Super-Eurocrats to the Rescue/Eurozone in Chaos?
By Staff News & Analysis - October 10, 2011

Merkel, Sarkozy agree to strengthen Europe banks Share … German Chancellor Angela Merkel and French President Nicolas Sarkozy said on Sunday they've reached an agreement to strengthen the European banks, but wouldn't go into details, according to published reports. – MarketWatch

Dominant Social Theme: The leaders of the Western world are struggling with the depth of the current crisis, but common sense will prevail. They will save Europe.

Free-Market Analysis: This is such an old story by now, such a hoary dominant social theme. The leaders of Europe, specifically Angela Merkel and Nicolas Sarkozy, are developing a plan that will be sufficient to ward off any default of break up of the EU.

Do people really believe this anymore? The crisis has been ongoing for four years in various iterations. But we are constantly informed nonetheless that top Eurocrats such as Merkel and Sarkozy have the wisdom and resources to fight off the approaching storm. When will the charade stop?

To ask the question is to answer it. The entire affair is likely being stage managed. This is how the Anglosphere elites operate. They pretend to make an effort, but the exact opposite effect is being sought. They use fear-based promotions to get their way.

The world is always said to be on the verge of falling apart and only this or that elite solution can save the day. There is always limited time before the next crisis strikes. Action must be taken NOW.

If Europe's leaders are pretending to do everything possible to defuse the crisis, they are actually doing everything they can to make it worse. Those at the very top want chaos and dysfunction. Out of chaos … order. In this case world government and a world currency to go with it.

How does one go about developing global government? Well, the simplest way is to make the current economic and sociopolitical system so horrible to live within that people will accept almost anything that promises to alleviate their suffering. In this case a globalization of the very system that has caused their problems to begin with.

The proximate cause of the current economic crisis is central banking. Start with the US, which was the engine of prosperity in the world, post-war. An entire internationalist, paper-money system was set up after World War II and the dollar was to be the most powerful currency by virtue of America's monetary and military might.

Thus, post-war, the Western world saw endless monetary inflation. In the 1950s there were mild recessions and in 1963 as well. Each time, central banks – the Fed in particular – responded by debasing the currency in order to re-expand the economy.

In the US, 1969 was a watershed year. The Nifty Fifty began to implode and this led to a bear market for paper currency and fiat money in the 1970s. Richard Nixon's abrogation of what was left of the gold standard didn't help. It was, thus, a bull market for money metals, much as we have today. It lasted ten years, where today's bull market will likely run at least 15 if not more.

Why is today's bull market money-metals leg so much longer than in the 1970s? Because the systemic imbalances are so much worse. In the US, Paul Volcker managed to damp down the circulation of money in the early 1980s but this gave rise to another boom that only made the distortions worse.

The crash of 1987 slowed monetary expansion temporarily, and then the recession of the early 1990s led to Alan Greenspan following a policy of continued monetary easing that contributed to the tech boom of the late 1990s and the subsequent crash in the early 2000s.

Ben Bernanke basically continued Greenspan's easy money policies – along with central banks around the world – and after the stock crashes of 2008 easy money became even more ubiquitous. At every inflection point during the past 60 years, central banks and especially the US Fed have printed more money.

The central banks, especially the Fed, have never allowed big businesses to go bust. Especially, the central bankers have NEVER allowed commercial banks – their distribution arm for phony money – to fail.

Go to almost any major city in the West or even in the developing world and all you will see in the downtown is banks. Banks as far as the eye can see, and their signage on all the tallest and most important buildings. Banks. Banks you never heard of. Banks. Banks are the biggest bubble of all.

The Western world's financial system must be salvaged, we are regularly told. Not a single bank must be allowed to fail or all else will fall down about our collective heads. It is nothing but a dominant social theme. The system is gong to fail, most likely – and perhaps that's been the plan all along.

The people running the world's central banking economy aren't stupid. They put the current system in place and they know it's unstable. Thus, they knew the day of reckoning would eventually come, and perhaps now it's here.

Western economies have been distorted by money printing into dysfunction. Price discovery has been all-but-severed from the REAL economy. Western economies, many of them, are frozen. Unemployment is up and entrepreneurialism is down. Half of Europe is bankrupt, America is facing the Greater Recession, Britain is in a similar situation and now the BRICs struggle with price inflation and must tighten monetary policy considerably, thus slowing their dynamic economies.

Are we to believe that the powers-that-be did not foresee something like this? Of course they foresaw it. And now we are to believe – again – that top Eurocrats have found the solution. We don't believe it. Things will continue to get worse in our view until the West screams out for a fuller dose of globalism, perhaps an international SDR currency as well.

Perhaps we are too pessimistic about how the world works in the modern age. But this is the mechanism we see at play, where the elites have put in place a system of money and speculation that inevitably drags down economies – but one that they then attempt to "save" with treaties codicils, summits and endless money printing.

On the other hand, we do believe that the elites are facing stiff pushback to their doomsday mechanisms. The Internet Reformation proceeds apace and many see through the phony crises and phonier solutions that are being offered to make it seem as if the powers-that-be are responsive to the dire situation that they themselves have created.

If things go according to plan, there will be world government and a world currency. Yet the world's elite political, business and military leaders are to be identified with endless efforts to defuse the crisis that actually has been caused by the system they support and actuate. It is all very cynical; we don't believe these "solutions" anymore. They are not serious.

Editor's Note: EUROZONE IN CHAOS … ZeroHedge reports the following: Slovac SaS Party Won't Change Position on Voting Against EFSF Expansion … With the zEURQ.BB surging, it appears nothing can possibly rain on Europe's parade today. Nothing, perhaps, except for the poorest country in the Eurozone, Slovakia, which as we detailed over the weekend appears poised to destroy the Eurozone, the Euro, and force a fresh restart, one that actually works. "Slovakian coalition leaders meet on Monday in a last-ditch bid to reach agreement on widening the mandate of the euro zone's bailout fund, under increasing pressure from turmoil in euro zone banks and a shift in public opinion at home. The small liberal Freedom and Solidarity (SaS) party argues that, as the zone's second poorest member, Slovakia should not have to bail out other euro zone countries, but it says it is still open to talks. The coalition parties called a meeting for 4 p.m. (1400 GMT) ahead of a vote on the EFSF in parliament on Tuesday, a spokesman for the SaS said. The party has so far said it will vote against the EFSF expansion." Alas, that was 4 hours ago. We just got an update from Bloomberg: Slovak SAS Party [Still] Says Won’t Change Position on EFSF. It may be time to book those EURUSD profits and sit it out for the rest of the day as it can get quite messy.

After Thoughts

The current Western system is SUPPOSED to disintegrate. We're just not supposed to notice that the same leaders who claim they are trying to prevent the world's economy from failing are actually facilitating it.

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