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“440 Million Europeans Have Just Joined a New Country”

GlobalEurope Anticipation Bulletin (GEAB), a European newsletter that “brings you its unique analyses on the upcoming stages of the collapse of the world order created after 1945, as well as numerous strategic recommendations for your decisions in the political, economic and financial fields” is out with one of its typically provocative theses: That the Greek bailout constitutes a coup in which a central monetary/fiscal authority has taken over the disparate economies of Europe. Here’s a snippet:

The fact remains that without knowing it, and without having asked their opinion, 440 million Europeans have just joined a new country, Euroland, of which some already share the currency, the Euro, and of which all now share the indebtedness and the joint means to solve the serious problems posed in the context of the global systemic crisis.

…Finally, the Eurozone leaders’ recent decisions confirm LEAP/E2020’s anticipations, contrary to the dominant chatter of these last few months, of the fact that not only will the Euro not « explode » because of the Greek problem but, on the contrary, a strengthened Eurozone will emerge from this stage of the crisis. One could even consider that, since the Eurozone decision, a kind of « Eurozone coup d’Etat » supported by Sweden and Poland, to create a huge apparatus to protect the interests of the 26 EU member states, the geopolitical deal in Europe has changed radically. Because it runs contrary to the prejudices which fashion their vision of the world, several months will be needed by the majority of the media and players to accept that, behind the appearance of a purely European budgetary-financial decision, lies a geopolitical split with worldwide impact.

…A radical unraveling of European governance has just taken place: a collective continental governance has just brutally emerged, ironically 65 years after the end of the Second World War, moreover celebrated with a big display in Moscow the same day as the holiday celebrating the creation of the European Coal and Steel Community, the common ancestor of the EU and Euroland. This simultaneity isn’t a coincidence and marks an important step forward in global geopolitical dislocation and the reconstitution of new global balances. Under the pressure of events set off by the crisis, the Eurozone has thus undertaken to grasp its independence with regard to the Anglo-Saxon world still expressed via the financial markets. This 750 billion Euros and this new European governance (of the 26) constitutes, at the one and the same time, the putting in place of the fortifications against the next storms caused by draconian Western indebtedness, and which will affect the United Kingdom and then the United States causing disturbances of which the « Greek crisis » has only given a small preview.

Some thoughts:

  • It’s not clear how the prediction that “a strengthened Eurozone will emerge from this stage of the crisis” can be realized. Or how grasping “its independence with regard to the Anglo-Saxon world still expressed via the financial markets” helps. But the eurozone could definitely end up relatively stronger than the US once Illinois and California default.
  • Each crisis of the past, oh, century-and-a-half has been “solved” by more centralization. Along with technological progress, this is the dominant theme of our time. And the two are becoming ever-more complementary, as the means to track and control individuals evolves along with the will to do so. Sorry to sound apocalyptic, but talk of a “coup” that produces a “strengthened Eurozone” makes me very nervous.

33 thoughts on "“440 Million Europeans Have Just Joined a New Country”"

  1. Robert: I would not take any comfort in anybody’s debt-to-GDP ratio because the GDP is basically meaningless as a measure of productivity, or in this case as a measure of the ability to repay loans. GDP is:

    private consumption + gross investment + government spending
    + (exports − imports)

    The more that a government and its citizens spend borrowed money, the more meaningless the GDP becomes. A country like ours with foolish lenders unquestioningly providing it with cash could approach having essentially all private consumption and all government spending being done with borrowed money, with net negative exports (like ours) and no gross investment. Such a nation would have essentially no productivity and no capability of paying back any loans ever, yet it would have a high GDP and consequently a low debt-to-GDP ratio (because ironically the more debt you incur and spend every year, the higher your GDP for that year).

    I look only at total debt and I do it with a graph, which unfortunately I cannot reproduce here. Our total debt is on the nearly vertical trajectory of an exponential curve. We are not just going into debt orbit … we’ve achieved escape velocity and are heading for the moon. With every American now in debt $95K (without counting unfunded mandates like Social Security) and $350K with such mandates, there is simply no way that we can ever, under any circumstances, repay this debt, even if it weren’t increasing astronomically every day.

  2. When contemplating the size of total debt of Spain (or any other country), one has to keep in mind that there can not be any economic activity without debt. This is the nature of our monetary system. Money enters the system as debt via loans. In other words, no debt means GDP = zero. In a fiat monetary system, it is not the size of the debt which matters. It is the ratio of debt/GDP and the sustainability of that ratio which matters. Historical experience shows that a debt to GDP ratio of more than 90% is not sustainable. In the case of Spain, that ratio is around 60% – a very low ratio in comparison to the US where GDP is around $14 trillion and the public debt is $13 trillion producing a debt to GDP ratio of 13/14 = 92.8%.

    So the size of Spanish debt is not a cause of worry. I would be more concerned about the growth rate of that debt. If the growth can be contained, then it is unlikely that the Spanish economy will unravel.

  3. The dominos are falling, one by one. This from today’s USA Today (May 26, 2010):

    Though the focus in recent weeks has been on Greece, the stakes are much higher in Spain. The Iberian nation’s external debt — both public and private — is $1.1 trillion, almost five times what Greece owes foreign investors. Spanish borrowers owe more than $220 billion to banks in both Germany and France. If they’re unable to fully repay those loans, Europe’s most important banks would confront massive losses. The fear is that could lead to a renewed credit squeeze in Europe while destabilizing still-fragile global capital markets.

    Full article is at:
    http://www.usatoday.com/money/economy/2010-05-26-worldecon26_CV_N.htm

  4. I apologize in advance if the following remarks are somewhat out of context.

    First of all, I wish to emphasize that the Euro is not a project in economics. It is a political project aiming at unifying Europe. In political projects, economics (and the associated cost) does not really count. A few hundred billion if distributed over 10 years is not really such a big sum. In my opinion, the Euro will survive the next ten years if not longer.

    Regarding Greece, I think the real villain is Germany and not Greece. It was Germany that with a conservative economic policy (low wages, high savings and high productivity) created an economy which was simply too strong. Moreover, maintaining a high credit rating, Germany enjoyed very low interest rates on her Bunds (= German Treasuries). After the introduction of the Euro, these favorable low interest rates applied to all sovereign borrowers in the Euro area including Greece. The low interest rates (based on the credibility of the German economy) were too tempting for the weaker European economies. Greece would not have been able to accumulate these high debts if interest rates were significantly higher. It was Germany which was ultimately responsible for the artificially low interest rates by maintaining a set of too conservative financial policies in running her economy.

    The solution to present crisis is obvious. Germany must change from being a saver and producer nation to a consumption based economy like all the other economies of Europe (and the US). Then interest rates will rise damping the appetite for further growth of public debt. To clear out the present debt we need a few years of austerity and controlled defaults.

    The German public should be educated that savings should not be placed in financial accounts denominated in Euros. Germans should do the same what China is doing: Place savings in commodities (including precious metals). Fiat money was invented in order to efficiently promote economic growth (Ponzi scheme). We all wish to be rich and for that reason we accept Ponzi principles like fractional reserve banking, fiat paper money and other monstrosities. Economic growth is not sustainable on a finite planet. Channeling savings into commodities and not into financial products (like stocks bonds etc) is the solution to the dilemma of the Euro. Let the EU run monetary policy. Germany should aim to be precisely in the middle of the pack. Its savings should be tied to commodities stored in German warehouses and not on future exchanges (where savers will be defrauded again by policies like naked short selling etc).

    Perhaps our host John Rubino should promote goldmoney more strongly in Germany. I think it is an ideal product for all these fearful savers in Germany who are paralyzed by what happened to their savings during the 20th century.

  5. Errata, last line of the previous post should read:

    – The issue is will Greece pay in real money or that paper stuff.

  6. On Point Random “Euro” Thoughts

    – Everybody it seems has a dog in this fight. Sarkozy & Merkel are spittin’ mad at Standard & Poors for rating Greek bonds junk. As a result, France & Germany are leading an effort to create a European Credit Reporting Agency.

    – Are the Europeans not paying attention? The USD collapsed BEFORE the subprime mortgage metldown. The USD collapsed because we BORROWED to finance two wars, Medicare part D at the same time as we cut prices, I mean lowered taxes and proceeded to a jobless recovery because the ho’s who got the tax break invested offshore.

    I guess our Euro friends thought their appreciating Euro was the result of they doing something right.

    – Remember the “We’re All Americans Now” headlines in France on 9/12/2001? Why didn’t we see the same headline following the recent Eurobank/Greek bond bailout?

    – When will these Austrian School econoheads stop misrepresenting Keynes? When Keynes postulated government pick up the slack when private investment curtails, he spoke of infrastructure investments. What we now call shovel ready projects. Things that actually put real people doing real work. Correct me if I’m wrong but I don’t recall Keynes advocating bailouts and bonuses for bankers.

    – While the Germans whine “poor us” publicly, privately they’re dancing on their desks. A lower valued Euro means a price advantage for exports.

    – Finally, at the end of the day, 35% of the Euro can be redeemed in gold. The Greeks are among the highest gold owning per capita populations in the world. IF push comes to shove Greece can pay their debt.

    – The issue is will the Greece in real money or that paper stuff.

  7. @Stan M,

    Art Laffer, supply side economist famous for the Laffer Curve, you remember him Stan; the guy conservatives touted as one of the 3 wise men, alongside Jude Wanniski and Paul Craig Roberts who set Ronald Reagan’s economic agenda.

    Art Laffer, supported by empirical study and evidence, says that undocumented residents are net contributors, not the takers or drainers you suggest.

    Little wonder Reagan offered amnesty. He saw both sides of the cost/benefit analysis.

  8. Everyone including the Politicians completely avoids the obvious solution to solve the fiscal crisis. That is stop paying all the free services for the illegal aliens. It is costing California $10Billion+ a year. If they had stopped this incredible nonsense a decade ago they would be solvent today. This is a major contributor to all the states financial problems. They are starting to get it but until they stop paying they will pay dearly and will deserve what they get.

  9. @Henry Coulter

    Indulge me, if you will, and consider two new categories of my own invention. Liberaltarian and Conservatarian.

    Each is a well read, exposed to different cultures Libertarian with 20 extra I.Q. points as a result of the reading and traveling.

    There are real advantages to the new labels such as not being confused with Tea Baggers or left wing whack jobs. Plus you don’t have to brand yourself a Libertarian with the caveat that you try not to be stupid about it 😉
    All the best,
    Thrash

  10. To Neanderthal Conservative:
    I am a conservative also but I like to distinguish myself from those conservatives who, like Sarah Palin, think we should remain the world’s Policeman and all it entails with 178 bases in every corner of the world and all the cost and consequences. I have also traveled extensively and lived in many countries since I was a child. You see, I consider myself a true conservative, a true believer in freedom. Yes, there are people who wants to kill us but is it because they “Hate us for our freedoms” or is it because we are meddling in their affairs and have military bases in their holy land? I am very loyal Ron Paul follower, until I started reading his books the whole thing did not make sense to me. now it makes perfect sense. In case you did not notice, this is libertarian site, not a neocon site which is what I believe you are.
    Even William F. Buckley, a regular concervative, did not consider George W. Bush a true concervative but a Neocon. W. Bush spent more money than ALL other presidents before him conbined. How is that conservativism? Of course, our current president is well on his way to out do him. There is a good book written by Chalmers Johnson on how we got to where we are, I forget the tittle but you can look it up on Amazon, educate yourself.
    The business of America should be business not world domination, our founding fathers knew that when they came here from Europe, they also said money should either be based on silver or gold or both, they said this for a reason.

  11. Thrash,

    I’m going to bow out of this discussion on California’s budget problems because I don’t know enough about it, and would rather spend my limited time studying “bigger” stuff. Speaking of which, the article below called “Hair of the Dog” is outstanding. It’s all about “the central bank of central banks”, the Bank of International Settlements (or BIS). I think you’ll like it.

    You too Duane.

  12. True Bruce C., it does seem like Arnold is going after the low hanging fruit. The cost to educate, medicate and incarcerate totals 84% of State spending though.

    Sources of revenue are derived 52% from income taxes, 22% sales taxes, 11% from corporate taxes and the remaining 15% from various use taxes and fees. Arnold does include reinstating the California Estate Tax that was abolished in 2001.

    Within downtown Los Angeles is an area that spans about 90 blocks loosely called the Garment District. It also contains the Flower District, Jewelry mart, furniture, novelties, you name it. Stop at the Starbucks for a bagel and late’ you will pay a sales tax on your bill. Shop at any of the thousands of independent merchants and the price includes sales tax because sales tax is estimated. And yes, most merchants make change out of their pocket as well as from the register.

    Our massive problem in raising taxes is three fold. One of my brothers in law benefits from prop 13. His property tax is $340 per year. His next door neighbor who recently bought is paying about $2,500. Such is the unintended consequence of Prop 13.

    Secondly, thanks to some ballot initiative a tax increase requires a two thirds majority in the legislature.

    Thirdly, any tax corporate tax increase is counter productive because businesses pack and move.

    Now for the zinger. About two years ago I was stunned to learn that the estimated poverty line for a family of four living in the City of Los Angeles was raised to…drum roll please…$72k per year.

    If we apply John Williams inflation rate of 9% compounded annually, the current poverty line for a family of four is a breathtaking $86k. I’m just rounding in my head, not using the calculator.

    Many of the unions represent first responders, teachers, trades people etc. Do we really expect them to live below the poverty line for the privilege of serving us? Are we really that special? And more importantly, why would they?

    The above is the situation on the ground here in California as best as I can ‘splain it to Lucy.

    Honestly, I don’t have the answer except that all of us here in California have to give more and take less or get out. I do believe that we won’t solve the budget crisis playing politics as usual.

    All the best,
    Thrash

  13. lol Bruce C.

    Merely anecdotal but speaks volumes. A nephew who is a contractor having just built a mid-six figure home for his family shared recently, “I’m trying to get a job at Building & Safety and wait this recession out in a government job.” BTW, fine young man, beautiful family and the views are simply spectacular.

    Oh smiley face: type colon, end bracket, return. For wink and a smile semi-colon, end bracket, return. 🙂 😉

  14. Here’s another thing: Arnold is an idiot. Besides being weak in arithmetic, he’s as politically stupid as every other Republican. Rather than going for the low hanging fruit and shorting the weakest citizens, he should have proposed some serious budgetary reparations aimed squarely at the unions. That would have forced the legislative chiwawas (sp?) to have to defend the indefensible, and/or propose taking benefits away from the poor or illegals instead.

    HE’S AN IDIOT!! (Or did I say that already?)

  15. Hey Thrash,

    Welcome back.

    Of all the stuff California pays for, I least object to most of what the Terminator proposes to terminate, at least in principle. I don’t know all of the details, but picking on in-home elderly support services, welfare mostly for kids, and some prison expenses seems bass-ackwards. It’s politically wimpy, avoids dealing with the big ticket rip-offs, and should anger every one who knows anything about that state’s government.

    The reduction in wages and benefits for state workers, however, I heartily endorse. I suspect they’re out of line with private industry compensation. Unfortunately, pension benefits were increased. Ditto the reason why. Not only that, his proposal doesn’t even reconcile the budget, even after a $3 billion dollar stipend of commemorative Obama bills.

    Maybe the politicians are seriously threatened with bodily injury or worse to themselves and their families. I seriously wonder. Not one of them at the state or federal levels are willing to take on the unions. All of this other crap is peanuts in comparison, not to mention the political intimidation that’s allowed to succeed.

    “Fortunately” political evasion and irresponsibility will soon no longer be possible, or will be usurped by economic and financial reality. A day (or decade?) of reckoning SHALL arrive, like it or not. Please keep me posted so I can catch a flight out there to watch firsthand the bloated union bosses go ape-shit, and maybe even be torn apart by their entitlement-addicted members. (Actually, I may not want to see that part, so just keep me posted.) Smiley face!

  16. Is California Next? First the facts:

    This week California entered the top ten of governments most likely to default according to Credit Writedowns. With default rated a 20% likelyhood I guess you could say that it’s running 4/1 against.

    California must close a $19 billion deficit. Governor Schwarzeneger proposes to completely eliminate welfare including but not limited to, Calworks, the State’s welfare to work program, subsidized child care, and in-home care for the elderly and disabled. Additionally the proposed budget calls for reform of Calpers, the public pension system and further cuts in State workers pay.

    Interesting that tax increases are not included in the Governor’s budget.

    The really sad part of this story is that during this crisis, with our State teetering on the brink of default, our elected representatives make the politics of a tax increase the priority.

    Is this what passes for leadership among the Boomer generation?

    Many here have expressed concerns about civil violence. Let’s see how well the peace is maintained if we eliminate welfare in California.

  17. Duane,

    You’re absolutely right. Being part of a network of people helping each other figure things out is the best part.

    I actually took that for granted. Not good.

    Thanks

  18. Well, truth to be told, they need much severe crisis for a real “coup” to happen for Euroland. See what happens in a near future whether it will be the end of Euro era, or beginning of “strengthened Eurozone”- I mean politically once it turns out that 1 trillion $ was only a joke. Of course, for the sake of bankers, they need a political unification. But, I have no idea why this sounds “apocalyptic”, unless you think it’s different in US.

  19. I also read the first paragraph, said okay i didn’t understand that, then read the 2d paragraph, didn’t understand that, … John R. was clear, though.

    Bruce – regarding the line we walk between taking away something from here that will help our own success, and watching the slow train wreck, I think there’s a third element that draws people together – that is the need to inform others, in case we think we possess a piece of the puzzle. I get excited when I see new people come on board (new to me), because they inform me, and also because maybe I can help fill in a missing piece in their own puzzle, quite aside from whether I can help myself. I started saying often during the Y2K fear, “civilized people want to be civilized”.

    On the topic of a nuclear missile defense shield, I always differed with those who argued “what good is it if it will only take out a fraction of the incoming missiles – it has to take them all out or we still have nuclear holocaust”. I would respond: “if one missile is taken out, it incrementally increases the possibility of our survival as a nation.” That’s the best case for a worst-case scenario, that we incrementally ratchet up the probabilities for civilization’s success in the aftermath.

    I hope the DNA for civilized behavior is somehow (miraculously) enhanced in the U.S.A. (and everywhere else), maybe through technology, but I think more likely through a common belief in something that is good that is greater than ourselves. God. Freedom. Posterity. …

  20. Gentlemen:

    This time is different because it’s us. Make no mistake, we have entered a phase or cycle of rule by men. We have forsaken rule by law. The politics of privilege is the order of this day.

    When Henry Paulson stooped to bended knee before Nancy Pelosi it appeared he was begging. In fact he wasn’t begging at all. He was threatening martial law.

    Alexis de Toqueville said it best, “The great American experiment in democracy will work so long until the People find out they can raid the treasury.”

    Ayn Rand? Ayn Rand is Sarah Palin with a degree. Neither should be taken seriously.

    Left and right speak with one voice now, “Give me freedom but don’t hold me responsible or accountable.” That is the message as we exempt this or that industry from tort litigation. The left won’t buy suspending miranda? No problem, self-proclaimed “civil rights liberals” will just expand the Public Emergency exemptions until miranda is irrelevant.

    Take heart Dick Cheney fans, the Obama Administration continues to rendition suspected terrorists.

    I enjoy Ferguson as well. I’d enjoy him more if he absented from repeating time worn cliches about taking of and from history. Albert Einstein said it best:

    Insanity: doing the same thing over and over again and expecting different results.

    The Federal Reserve is the fourth central bank in our brief history.

    Even better Albert Einstein left us with advice worth heeding:

    Try not to become a man of success, but rather try to become a man of value.

    All the best,
    Thrash

  21. Hi Roota,

    (that’s a cool name)

    Those clowns are the anti-heroes. They think the system will chug along for pragmatic reasons. People do have their limits though.

    I don’t understand how/why the British have gotten so screwed up. They must have some collective guilt, similar to the Americans over slavery, but I’m not sure what about. They tolerate all sorts of bizarreness.

  22. Duane,

    Thanks for the reference to Niall Ferguson’s interview (http://bigthink.com/ideas/20068). It’s always refreshing to learn the perspective of one who has a very different focus.

    The “This time is different” theme just doesn’t go away and, ironically, instead of succinctly settling the issue once and for all, it’s caused people to question it even more, and I think for good reason. That’s because the statement is actually contextual even though it’s cynically propounded as a universal truth. Or, to put it differently, sometimes it’s misapplied, sometimes misinterpreted, and sometimes both.

    The statement is meant to apply to human nature and thus to predictable human actions in response to essentially similar circumstances. That part most people get, I think, though a first level of debate centers around the “essential similarity” of circumstances. For example, many people question the role of the internet, claiming that IT is unprecedented and “different”. Ferguson address that by claiming that the internet is essentially the same as the printing press, that it is the distribution and networking of knowledge that is the important similarity, and that the speed at which this occurs is not important. I have no problem with that argument as such, but he does imply by his own example that the “tome” now applies to modern history, post Reformation.

    Those same people who claim that technological advances are more organic than Ferguson believes may also engage in a second level of debate that questions why men will always choose the same actions under similar circumstances. To me this is the more interesting and practical question. It’s essentially asking whether or not men CAN choose different actions given “the same” circumstances, or just choose not to. The whole concept of human nature is challenged, and the purposes of education, rational thought, and knowledge of history is in opposition. What I find personally interesting about web sites like this one, and the people who interact and make comments, is that a fine line is walked in which knowledge and understanding is sought for one’s own personal benefit yet simultaneously watching a fairly predictable train wreck play out. So, clearly, some people are able to take different actions given similar circumstances, which is proof to me that human nature either subsumes an ability to learn, or that human nature has nothing to do with knowledge and action. I could go on in my critique of the basic static theme (“it’s never different this time”), but I’d rather focus on something else.

    For me, the most interesting and practical questions going forward entail what things will be like if/when there is a currency crisis in this country, or a severe depression, or high inflation – whatever. The bottom line, which I insist WILL be different, is that most people are going to be far more disadvantaged and unprepared for any of the above circumstances, given our high tech culture, service-oriented economy, specialization, distribution systems, etc. THAT will be unprecedented. Even during the G. D. most(?) people lived on farms, were relatively self-sufficient and lived fairly simply.

    Not this time.

  23. After almost 800 years of being ensrined into British Law the Magna Carta was superseded by the Treaty of Lisbon in december last year.

    Is there a Galts Gulch associate in Europe, better still somewhere in England? I can pay the entrance fee with Gold and Silver.

    Perhaps someone send these LEAP idiots a copy of Atlas Shrugged?

  24. I agree with Bruce that the style of this article is so pedantic as to make it unintelligible.are they french?
    I am french educated but find it painful to read.
    It does seem that Europe is being integrated in the worst way: for the benefit of a degenerate conglomerate of bankers and so called intelectuals.
    The money I had there is quietly leaving for better shores.
    Bye Europe

  25. Hey John,

    Of short/immediate term benefit of the Greek bailout is the decline in value of the Euro to the Yuan Renminbi. For an exporting economy such as Germany to kick China in the butt is a slam dunk win/win for Angela Merkel. If we can execute a controlled collapse of the USD as well, maybe there is some light in this tunnel.

    Either way, controlled collapse or market induced FUBAR, gold wins.

    http://www.mataf.net/en/chart/converter-EUR-CNY

    You’re right of course, centralization enhanced by technology is a major theme of our time. Would you also consider the rise of corporate governance in direct competition with public institutions a major theme of our time? If so, is the expansion of corporate governance, ie. use of mercenaries, a counterweight or offset to centralization?

    All the best,
    Thrash

  26. “…a central monetary/fiscal authority has taken over the disparate economies of Europe.”

    uh, didn’t that happen about 20 years ago when the Euro was adopted? Perhaps it just takes two decades before the Law of Unintended Consequences kicks in.

    With apologies to Bob Dylan… there are many here among us who felt the Euro was a joke… or at least a thinly disguised currency.

    Giving up your country’s currency sacrifices your sovereignty. Without sovereignty your country no longer has control of its destiny. Lack of control leads to subjugation. When subjugation is complete, oastracization ensues. Once you are totally ostracized, you’ll have your sovereignty again.

    The Euro sausage was made, and now we’re witnessing the unmaking of sausage… it looked tasty going into the process, but it’s not palatable coming out of it.

    How do investors do a financial duck and cover? Apparently, it’s too late. The handbag is here and we know where it’s going.

  27. First of all this snippet from the GEAB is almost unreadable. I suppose the author is trying to sound sophisticated, but illiterate is more like it. It’s very European though. Thank you, J.R.., for not posting any more of it.

    All of this nonsense about one diabolical group or another working behind the scenes to create some new global order is ridiculous. The PIIG bailout package was actually a European bank bailout which means the losses will be borne by European and US taxpayers. But that wasn’t a coup by some group (Poland and Sweden, are you kidding?) to seize power. The power already existed which is how and why the bank bailouts occurred. Furthermore, significant pressure was exerted by the US to protect its interests. The EU bailout boondoggle is very similar to the US’s TARP boondoggle. The rational was the same (if the banks suffer loses from default then there will be a domino effect that will lead to a financial meltdown), and the solution was the same (buy the lousy bonds from the banks and if they default then we’ll socialize the loses amongst the tax payers.) That didn’t change the world order, it just manifested the inevitable results of socialism, which has “proudly” existed in Europe since WW 2. In fact, what happened was inherent and preordained in the EU model (“one for all and all for one!”).

    I agree with J.R.. that the only way the EU could possibly emerge stronger than the “Anglo-Saxon world” is on a relative basis. Since the Obama administration likes the European model so much we may have a race to the bottom and win, but I still wouldn’t credit the Global Masters for that pathetic result. In any case, socialism is unsustainable and self-defeating so the ultimate result will be social and financial ruin.

  28. I’ve never understood the theory that a strong EU and EMU will prevent violence in Europe. The primary cause of the US Civil War was the imposition of the same economic policies on two very different economies. So how exactly is the EMU supposed to prevent warfare, again? Some countries must necessarily be screwed over in this system, and the EU / EMU just provides the mechanism. It’s more a guarantee of violence than a preventative. And what do they do when Greece tries to secede? Does Germany arm the pro-EU faction in a Greek civil war? Maybe they don’t care about Greece– but, say, Spain? Do they let Spain leave peacefully if it so chooses?

    The elites like centralization for the obvious reason that it brings more of the world under their power, but perhaps they should read a bit about biodiversity. Ecosystems that lack diversity are prone to sudden collapse, and so are societies. And yet all the elites have done for a century and a half, as John says, is fight for the opposite, for centralization / homogenization. I guess this explains why all those long-term cycles are suggesting it’s TEOTWAWKI.

  29. Yes! Angela Merkel already told the Greeks that if they want to “rescued” it would mean they would have to give up national authority. In other words, the Germans (think) they have achieved what Adolph Hitler only dreamed of, taking economic control of all Europe without firing a single shot. Of course, it isn’t JUST the German bankers who want this central (fascist) banker-controlled government, there are French bankers, Austrian bankers, etc. but it is the Germans who provide the backbone for a Euroland. You can bet the Russians don’t like this. Look at their agent, the new British PM. He is related by birth to Russian royalty. Some coincidence, huh? In fact, the old European royalty are the ones who control these banks. I wonder who the anti-christ will turn out to be. Well, no wonder who’s body is being used, you can be certain that, as with Hitler, it will be Satan who is in control for the very short time period he has left on the stage (before Jesus returns to rule on the throne in Jerusalem).

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