Temptations of a Peseta default in Spain .. Defying charges of heresy, Spanish economist Lorenzo Bernaldo de Quiros has penned a piece in El Mundo that more or less calls for Spanish withdrawal from the euro – unless Mario Draghi conjurs up real magic at the ECB. – UK Telegraph
Dominant Social Theme: Everything is OK. Wait, everything is NOT OK.
Free-Market Analysis: We have the movie "Two Faces of Eve" and now a journalist gives us the "Two Faces of Evans."
Why bother to comment? Well, the polarity seems to us to illustrate more powerfully than anything we can do ourselves how horrible it is to try to honestly cover the financial news these days.
For Evans-Pritchard it is an especially difficult labor as honesty keeps breaking through. It was just yesterday, in fact, that Ambrose Evans-Pritchard again revealed himself as a proper Keynesian, calling for Mario Draghi to print as much euro paper as possible as quickly as possible.
Does that not sound like an endorsement of money printing, dear reader? It sure did to us. And yet today we find an entirely different face of Evans-Pritchard's reporting on the anti-EU thesis of Lorenzo Bernaldo de Quiros. Toward the end of this article, Evans-Pritchard writes:
Last week, the president of Asturias [Javier Fernández Fernández] said it would be better for Spain to leave the euro than hold out a "begging bowl." Who can argue with him? Unemployment is now 24.6pc, or roughly 29pc under the measuring method used in the early 1990s. This is the worst in Spain's recorded history.
There is no light whatsoever at the end of the tunnel. Pure blackness. EMU really is that destructive. Growth will contract by a least 3pc next year, according to Citigroup. The slump will grind on into the middle of the decade. It strikes me as very naive to imagine that the Spanish people will put up with this Maquina Infernal for year after year. Why should they?
Are we imagining something? There are apparently at the very least two reporters at work within Evans-Pritchard. As we regularly analyze dominant social themes, he provides us with a properly conflicted mainstream media scribe.
It's very hard to write about, well … anything from a mainstream point of view in this era of the Internet. Boosting the euro and EU on a regular basis is simply not something any normal person can do.
Evans-Pritchard shows us clearly that it is fairly impossible. He's being driven to distraction by conflicting impulses. First, he cannot fully acknowledge the dysfunction of the modern money system. Second, he cannot ignore its effects.
Thus the schizophrenia. One day (yesterday), he is approaching the oncoming breakdown of the EU and euro from a properly Keynesian point of view and the next he is metaphorically throwing up his hands and declaring that those trapped within the Eurozone ought to rebel. Here's some more – Evans-Pritchard's rough translation of the article in question:
Spain is heading for insolvency as big chunks of debt come due later this year. Events are moving fast. The relevant issue is no longer whether this will happen, but whether it is better for Spain to restructure its debt "inside or outside" EMU.
"Inside the euro and without financial resources, a debt reduction is pointless. The Spanish economy would have to go into deepening internal deflation, with cuts in prices and salaries, to restore competitiveness. This is impossible, or at least improbable."
The process would take too long. Capital flight would continue. It would lead to another debt restructuring in short order (as in Greece).
"The snake would bite its own tail in a diabolic spiral," he said.
Mr Bernaldo de Quiros — who heads Freemarket Corporate Intelligence — seems to assume that there will not fact be a eurozone rescue (or that the Rajoy government will refuse to accept Troika terms).
He contemptuously rebuts the "apocalyptic casuistry" of those who claim that the banking system would necessarily collapse, or that real interest rates would surge, or that Spain would succumb to hyperinflation.
He notes the success of Britain, and the Scandinavian states in leaving the Gold Standard in 1931 – and those Latin American states that did so later (perhaps a better parallel, since Spain today has net external debt near 100pc of GDP). Their recoveries were in stark contrast to those like France, Poland, Belgium, Italy, and the Netherlands that clung to the dysfunctional fixed-exchange system until the bitter end, trapped in perma-slump.
Because Evans-Pritchard is in many ways an erudite financial editorialist, he is obviously being driven over the edge by the brief he must fulfill. If he wishes to keep his job, he simply cannot reveal the depravity of the current monetary system or his complicity in it.
Other journos with less facility have fewer compunctions when it comes to writing drivel, but Evans-Pritchard provides us with a profile of a man evidently in full meltdown, so hounded by moral or intellectual scruples that he cannot remain consistent day-to-day.
Credibility, constancy and profitability are all draining away now as even the best mainstream press and "press-titutes" find it impossible to create a long-term, believable narrative.
Here at the Daily Bell we've been fairly constant in our predictions that the EU was likely built to fail – and that the only question is whether it will fail outright or whether hundreds of millions are to be made even more miserable by the power elite's pursuit of world government.
What we call the Internet Reformation is stressing every part of the elites' phony globalist narrative. It is not surprising, therefore, to find signs of schizophrenia throughout the one-world enterprise. Evans-Pritchard (and others like him) is also a victim.
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