STAFF NEWS & ANALYSIS
EU Elite Starts to Stagger?
By Staff News & Analysis - February 15, 2010

The summit started as it meant to go on – in chaos, confusion and unintended farce. The big moment – the heads of state meeting, which is supposed to be the centrepiece of every European summit – was scheduled to begin at 10am in the wood-panelled Bibliothèque Solvay in Brussels' European quarter, but as the hour approached, it became clear that nothing was doing. As more time passed, it became clear that something was wrong. Eventually, Herman van Rompuy – the new European president, in charge of his first big set-piece – explained that a snowstorm had held up a number of the participants. The meeting would be delayed by two hours. It was a poor excuse. Everyone knew what was really holding up the summit. Behind the scenes, in ill-tempered exchanges in private conference rooms nearby, the grand European plan to help prevent Greece sliding into economic collapse was unravelling – and fast. In a radical move, the leaders – from President Nicolas Sarkozy of France and Chancellor Angela Merkel of Germany to the European Central Bank (ECB) president Jean-Claude Trichet (pictured left) – had already agreed to throw out the usual European Council agenda and replace it with one topic: Greece's economy. The problem was that no one could agree on what to do about the stricken nation. – UK Telegraph

Dominant Social Theme: Troubles shall be overcome?

Free-Market Analysis: We have noticed somewhat to our surprise — and pointed out to our readers — that power elite dominant social themes do seem to be unraveling at a rapid rate: central banking, peak oil, corporatism – all are under fire or at least being questioned. In this article we shall examine the EU (political centralization) and global warming at a bit more length.

The EU first. We have never been proponents of the European Union, believing it to be based on bribes and accompanying corruption – else no EU. It purportedly began as a purely economic effort designed to make sure European countries "played well" with each other and looked to each other for profitable trade. But it has evolved into a distorted version of Charlemagne's greater Roman Catholic empire without either the spiritual elements or unifying vision.

And now the Greeks are falling out of the European bed. (And they are not alone.) The unruly tribes of Europe – especially the Greeks, Lord bless them – were willing to pocket unlimited amounts of EU fiat money in return for making pious noises about discipline and austerity. But somehow it apparently never happened — and now the Greeks look to devalue, but they can't. They are members of an austere European Union. So we ask this simple question: For how long? When times get tough, are the Greeks — a quarrelsome and uneasily balanced agglomeration of competing social and economic interests – apt to stick around?

The odds of the Greeks submitting their economy to Germany's critical eye and Teutonic budget analysis are what? Not too good, we believe. France, especially, can attempt to orchestrate bailout statements showing "solidarity" ‘till mutton spawns lamb-chops. We ask: Are hard-edged, gimlet-eyed hedge fund traders going to believe them? Those odds are as good as Germany bailing out Greece – or Greek citizens standing for it. Here's some more from the above article:

It wasn't merely that Greece, a relatively small economy, was close to collapse; it was that, left unchecked, the panic could spread to Spain, Portugal, Italy or Ireland – all of whom suffer the same ballooning budget deficits and overburdened consumers.

For a whole swathe of euro members to be allowed to crumble would beg questions about the entire euro project. Indeed, as Papandreou pointed out at the World Economic Forum at Davos last month, the attack could be seen as a speculative assault on the euro, targeted at first through its "weakest link". As if to bear out his point, figures from the Chicago Mercantile Exchange released on Monday indicated that speculators had amassed their biggest positions against the currency since its foundation more than a decade ago.

So it was that a week before Thursday's summit, in a bilateral meeting in Paris, Sarkozy told Merkel that France and Germany would have to mastermind some kind of plan to protect Greece. His broad proposal was that the northern European nations should at the least issue a statement promising to stand behind Greece, and perhaps go so far as to spell out how much they would put into a potential lifeboat. Merkel was not convinced. For one thing, she was well aware that Sarkozy had his own political motivations for such a move: the alternative, an International Monetary Fund (IMF) bail-out, would enable IMF chief Dominique Strauss-Kahn, Sarkozy's most likely opponent at the next French election, to ride in and "save the euro".

But, more fundamentally, by organising a bail-out Germany would be seen as providing unfair support for a country which had proven itself incapable of fiscal rectitude. Such a move would not only be hideously unpopular with German taxpayers, it would potentially encourage poorer countries to follow Greece's lead. Moreover, under the German constitution, such moves were legally tricky to organise.

It has been pointed out that the IMF could ride to the rescue of both Greece and the Eurozone. But, to us, this would be a little like the cavalry galloping to the rescue of the wrong side. How could the EU retain credibility after such an event took place? What, finally, would be the added value? It should have stayed a trade zone, then. An IMF bailout, in our opinion, might be the beginning of the end more likely than the "end of the beginning."

And there is this … How many other countries would the IMF have to bail out? From our point of view the Euro-Union might well, eventually, become known as the IMF-union. Poor euro! What would it eventually and finally be worth? The whole, stated idea was to create a healthy and profitable "United States of Europe." With half of Europe spinning into bankruptcy the union looks more and more like a "United States of Zimbabwe." Or maybe Venezuela.

But the potential unraveling of the EU, or at least part of it, is not the only story. Astonishingly the destruction of the global warming meme continues apace, with the head of the UN's IPCC under pressure to resign over flawed analysis that indicated Himalayan glaciers, the source of much of the region's fresh water would shortly evaporate due to the heat by increased warming. The dike has delightfully and metaphorically broken, with many mainstream publications beginning to report something other than global warming blather. Here's something astonishing from the London Times:

World may not be warming, say scientists … The United Nations climate panel faces a new challenge with scientists casting doubt on its claim that global temperatures are rising inexorably because of human pollution. In its last assessment the Intergovernmental Panel on Climate Change (IPCC) said the evidence that the world was warming was "unequivocal".

It warned that greenhouse gases had already heated the world by 0.7C and that there could be 5C-6C more warming by 2100, with devastating impacts on humanity and wildlife. However, new research, including work by British scientists, is casting doubt on such claims. Some even suggest the world may not be warming much at all.

"The temperature records cannot be relied on as indicators of global change," said John Christy, professor of atmospheric science at the University of Alabama in Huntsville, a former lead author on the IPCC. The doubts of Christy and a number of other researchers focus on the thousands of weather stations around the world, which have been used to collect temperature data over the past 150 years. These stations, they believe, have been seriously compromised by factors such as urbanisation, changes in land use and, in many cases, being moved from site to site.

Christy has published research papers looking at these effects in three different regions: east Africa, and the American states of California and Alabama. "The story is the same for each one," he said. "The popular data sets show a lot of warming but the apparent temperature rise was actually caused by local factors affecting the weather stations, such as land development."

We confess that we feel a little like a Chinese person might have felt after Mao's death when "a hundred flowers" began to bloom. Truth-telling is astonishing. The mainstream media is actually reporting on reality. Who would have "thunk it." Between the apparent implosion of the EU and the collapsing credibility of global warming, we are faced with the idea that some of the elite's promotions are falling faster than we ever expected – thanks to the truth-telling of the Internet as we regularly try to note.

NOTED: Totally Occupied: 700 Military Bases Spread Across Afghanistan … Existing in the shadows, the US base-building program is staggering in size and scope and also extraordinarily expensive. … Nearly a decade after the Bush administration launched its invasion of Afghanistan, Tom Dispatch offers the first actual count of American, NATO, and other coalition bases there, as well as facilities used by the Afghan security forces. Such bases range from relatively small sites to mega-bases that resemble small American towns. Today, according to official sources, approximately 700 bases of every size dot the Afghan countryside, and more, like the one in Shinwar, are under construction or soon will be as part of a base-building boom that began last year. – Alternet … (Ed Note: All this to ensure Al Qaeda doesn't return?)

After Thoughts

The power elite creates and promotes its dominant social themes to inculcate fear in average people – a fear that is then translated into increased centralization of authority. In the era of the Internet, with the entire secret process available to anyone who wishes to look, the elite looks neither secretive nor clever. Investors may observe that promotions are under pressure in numerous areas beyond global warming and international political centralization (the EU.) Central banking as a dominant social theme is becoming increasingly shaky. And of course the theme of gold and silver as "barbarous relics" went out of style sometime ago, probably after gold first broke US$1,000. It may have much further to go. And power elite promotions may continue to erode as well.

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