This page has been archived and commenting is disabled.
Obama to EU: Get Your S__t Together; Got An Election Next Year
The Obama administration has been fiercely lobbying European governments and central banks to shut up and do something. No more disagreements in public, Timothy Geithner told them in Poland. No more disputes over fundamental issues. To heck with democratic problem resolution. The world is collapsing, and it's time to act boldly and decisively. Hank Paulson's extortion racket is back.
This time, it isn't Congress and American taxpayers that are targeted, but the Europeans, or rather a select few, in particular certain recalcitrant elements in the German government and in the Bundesbank. The White House brandishes the big fix of 2008 and 2009. That's how we fixed our crisis, that's how you should fix yours, they say.
Alas, the big fix of 2008 and 2009 today: Withered green shoots, high unemployment, annual budget deficits near 10% of GDP, and a gargantuan pile of debt. The Fed printed trillions. Inflation in goods and services is getting ugly. Real wages and purchasing power continue their long decline. Negative real yields on treasuries, high-rated bonds, and CDs are guaranteeing their owners insidious losses, while income streams are drying up. Lower real wages and disappearing income streams are a powerful drag on the economy. And despite all this, the financial sector is tottering again.
The big fix did buy a couple of years of hope. And that's the lesson Obama wants these recalcitrant elements in Germany to learn: One year and two months is all he needs. Till the election.
28 times, that's how often he has spoken recently with the German Chancellor, Angela Merkel, the New York Times reported. The goal: persuade Merkel to act forcefully—rather than democratically. But Merkel is zigzagging through a minefield between battle lines.
On one side are German banks and corporations. For years, they have been the primary beneficiaries of the euro, which gave their Eurozone trading partners a strong currency and easy access to cheap loans with which to buy German goods and services. Now, that gravy train is slowing down, and they're panicking. Very loudly. They remember how exports collapsed during the last crisis. GDP collapsed as well. The numbers were stunning. The worst quarterly GDP declines ever in the Federal Republic of Germany, down 2.1% in the fourth quarter of 2008, and down a horrid 3.8% in the first quarter of 2009. Annualized, those two quarters printed a double-digit decline. The German economy lives and dies by its exports.
(Ironically, it got pulled out of its funk by bailout moneys the Fed and Treasury handed out, a good chunk of which went directly to German banks, and indirectly to German exporters. Yet, I've never heard them thank American taxpayers and wage earners who are footing the bill).
On the other side of Merkel's minefield are various politicians, the Bundesbank, and the vast majority of the population. 89% oppose the expansion of the bailout mechanisms. Ominously, 60% don't want to be part of the Eurozone anymore. They oppose the bond-buying spree the European Central Bank has embarked on. They don't want inflation as a solution. They don't want to be burdened by southern Europe's sovereign debt (for gory details: Bailout Rebellion In Germany Heats Up).
Obama is also talking intensely with French President, Nicolas Sarkozy, former bosom buddy of George W. Bush. France being the second largest economy in Europe, it must figure into the equation.
Sarkozy too faces a difficult election in 2012 and wants something done to paper over the debt crisis. In contrast to Germany, the French political establishment isn't engaged in public soul searching about the bailouts and seems to support whatever measures of borrowing, printing, and guaranteeing are proposed. But what is on the front pages every day? The reeking corruption scandals Sarkozy and his people are embroiled in. Lurid stories about briefcases filled with cash have replaced reports about the current run on French banks. It keeps the people distracted.
So the White House is out in force this weekend at the G-20 meeting in Washington, coaxing, lobbying, persuading, and twisting arms. Throughout, they're holding up the big fix as a model for the bold and decisive action they expect Europe to take. That the big fix will make things worse long term isn't the issue. The issue is the election. Having studied how the Bush White House ran over Congress to impose TARP on the American people, Obama now urges the German government to deploy the same strategies.
The big fix has come home to roost: Snapshot Of Our Calamity Economy.
Wolf Richter - www.testosteronepit.com
»
- advertisements -
R U kKidding,
Stick to burning crosses.
moron
Obama Mr. hope with no change, goes with the tried and true pattern of telling lies to the public. Mr. the problem is contained Bernanke (these people would be best delt with by the Mob.
The Europeans had their chance and they blew it.
They could have sucked it up and issued Eurobonds which would have given 'them' something to sell in a Eurobond market. The EU would compete with the Treasury as a safe haven from itself!
:)
Just kiddin' they could have a debt-product like the Japanese have a debt product, the PIIGS could have been quietly bailed along with the banks and the various social constracts held together for a little while.
Germans are afraid of too much debt like Japan and a similar deflationary outcome so they have opted for the deflationary outcome, instead!
You can't make this stuff up!
The PIIGS are ALL going to default and there will be hell to pay. A lot of 'wealth' will flow to the Treasury driving (real) interest rates even lower than they are now. Crude prices will crater and Obama will wind up looking pretty good.
Euro-default and chaotic unwind are better for the US from the 'safety-trade' standpoint than more European can-kicking.
The real problems are emerging in China, where the wheels are coming off.
This is my take as well. Euro will fall and the dollar and treasuries will be the safe haven again, China's economy will weaken and reinforce the run to treasuries and the dollar. This will alleviate the lack of buying freeing up FED money to invest elswhere. Who benefits? Who owns the most Treasuries? The FED.
Strong dollar will deepen the depression...zero exports and soaring unemployment as companies lay off more workers due to falling business (plunge in aggregate demand due to strong dollar, higher prices)...imo.
Everyone thinks of the US and Europe it'll be Europe that'll topple first ...isn't the 3rd answer nobody is mentioning possibly 'BOTH'
How is all that business Goldman Sucks CDS's wrote regards Greece frauding their way into the EU doing?
Those guys must feel like Bernie Madoff, right before they took him away. It gets old, talking about institutionalized embezzlement, perjury, wire fraud, deriliction of duty, filing false instruments and a long, long list of other crimes. but it gives me writing material. Otherwise, I'd have to write kiddie books and screenplays like "Bernankian Nights". I need more coffee.
This is how I see commodities markets
Imagine this conversation at the craps table, in a whorehouse.
http://georgesblogforum.wordpress.com/2011/09/22/war-of-the-money-worlds-update-09222011/
h, and here is the oldest and most miserable one-DJIA and correspondingly, economy forecast made in Feb6, 2011:
http://saposjoint.net/Forum/viewtopic.php?f=14&t=2626&start=0#p30485
Whole 2012 will be a recession in the USA (and many other places)-that was clear long ago.
So Obama stands no chance to be reelected. Third party will have a good chance since both other screwed it up totally.
Wrong. If Repubs nominate RINO Romney, TP will go 3rd Pty. Obama could win in the Electoral College with no more than 40% of the popular vote. Rick Perry will then take Texas out of the USA, and 20-25 High Plains, midwestern, and southern states will follow. Civil War by spring, 2013.
We have a duty based on the founding documents of our country to overthrow our current government. The problem is people still think we live under a government based on those documents. The constitution is shredded and we only live under the illusion of freedom. Nazi Germany was more free for German citizens than the USA today. Hitler didn't have anywhere near the level of technology for private invasion that our government uses on a daily basis. The SS could only dream of monitoring the conversation of every American and survey their every move.
Say you get an entire town to agree to march on Washington and take it over. Do you think that rally will ever get started? The only opportunity we had was when Glenn Beck had 300k+ right minded Americans on the national mall. Say what you want about the man but he was able to bring people together. He should have told the crowd to march on the capital and take it over. A contingent could have taken the White House. We could have had a very quick and quiet revolution with no bloodshed. That was our only chance and that is why the man was targeted for destruction. Never again will that many white people ever be alowed to assemble in Washington.
Now the only solution will be violence and massive bloodshed all around the world. I can see the images of bloody streets on fire with the flickering light illuminating giant posters of Obama with his message of hope...
The only way the Gestapo could gauge public opinion was to infiltrate cinemas.
imho the factions are braking apart-- I suggest that Obamma is a mouthpiece for the banks--wanting the EU banks not to fail so the US banks won't fail---on the other hand you have the Fed whose vested interest is in the USD and US bonds--Ben wants a "safe haven dollar" while Obamma is working for inflating away debt-- Ben wants govt to spend less to fortify the dollar while "o" wants more spending to buy votes-- Ben seems to have walked away from the banks and bailouts and is trying to firm the dollar long term--just saying/ just guessing
Do you know who owns the Fed - literally? The Fed works for the institutions that own it.
R-O-T-H-S-C-H-I-L-D. Spelled it for ya.
In Egypt every one is told they won the last war against Israel. Only a few idiots believe it but it is politically correct to ignore it there if you know what is good for you.
Similarly in the US we are told papering over the depression/recession actually cured it and all is well and recovering. Again only a few idiots believe it but anyone who wants political favor better nod their head in solemn agreement and try not to snicker.
"The issue is the election."
The issue is the erection. Financial erection of the DOW.
Morning WB. Classic!
when Bumma was elected even the Fox News right-wing leaning political commentators were getting emotional and teary eyed
one wonders how many turds in the road the sewer (political) system needs to produce before these morons realise democratic Govt is never ever going to come up smelling of Roses??????
I don't know about 2012 election worries. I think O is trying to get all the major economies to SIMULTANEOUSLY print money.
That will solve the world's debt overhang through default via inflation.
But he has to get the EU to go along with it.
I think that TPTB have begun to grasp that the future of western civilization is at stake (and their wealth is at great risk of buying them a rope tied to a lamppost).
Given the choice between losing their power with a great reset that destroys the financial system status quo, and global inflation through money-printing, they are choosing the latter.
They actually believe that an inflationary default will preserve their wealth and control.
They think they can ride the tiger. All I can say is, good luck on that!
But the Germans have had some rather bad experiences with that strategy, so don't bet on them joining in.
from a previous post :
Merkel distrusts state/oligarchical corruption in peripherals. So she wants them all to act like responsible germans. This is like asking a dolmades to taste like a frankfurter. How do you reconcile a financial power house with a mercantile power house, both of which have OPPOSING agendas in Euroland. Its the same german house we are talking about. So the contradiction is between herr Angela, the prussian disciplinary, and Frau Merkel, the mercantile exporter to PIGs and sundry.
Does Germany have two heads on one body, or the contrary? Will she think with one mind...This is a Deutsch dilemma. We need to ask Goethe.
Not easy to solve the fundamental flaws of the Euro construct. There is no HItler to make unilateral decisions. The elected shills, hamstrung by their banks and sovereign spiels, cannot defend both the productive North and the lazy South, incestuously linked by ONE money. And Merkel is spread-eagled as explained above. France is no help as its cooking its banking books; the Pigs are in "out of control satelite mode", about to hit the ground, like that NASA spin-around today.
So O'bammy has no friends in Euro land nor on Capitol Hill, and rationally speaking, he is toast for the sake of WS jam.
2nd amendment, we have a duty to replace these clowns
100 years of replacing clowns with yet more clowns ...when will the penny drop for you the system is a black comedy?
Obama is a jackass high on Wall Street crack.
High on living the good life...
great pay and great office to try and lower your Golf handicap ...did he ever have any more ambition than that while he dutifully fronted the biggest Banker-Fed robbery in US history?
FED and any Central Bank has nothing except to print and survive, no other choice for them
This entire financial system is broke
$ 1000 trillion WMD's sitting at Fraud Street which can destroy the entire planet
FED+ECB+BOE+BOJ+WH+IMF+WB etc. etc. put together can't solve this problem
They have the capacity to postpone little further but not indefinitely
David advices only one thing and World will listen to David = Go back to stone age and re-start please
Thank you
David
Treason first, then crimes against humanity
oh yeah the big fix
you8 mean get banks to lie about their asstes and print the reswt
EU shouldtelkl Obama to go back to sucking Buffets c*ck
"Yet, I've never heard them thank American taxpayers and wage earners who are footing the bill"
Seriously ? Who do you think has been buying the US ponzy -estate derivatives for decades? There called Landesbanken and who knows why they do what they do but i suspect there are very old deals going on that matter.
Ireland, now that country can lay claim for suffering to bail out Europe ... the US, not so much. In net the US is at the very top of the Ponzi, percentage wise the EU doesn't come close to it's trade deficit.
TK -Wolf wrote "...thank American taxpayers and wage earners who are footing the bill."
Buying our Ponzi thanks TPTB, not we peons that paid the taxes that were leveraged and exported. Small point, but there is a difference in our 'everybody equal' society here stateside.
Theyre just looking for an excuse to print - Its coming. November 2011? Spring 2012?
/shrug
Theyre going to have to its inevitable. They dont know how to do anything else and they dont have anything left.
The EU bail out fund is actually the opposite of a printing strategy, the northern countries are committed to limiting deficits while participating ... so this is closer to an austere deflationary strategy than a printing strategy. It's of course still a wrong strategy set up for failure because it doesn't include financial reform/default ... but still not a printing strategy.
It's the US/IMF pushing for a printing strategy (because it can delay the inevitable longer).
They want people to be screaming at them....print damn it print! What happened, we like it when the cheese came back for a while!
Nice link. I am something of a Biblical historicist. That being, something like 40% of the Bible is prophecy. The prophecies found in Daniel and Revelation have largely been fulfilled. In Nebuchadnezzar's dream of the great statue, the feet were iron mixed with clay. Just as clay and iron do not truly mix, but stay separated, so Europe will NEVER become a singular entity. The Euro experiment is doomed, and has been from the beginning of time. The Creator has said so, and He knows the end from the beginning.
Have you ever heard of the Koala Bible?
NO?
Find it it will tell you things that you need to know right now about how to invest.
Trust me.
Too funny.. I will never understand the yearning for power and office that seems to animate these politicians. So what if Obama wins another 4 years? He will just get to preside over the worst meltdown in world economic history is all. What's coming is something that will not be deflected by grandstanding speeches and lofty rhetoric.
Then again, I am basically an attention-shunning, pleasure-immune stoic, plodding on until I push up some pretty daisies. In the meantime, work that job, buy that silver, and man your ramparts: the future of civilization is counting on every one of us.
It is rather sad, those power hungry actors who would sell their people down the river for just one more chance to rule.
Sarkozy breaks partnership with Merkel and points to new partner: shocking photo of EU leadership break-up.
http://www.telegraph.co.uk/news/worldnews/europe/eu/8784530/Europes-prob...
Fishy smell in Spanish politics???
"The White House brandishes the big fix of 2008 and 2009. That's how we fixed our crisis, that's how you should fix yours, they say."
Allow me to piggyback in here tom...everything must be based on a lie with these people. Even when the truth is perfectly acceptable they will opt for a lie...they're pathalogical liars.
The latest crumbling pillar of ObamaCare...
http://republicans.energycommerce.house.gov/Media/file/PDFs/092211jointltrtohhsclass.pdf
When is the government going to quit being everyone's mommy?
If we kicked out the minorities...think of all the problems it would solve.
It's funny how the cold keeps all the riff raff away. All the great societies are up north...where it's apparently too cold for the darkies...because that's another thing the great societies share...lack of brown people.
im all for war and eugenics. round up all retards and execute. YOU FIRST ON THE LIST,,,, lolololo
i read that whole thing, as everyone should
absolutely ridiculous
It is, isn't it...lol...always remember, we are fortunate in our enemies.
He is saying to Angela, "Hey, don't be like this, a pussy- now give us some money"
ECU will get tons more public pushback if they follow Paulson.
Ben should resign and be run out of town for gross market manipulation.
American wealth has been destroyed, houses, gas, REAL CPI, 401ks
It's sickening.
GWB and 0bama should be prosecuted for crimes against the country. And their administrations leadership along with every yea voter in CONgress