- Heavily indebted Eurozone countries face insolvency.
Adding more can't save them. Nonetheless, policy makers repeat past mistakes,
compounding failure with more of it.
- Banker occupation corrupts Europe and America. They decide
what's best for them. Wrecked economies follow. So do mandated austerity
measures, including public sector layoffs, wage and benefit cuts, tax hikes
on workers, cuts for corporate crooks, and unrestrained economic freedom
- Selling out to bankers, Eurozone leaders pledged an "ambitious
and comprehensive" debt crisis solution. Knee-jerk market euphoria
greeted it. Second thoughts perhaps know what's so far revealed falls far
short of resolution. In fact, crisis conditions will worsen, whatever short-term
gains are achieved.
- On October 30, Bloomberg headlined, "Europe Blowing
Last Chance to End Crisis: View," saying:
- "The euphoria over Europe's latest rescue package
faded quickly. Now the question is whether European leaders will ever agree
on measures needed to end the sovereign debt crisis, and whether they will
get another chance."
- Fixing it depends on hoisting bankers on their own petards.
Otherwise, economies can't recover. None held hostage to bankers ever do.
Resolving that issue is job one. Whether or not it's possible isn't known.
So far, it's not even mentioned.
- When economic shysters run nations, economies and ordinary
people suffer. That condition plagues Europe and America. Instead of addressing
dire conditions responsibly, policy measures so far adopted exacerbated
- On November 1, London's Telegraph contributor economist
Liam Halligan headlined, "Why the latest eurozone bail-out is destined
to fail within weeks," saying:
- Last week's Eurozone deal is more smoke than fire. It
"made Western Europe's grotesque debt crisis even more acute, sowing
further infectious spores of confusion."
- Bond vigilantes signaled what equity investors should
have known. Debt liabilities can't be resolved by more of it. A bad situation
gets worse. In addition, other important issues remain unresolved. Details
so far are sketchy.
- Cooler heads know taking on water faster than removing
it means eventual sinking. Economies are like leaky vessels. When they're
big enough or interconnected like in Europe, trouble and contagion follow,
and nations aren't supplying life boats, at least not to their working
- What's needed "urgently is a clean, transparent
Greek default - allowing this (failed) economy to leave the eurozone, reestablish
a" devalued drachma, manage its own monetary and fiscal policies,
and start down the road of recovery.
- The same holds for other troubled Eurozone countries.
Entrapped in its straightjacket's killing them. Combining 17 dissimilar
economies under rigid euro rules failed. It's just a matter of time until
the entire alliance crumbles. Troubled Greece should act first. Others
can then follow.
- Describing all "non-solutions" so far as "extend
and pretend," Halligan ended saying he gives last week's deal "two
weeks" to fail.
- On October 31, Naked Capitalism headlined, "Europe's
Economy is Falling Apart," saying:
- Besides troubled Portugal, Italy, Ireland, Greece and
Spain (so-called PIIGS countries), Belgium's now in trouble. Cyrus looks
worse. Stagnation, deterioration, and economic decline threatens one country
- Predictions are that Germany, Europe's economic engine,
will stall next year. France also has problems. All of them look to China
and Japan for help. They have their own domestic issues to resolve, and
won't throw good money after bad without getting lots in return - assets
bought cheaper perhaps than European nations will sell.
- Economiccollapseblog.com called the deal a Greek default
in disguise. At best it buys a few months. However, it'll hasten collapse
of other troubled Eurozone countries.
- "Instead of being a solution, the European debt
deal has brought us several steps closer to a complete financial meltdown
- Others may agree. Economist Sony Kapoor said "(A)ny
deal impresses people (until) they start deconstructing it and parts start
- According to economist Ken Rogoff, "It feels at
its roots to me like more of the same, where they've figured how to buy
a couple of months."
- VT Capital's Neil MacKinnon said much the same thing.
So did others, dissing a rotten scheme, making a bad situation worse by
buying time, and not much of it.
- Eurocrats may claim resolution. In fact, they bought
worse trouble ahead for countries teetering on insolvency.
- On October 31, the Daily Bell headlined, "Latest
EU Bailout Deal Not Meant to Work? saying:
- Last week's deal "is already falling apart and,
as a result, the entire process is ever more publicly suspect. (The) dominant
theme (is) hope."
- The smartest guys in the room came off looking dumb.
"(D)isaster is being stage-managed to ensure that when Europe does
fall apart, no one shall be to blame. The Eurocrats will be able to spread
their hands, palms up, and say in unison, 'Don't blame us.' "
- The IMF will then step in as global central banker, masking
its loan shark of last resort role. Perhaps that's "the REAL plan"
or one of them "as it looks more and more as if the euro is going
the way of the Dodo."
- Globalists may lose out on their one world fits all scheme,
at least for now. Across Europe and America, anger rages against a broken,
deeply corrupted system, sacrificing people on the alter of saving bankers.
- Even Eurocrats lacked the power of their convictions,
voting for a bailout deal they didn't fund. They want China and other G20
countries to step in. Ahead perhaps the Fed and European Central Bank (ECB)
will provide quantitative easing (QE) solutions.
- So far, money created to save banks hasn't worked and
won't now. Using for it economic growth wasn't tried. Instead, bad solutions
compound others creating worse than ever conditions.
- China expressed great skepticism. So did Forbes commentators,
- Last week's "plan is obviously just another temporary
fix." Earlier "comprehensive (and) final" deals didn't work.
"(I)t may be only months before" another's needed.
- Europeans aren't pledging their own resources. They want
others to chip in. "They refused to commit their own cash or even
issue sovereign guarantees."
- "Europe doesn't need Chinese capital. They need
someone foolish enough to lend money to countries that probably won't repay."
- In the end, China may arrange its best deal and buy "rubbish
bonds" because Europe is its largest market. It already owns up to
$1 trillion in euros, and, with America and Europe, it's the third leg
of the world economy.
- "America is struggling with its Greater Recession.
Europe seems on the way to shattering, and thus China is now propping up
the world's economy."
- The burden may be too great to bear. "China's problems
are manifold and deep.They're just not being properly reported." Instead
Western media pretend all's well "until the entire system simply collapses."
- It may, in fact, be the grand scheme for "a new
currency and a new system waiting in the wings" to swoop in and take
- In other words, everything may change but stay the same
with money power consolidated in fewer private hands to make more of it
at our expense.
- A Final Comment
- Troubled Italy has to roll over $425 billion of its $2.7
trillion debt load next year. As bond yields rise in troubled economies,
who'll buy what may become toxic junk and at what price? The higher they
go, the worse off Italy, Spain, Greece and other troubled Eurozone countries
- Across Europe, more questions than answers followed the
latest flawed deal. Economist David Rosenberg called it "financial
wizardry at its penultimate."
- The Economist called "holes in the rescue plan...plain
to see. The scheme is confused and unconvincing. Confused, because its
financial engineering is too clever by half and vulnerable to unintended
- "Unconvincing, because too many details are missing
and the scheme is at its core not up to the job of safeguarding the euro."
It's the third Eurozone "package this year. It is unlikely to be its
- Rosenberg asked who'll supply new bank capital? Enough
is needed to reduce default risks in troubled countries. The entire scheme
depends on voluntary haircuts. Who'll agree to take losses to save others?
- Unintended consequences abound. Risks are overwhelming.
No one's sure what's proposed won't make a bad situation worse, including
- Germany's Angela Merkel admitted "We don't how how
this works yet." Others suggest they're flying blind. Who'll supply
trillions more when troubled Spain, Italy, and other Eurozone countries
need help? Not enough resources exist to solve a problem already too great
to handle, short of shutting down and/or nationalizing insolvent banks.
- Since 2008, Eurozone planners promised solutions, but
didn't deliver. This year alone they had three grand schemes. Early on
they said Greece would muddle through. Problems wouldn't spread. Banks
were sufficiently capitalized.
- They've been out of step, off base, and dead wrong each
time. Their latest scheme banks on staving off Greece's default at all
costs when it's clear prevention's not possible, just delay.
- Moreover, the longer inevitability's put off, the worse
final resolution becomes. Prime Minister Papandreou's latest scheme is
a referendum on the EU deal. Greeks revile him and his government.
- Public anger greeted his plan. A poll showed 15% support,
60% against. Why trust a man who sold them out to pay bankers? Now he says
"Let us allow the people to have the last word. Let them decide on
the country's fate."
- It's not known what choices will be given or how questions
will be framed. Clearly Greeks won't accept further sacrifices on already
unbearable ones. Taxes went up. Layoffs followed. Wages were slashed 30%.
Benefits eroded or were lost, and Greece is worse off now than when crisis
- Greek law requires government officials framing referenda
language. Parliament must approve it, then the president. People get what
they give. So far they've been all take. Expect little better now.
- Greeks and others across Europe deserve final say. Most
want out of euro's straightjacket. Banker occupation followed. Debt entrapment
benefits them at public expense. In troubled times, people bear enormous
burdens to pay them.
- Given a choice, who'd agree to debt slavery? What's ahead
is unknown, but sustained rage combined with nationwide general strikes
is the best option to get what corrupt politicians won't give.
- Stephen Lendman lives in Chicago and can be reached at
- Also visit his blog site at sjlendman.blogspot.com and
listen to cutting-edge discussions with distinguished guests on the Progressive
Radio News Hour on the Progressive Radio Network Thursdays at 10AM US Central
time and Saturdays and Sundays at noon. All programs are archived for easy