Robert Mundell, evil genius of the euro … For the architect of the euro, taking macroeconomics away from elected politicians and forcing deregulation were part of the plan … John Maynard Keynes in 1944 at the UN International Monetary Conference in Bretton Woods, New Hampshire. Robert Mundell's work on the collapse of Bretton Woods paved the way for European Monetary Union. The idea that the euro has "failed" is dangerously naive. The euro is doing exactly what its progenitor – and the wealthy 1%-ers who adopted it – predicted and planned for it to do. That progenitor is former University of Chicago economist Robert Mundell. The architect of "supply-side economics" is now a professor at Columbia University, but I knew him through his connection to my Chicago professor, Milton Friedman, back before Mundell's research on currencies and exchange rates had produced the blueprint for European monetary union and a common European currency. – UK Guardian

Dominant Social Theme: Mundell had it all planned out.

Free-Market Analysis: This article asserts something that we have written about a good deal from the aspect of the European political economy.

In fact, we recently quoted the UK Telegraph on the political evolution of the EU and the euro. Turns out it was both malignant and creepy.

It wasn't just Robert Mundell who had the idea that manufacturing a currency crisis would cause a closer, greater union. This idea was popular with a number of top bureaucrats within the EU power structure itself. You can see our article on the subject here: "The EU … Not So Beneficial After All, but Certainly Hypocritical."

And here is something from the Telegraph article that we commented on in our article:

As long ago as 1957, Jean Monnet – who was the real organising genius behind the gradual building of "Europe" into a single, unified state – suggested that it was only through monetary and economic union that the "political union which is the goal" could be achieved. "There are no premature ideas," he wrote, "only opportunities for which we must learn to wait."

By 1970, Monnet's ideas were being fleshed out by the Werner report, which saw monetary union as the key step towards political union. But in 1978, another report for the European Commission, by Sir Donald McDougall, warned that it would be reckless to create a single currency unless Europe was first given an all-powerful government, with the power to tax, and to make a massive transfer of resources from the richer states to the poorer.

In the 1980s, though, that other great integrator Jacques Delors (second only to Monnet in his influence on the drive to European political union) decided to ignore the advice of McDougall and others and to launch the single currency without the suggested preconditions. To move straight to fiscal union, he knew, was not on the cards. But if the single currency was put in place first, it would create exactly the kind of strains which had been foreseen – making fiscal union the only way out.

Mundell gets credit, but so should Monnet and Delors. Certainly there are others. It never occurred to these important men how many families would be bankrupted by their evil plans and how many, stripped of resources and deprived of hope, would commit suicide.

For such men, the ends always seem to justify the means. Mundell obviously wanted to use the authoritarianism of centralization to defeat the profligacy of socialism. But as we are seeing now, the EU may end up in the short-term with the bitter detritus of such over-reaching.

Mundell surely felt he was too smart for his plans to mis-fire, though they certainly have. According to the article that we excerpted at the beginning, Mundell wanted to create a European trap that would "blow away government rules and labor regulations."

The euro would really do its work when crises hit, Mundell explained. Removing a government's control over currency would prevent nasty little elected officials from using Keynesian monetary and fiscal juice to pull a nation out of recession.

"It puts monetary policy out of the reach of politicians," he said. "[And] without fiscal policy, the only way nations can keep jobs is by the competitive reduction of rules on business."

He cited labor laws, environmental regulations and, of course, taxes. All would be flushed away by the euro. Democracy would not be allowed to interfere with the marketplace – or the plumbing.

As another Nobelist, Paul Krugman, notes, the creation of the eurozone violated the basic economic rule known as "optimum currency area". This was a rule devised by Bob Mundell.

There is considerably irony in the strategy that Mundell devised, and he violated his own rules to promote it because he intended for the EU – or at least the currency – to come under considerable strain.

This is the story anyway. We're not sure of the underlying motivation, however. We think the larger strategy runs much deeper than Mundell, who is an operative not a principal within the power elite that wants to run the world.

It pleases this power elite to run its plans through such individuals as Mundell. This gives everyone more deniability. But that doesn't mean Mundell is providing us with a bottom-line strategy.

The real strategy, as we have often indicated, may rest on the concept of introducing maximum chaos into the Eurozone. That's how the elites work, after all. The only way to realize world government is by making middle classes so miserable and distracted that they will welcome even an authoritarian solution so long as it promises to relieve the pain.

Mundell may propose his own clever rationale but that doesn't mean that is the ultimate plan. The power elite usually works in layers, with many underlying contingencies. One thing the elites probably did NOT count on was what we call the Internet Reformation. It's informed people about their manipulation by the powers-that-be in a way that has not ever happened historically before.

The profound knowledge of the way the world actually works continues to grow, making it increasingly difficult for the power elite to realize its plans in a timely or tidy way.

This does not stop those plans, of course. Via war, economic depression and outright authoritarianism, the elites are surely providing the world with a bellyful of chaos. Whether it will work this time is more questionable than before, given the level of enlightenment that has swept the very intelligentsia that the elites have always counted on to fall in line.

We do believe that the top operatives of the EU had in mind using currency chaos to advance a political union. But we think there are deeper forces at play as well. As usual, from our point of view, history will likely resolve it into a battle between the forces of 'Net enlightenment and power elite manipulations. The EU and its long-suffering citizens will be caught in the middle. In fact, they already are.