Depression. It would also serve every nation to abandon the so-called
free trade agreements and initiate true free trade. All of these measures would
ultimately lead to the disintegration of artificial treaty unions like the EU
and the return of truly sovereign nations. The present political class would
also be swept away in the hurricane of real change.
Access Investments-Building Awareness - European Union-ROMANIA
Friday, June 8, 2012
Now the party is over.....
Even a default , bank bankruptcies and a return to original currencies would
be only a temporary relief for the economies of the countries of Europe. The rot
would continue because the monetary system that has been in place since 1971 is
unworkable in the long run. By this I mean the issuance by central banks of
irredeemable digital "money" as debt allied with fractional reserve banking and
a macroeconomic theory that justifies the price fixing of the rental of this
"money" which comprises one half of every transaction. For the most part, most
countries got what they wanted from the Euro, initially at least. The PIIGS (and
Belgium) gained a stronger currency, easy access to the capital markets and an
ability to borrow - unchecked - France checked Germany and Germany both moved to
the center of Europe and her exporters benefited from a currency devalued by
30-40%. Now the party is over, but there are still now there are no discernable,
serious voices in Europe's major democracies that wish to leave the
Euro...Indeed, it's difficult to see what the process would be that leads to a
Euro unwind. I'm not sure that Frau Merkel has the political mandate to start
writing checks to individual countries without further surrender of sovereignty
by those countries to the EU/EC, so I don't think that there is much point in
brow-beating her over it. .... In short, her hands are tied: the paradox here being that the [German]
political system that produces weak coalition governments incapable of making
decisions was part of the post WW2 settlement for Germany. What the world needs
is to recognize that this "big picture" thinking is delusional. It is all a
dream of perpetual prosperity that has turned into a nightmare. We must as soon
as practicable introduce competing currencies with sound money, traditionally
gold and silver, free banking, removal of legal tender laws and abolition of
fractional reserve banking. This can be accompanied by the re-introduction of
real bills trading with 91 day maturities into gold or silver on commodities in
most urgent demand. This market was closed during WWI and not re-opened because
it would have given Germany the opportunity to recover quickly through fluid
multi-lateral trade. It provides the wage fund without which we descended into
the Great Depression. It would also serve every nation to abandon the so-called
free trade agreements and initiate true free trade. All of these measures would
ultimately lead to the disintegration of artificial treaty unions like the EU
and the return of truly sovereign nations. The present political class would
also be swept away in the hurricane of real change.
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The ratings agency Fitch delivered a strong rebuke to Europe's policy elite tonight when it sharply downgraded Spain's creditworthiness and moved the eurozone's fourth-biggest economy a step closer to an international financial bailout.
Fitch said mistakes at a European level that had allowed the debt crisis to escalate were in part to blame for its decision to cut Spain's credit rating by three notches to just above junk bond status.
The move – which follows the pattern that led to Greece, Ireland and Portugal needing help from Europe and the International Monetary Fund – makes it harder and more expensive for Spain to borrow money on the world's financial markets.
Fitch, which also served notice to George Osborne that the UK faced losing its AAA status if the double-dip recession intensified, cited the ballooning cost of bailing out Spain's struggling banks and a longer-than-expected slump for the downgrade from A to BBB.
"The dramatic erosion of Spain's sovereign credit profile and ratings over the last year in part reflects policy missteps at the European level that, in Fitch's opinion, have aggravated the economic and financial challenges facing Spain as it seeks to rebalance and restructure the economy," the agency said.
Amid growing fears for the health of Spanish banks that lent aggressively to fund the country's property bubble, Fitch said it believed the recapitalisation of the struggling financial sector would be €60bn (£49bn) – double its previous estimate.
"Spain is forecast to remain in recession through the remainder of this year and 2013, compared to Fitch's previous expectation that the economy would benefit from a mild recovery in 2013," the agency said. It added that Spain had been especially vulnerable to a deterioration in Europe's debt crisis because it had a high level of foreign debt and it suffered from a lack of investor confidence in the ability of Madrid to get to grips with the country's budget deficit and restructure the banks "in a timely fashion".
Fitch said that Spain remained at risk of a further downgrade and that its new BBB rating was based on the assumption that it would get help from Europe to bail out its banks, although not necessarily the sort of strings-attached package required by Greece, Ireland and Portugal.
The coming of the Black Death to 14th-century Europe meant the church needed someone to blame. Since God was exonerated ex officio, the obvious culprit was human sin, though some theologians favoured Mongol hordes, the waning power of Rome, not enough austerity and the alarming junction of Mars and Saturn in Aquarius. No one thought it was just a plague.
The same is true of today's Black Death: the euro crisis. Pundits attribute its woes to wicked debt, insufficient austerity and the need for more power to Brussels. Were Geoffrey de Meaux alive today he would also blame Venus's transit of the sun. As in the 14th century, these wiseacres assure us that redemption will come from giving more control to superior authority and from a more drastic austerity than any yet attempted. National self-flagellation is also much recommended.
As for the euro, like the black rat it gets off scot-free. It survives every debacle as that apogee of dogma, a "good idea in principle". A generation of European politicians have worshipped at its shrine and they are now too old to recant. To be "for" the euro was to be progressive, international, indulgent of the rich and munificent to the poor. It was a symbol of futurist sophistication, waved like a holy rood in the face of crabby, narrow-minded Eurosceptics.
[.. A currency fashioned to enrich German exporters and ensnare Mediterranean nations in German credit was never going to work. ..]
Let's be lazy and blame the Germans - today's black rats.
But no whatever you do, don't blame hard work, efficiency, savings, honoring contracts, the rule of law, education, a solid infrastructure and a commitment to excellence when making products the world wants.
--------------
best regards -- Columbus, Ohio -- the United States
The euro was a ghastly mistake, yet no one in power has the guts to say so – let alone make amends.
Hence the fact that Merkel is now talking openly of political union - and even the supposedly Eurosceptic Cameron is cheering her on, merely complaining that it isn't happening fast enough.
The imbalances created by the single currency straitjacket have ruined national economies, and now the engine of destruction has moved on to chewing up the nation states of Europe and democratic government itself. It isn't just insane, it's incredibly dangerous.
God alone knows how much worse things are going to get.
No, Jenkins is correct. It might not have been the intention to help out German industry by rewarding it with a permanently depressed exchange rate, but any economist with half a brain could have seen this problem coming a mile off. Not to mention the huge destruction that artificially low interest rates would inflict upon the periphery, allowing profligate politicians like those in Greece to binge on cheap debt and generating an uncontrollable property boom in Spain and Ireland.
And now, because the weak states can no longer slash interest rates and devalue to help close the competitiveness gap, all they can do is slash wages and accept violent economic contraction instead.
This won't lead to the kind of peaceful, happy and united Europe that the wretched project was supposed to create. It just creates misery, social chaos and political unrest in the periphery, and mutual distrust and hatred between the creditor and debtor states. It's a complete disaster.
The Euro was fine until we all found out what those pesky financiers had been doing for years.
It's not the Euro's fault either is it?
The financiers are the virus on the flea of the Black Rat.
The reasons for a banking union and further integration are directly related to weaknesses in the one size fits all single currency. There is absolutely no reason why the United Kingdom should become involved.
Similarly the financial transaction tax might be okay for the eurozone but they should not expect the United Kingdom to participate. Without United Kingdom participation the idea will get quietly dropped anyway since 70% of all financial transaction occur in this country. A eurozone only financial transaction task would only result in
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