Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
Gold and Silver The Die Is Cast - 27th Feb 20
US Economy Permanently Addicted to Zero Interest Rates - 27th Feb 20
Has the Stock Market Waterfall Event Started Or A Buying Opportunity? - 27th Feb 20
Advantages of Enrolling in a Retirement Plan - 27th Feb 20 - LS
South Korea Coronavirus Outbreak Data Analysis Warning Rate of Infection is Exponential! - 26th Feb 20
Gold Price Long-term Trend Analysis Forecast 2020 - 26th Feb 20
Fake Markets Are on Collision Course with Reality - 26th Feb 20
Microsoft is Crushing the S&P 500, Secret Trait Of Stocks That Soar 1,000%+ - 26th Feb 20
Europe's Best Ski Resorts For The Ultimate Adventure - 26th Feb 20
Samsung Galaxy S20+ vs Galaxy S10+ Which One to Buy? - 26th Feb 20
Gold Is Taking on $1,700 amid Rising Coronavirus Fears - 26th Feb 20
Is This What Falling Through the Floor Looks Like in Stocks? - 26th Feb 20
Gold Minsky Moment Coming - 26th Feb 20
Why Every Student Should Study Economics - 26th Feb 20
Stock Market Correction Over? - 26th Feb 20
US Bond Market Yield Curve Patterns – What To Expect In 2020 - 25th Feb 20
Has Stock Market Waterfall Event Started Or A Buying Opportunity? - 25th Feb 20
Coronavirus IN Sheffield! Royal Hallamshire Hospital treating 2 infected Patients, UK - 25th Feb 20
Dow Short-term Trend Analysis - Coronavirus Trigger a Stocks Bear Market? - 24th Feb 20
Sustained Silver Rally Coming? - 24th Feb 20
Should Investors Worry about Repo Market and Buy Gold? - 24th Feb 20
Are FANG Technology Stocks Setting Up For A Market Crash? - 24th Feb 20
Gold Above $1,600 Amid FOMC Minutes and Coronavirus Impact - 24th Feb 20
CoronaVirus Pandemic Day 76 Trend Forecast Update - Infected 540k, Minus China 1715, Deaths 4920 - 23rd Feb 20 -
Ways to Find Startup Capital - 23rd Feb 20
Stock Market Deviation from Overall Outlook for 2020 - 22nd Feb 20
The Shanghai Composite and Coronavirus: A Revealing Perspective - 22nd Feb 20
Baltic Dry, Copper, Oil, Tech and China Continue Call for Stock Market Crash Soon - 22nd Feb 20
Gold Warning – This is Not a Buying Opportunity - 22nd Feb 20
Is The Technology Sector FANG Stocks Setting Up For A Market Crash? - 22nd Feb 20
Coronavirus China Infection Statistics Analysis, Probability Forecasts 1/2 Million Infected - 21st Feb 20
Is Crude Oil Firmly on the Upswing Now? - 20th Feb 20
What Can Stop the Stocks Bull – Or At Least, Make It Pause? - 20th Feb 20
Trump and Economic News That Drive Gold, Not Just Coronavirus - 20th Feb 20
Coronavirus COVID19 UK Infection Prevention, Boosting Immune Systems, Birmingham, Sheffield - 20th Feb 20
Silver’s Valuable Insights Into the Upcoming PMs Rally - 20th Feb 20
Coronavirus Coming Storm Act Now to Protect Yourselves and Family to Survive COVID-19 Pandemic - 19th Feb 20
Future Silver Prices Will Shock People, and They’ll Kick Themselves for Not Buying Under $20… - 19th Feb 20
What Alexis Kennedy Learned from Launching Cultist Simulator - 19th Feb 20
Stock Market Potential Short-term top - 18th Feb 20
Coronavirus Fourth Turning - No One Gets Out Of Here Alive! - 18th Feb 20
The Stocks Hit Worst From the Coronavirus - 18th Feb 20
Tips on Pest Control: How to Prevent Pests and Rodents - 18th Feb 20
Buying a Custom Built Gaming PC From Overclockers.co.uk - 1. Delivery and Unboxing - 17th Feb 20
BAIDU (BIDU) Illustrates Why You Should NOT Invest in Chinese Stocks - 17th Feb 20
Financial Markets News Report: February 17, 2020 - February 21, 2020 - 17th Feb 20
NVIDIA (NVDA) GPU King For AI Mega-trend Tech Stocks Investing 2020 - 17th Feb 20
Stock Market Bubble - No One Gets Out Of Here Alive! - 17th Feb 20
British Pound GBP Trend Forecast 2020 - 16th Feb 20
SAMSUNG AI Mega-trend Tech Stocks Investing 2020 - 16th Feb 20
Ignore the Polls, the Markets Have Already Told You Who Wins in 2020 - 16th Feb 20
UK Coronavirus COVID-19 Pandemic WARNING! Sheffield, Manchester, Birmingham Outbreaks Probable - 16th Feb 20
iShares Nasdaq Biotechnology ETF IBB AI Mega-trend Tech Stocks Investing 2020 - 15th Feb 20
Gold Stocks Still Stalled - 15th Feb 20
Is The Technology Stocks Sector Setting Up For A Crash? - 15th Feb 20
UK Calm Before Corona Virus Storm - Infections Forecast into End March 2020 - 15th Feb 20

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Cyprus Haircut: Germany's Social Darwinist Economic Miracle

Politics / Eurozone Debt Crisis Mar 18, 2013 - 04:03 PM GMT

By: Andrew_McKillop

Politics

ANGELA MERKEL WAS FIRM
The now celebrated "Cyprus haircut" of bank depositors' savings and private wealth, from the account of the smallest "man in the street" to those of the Russian oligarchs who have transformed Cyrus's banking system into a vast money-laundering machine, was described by Germany's Angela Merkel as follows:


"I think it is right that this step has been taken, and I think it's a good step that makes agreeing to help Cyprus definitely easier for us". She added: "Anyone having their money in Cypriot banks must contribute to the Cypriot bailout". (Newswires).

At its worst, made easier by there being no "nice side of the affair", this operation marks a major victory for Germany in its never-disclosed strategy of getting a revenge on history, for its wartime defeat. In Europe today, Germany is the only real winner, with the lowest unemployment and a rock-solid huge trade surplus. Everywhere else, there is a toxic mix of recession, debt, government deficit, mass unemployment and misery - called "austerity politics".

GERMAN ECONOMIC MIRACLES, THEN AND NOW
Commentators are already warning of the causal linkage between deliberately forcing citizens into unemployment and misery (AKA "austerity politics"), and the rise of extreme political movements. Germany in the 1930s is the classic case. As unemployment soared above 25% of the workforce, so did the votes for the Nazi Party. Immediately after it obtained total power in 1933, the Party operated its famous, but short-lived "economic miracle". In the 5 years 1933-1938 unemployment fell by 5.4 million or 96%. Through 1933-1937, Germany ran a trade surplus every year.

In Europe, the so-called Technocrats operating their now four-year-long process of huge bailouts for private banks, and ever-rising unemployment are acting in cynical disregard to the political result of their action. Unlike the Nazi "miracle", the likelihood of their action reducing joblessness is zero.

Underappreciated by many, the Nazi Party favoured "liberal" policies which avoided heavily taxing wealthy private citizens and major enterprises. It preferred crowd-pleasers like a series of laws making it impossible for Jews to work in Nazi Germany, creating jobs when the Jews fled, and laws excluding women from most types of work. Hitler had made it clear that women true to the Aryan race should stay at home and look after children. This again reduced the male unemployment rate.

Massively raising defence spending, from 3% of GDP in 1933 to 32% in 1939 employing 22% of all working Germans in defence-related industries, and outlawing all trade unions, also helped.

More importnt and dangerously similar to the de facto but never admitted underlying policy and strategy of today's German-dominated elite "technocrats" in Europe, through institutions ranging from the bank and finance sector to the ECB, the European Commission and its agencies, one of the first Nazi Party actions in it "miracle working" programme was to bring the bank sector into "close proximity" to the Nazi leadership - but in no way to nationalize it. In fact the opposite. In 1934 Hjalmar Schacht, president of the Reichsbank and the Party's Minister of Economics, stated that around 70% of the capital of Germany's corporate banks had been controlled by the Weimar Republic. Citing "unwarranted interference by the State",  and in quick succession the Commerzbank, Deutsche Bank and Dresdner Bank were reprivatized garnering large inflows of revenue for Germany's Treasury. The private owners of the newly private banks were of course "onboard" for the rest of the Nazi ride.

Similar privatization action was applied in most other sectors of the economy, but the underlying strategy was to lever ever-increasing State control. Economic historians often conclude that the Nazi Party, exactly like Europe's "technocratic" elites of today was not only looking for business community support, but sought a concentration of capital in a few trusted large corporate hands, operating a "stealth strategy" for more control over the economy. In the same way as Europe's elites of today, privatization was a tool to “facilitate the accumulation" of economic power in the hands of the Party's foremost collaborators.

LESSONS LEARNT
Learning an important lesson from history, todays German dominated "Eurocrat" programme for gaining total control of the economy - or whats left of the economy - avoids offending powerful external players. In Cyprus, Russian oligarchs will probably treat a one-time 10% "wealth tax" as a reasonable tax to pay on their money-laundering operations, as long as it is not repeated. Conversely, in 1941, the Nazi Party's "privatization" of American-owned German bank assets, with the only permitted corporate buyers being German, was a certain but often ignored factor driving the US into war with Germany.

Like our "Eurocrat" elite of today, the Nazi Party of the 1930s was Social Darwinist. Its leader, Adolf Hitler in 'Mein Kampf' had explained that the "competition-and-exclusion principle", his interpretation of Darwin's natural selection, not only favoured the Aryan race, but set the framework for economic triumph. This required the concentration of capital in the hands of a chosen elite, who would use this power not only to their own benefit, but also for the benefit of "ordinary Germans".

In 1931, in a speech that Angela Merkel could very easily recycle today, Hitler said: "I want everyone to keep what he has earned subject to the principle that the good of the community takes priority over that of the individual....every owner should feel himself to be an agent of the State…". In Cyprus today, even the Russian oligarchs will be forced to pay a 10% "money-laundering tax" on their scams, but this action will help draw the power elites ever closer together.

To be sure, in Cyprus today, the real scandal is how Europe let the Cypriot banks get into such deep trouble that there were no easy ways out and the "wealth tax" was seen as the least bad option. Average government friendly media adds that allowing countries like Greece and Cyprus into Europe’s financial "inner sanctum" creates moral hazard, scarcely concealed corruption, and dangerous financial instability. They add that when the house of cards collapses, alarmed investors look to governments to save them, but ignore the real process in play - the concentration of financial power in the invitation-only circle of approved hands.

With the now celebrated "Cyprus haircut" crowding out all analysis of Europe's crony bankster clan always moving forward in its linkage with the Eurocrats and selected external banksters - in the Cyprus case, Russian - Germany has stamped its own interpretation of "Social Darwinism" on the ever declining economy. Europe's new Third Reich has made it clear: it will always retain the right to take what it wants, where it wants, always operating with and for the elite.

By Andrew McKillop

Contact: xtran9@gmail.com

Former chief policy analyst, Division A Policy, DG XVII Energy, European Commission. Andrew McKillop Biographic Highlights

Co-author 'The Doomsday Machine', Palgrave Macmillan USA, 2012

Andrew McKillop has more than 30 years experience in the energy, economic and finance domains. Trained at London UK’s University College, he has had specially long experience of energy policy, project administration and the development and financing of alternate energy. This included his role of in-house Expert on Policy and Programming at the DG XVII-Energy of the European Commission, Director of Information of the OAPEC technology transfer subsidiary, AREC and researcher for UN agencies including the ILO.

© 2013 Copyright Andrew McKillop - 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 advisor.

Andrew McKillop Archive

© 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