Germany Is Open to Pooling Debt, With Conditions … Pressed by a banking crisis and turmoil in the markets, Germany has indicated that it is prepared to accept a grand bargain that would provide greater support for its most indebted euro zone partners in exchange for more centralized control over government spending in Europe … The German chancellor, Angela Merkel, said that finding the way to "more Europe, not less" was the next task for Europe's leaders. "The world wants to know how we expect the political union to complement the currency union," Ms. Merkel said at a news conference here Monday with José Manuel Barroso, the president of the European Commission. "We have to find an answer in the foreseeable future." – New York Times
Dominant Social Theme: Thank goodness Merkel is coming to her senses.
Free-Market Analysis: Like some sort of bad joke or living nightmare the European Union rolls along. It really does resemble a Zombie apocalypse, though unfortunately it is not a Hollywood production but an ever-expanding political engorgement.
One would think that having bankrupted half of Europe, the Masters of the Euro-verse would be having second thoughts about plunging ahead. Not so. The only thing that will do is MORE union, says Ms. Angela Merkel, Germany's Iron Chancellor.
The world wants to know how a "political union" will complement an economic one. Really? Where exactly did Ms. Merkel meet this "world"? How did she communicate with it? Did she look it in the eye? It's a pretty big place; what did she stand on? Does it even have an "eye"? Let alone two …
No, this is rhetorical nonsense. She is groping for answers, but there is no answer. There is likely – as we often postulate – only a tiny power elite that controls central banks and wants to create an official world government as well.
And Ms. Merkel apparently works for them.
Power is an aphrodisiac, people say. But it seems to us that Ms. Merkel really has no power. She is actually following a script. She is a player in a drama that has seemingly been unfolding for the past century at least with thousands of main and bit actors.
It is what might be called directed history. And, indeed, all the world's a stage, as Shakespeare wrote (whoever HE was). The difference between the real world and stagecraft is that when people are killed in battle, they don't get back up again to take a bow at the drama's end. And poverty, malnutrition and disease are all too real, not merely devices to advance the plot.
We are told – for months, even years – that Germans are adamant that they not end up in a position where they shall have to pay billions to shore up the EU. Austerity is the only feasible solution.
But suddenly, there is an alternative, one that does not breach the various fundamental compacts that are essential to the larger cooperative body. Here's how the article (above) describes it:
German officials remain adamant that they are not talking about euro bonds, or jointly issued debt, which they have dismissed as unconstitutional. More likely is a plan to combine much of Europe's bad debt into a single fund with the idea of paying it off over 25 years, an idea gaining traction in Germany as an alternative to euro bonds, officials say.
The worsening crisis has led to a sweeping effort to chart a new path forward for the union, one that encompasses fiscal integration, Europe-wide banking supervision, and tighter coordination of economic policies.
German leaders have not provided details of a potential deal — and not every country may be eager to sign on — but it would be likely to mean an expansion of executive power in Brussels over fiscal targets in member states and supervision of their banks, along with Europewide deposit insurance. It would go far beyond what was contemplated for Europe even six months ago.
Changes on this scale would not be easy, involving an arduous process of treaty alterations that could take years, and it is unclear if they would be enough to reassure markets of the stability of the euro. But as Ms. Merkel has repeatedly made clear, Germany would be open to rescuing ailing banks and member states in the region only if that were part of an overhaul of the basic architecture of European governance.
What the article is not telling us is that this new "sinking" fund is reportedly to be backed by … wait for it … tons and tons of gold extracted from the union's miserable and indebted PIGS. This is the ultimate irony – that the fate of the EU rests on the provision of this much-maligned metal.
John Maynard Keynes called gold a "barbaric relic" – but he also said "in the long run we're all dead." And Keynes is dead but much of the mischief he did in his life lives on.
Ultimately, Keynes worked for the same Money Power that Merkel recognizes. Ms. Merkel's role is to provide the argumentation that will make the dénouement more believable. Keynes had a bigger part. His charge, apparently, was to justify the role of government in the implementation of Money Power.
Keynes performed very well. So has Merkel in a more subdued way. Of course, she is assisted by a cast of thousands. And at each juncture we are told solemnly that there is no assurance of success. The EU can fail at any moment. Full-scale depression can crash down upon the world at any time.
It is all what we call a dominant social theme, a fear-based promotion. The idea is to scare the masses into accepting globalism. Trillions of tons of newsprint will likely be disseminated to convince us of this faux-reality.
The article ends with the following observation:
"Merkel is slowly adapting to different times because she is afraid of not jumping on the train in time," said Stefan Kornelius, foreign editor of the German newspaper Süddeutsche Zeitung. "She doesn't want to be the gravedigger for the euro."
What a charade! Merkel will not be the gravedigger for the euro because that is not her role. Having been painted as the primary obstacle to the survival of the EU, she has suddenly emerged as the world leader most in favor of its enhancement. Coincidence? You decide.