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Europe: Where Politics Is All That Matters
The trouble
with financial forecasting for Europe is that the biggest decisions are always
made in the political arena, NOT economically. Case in point, Greece, which is
obviously bankrupt, voted for another round of bailouts despite the fact the
first round was a disaster (won’t be paid back) and the Greece economy is in ruins.
From a
purely economic standpoint, it’d made a heck of a lot more sense to kick Greece
out of the Eurozone (why should Germans be shouldered with Greek liabilities?).
No businessman with a clue would want to support another Greek bailout.
However, politics, not business rules in Europe politicians are both clueless
and insanely corrupt.
This is why
the Euro continues to hold up and even rally despite the fact the Eurozone is
beyond doomed. Does anyone really
believe the Euro is going to even exist in its current form a year from now?
We’ve had two Greek bailouts and now Portugal is lining up for a bailout too.
And what’s going to stop Spain and Italy from doing the same?
Finally… how
on earth is a strong Euro good for the European economy? Why defend it? Why not
let it collapse to benefit European exports? Again, politics.
This is why
I’m ultrabearish on the Euro and the Eurozone. Sure, the US has horrible
deficits, debt loads, and politicians. But the idiocy that occurs on this side
of the pond is NOTHING compared to
what happens in Europe. In the US, people at least want to be a part of the US (you don’t see New Yorkers wanting out
of the union because California is bankrupt).
Europe on
the other hand is a bunch of countries, who don’t even speak the same
languages, have a long history of wars amongst each other, and who really don’t
even like each other, joined together under a single union which most European
voters now don’t even want to be a part of.
And. They.
Voted. To. Give. Greece. More. Money.
It’s
staggering. But it presents us with a phenomenal opportunity to make money when
the Eurozone crumbles. Judging from the fact that even the ratings agencies are
admitting Greek defaulted despite receiving another bailout, it won’t be long.
The line to
watch is 140 on the Euro. Whenever we take this line out, the Eurozone will
begin to crumble with
When this
happens, the US Dollar will rally hard for the mere reason that the Euro
accounts for over 50% of the US Dollar index. And this in turn will crush
stocks.
Which is why
if you’ve not taken steps to prepare for the coming market collapse, you can
download my FREE report devoted to showing in painstaking detail how to protect
yourself and your portfolio from the coming ROUND TWO of the Financial Crisis
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I call it The
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Again, this
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and click on FREE REPORTS.
Good
Investing!
Graham
Summers
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It's all about banks and derivatives and holding an illusion of stable fiat money system.
Not Greece, but german and french banks are beeing bailed out.
Agreed. But how to get those gold reserves back, when the shit hits the fan?
David Copperfield can easly handle this.
The problem is the EU burocrats & most nation's politicians, that wanted to "graft" a unity onto this continent, by "distributing" wealth that was coughed up by the more liquid countries in the north, and then pass it on (bettering their own personal position of power in the Brussels pecking order) in the form of bribes, and uncontrolled subsedies. This reality created a backstop which prompted banks to go along with the whole "movement".
The original intent, or so it was believed to be here, was to erect mechanisms so that trade, and economic prosperity because of a loosening of the financial structures of the souverign countries, and then have the souverign states grow towards each other.
The politicians wrecked it. Yes, that's an accurate analasys. And they'll try to "overrule" the market forces that have been awoken by themselves, with more political shennannigans. They'll try to "shortcut" all those mistakes they've made, while in the run-up to this disaster, their job was simple: Keep the ship of the EU tidy, and regulate the flow of commerce so it can move unhindered. They've become the errand boys of the big corporations, and banks, and forgot that it was the people that gave them the mandate in the first place. They were supposed to extend those democratic structures to a larger scale. A huge task, but they didn't even try. And now, as the origami unfolds, and instead of lasting structures, there's unstabillity and systemic risk, they want to put the "privatisation" and "global market forces" to sleep.
The people of europe are not stupid. They may have not paid enough attention to sneaky deals, like the "Treaty of Lisbon" which is an affront of the centuries old democratic systems, but they will, when push comes to shove, not go along with the further "europafication" of the souverign countries. They went along with the EU plan, because it was, and still is, logical. But most don't know about what really goes on. A comprehensive interview with the whistleblower Marta Andreasen has a few hundred hits on youtube. People didn't care because their economic interests were far more regional, which was, until 2008, unhindered by the larger european structures. In short the European Union could've worked, but they corrupted it, because of a lack of democratic oversight.
The road ahead is a return to a previous state where the souverign nations work together, i.o.w. decentralisation, and germans and dutch will continue to trade with southern countries, including n-africa, for the simple reason that it's profitable. Or if these idiots in Brussels really go ahead with it, a fascist corporate state in Europe, which will not work, will result in a civil war, and in much bloodshed, and after that decentralisation. THAT is the diffference with the USA: The peoples of the souverign countries are much more "grounded" in their old structures, and much more suspicious of yet another tyrant, than in the USA. (we've seen a few) EVEN if the tyrant has no "face" and isn't a real "person" (take one look at Van Rompuy) the social and cultural structures are still in place, even grew stronger. Regard what goes on now in Greece. Their plan (The Troika and the banks) was perfectly executed, it rode in on the horse of "privatisation", but it will fail, because it is economically unviable. Not one greek will coöperate, or even contribute to the betterment of the greek nation. And that is the New European Order burocrat's mistake. By destroying the systems that allowed access into souverign nations, they lose access to those nations. Sure they can loot the assets, the shipyards, the gold, the highways, the pensions. But the people are against them, and just like Argentina they'll throw them out. You'd say. "Big deal, they got all the assets they wanted?" No, the politicians have to keep political control over all european states, to be able to keep their loot, so they failed. The ones that really benefit, the senior bondholders, are part of the larger economical and social structures too. Yes, they won, like they always did. But for how long?
So despite the dreams of the burocrats in Brussels, who have been acting on the idea of politics being superior than market forces, it is the market forces; the economy which allowed them to play their little games of "unification at all cost", and without the tailwind, their EU fascist state, built on a fiscal mess, and destruction of wealth and production capabillity, is dead in the water. When hunger and poverty wake the masses out of their slumber, they'll have their terrible revenge.
One thing that can prevent this is good leadership. Men who understand the real relations, and have not become blabbering idiots or shrewd powermongers, that wait like vultures. Though we're surrounded by clowns and con-men.
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Since you mention the USA; my personal idea about the USA, is that it's well on it's way to become a militairy dictatorship, as the economic empire is collapsing, the militairy supremacy will take it's place. And that the technological implementation of the tools of a police state and the ideas at it's foundation already surpass Orwell's darkest dreams. It is going to be, please excuse the expression, borrowed from Max Keiser, I don't mean to insult: "a reservation". The big difference is that americans are less grounded in cultural and social connections, and don't really care what happens to the neighbours, or the people in the adjacent city. And that will be their economical downfall as well, ironically.
We're all screwed, the difference is how people react.
It's not over until we say it's over.
Great work Graham! Uncanny analysis as always! Thanks so much for bringing awareness to your free SPECIAL report. Never noticed that before. I was blind and I can see! Its almost worth continually posting that even if you've got noting to say as it most definitely is a literal treasure trove of unimaginably glory!
Not sure why your're deleting my comments I'm your no.1 fan and COMPLETELY serious!
lots of love,
Tenma13
Of course they bailed out Greece, that's what the Euro is for. The bailouts are a economic inevitability built into the Euro's architecture. Politics has nothing to do with.
The euro was built to print, because the Euro was born amidst a world drowned in the dollar system's debt. Like the dollar, the Euro too will be printed.
Except unlike the dollar, the euro was designed to "survive" this inevitable printing - see http://www.ecb.int/press/pr/wfs/2011/html/fs110406.en.html