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Germany Makes the Final Push for Control of the EU

Phoenix Capital Research's picture




 

 

I know I’ve been labeled as “Gloom and Doom” in the past, but the charts for Europe’s markets are beyond anything I’ve ever seen before. It is highly likely that MANY of the banks over there will not even exist in their current form within two years.

 

I realize some of this may sound overly dramatic. But the following should give you an idea of how serious things are getting:

 

            A Vote of No Confidence in Europe

 

Germany and France's joint proposal to allow Schengen-zone countries to temporarily reintroduce border controls as a means of last resort might sound harmless. But doing so would damage one of the strongest symbols of European unity and perhaps even contribute to the EU's demise.

 

Germany and France are serious this time. During next week's meeting of European Union interior ministers, the two countries plan to start a discussion about reintroducing national border controls within the Schengen zone. According to the German daily Süddeutsche Zeitung, German Interior Minister Hans-Peter Friedrich and his French counterpart, Claude Guéant, have formulated a letter to their colleagues in which they call for governments to once again be allowed to control their borders as "an ultima ratio" -- that is, measure of last resort -- "and for a limited period of time." They reportedly go on to recommend 30-days for the period.

 

http://www.spiegel.de/international/europe/german-and-french-proposal-for-border-controls-endangers-european-unity-a-828815.html

 

This story has been almost completely ignored by the mainstream media. Let me ask you this… do you think Germany and others are really concerned about an influx of migrants? Of course not, the whole idea is ridiculous. Italy was supposedly upset about 25,000 migrants from North Africa… Italy has a population of 65 MILLION!

 

No, the move to create border controls is about one thing only: stopping people from fleeing with their money when the collapse comes. The political elite in Europe are watching the bank runs in Spain and Greece and know that when the big Crash comes similar runs will occur throughout the EU.

 

Consider the following story and you’ll see what I mean:

 

Swiss eye capital controls if Greece goes

 

The Swiss National Bank is considering imposing capital controls on foreign deposits if Greece leaves the euro, as the franc comes under heavy demand from investors seeking a haven in Europe.

 

Speaking to Swiss media, Thomas Jordan, head of the Swiss central bank, said the Swiss government and the SNB were looking at ways of dealing with an expected flood of foreign money into the country in the event of a Greek exit from the eurozone.

 

http://www.ft.com/cms/s/0/d7678676-a810-11e1-8fbb-00144feabdc0.html#axzz1wNKR2leW

 

Potential border controls in the EU and capital controls in safe haven Switzerland to stop inflows of funds? If that doesn’t tell you point blank that the political elite in the EU are scared stiff, nothing will.

 

Indeed, Germany has made a massive power grab to control most of Europe’s finances… but under one condition: it be given access to other members’ gold reserves as collateral.

 

            Europe’s debtors must pawn their gold for Eurobond Redemption

 

Southern Europe’s debtor states must pledge their gold reserves and national treasure as collateral under a €2.3 trillion stabilisation plan gaining momentum in Germany.

 

The German scheme -- known as the European Redemption Pact -- offers a form of "Eurobonds Lite" that can be squared with the German constitution and breaks the political logjam. It is a highly creative way out of the debt crisis, but is not a soft option for Italy, Spain, Portugal, and other states in trouble.

 

The plan is drafted by the German Council of Economic Experts and inspired by Alexander Hamilton’s Sinking Fund in the United States -- created in 1790 to clean up the morass of debts left by the Revolutionary War. Flourishing Virginia was comparable to Germany today…

 

The plan splits the public debts of EMU states. Anything up to the Maastricht limit of 60pc of GDP would remain sovereign. Anything over 60pc would be transfered gradually into the redemption fund. This would be covered by joint bonds.

 

Italy would switch €958bn, Germany €578bn, France €498bn, and so forth. The total was €2.326 trillion as of November but is rising fast as Europe’s slump corrupts debt dynamics. The sinking fund would slowly retire debt over twenty years, using designated tithes akin to Germany’s "Solidarity Surcharge".

 

In effect, Germany would share its credit card to slash debt costs for Italy, Spain and others. Yet it is the exact opposition of fiscal union. While eurobonds are a federalising catalyst, the fund would be temporary and self-extinguishing. "The fund is a return to the discipline of Maastricht with sovereign control over budgets," said Dr Benjamin Weigert, the Council of Experts’s general-secretary…

 

The fund implies a big sacrifice for Germany. Its interest costs on joint debt would be much higher than today’s safe-haven rate of 1.37pc on 10-year Bunds. Jefferies Fixed Income says it would cost 0.6pc of German GDP annually. The Council of Experts -- or `Five Wise Men’ -- argue that this would be modest compared to the growth adrenaline of rescusitating monetary union.

 

Yet it is not charity either. One official said a key motive is to relieve the European Central Bank of its duties as chief fire-fighter. "We have got to get the ECB out of the game of distributing money, and separate fiscal and monetary policy. Germany has only two votes on the ECB Council and has no way to control consolidation," he said.

 

Germany would have a lockhold over the fund, able to enforce discipline. Each state would have to pledge 20pc of their debt as collateral. "The assets could be taken from the country’s currency and gold reserves. The collateral nominated would only be used in the event that a country does not meet its payment obligations," said the proposal.

 

http://www.telegraph.co.uk/finance/financialcrisis/9298180/Europes-debtors-must-pawn-their-gold-for-Eurobond-Redemption.html

 

Folks, the EU End Game is now officially in play. Germany has played its hand: if you want us to foot the bill we want your Gold. This tells us:

 

  1. Germany is aware that most EU Sovereign bonds and paper are garbage (this is confirmed by the fact that Germany has passed legislation allowing its own banks to dump EU Sovereign bonds into a bailout fund during a Crisis).
  2. Germany will only put up more money if it’s granted fiscal control of the EU and Gold bullion as collateral.
  3. Germany is the REAL monetary power in Europe (not the ECB).

 

I believe this is Germany’s final push for EU control. If this fails and Germany ceases to offer additional bailout funds in some form then the EU will collapse (as noted earlier, the ECB, IMF, and US Fed cannot prop the EU up nor will the ESM mega bailout fund work). Spain’s literally on the verge of seeing a bank holiday. Germany is the only one who might have the funds to prop it up. And Germany wants gold.

 

In plain terms, the EU will likely not last through the summer. It’s literally GAME OVER time. Various proposals will crop up (such as Germany’s “cash for Gold” program), but no one (not even Germany) actually has the funds to support the avalanche of banking failures that is coming.

 

THIS is why various countries are moving to put border and capital controls in place. They know the game is up. It’s now just a matter of time before things go from ugly to truly disastrous.

 

On that note, if you’re not preparing for the collapse of the EU, you need to do so now. I recently published a report showing investors how to prepare for this. It’s called How to Play the Collapse of the European Banking System and it explains exactly how the coming Crisis will unfold as well as which investments (both direct and backdoor) will profit from it.

 

This report is 100% FREE. You can pick up a copy today at: http://www.gainspainscapital.com

 

Good Investing!

 

Graham Summers

 

PS. We also feature numerous other reports ALL devoted to helping you protect yourself, your portfolio, and your loved ones from the Second Round of the Great Crisis. Whether it’s a US Debt Default, runaway inflation, or even food shortages and bank holidays, our reports cover how to get through these situations safely and profitably.

 

And ALL of this is available for FREE under the OUR FREE REPORTS tab at: http://www.gainspainscapital.com

 

 

 

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Sun, 06/10/2012 - 17:27 | 2512778 Silberadler
Silberadler's picture

@Cliff - I second that.

@Graham:

The German Politicos are way to ignorant, stupid and divided to even consider something like this.

The political landscape is far too divided for any attempt to 'conquer Europe'.

What rubbish.

Just look at the last elections.

People elected 'The Pirates' to parliament to show established political parties that they are fed up.

Something like this certainly does not happen in US of A

That's the place you need to worry about.

 

As for border controls in Europe:

'Der Spiegel' reported this and it is basically a non issue and - beyond that - I still remember the times when border posts were staffed.

No big deal.

Besides: there are so many paths and side roads to cross borders - if the borders are not reinforced like it was the case with the iron curtain (GDR) there is no way for 100% control.

So, what is all this alarmist fuss about ?

Again I see the big wave with the swastika when Germany gets in focus. What for ?

Educate yourself and then rewrite this rubbish to match facts.

This crap makes me puke and is an insult to most ZH readers.

 

Sun, 06/10/2012 - 18:00 | 2512820 Zero Govt
Zero Govt's picture

judging by the shit state (delapidation) of the many border crossing buildings i've come across it could take a fair while before they're refurbished and useable again

Graham has a dirty weekend in Paris and thinks he knows the continent !

Sun, 06/10/2012 - 17:07 | 2512757 The Reich
The Reich's picture

International bankers already rule €rope.

Sun, 06/10/2012 - 16:52 | 2512745 Jack Sheet
Jack Sheet's picture

"This story has been almost completely ignored by the mainstream media."

Bullshit. Der Spiegel is mainstream media, so are the other sources you are quoting.

Sun, 06/10/2012 - 16:42 | 2512731 NoTTD
NoTTD's picture

But why do the Huns want gold?  Do they plan to sew it into the linings of their clothes before skating off to . . . not sure where the Germans would go to flee the Germans.  Afterall, it's not like it  is money.  Shouldn't they be demanding all the currency reserves?  

Sun, 06/10/2012 - 13:41 | 2512346 Cliff Mclane
Cliff Mclane's picture

Germany is simply neither able nor willing to control Europe. The Merkel government (three parties) is divided on almost everything and slowly falling apart. Merkel herself is no Margaret Thatcher, she has no other plan than to survive politically as long as possible. You just have to look at her "Energiewende" (nuclear energy dumped, wind-energy is king, but no power lines built to bring power from wind-farms to the consumer, we just survived a black-out where I live because the wind blew the wrong way).

German centralbank money is not in vaults in Germany but in New York, London etc.  Surely you do not expect the German Navy to bring it home from NYC by force?. The powers that won victory in 1945 still control Germany` s gold. The German parliament was not even able to clarify how much gold Germany owns. The Bundesbank simply refused to specify how much physical gold Germany owns and how many claims(!) exist ( that can be cancelled) by other countries.

"Sueddeutsche Zeitung" and "Spiegel" are not to be considered respectable newspapers. The German Social Democratic Party holds a significant part of this paper. "Spiegel" is a tabloid now that distributes more and more propaganda instead of facts. This is due to its falling numbers of copies sold.

So please don´t take this nonsense of German domination of Europe as a real threat.

I agree on the other hand that the freedom of capital movement in Europe is under threat. As more than three quarters of German voters are against paying for Europe indefinitely the government gets ever more unpopular because people begin to realize that they will have to pay real money for the EUdSSR.

Sun, 06/10/2012 - 15:47 | 2512655 Black Forest
Black Forest's picture

You are absolutely right, Cliff.

 

Sun, 06/10/2012 - 14:57 | 2512525 OttoMBMP
OttoMBMP's picture

You are right, Cliff.
There is no German politician who would defend German interests.
In any case, this funny plan is so outright ridiculous, that it should not even be mentioned.
Germany will pay till the complete bankruptcy is there. All countries must be equally bankrupt, their peoples equally scared. Than, the time has come for the full blown EUSSR dictatorship.
I can assure you all, it will not be dominated by Germans. That is not in the NWO plan. Anti-German propaganda, though, which also can be found on ZH from time to time is welcome in Bruxelles and Washington.

Sun, 06/10/2012 - 15:17 | 2512579 Uncle Remus
Uncle Remus's picture

We can lend them Aaahhnolt. He's Austrian and was in the "arts".

Sun, 06/10/2012 - 15:17 | 2512570 zaphod
zaphod's picture

Exactly Cliff, anyone who thinks the FED will freely give Germany the gold it "owns" is crazy. That gold was taken in 1945 and only put on Germany's and other EU countries balance sheets as part of the reconstruction efforts, otherwise there would have been no base for the EU to rebuild post war.

But that gold is never going back. When the SHTF and a gold standard is restored we'll see lots of those New York vault accounts transfer over to the FED.

The FED and US simply used these mechanisms to build the dollar as the reserver currency, but when the dollar falls, the gold will be used to reestablish control, there is no other way. Oh, I suppose the US could start to work and produce again, but that would require work with the wellfare state can not handle. Much easier to reestablish reserve curreny status through gold and start a new ponzi scheme than to work for a living.

Sun, 06/10/2012 - 14:11 | 2512422 Wolferl
Wolferl's picture

You "just survived a black-out" because of renewable energies or the shutdown of some old nuclear power plants? Really? Where do you live, in Taka-Tuka-Land? You are a goddamn liar.

Mon, 06/11/2012 - 10:43 | 2514497 Cliff Mclane
Cliff Mclane's picture

We had a lot of sunshine. Solar power was produced a lot. Evening came. The wind was blowing very strong at short notice in Lower saxony. Very few people live there, but a lot of wind-farms produce energy.. They had suddenly too much (!) power that could not transported away to consumption in the West and South of Germany. Then the wind lost its strength and things went the other way. Solar power was off due to the night.

It takes about half an hour to shut down coal or gas powered stations. The local "Umspannwerk" (do not know the English word for it) went out of business, broke down. This incident could have spread to the whole of Northern Germany, but this did not happen -this time.

The German quality daily "Die Welt" reported this blackout in their business section. Our local paper did not. They like wind-energy very much and ignore things that notfit into  their weltanschauung.

I am certainly not a goddam liar but you did certainly not enjoy any kind of training of being polite. Fool.

Sun, 06/10/2012 - 13:37 | 2512335 agent default
agent default's picture

This will not be resolved politically, this will be resolved by rioting and violence.  The governments that are selling their countries down the river will be overthrown violently in the end.

Sun, 06/10/2012 - 13:29 | 2512320 apberusdisvet
apberusdisvet's picture

No wonder the experts are calling for 10K gold.  Totalitarian control is obviously the first agenda.  But anciallary is control of gold.  Hmmm:   anyone know what happened to Lybia's gold?  Tunisia's? Egypt's?

Sun, 06/10/2012 - 15:14 | 2512568 Uncle Remus
Uncle Remus's picture

Boating accident. Yeah, dat's it - a boating accident.

Sun, 06/10/2012 - 13:13 | 2512279 ebworthen
ebworthen's picture

Stukas and Panzers replaced by gold confiscation and loss of tax sovereignty.

Armies replaced with:  digitized binary data fiat currencies unhinged from tangibles, subjugation to monetary and asset control/confiscation, bi-flation, and bureaucrats.

Sun, 06/10/2012 - 13:28 | 2512318 WhyDoesItHurtWh...
WhyDoesItHurtWhen iPee's picture

Ahhh ..........the Golden Rule .........

Sun, 06/10/2012 - 13:28 | 2512313 Uncle Remus
Uncle Remus's picture

Do not be foolt by diese seeminkly innocuous methods. Vee still haf vays.

Do NOT follow this link or you will be banned from the site!