Wheels Falling Off Euro?
By Staff News & Analysis - May 15, 2010

Concerns about the sovereign debt difficulties of Greece has raised the market's awareness. If this is a global problem, who is going to be in charge of the bail out? As far as debtors go, Greece is a piker, but look at the problems that bail out is causing. Give them €100B and they riot. Raise the ante to €150B, and tell the Greek bureaucrats they must take a pay cut and they schedule a new riot. As the government borrowing cost soared for Greece and started to work higher in Spain and Portugal, it was obvious more had to be done to defend the euro. The division between the frugal northern Europeans and their spend thrift Mediterranean partners was great. According to Spanish reports Nicholas Sarkozy (left) told Germany's Merkel that she had to get aboard the bailout plan or Sarkozy was going to cash in his euros for French francs and go home. This threat, along with pessimistic comments by euro doubters such as Paul Volcker, had made many question weather the euro will survive. – ForexRazor

Dominant Social Theme: All very worrying.

Free-Market Analysis: What a day Friday was! The Daily Bell began its coverage of both the falling euro (and the failing EU) by pointing out that (as predicted), the power elite and the EU political elite, particularly, were using the EU "crisis" as a way to call for increased centralization (EU Leaders Seek 'US of Europe'). But then came the news that Nicolas Sarkozy of France had threatened to withdraw France from the EU if Angela Merkel of Germany didn't go along with the EU's just-announced trillion-dollar bailout program. It was also reported that Sarkozy had been supported in his position by Spain and Italy.

As intriguing as this is, we don't want to over-analyze the interplay between Sarkozy and Merkel (much beyond what we have already written in yesterday's article). Over-analyzed it can become a distraction and take away from the larger picture. Perhaps French banks that have a great deal to lose apparently were pushing Sarkozy, perhaps he and Merkel were having a personal falling out; perhaps it was simply a bluff. Finally, Sarkozy and his allies may have pushed the bailout in order to set a precedent for further EU bailouts which France itself and other profligate EU countries may soon need.

We find it difficult to believe that Sarkozy (by his lonesome) would voluntarily lead the charge to remove France from the EU, nor could he easily do so. It would likely take continued pressure from the French street, unions, etc. However, Sarkozy's threats may well have damaged the EU by illustrating that the EU is not inevitable and its continuance is not a foregone conclusion. Certainly even the power elite is not a monolithic organization. Despite their goals of global centralization there are parochial differences between elite elements that can come to the fore, especially in times of duress. This is obviously such a time.

Enough then. The power elite is having an increasingly bad time of it. Indeed, this is the bigger issue, the one we try keep our eye on. The toppling of the euro were it to occur (which would be much the same as the toppling of the EU itself in our opinion) would be an extraordinary event, one that would have fundamental ramifications throughout the world that might last for decades. It might even spell a temporary end to the power elite's endless attempts at global centralization of so many aspects of every-day life. That's why we've written so much about it recently.

Yes, the failure of the EU and euro, coming behind the difficulties the elite is having with its global warming promotion, would be devastating. The disruptions have already been most damaging to the elite's promotion of central banking as necessary to the economy and even to the idea that a technocratic elite is most necessary to the organization and proper running of the world. Our position continues to be – when the it comes to the EU or virtually any other elite dominant social theme – the elite itself is having a devilish time of it. Sustaining the kinds of promotions that were so easy to suggest and inculcate in the 20th century is becoming increasingly difficult.

We come back to this point once again because it is very important from an investment point of view and also simply from the point of view of someone who is an interested an active citizen in the West. Whether the (mostly Anglo-American) power elite can continue to organize the Western world as it did in the 20th century is the question that the Bell devotes itself to analyzing. It has taken our audience from virtually nothing a year ago to over four million hits in April. There is obviously a great thirst for knowledge out there in the blogosphere and we are not surprised. People seek the truth, or at least variants thereof.

What were the developments we wanted to mention? First there is the continued unrest in Greece, which has now seen several bombings as well as continued national strikes to protest the austerity measures that the socialist government has undertaken at the demand of the EU. The unrest in Greece is spreading. Regarding Spain, the UK Independent reported the following: "Following yesterday's [increased austerity announcements by the government] union leaders issued veiled threats of taking to the streets. 'The behaviour of the trade unions has been and is impeccable during these times of crisis and will continue to be so, but [yesterday's] announcement is a turning point,' Ignacio Fernandez Toxo, president of one of Spain's largest trade unions, told reporters."

As expected, top financial leaders continued what must be a fairly transparent verbal campaign to use the EU crisis as a springboard for political and economic unity. "Tall" Paul Volcker, the onetime hero of the American Fed issued a call for closer ties while sounding the alarm about the euro itself. As the Financial Post reported yesterday, "In a speech given at the home of London's Mayor, Paul Volcker warned of 'the great problem of the possible disintegration of the euro.' According to the 82-year-old former head of the U.S. Federal Reserve, who is now in charge of President Barack Obama's Economic Recovery Advisory Board, 'The essential element of discipline in economic policy and in fiscal policy that was hoped for has not been rewarded in some countries.'"

We wonder how effective all this EU centralization talk will be. As we have pointed out before, the crises affecting the West are probably larger and more difficult to control than the elite expected based on previous experiences. Its strategies and activities have been so magnified by the Internet, and generally by their own rash actions, that what is going on now both in Europe and throughout the Western world is verging on spinning-out-control. The American Free Press (definitely an alternative news site and a somewhat controversial one) carried an article by longtime Bilderberger and Trilateral Commission observer James P. Tucker, Jr. about a recent TC meeting (apparently May 7-10 in Dublin Ireland) Here's an excerpt:

TC boys are upset they were unable to exploit the economic crisis they helped generate by creating a world "treasury department" under the UN. They blame "rising nationalism" and ask "how those people knew about this," according to witnesses inside the TC hotel. Still, the TC is charging ahead.

In a commentary based on interviews with (or dictated by) TC leaders, economist Richard Douthwaite wrote May 7 in The Irish Times: Economic growth cannot increase incomes reliably and quickly enough to deliver the desired result. The only possible remedy is inflation. This could be engineered by having the European Central inflation. This could be engineered by having the European Central Bank create money out of nothing to give all the euro zone countries to spend. … Another irrational obstacle is the feeling that money cannot be created out of nothing. …

In this column, Douthwaite calls for Europe's central bank to turn on the printing presses in the same way the privately owned and controlled Federal Reserve Bank has been flooding its cronies in the United States with dollars. According to banking regulations in Europe, the European Central Bank is limited in how many euros it can release into the money supply through a 2-percent cap on inflation. Douthwaite, however, would like to see this hobble taken off the bankers.

We try always not to get ahead of ourselves when reporting on the elite's promotions and their successes and failures, but taken in aggregate what is now occurring is fairly astonishing. Monetary policy is a mainstay of many top alternative news sites and increasingly has penetrated the mainstream press. Such a trend would have been unheard of in the 20th century. The truth-telling of the Internet (as opposed to the Gutenberg press) seems to be destabilizing elite promotions in certain areas far sooner than even we would have expected.

In fact, the concepts that the Bell regularly enunciates are not theoretical anymore but are occurring in real-time every day, and we can see them, as can you. Nonetheless, we have take care to caution that society always includes a ruling elite and that communication revolutions like the Internet can change society in fundamental ways but that the elite will then, as it must, take a step back, regroup and begin anew. The challenge for those affected by this monumental struggle is to anticipate what is real, what is hype and where things are headed generally as it involves the Internet, the elite's dominant social themes and their potential effectiveness or lack thereof.

After Thoughts

As far as the EU and the euro goes, obviously the jury is still out, but we do believe that the backlash to EU centralization efforts will be significant – as will be the backlash to continued efforts by the EU to enforce "austerity" on the EU's fractious tribes. One thing is clear: Today's EU and euro are not yesterday's. Much has changed regarding the perception of both these entities. If the wheels are not falling off, they may be seen as wobbling.

Share via
Copy link
Powered by Social Snap