During the hearings before the German Constitutional Court, Finance Minister Schäuble, perhaps unwittingly, put his finger on yet another fatal flaw of the Eurozone: a central bank that could bail out speculators and pile the resulting losses on taxpayers of other countries, no questions asked, whenever it felt like it, without controls – “to save the euro,” as it were.
Entries in Euro (158)
In my interview with Voice of Russia, I talk about the ECB's fears for its own existence. I use Spain, which is stuck in an existential crisis, as an example of the greatest “achievement” of central banks: the separation of economic reality from stock markets. And I get a chance to lambaste the French finance minister who is once again barking up the wrong tree.
At first blush, the German economy appears to be ailing – at first blush because the stock market, in its omniscient manner, is predicting wondrous developments as it hop-scotches from one all-time high to the next. This relentless optimism has morphed into a breeding ground for projections into outright magnificence. But inconvenient data is getting in the way.
Contributed by Don Quijones: It is as if the youngest democracy in Western Europe has lost its youthful innocence. After the betrayal of so many hopes and promises, reality is dawning on the people that neither democracy nor EU membership quite are the panacea they were cracked up to be.
Austerity succeeded in trimming the bloated government sector. But instead of picking up the slack, the private sector destroyed jobs almost four times faster! The hope is that this fiasco will finally reverse course, that something will click and start a virtuous cycle before the unspeakable happens. But so far, it has relentlessly gotten worse.
Those close to the epicenter of power, those near Chancellor Merkel, have to toe the line on the euro – it’s far more than just a currency, it’s a sacred concept worth saving no matter what the costs. While the possibility of a small country's exit from the euro has been accepted, the euro itself has been inviolable in those circles. Until now. An insider offered a "Plan B"; and the euro’s life is limited to five years!
The average Cypriot household had a phenomenal net worth of €670,900 in 2010 – over three times that of German households. That wealth had been sucked out of the cesspool of corruption that the banks and the government were, until neither had a drop of lifeblood left. Now the party is over. And you can almost hear the snickering among European politicians.
Everyone learned a lesson from the “bail-in” of Cypriot banks: Russians who’d laundered their money there; bondholders who’d thought they’d always get bailed out; Cypriot politicians whose names showed up on lists of loans that had been forgiven; even Finance Minister Sarris. His lesson: when a cesspool of corruption blows up, no one is safe. And German politicians learned a lesson too: that it worked!
The Stunning Differences in European Costs of Labor: Or Why “Competitiveness” Is A Beggar-Thy-Neighbor Strategy
The ominous term “competiveness” is bandied about as the real issue, the one causing Eurozone countries to sink deeper into their fiasco. To address it, “structural reforms,” or austerity, have been invoked regardless of how much blood might stain the streets. And a core element of these structural reforms is bringing down the cost of labor.
Cyprus didn’t prick the Eurozone bailout bubble, the notion that bank investors who took enormous risks to gain financial rewards would always be made whole by taxpayers. That bubble had already been pricked in February. But it was the first time that the international bailout cabal, the Troika, stuck its needle into it—while Germany quietly bailed out all investors in one of its own rotten banks.
Why is it that 17 nations have to fundamentally reorganize themselves and shift sovereignty away from national parliaments to new layers of transnational, beyond-control bureaucracies that can extract untold wealth from taxpayers—just to save the banks?
Anti-euro movements have been squashed by political establishments across the Eurozone. Then Italy happened. Two anti-austerity parties captured over half the vote and threw the status quo into chaos. It stoked a fire in Germany where Chancellor Merkel’s bailout policies have hit resistance. Now the heat is on to dissolve the “coercive euro association.”
There have been waves of threats by Eurozone politicians to bully people into accepting “whatever it takes” to keep the shaky construct of the monetary union glued together. These threats peaked last year with disorderly default, and when that wasn’t enough, with the collapse of the Eurozone. But now, the ultimate threat has been pronounced: war.
The ECB and the national central banks of the Eurozone set out to collect “micro-level information” on household wealth. A massive bureaucratic undertaking. Surveys went out in 2010. Results are now ready. No one in Europe had ever done a survey on that scale before. And no one might ever do it again. Because, in the era of bailouts, the results are so explosive that the Bundesbank is keeping its report secret—and word has leaked out why.
Euros entered circulation on January 1, 2002. For six years, they grew on trees in southern Europe. But the bubble got pricked. Since then, the monetary union has been in crisis. Almost half of its existence! Until suddenly, its problems were solved. But now confidence in the monetary union is weaker than ever. With a hue of resignation in Germany.
Former Italian senator Sergio De Gregorio confirmed: “The Cavaliere paid me,” he said about the €3 million he’d received in 2006 from Silvio Berlusconi. “Of course I took the money.” Frustrated with this daily display of corruption, 8.7 million angry Italians voted for Beppe Grillo’s 5-Star movement. While it wasn’t enough to govern, it was enough to give the political establishment conniptions—and show that anger and frustration finally count.
“I’m appalled that two clowns have won,” said the man who'd try to knock German Chancellor Merkel off her perch this year. He was referring to former comedian Beppe Grillo and former Prime Minister Silvio Berlusconi. One of them is “a professional clown who doesn’t mind being called that,” he explained; the other is “a clown with special testosterone boost.”
“I’m sitting on cash,” Felix Zulauf said when he was asked in an interview where he was putting his money. With decades of asset management experience under his belt, he’d founded Zulauf Asset Management in Switzerland in 1990. But now he was worried—and has turned negative on just about everything.
LEAKED: Mario Draghi And His Triumvirate Shut Up German Finance Minister To Keep Cyprus From Blowing Up The Eurozone
The state-sponsored chorus about the end of the debt crisis is deafening. It even has feel-good metrics: the “Euro Breakup Index” fell to 17.2%. In July, it stood at 73%. For Cyprus, fifth country to ask for a bailout, it fell to 7.5%. “A euro breakup is no issue anymore,” the statement says. Just then, top Eurocrats expose what a con game they think these bailouts really are.
Bernd Scheifele, CEO of HeidelbergCement—one of the world’s largest producers of construction materials with nearly 55,000 employees at 2,500 locations in over 40 countries—lashed out against European politicians and their inability to bring budgets under control. But he reserved the most devastating judgment for the euro itself.