Best of the Week
Most Popular
1. 2019 From A Fourth Turning Perspective - James_Quinn
2.Beware the Young Stocks Bear Market! - Zeal_LLC
3.Safe Havens are Surging. What this Means for Stocks 2019 - Troy_Bombardia
4.Most Popular Financial Markets Analysis of 2018 - Trump and BrExit Chaos Dominate - Nadeem_Walayat
5.January 2019 Financial Markets Analysis and Forecasts - Nadeem_Walayat
6.Silver Price Trend Analysis 2019 - Nadeem_Walayat
7.Why 90% of Traders Lose - Nadeem_Walayat
8.What to do With Your Money in a Stocks Bear Market - Stephen_McBride
9.Stock Market What to Expect in the First 3~5 Months of 2019 - Chris_Vermeulen
10.China, Global Economy has Tipped over: The Surging Dollar and the Rallying Yen - FXCOT
Last 7 days
After 8 Terrific Weeks for Stocks, What’s Next? - 16th Feb 19
My Favorite Real Estate Strategies: Rent to Live, Buy to Rent - 16th Feb 19
Schumer & Sanders Want One Thing: Your Money - 16th Feb 19
What Could Happen When the Stock Markets Correct Next - 16th Feb 19
Bitcoin Your Best Opportunity Outside of Stocks - 16th Feb 19
Olympus TG-5 Tough Camera Under SEA Water Test - 16th Feb 19
"Mi Amigo" Sheffield Bomber Crash Memorial Site Fly-past on 22nd February 2019 VR360 - 16th Feb 19
Plunging Inventories have Zinc Bulls Ready to Run - 15th Feb 19
Gold Stocks Mega Mergers Are Bad for Shareholders - 15th Feb 19
Retail Sales Crash! It’s 2008 All Over Again for Stock Market and Economy! - 15th Feb 19
Is Gold Market 2019 Like 2016? - 15th Feb 19
Virgin Media's Increasingly Unreliable Broadband Service - 15th Feb 19
2019 Starting to Shine But is it a Long Con for Stock Investors? - 15th Feb 19
Gold is on the Verge of a Bull-run and Here's Why - 15th Feb 19
Will Stock Market 2019 be like 1999? - 14th Feb 19
3 Charts That Scream “Don’t Buy Stocks” - 14th Feb 19
Capitalism Isn’t Bad, It’s Just Broken - 14th Feb 19
How To Find High-Yield Dividend Stocks That Are Safe - 14th Feb 19
Strategy Session - How This Stocks Bear Market Fits in With Markets of the Past - 14th Feb 19
Marijuana Stocks Ready for Another Massive Rally? - 14th Feb 19
Wage Day Advance And Why There is No Shame About It - 14th Feb 19
Will 2019 be the Year of the Big Breakout for Gold? - 13th Feb 19
Earth Overshoot Day Illustrates We are the Lemmings - 13th Feb 19
A Stock Market Rally With No Pullbacks. What’s Next for Stocks - 13th Feb 19
Where Is Gold’s Rally in Response to USD Weakness? - 13th Feb 19
US Tech Stock Sector Setting Up for A Momentum Breakout Move - 12th Feb 19
Key Support Levels for Gold Miners & Gold Juniors - 12th Feb 19
Socialist “Green New Deal” Points the Way to Hyperinflation - 12th Feb 19
Trump’s Quest to Undermine Multilateral Development Banks - 12th Feb 19
Sheffield B17 US Bomber Crash 75th Anniversary Fly-past on 22nd February 2019 Full Details - 12th Feb 19
The 2 Rules For Successful Trading - 12th Feb 19 -
Financial Sector Calls Gold ‘Shiny Poo.’ Are They Worried? - 11th Feb 19
Stocks Bouncing, but Will They Resume the Uptrend? - 11th Feb 19
EURO Crisis Set to Intensify: US Dollar Breakout Higher
Stock Market Correction Starting? - 10th Feb 19
Gold Stocks Gather Steam - 10th Feb 19
Are Gold Bulls Naively Optimistic? - 9th Feb 19
Gold, Silver Precious Metals Update - 9th Feb 19
The Wealthy Should Prepare to Be Soaked - 8th Feb 19
US Business Confidence Is Starting to Crack - 8th Feb 19
Top Myths and Facts about ULIP Plans - 8th Feb 19
A Major Stocks Bear Market in 2020? - 8th Feb 19
Gold Market Extremes Test Your Mettle - 8th Feb 19
The Venezuela Myth Keeping Us From Transforming Our Economy - 8th Feb 19

Market Oracle FREE Newsletter

The Real Secret for Successful Trading

Euro-zone Bailout, What Could Possibly Go Wrong?

Politics / Eurozone Debt Crisis Oct 09, 2012 - 06:33 AM GMT

By: Raul_I_Meijer

Politics Best Financial Markets Analysis Article

Fitch has given the ESM, which reportedly became "operational" today, even though the Eurozone members will take years to full its coffers from today's €200 billion to the desired €500-600 billion, an AAA rating. The European (hey, what happened to Emergency?) Stability Mechanism needs this rating in order to sell bonds. Since eurobonds are not deemed acceptable by too many parties involved, the new pride of Europe will start selling ... right, eurobonds, just under another name.


With which, for starters, it can fund the 7000+ policemen needed to protect Angela Merkel as she oversees the troika induced damages in Athens, riding in on some modern version of the milk-white steed that scorched earth conquistadores rode throughout history to assess the loot. Bad move, Angela, if only because the battle is not yet won.

Did you notice that the Troika report is still not out yet? Wasn't that supposed to be presented ages ago? Shouldn't those guys have been moved to Madrid over the summer? True, Spain still insists it neither wants nor needs a bailout. But that's just bull, which makes the efforts to conceal it bull fighting. Spain will need much more money than anyone has admitted to date, as will Greece, new kids on the chopping block Cyprus and Slovenia, and old hands Portugal and Ireland. By the time the magnitude of the required bailouts can no longer be hidden, Italy will join the fray, followed by France.

Europe's on a road to nowhere but down, for no better reason than the safeguarding of political careers and a bankrupt banking system. The best we can hope for is that in Athens tomorrow, October 9, the headlines will not be what Merkel and the Greek political class have to say, but the mass demonstrations that will take place despite the crackdown that has been announced.

Sure, Merkel is smart enough to have something nice to say tomorrow, to not come empty handed. But Europe is stuck in a downhill Groundhog Day experience where every new day comes with new - higher - demands, new rounds of worse numbers and new measures that take away more of what little the people at the bottom have left.

Trying to preserve the European Union at any price is the surefire recipe to break it apart, and not in peaceful ways. The people presently in power in Brussels, Paris, Athens, Madrid and Berlin and all the other capitals have eyes for one way forward only, no Plan B. And it is high time that in one or more of these capitals that situation changes.

If the Athens demonstrations become massive and/or violent enough, the position of the Samaras government will eventually become untenable. The same of course is true in Madrid, where tens of thousands of people hit the streets on an almost daily basis. It's just that tens of thousands doesn't do the trick. It takes millions, and on a continuous basis.

Protests need to effectively paralyze a society to remove a government. Of course we could argue this already happened in several European countries, but so far control had been strong enough to make sure the new guy was just like the old guy. And even if Merkel would lose next year's elections, another Europhile will take her place. Holland last month didn't even bother to elect a new guy.

The change will have to come from the poor part of town; and not through elections, but through more direct democracy. Obviously, if you add up what's already been done to Spain and Greece, and you top it off with the fact that both will need a lot more of the same, while other problem cases will also come knocking, it's hard to see how not at least one European government will be toppled.

The current political paradigm in Europe is way past its best before date, and it is and will be directly responsible for what follows. Which cannot possibly be pretty, because the paradigm is solidly based on taking away everything that's not bolted down, from the people themselves, and from the countries they live in.

How that could ever count as a strategy to keep a union of countries together is a great mystery. What Could Possibly Go Wrong? Or rather, it's a nonsensical excuse, albeit apparently credible, to keep the looting going until there's nothing left to drag off home. Here's hoping at least one nation decides to stop the wrecking ball before it's left with nothing but misery.

Here's to Zorba. And Don Quixote. Poverty is inevitable in the western world, even as people still refuse to even contemplate what a $1 quadrillion derivatives market can do to their economies and their lifestyles once it starts getting shaky. New found poverty has started in Greece and Spain, and it will spread through the rest of Europe, North America, Japan, Australia etc. Poverty need not rob people of their pride, their morals, or their kindness. It all too often does, though.

By Raul Ilargi Meijer
Website: http://theautomaticearth.com (provides unique analysis of economics, finance, politics and social dynamics in the context of Complexity Theory)

© 2012 Copyright Raul I Meijer - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules