- One size fits all doesn't work. Uniting 17 dissimilar
countries under rigid euro rules failed.
- Membership means foregoing the right to devalue currencies
to make exports more competitive, maintain money sovereignty to monetize
debt freely, and legislate fiscal policy to stimulate growth.
- Eurozone's obituary remains to be written. It's just
a matter of time.
- Maastricht criteria limit inflation, long-term interest
rates, budget deficits, and government debt. Granting money power to a
supranational authority flopped. Globalists want it anyway. Wrecking economies
to enrich bankers matters most.
- The euro's 1999 introduction prevented the European Central
Bank (ECB) from financing government deficits. Eurozone members can't monetize
credit. Their public sector is "dependent on commercial banks and
bondholders," explains Michael Hudson.
- It's a "bonanza for them, rolling back three centuries
of attempts to create a mixed economy financially and industrially, by
privatizing the credit creation monopoly as well as capital investment
in public infrastructure monopolies now being pushed onto the sales block
for bidders - on credit, with the winner being the one who promises to
pay out the most interest to bankers to absorb the access fees (economic
rent) that can be extracted."
- As a result, nations were financialized and economies
privatized. "Financial oligarchy" replaced democracy. Wealth
more than ever is concentrated in private hands. Banker rules force selling
off public land and enterprises.
- Austerity demands public sector layoffs, wage and benefit
cuts, and unrestrained economic freedom, unfettered of rules, regulations,
onerous taxes, and trade barriers.
- Governments work best by getting out of the way to give
private business free reign. Financialized economies empower bankers most
of all. Money power in private hands and democracy can't coexist.
- Troubled Eurozone countries now suffer most. Throwing
good money after bad delays decision day at the price of far greater trouble
- Greece highlights what other debt entrapped countries
face, including bankruptcy, mass impoverishment, and growing anger threatening
- Pledging an "ambitious and comprehensive" debt
crisis solution, Eurozone leaders sold out to bankers.
- Europe's debt problem is too great to solve. Throwing
good money after bad compounds it. Eastern Europe is deeply troubled. Greece,
Portugal, Ireland, Italy and Spain owe up to $6 trillion.
- Allegedly less than one-fourth was pledged, but sketchy
details leave many unanswered questions. European debt is triple the size
of Germany's economy. Its banking giants are insolvent. So are France's.
Solutions tried so far failed. Wednesday's deal may be worst of all.
- On November 23, a congressional "Super Committee"
must agree on $1.2 trillion in spending cuts. Republicans won't raise taxes.
Democrats oppose greater social safety net cuts.
- Without resolution, automatic cuts will result. Ordinary
Americans will be hit hardest. Any steps taken won't solve out-of-control
deficits. Disruptions and dislocations are assured.
- For the first time ever, Western societies face default.
Eurozone unity is crumbling. Major banks face bankruptcy. Political solutions
assure greater trouble. Rage against the system grows.
- Bailouts accomplish nothing. Ordinary people suffer most.
The mother of all train wrecks approaches. On arrival, it'll be too big
to ignore or resolve without consequences no one wants to consider.
- Economist David Rosenberg called the Eurozone deal "tentative,"
involving 100 billion euro bailout for Greece. Allegedly it includes a
50% debt haircut, but suspicions are that bookkeeping entries may end up
shifting it from one account to another so bankers get off easier than
- With leverage, a pledged overall 250 - 275 euro package
implies 1.375 trillion euros for troubled Eurozone economies. If Italy
needs help, as expected, it's not nearly enough to cover its debt burden.
- Where funds come from isn't clear. Voluntary public and
private investor participation is needed. Who'll provide it isn't known,
especially with fears of throwing good money after bad.
- Moreover, clear details are lacking, and 17 Eurozone
countries must agree to go along. Bailing out Greece is one thing. What
if Portugal, Italy and Spain follow. Healthy countries like Germany haven't
enough money for it without wrecking their economies and raising public
anger higher than now.
- In addition, doubts are being raised. The Financial Times
(FT) questioned "optimistic assumptions" about Greek privatization
- Under the best scenario, substantial risks remain. FT
headlined, "Eurozone bailout: the blogosphere's verdict," saying:
- the Wall Street Journal Europe Source blog called the
deal "too little too late to keep Italy out of the crosshairs of financial
markets and open the next battle in the struggle to save the euro;"
- "FT Alphaville" worried about projecting Greece's
debt still at a troubling 120% of GDP in a decade under assumptions too
optimistic to meet;
- some analysts can't distinguish between smoke and mirrors
and reality in the announced package;
- stagnant growth worries Germany's Die Welt commentator
Gunther Lachmann, saying the deal omits ways to create jobs and achieve
- Germany's business daily Handelsblatt said the agreement
creates problems Germans wanted to avoid; and
- other critics see nothing good ahead for troubled Eurozone
countries; at best, only their day of reckoning was delayed.
- Regular Progressive Radio News Hour contributor Bob Chapman
expressed great skepticism about a workable policy response, saying:
- "All the lies of the past two weeks by various European
governments and bureaucrats, as well as Sarkozy and Merkel, were just delaying
tactics to attempt to find a solution to Europe's financial dilemma."
- In his judgment, they don't have one, headlines notwithstanding.
- On October 28, Naked Capitalism headlined, "Grand
European Rescue Already Starting to Come Unglued?" saying:
- Analysts worry about wrecking economies to save banks.
Other issues include an inadequate "rescue fund, heavy reliance on
smoke and gimmickry to get it to that size, insufficient relief" for
Greece, doubts about whether "banks will go along with the 'voluntary'
rescue, and way too many details left to be sorted out."
- In addition, "haircuts will apply to only a portion
of (Greek) bonds" if enforced. Smoke and mirrors manipulation suggests
not, or at least not as announced.
- Moreover, troubled banks in greater trouble from haircuts
will get bailout help to compensate.
- About one-third of Greece's 350 billion debt is held
by private international investors. The ECB, IMF and sovereign governments
hold another third. The remainder is held by Greek and Cypriot banks and
the Greek Social Fund.
- If half of Greece's debt is written off, the nation's
pension funds will lose 12 billion euros. As a result, they'll face bankruptcy.
At the same time, Greek and other banks need hundreds of billions of euros
to survive. Some need even more. Patchwork bailouts only delay their day
- Even the ECB is skeptical about a flawed deal. Bundesbank
president Jens Weidmann expressed alarm about leverage "without putting
any new money into the pot."
- China and other BRIC countries are being courted to help.
None will without compensating benefits. Eurozone countries must contribute
most. A workable package is key. What's known makes a bad situation worse.
China's got its own problems. Will it exacerbate them by bearing some of
- Most troubling is throwing good money after bad. Greater
trouble ahead is assured. Out-of-control debt isn't resolved by more of
- Neither is repeating failed policies and expecting a
- Reality differs greatly from hope. European officials
met 20 times this year alone because nothing tried so far worked.
- Bond investors reacted negatively to their latest deal.
They usually have the last word.
- Stephen Lendman lives in Chicago and can be reached at
- Also visit his blog site at sjlendman.blogspot.com and
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