What almost everybody calls capitalism is actually fascism, a system where both consumer and capital goods are privately owned, but they are strictly regulated and controlled. This is a huge distinction.
"Either Cyprus is going to have to find the money to fund the bailout, or it's going to have to leave the Euro - to default, devalue, and decouple," is the cold hard truth that UK MEP Daniel Hannan explains in this brief clip. Neither of these paths, he goes on to say, is an easy one, but he believes "there is no doubt the second of them is the less painful - allowing Cyprus to price itself back into the market and start exporting its way back to growth again." There are no good outcomes for a country as indebted as Cyprus is, "but if I were a Cypriot member of Parliament, I would vote now to go back to an independent currency as the least painful of the various difficult options." ... he concludes, "the really interesting question is - who's next?" Now that the precedent has been set (that governments can come after what is in your savings account) what country is safe?
The past and present bailouts of each and every bank (and 'important' industry) will, one day, be seen as a generational offense is how MEP Daniel Hannan begins this thoroughly British demolition of the three critical myths surrounding the crisis, that despite market optics, we are still living through. From the idea that capitalism has failed (it has not in his view, it has been ravaged by political pandering), to the crisis being caused by lack of regulation, and that greed is the single-driver of the mess that we remain in; Hannan suggests in a brief but extremely eloquent debate that there is a world of difference between being pro business and pro market as he destroys any semblance of credibility that the political (and elite) class has echoing a young Ron Paul in his thoroughly libertarian free-market sensibilities.
In an impassioned 80 seconds, MEP Daniel Hannan exposes the structurally rotten "syphilitic core" of a European Union whose existential crisis has now seemingly been pronounced 'over' by those wondrous self-denying members of the European elite. "There is an extraordinary denial going on," the eloquent Englishman expounds as he notes that they still "haven't addressed the fundamental problem," of 'applying a single monetary policy to countries with widely divergent conditions and means' leaving unemployment rising and growth stagnating. He notes that the crisis in one respect is over, the moment of decision of taking one of two paths, is indeed over - and "the squaller, the wretchedness, the unemployment and poverty have now become structural."
Instead of waffling on for an hour about all the wonderful things that Europe will become as a stronger world power if only everyone can just get along, give up sovereignty, and bow to Barroso, Daniel Hannan sums up perfectly what 'should' happen in order for some closure and resurrection to occur in the dis-union.
72 seconds of crystal-clear thought from English MEP Daniel Hannan as he rather poignantly questions European leaders on the results of last July's European Stress Tests (and the Spanish banks passing with flying colors). In one of the more colorful analogies of the European cataclysm, Hannan describes Europe's self-dealing bailouts as "a transfusion, taking blood from one arm and pumping it into the other arm" noting that unfortunately, there is also a hole in the tube. You simply don't solve a debt problem with more debt; as he concludes "the Euro is the problem not the solution".
In a brief but as usual succinct statement, MEP Daniel Hannan points out the country that decided to say no to establishment-rules and stuck to its guns by taking losses, devaluing its currency, and growing its way out of its pit of despair. The eloquent Englishman notes Iceland's current enviable position in terms of not just growth but Debt to GDP and proffers upon his European Parliamentarian peers that perhaps, just perhaps, there is a lesson in here for all European governments (cough Greece/Portugal cough). 67% of 'shrewd and canny' Icelanders are now against joining the Euro.
The first instinct of any card-carrying Eurocrat is to reach for his wallet, or as clear-thinking MEP Daniel Hannan points out, someone else's wallet. His prophetic words with regard the bailout-and-borrow bandwagon, that Europe remains on, running out of track are so critical that they bear repeating as he remains incredulous that his fellow MEPs still see the one solution to a debt crisis as yet more debt...
"All the options from here are bad, I am afraid" is how MEP Daniel Hannan describes the way forward in Europe in this FOX News interview. In one of the clearest and least status-quo-hugging explanations of what has occurred (gentile and bloodless coups in Italy and Greece), the 'cruel and irresponsible behavior' of European leaders stuns him and all in the name of the 'wretched single-currency'. When asked why they (the EU leaders) just don't get it (channeling Upton Sinclair's now infamous quote), Hannan replies "It is remarkably difficult to make a man understand something when his salary depends upon his not understanding it" as he makes it clear that the vested interests in keeping the Euro going (well paid and powerful government jobs for example) means they are prepared to inflict this shocking poverty on the Mediterranean countries. Summing it up nicely: until they leave the Euro, the Greeks have got no light at the end of the tunnel, making the point that Greece's least painful option is to Default, Decouple, and Devalue.
An interesting and succinct compare-and-contrast (by MEP Daniel Hannan) of the U.S. Constitution and its European equivalent (Lisbon Treaty) presented with little comment except to note in the last week we have discussed how the Irish view their German masters, how the French/Italians/Spanish will do pretty much anything in order that the Bundesbank will enable ECB monetization, and perhaps more critically the exodus of capital not merely from peripheral European debt markets but from the core also. We suspect the status quo cannot exist much longer (Keynesian Endgame?) and regimes (fiscal/monetary/political) will change as tail risk becomes the only risk.
The political and social disruption resulting from eurozone nations being processed like sausages will wear on investors’ nerves, in the same way that living near a slaughterhouse and listening to the screams of livestock being rendered, weighs on the mood.
Just your typical London protest. The Telegraph has recorded the attempted break and entry into a bank, which however proves too much for scattered "anarchists" courtesy of reinforced glass. The same can not be said for the Ritz hotel unfortunately.
These are some of the more important headlines coming from around the World this morning.
You may remember Daniel Hannan for his rather direct and brazenly eloquent critique of Gordon "The Devalued Prime Minister of a Devauled Government" Brown last spring. If not, it is quite easy to get acquainted with Mr. Hannan's singular voice via his veracity-charged YouTube channel. (We are particularly fond of the instant classics, Richard II on the EU constitution, The Brussels Racket, and The Germans Have Caught On). I have personally been a Hannan-fan for quite some time so it should surprise no one to learn that I was thrilled when he accepted my invitation to write for Zero Hedge. As a result, Zero Hedge is pleased to present our readers with the first of what we hope are many Hannan pieces at Zero Hedge. Welcome, indeed, Mr. Hannan!