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Guest Post: EU Fiscal Union = EU Debt Serfdom

Tyler Durden's picture




 

Submitted by Charles Hugh Smith from Of Two Minds

EU Fiscal Union = EU Debt Serfdom

"Fiscal union" is a code-phrase for a highly profitable debt-serfdom: the banks profit, the EU bureaucracy flourishes and the people of the EU are imprisoned in a modern serfdom.

The stock and bond markets are gearing up to celebrate the EU's approval this Friday of "fiscal union," the necessary surrender of sovereignty that's needed to seal the bondage of the EU's hapless citizenry to the banks and the lapdog bureaucrats slavishly devoted to their dominance.

"Fiscal union" is the code-phrase for the EU nation agreeing to automatic sanctions (penalties) should their borrowing exceed what is deemed prudent. In this sense, it's little different from the 3% deficit limit that the member states agreed to via the initial treaty but conveniently ignored.

The "teeth" of automatic sanctions is supposed to force nations to "tighten up" their fiscal and tax policies (including collection)--"austerity" at the fundamental economic and governmental levels.

In other words, "Oops, we borrowed too much, default looms, let's paper over the insolvency by really really really promising to borrow less from now on."

The mechanisms of the overborrowing--overleveraged, politically dominant banks and the euro--are left untouched. Why? For the "obvious" reasons the mechanisms of EU governance has been captured by the banks and their apparatchiks, and as a result of the quasi-religious devotion of the Eurocrats to the single currency, a catastrophically wrong-headed fantasy that they cannot give up without losing face.

I described the systemic problem with "austerity and higher taxes" as a "solution" to crushing debts in It's Your Choice, Europe: Rebel Against the Banks or Accept Debt-Serfdom (December 5, 2011): it sets up a positive (mutually-reinforcing) feedback loop where diverting more of the national surplus to pay interest on old debt leaves less for productive investment, a cycle of indenturement to debt that ratchets the risk of default ever higher, which drives interest rates up which then increases the cost of servicing all that crushing debt which then diverts more of the national surplus (via austerity and higher taxes) to paying the higher interest.

Every euro shipped off to the banks and bondholders is a euro that isn't going to be spent in the national economy, which means the economy contracts from a dearth of investment, income and spending. "Growing our way out of debt" is impossible in this indentured-to-debt positive feedback loop.

In a functioning democracy, then those who reaped the gain (the banks) would actually be exposed to the risk that accompanied their gain. But sadly, the EU is not a democracy except as a simulacrum propped up for PR purposes. The risk and the gain have been neatly separated by the Eurocrats and the toady figurehead leadership (Merkozy et al.).

As a result the gain remains safely private with the banks while the risk and losses are shifted to the taxpayers and citizens of the EU, who must now make good on those stupendous losses while remaining exposed to the risk of future default.

The same is of course also true in the U.S., another facsimile democracy in which the government and its proxies guarantee banks' profits and leverage while transferring the risk and losses to the voiceless taxpayers. (Go try to cast a vote over Fed policy. Serf, meet your Overlord, Ben Bernanke).

The banks and their lackeys in government prefer to use unaccountable proxy agencies to do the heavy lifting--the European Central Bank (ECB), the Federal Reserve, and the European Financial Stability Facility (EFSF), which is soon to be joined with other alphabet-soup agencies of oppression and predation, all in the name of "rescue."

Rescuing who and what? The banks and bondholders, of course. This requires avoiding not just democracy but also capitalism, which would require the clearing of bad debt via the discovery of price of both debt and risk, and also socialism, which would require wiping out the wealth of the banks and bondholders via nationalization, a process that would at least return surviving assets and control to an elected government.

It's not democracy, capitalism or socialism--it's all opacity and artifice to mask the imposition of a new, improved debt-serfdom on Europe, all in the name of "fiscal unity."

The eurocrats and the toady leadership would be more honest were they to simply declare: "We had to destroy democracy to save the banks. You are now serfs in our financial fiefdoms."

 

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Wed, 12/07/2011 - 11:38 | 1954848 AngryGerman
AngryGerman's picture

...sounds like business as usual. That's the way it always worked. read niall ferguson.

Wed, 12/07/2011 - 11:52 | 1954896 HedgeAccordingly
HedgeAccordingly's picture

The bottom fell out of Crude on ECB rate worries as well as inventory builds.. funny - http://hedge.ly/uxVyIL

Wed, 12/07/2011 - 11:59 | 1954930 falak pema
falak pema's picture

some arab sheikh just made a million. These guys own the stuff and can jerk it around.

Wed, 12/07/2011 - 12:11 | 1954978 eureka
eureka's picture

asking EU to give up EUR is like asking US FED RES to give up giving free USD to US banks - without which there will be no more US EMPIRE and USD world reserve currency - without which US serfdom to China is ...

Wed, 12/07/2011 - 12:11 | 1954980 Oh regional Indian
Oh regional Indian's picture

Nuts eh? I read a fascinating take today on the Parallels between Frak Herbert's Dune and the whole oil as spice and Fremen as Irakis (Arrakis).... fascinating. It definitely was last century's curse, vastly multiplying our killing/mutilating power.

Time to say goombye to the age of petroleum.

Viable options existed and were suppressed all through the last century. We are living not the best but the worst of tesla.

ORI

/the-plan/

Wed, 12/07/2011 - 12:12 | 1954981 wang (not verified)
wang's picture

'Twas always thus

so sometime late Thursday, maybe Freitag a vague statement will be issued that will be sufficiently optimistic on fiscal union that the ECB will have the cover they need to start printing and a rally will ensue the likes of which we have not witnessed, of course if I am wrong (and I frequently am) you may want to dust off your 10k party hats.

 

Wed, 12/07/2011 - 14:42 | 1955584 philipat
philipat's picture

We have now been side-tracked into "Treaty Changes" as the next "Progress". The EUZ wants to ram these through with a minmum of democratic scrutiny. However, these che approval of these changes should not be taken for granted. For the periphery, "Fiscal union" means a loss of sovereignty, German approval of annual budgets and "Equalisation"of fiscal policy. All of this removes the only potential competitive advantage that the periphery could deploy.

Ireland for instance has specialised in helping US Corporations "Minimise" US taxes by offering low Corporate rates and tax holidays, in which it has been very succesful. So why would Ireland want to surrender the only succesful strategy it has? Ireland should have let the Banks go under and defaulted on its debt, just like Iceland which is now growing nicely again, or, earlier, Sweden then rebuilt by leveraging its tax advantages and highly educated English-speaking workforce to pull capex away from not only the Eurozone but also the UK.

No wonder the Eurocrts want to shove these changes down the throats of the people. Again.

Wed, 12/07/2011 - 11:40 | 1954853 SHEEPFUKKER
SHEEPFUKKER's picture

Gone serfing. 

Wed, 12/07/2011 - 12:01 | 1954928 bigdumbnugly
bigdumbnugly's picture

taking over/unders on whether this union lasts longer than my own abbreviated 'til death do you part version.

Wed, 12/07/2011 - 12:28 | 1955033 Troy Ounce
Troy Ounce's picture

 

 

 

 

New Olympic sports

serf throwing

Aquaserf

Ice serfdom

Table serfdom

modern Serfathlon

serfwondo

Serfminton

Serfball

Serflifting

 

 

 

Wed, 12/07/2011 - 11:47 | 1954855 DormRoom
DormRoom's picture

Welcome to the desert of the real ......money.

 

The Titans were usurped by the Gods whom were usurped by Heroes whom were usurped by Hellenic Greek whom were usurped by the Romans whom were usurped by the Church-Clergy whom were usurped by the King-Mercantilists whom were usurped by the Capitalists whom were finally usurped by the Ogliagarchial Collectivists.

The tomes on control, and unliberty, since Guttenberg, are volumes.

one debt to rule us all. one debt to bind us.

Wed, 12/07/2011 - 11:42 | 1954860 Captain Kink
Captain Kink's picture

Revolution is the endgame of forced servitude...  maybe they need to go through this to get to the democracy on the other side.

Wed, 12/07/2011 - 11:44 | 1954865 Ancona
Ancona's picture

I like serfing! It's relaxing........oh, wait........never mind.

Wed, 12/07/2011 - 11:58 | 1954920 SheepDog-One
SheepDog-One's picture

We got it FIXED! See, all you millions and millions of people now have nothing, your kids will have nothing, your kids kids will have nothing....you now work for us to keep us up here living like kings and you will work the rest of your lives ONLY for us...now get to work, damn peasants!

Wed, 12/07/2011 - 11:44 | 1954868 wisefool
wisefool's picture

Where is Timmay? It be cool if they started including him on the "where are the carriers" maps.

It is important for the euroes to understand that the USA provides the military, and pay taxes (to the IMF). Two of the most defining aspects of serfdom. Get used to it eurochildren!

Wed, 12/07/2011 - 12:32 | 1955052 Ropingdown
Ropingdown's picture

Geitner's just leaning on euro-people to print and go joint-and-several because the US needs cover to start printing itself, and fears getting stuck with worthless euro-nation bonds.  He's terrified of euro bank collapses for the obvious reason that every euro bank problem reveals a bit of excessive risk or deception at some US bank.  No mystery there, is there?  Germany resents Geitner's transparent meddling, and of course Belgium, Luxembourg, Italy, et al love it. 

Wed, 12/07/2011 - 13:11 | 1955246 wisefool
wisefool's picture

See, I am thinking he is there to defend the IMF "petty cash" fund from paying for merkozi trists in all these hotels. Timmay is kinda of a US tax payer. It would be pretty sweet though if they started putting SEC-IRS on the fleet deployment maps.

Wed, 12/07/2011 - 11:45 | 1954869 SheepDog-One
SheepDog-One's picture

Blah blah blah.....wheres all the piles of FREE MONEY at? Talk of future promises and responsibility is BORING, this here is a crystal meth fueled crack and grain alcohol market party! 

Wed, 12/07/2011 - 11:46 | 1954874 LawsofPhysics
LawsofPhysics's picture

World serfdom is the endgame people.  A world run by a few members of an elite club and everyone else working for chinese wages to create real value to be enjoyed by those elite and no one else.  Real growth is dead and has been for a while and the effectiveness of creating more paper "assets" to bail out bad paper "investments" is becoming short-lived at an exponential rate.

Hedge accordingly.

Wed, 12/07/2011 - 11:47 | 1954876 Spitzer
Spitzer's picture

Zerohedge refuses to acknowledge that ECB and the fed are two totally different animals. There is a cold war going on between the two

Wed, 12/07/2011 - 12:03 | 1954915 hedgeless_horseman
hedgeless_horseman's picture

 

 

...ECB and the fed are two totally different animals.

Yes, maybe one is an old ox and the other a young ass, but both are domesticated beasts of burden for use by the big banks, then slaughtered and replaced once their usefullness has ended. 

Are you not familiar with why The Fed (and ECB) was formed, and who formed it?

Read The Creature From Jekyll Island.

 

Wed, 12/07/2011 - 12:09 | 1954970 Spitzer
Spitzer's picture

Old hard money Europe(mainy the french who ended Bretton woods 1 by pulling out of the London Gold Pool.) formed the ECB in 1962.

Fuck the creature, read up on the Ganoa confrence. http://en.wikipedia.org/wiki/Genoa_Conference_%281922%29

Wed, 12/07/2011 - 12:28 | 1954995 hedgeless_horseman
hedgeless_horseman's picture

 

 

My point, exactly, as the same Old Hard Money Europe was there at Jekyll Island to form The Fed.  You cannot get any older, harder, monied, or European than the Warburg and Rothschild families.

In my opinion, any "war" between the ECB and Fed is scripted.  The short-term goal is Eurobonds to allow the ECB to get caught up with the USA, UK, and Japan, then the synchronized diving can get started in earnest.

Wed, 12/07/2011 - 12:29 | 1955039 Ghordius
Ghordius's picture

cold war - you trade, you even help, sometimes - how old are you? Less then thirty, I suspect. And no, the pictures aren't arguments.

Wed, 12/07/2011 - 12:43 | 1955075 hedgeless_horseman
hedgeless_horseman's picture

 

 

Much older, but thank you.  I'll take that as a compliment

I am merely trying to open people's mind to alternative theories that may not be so obvious.  For example, I believe that CBs collude rather than compete, so Race to the Bottom may no longer be an appropriate analogy, and so I have proposed Synchronized Diving.  I certainly do not know the truth, and probably never will.

Wed, 12/07/2011 - 12:49 | 1955132 Ghordius
Ghordius's picture

ok, then you do remember the cold war. do you remember how US grain was shipped to the Soviet Union? made US farmers happy? yes, this kind of collusion

Wed, 12/07/2011 - 13:01 | 1955192 hedgeless_horseman
hedgeless_horseman's picture

 

 

I disagree that shipping US grain to the Soviet Union had anything to do with making US farmers happy. 

Wed, 12/07/2011 - 13:26 | 1955314 Ghordius
Ghordius's picture

from memory, and I might be mistaken: as soon as the exports decreased Reagan started to pay farmers to keep land fallow

anyway, my point is that Spitzer is right, they have a "cold" war. and they do collude and help each other. hell, they practically share a banking system...

Wed, 12/07/2011 - 12:27 | 1955020 Ghordius
Ghordius's picture

I agree with Spitzer, FED and ECB are two different animals and in a cold war.

"Creature from Jekyll Island"? If you want a good article without "conspiracy theories" about how the FED was formed,

read this (http://www.marketoracle.co.uk/Article31892.html)

from US Congressman and Presidential Candidate  Dr. Ron Paul,

and note that part how the US Commission was sent to Europe to "see" how central banking was done here. And then how it was setup.

And don't come with "how the ECB was formed" before you have studied it. You are clearly thinking in the lines of "if the Yankee version is bad, the wog's is clearly worse".

A hint: the ECB is a "Federation" of Central Banks, one CB, one vote.

Wed, 12/07/2011 - 12:33 | 1955048 hedgeless_horseman
hedgeless_horseman's picture

 

 

Are you saying that Oceania's central banks have always been at war with Eurasia's central banks?  It sure sounds like it.  Don't believe the fascist propaganda.

Wed, 12/07/2011 - 12:45 | 1955118 Ghordius
Ghordius's picture

you are so cute! so you prefer other propaganda...

be so kind to explain why my POV is fascist so that my fascist relatives smile on me from heaven

Wed, 12/07/2011 - 13:02 | 1955175 hedgeless_horseman
hedgeless_horseman's picture

 

 

Fascists are about pitting us versus them...divide and conquer.

http://en.wikipedia.org/wiki/Fascism

Your's and Spitzer's posts are about pitting ECB versus The Fed...divide and conquer.

In 1984, Oceania had not always been at war with Eurasia, it was just fascist propaganda.

Wed, 12/07/2011 - 13:06 | 1955222 Ghordius
Ghordius's picture

sorry, sorry, sorry, I missed the 1984 reference. I apologize.

And I was brought up by real fascists who knew personally from the inside how it works. And I'm quite sure I'm a "Classical Liberal", because or despite that.

No, I don't think two little posters in ZH can really pit two MegaEntities like the ECB and the FED against each other. I still urge you to read Ron Paul's article, though.

My point is that they are helping each other - grudgingly. The FED and the Bank of England would prefer to have the old continental currencies or the EuroBonds or a Fiscal Union - it would make their instruments sharper.

Wed, 12/07/2011 - 13:10 | 1955243 hedgeless_horseman
hedgeless_horseman's picture

 

 

No worries.  Most of my references get missed.

Peace.

Wed, 12/07/2011 - 13:14 | 1955260 Ghordius
Ghordius's picture

Peace - read this 1954180 BTW, it's a discussion I had with popo about the real strenght of the USD

Wed, 12/07/2011 - 14:12 | 1955483 boiltherich
boiltherich's picture

Fed= good cop, easy money and tons of it

ECB= bad cop, no money for YOU flagrant welfare reprobates

End result three quarters of a billion people owing everything above subsistance to the two and their shareholders.

Wed, 12/07/2011 - 12:41 | 1955096 GeneMarchbanks
GeneMarchbanks's picture

Mentality, my friends. Both sides of the pond are seeing things only one way. You have to have at least lived on both continents (+ done some business) to appreciate the immense complexity here.

As far I'm concerned nothing is 'pre-destined' to happen. Wittgenstein: that tomorrow will happen is only a hypothesis. We do not know whether or not tomorrow happens.

With that in mind, we are dealing with groups of people who now see that their perceived 'collective' interests are no longer viable. Someone, somewhere has to suffer. Germany dance to the tune of the Squid is hard to imagine by me. On it goes, the killer suspense...

Wed, 12/07/2011 - 12:59 | 1955187 Ghordius
Ghordius's picture

everytime my sister mentions Wittgenstein is to use it as a code word for "Shut up!" 8-)

CHS in this article is saying that what could happen here in the EZ to appease the markets is Debt Serfdom.

EU Fiscal Union = EU Debt Serfdom, he writes.

He is an hypocrite and seems too scared to put up the other equation

US Fiscal Union = US Debt Serfdom ??

Wed, 12/07/2011 - 12:00 | 1954935 SheepDog-One
SheepDog-One's picture

I agree Spitzer.

Wed, 12/07/2011 - 12:26 | 1955028 kito
kito's picture

@spitzer--not true, they are one of the same. the only reason why ecb hasnt launched their own qe bonanza to fix their banking mess is due to germanys refusal to allow their currency to be debased. if not for germany, europes qe wouldve been implemented already................

Wed, 12/07/2011 - 12:32 | 1955051 Ghordius
Ghordius's picture

kito, there is a poker game going on, bloody Germany's CB, the BuBa has exactly ONE VOTE out of seventeen.

Of course the political will of the German Nation is important, but it's still technically one vote.

Fact is that out of seventeen, no one really wants to print like the Old Master Ben does. Except Belgium, perhaps...

Wed, 12/07/2011 - 13:13 | 1955255 kito
kito's picture

ghordius, maybe you should check out the exodus of germans from the ecb over the past year.....hmmm.....wonder why?

Wed, 12/07/2011 - 13:20 | 1955291 Ghordius
Ghordius's picture

because no "real" German central banker wants to go down in history as "the" German at the ECB that inflated again?

Of course the Germans are not happy, hell, I would not be happy there, too! Still, note how quick Magic Ben was with helping out with unlimited dollars at no cost for the european MegaBanks.

I think one of the biggest misunderstanding of common financial knowledge is that a CB is a bank.

We should find a new word, something that conveys the "creation of currency on behalf of the sovereign" part.

A Fiat Central Bank is more something like a Weapons System.

Wed, 12/07/2011 - 15:39 | 1955777 Spitzer
Spitzer's picture

good points Ghordius..

clearly the ECB won the latest standoff with the Fed, hence the newly cheap dollars. The death of MF global was also an ECB win.

ECB 2 Fed 0

Wed, 12/07/2011 - 11:47 | 1954877 jm
jm's picture

Rubbish post. 

People that ran up debts have to sacrifice as well as the creditors have to sacrifice through inflation and haircuts. 

This is called paying the piper, not debt slavery.

Wed, 12/07/2011 - 12:15 | 1954994 island
island's picture

So you think other people paying the debts of the indebted and gamblers is "paying the piper"?

What friggin' school of critical thinking did you go to? 

Wed, 12/07/2011 - 12:45 | 1955094 Ropingdown
Ropingdown's picture

Germany is saying "let the dancers pay the piper."  The others (and Geitner) are saying "no, everybody has to pay the piper because after all they knew we were dancing, didn't they."  I prefer the view that it isn't my job to tell the dancers they should be working more, dancing less.  They could possibly end up simply kicking the piper out of town with no dinner, as Iceland did, but then most pipers will avoid the town...for a time.

Wed, 12/07/2011 - 14:03 | 1955452 JOYFUL
JOYFUL's picture

this pay the piper analogy is  much too lederhosen and bratwurst and generally uptight euro crap what is just not going to cut it here....no matter who says what, it all comes down to the dance...

"The "teeth" of automatic sanctions is supposed to force nations to "tighten up" "

  http://youtu.be/Wro3bqi4Eb8 Archie Bell & The Drells - Tighten up (1968)

A bunch o bro's from Houston Tejas figured this thing out bout 50 some years ago, put it to music, and everybody what was hip got down to it! Those what dinnet, well,

losers gonna lose!... Now face the music EVERYBODY an DO THE TIGHTEN UP!

Wed, 12/07/2011 - 15:49 | 1955799 jm
jm's picture

It takes two to tango.  Creditors should have been more selective and debtors should have been more prudent.

There is too much debt for it to be mathematically serviceable.  The debt level needs to be reduced.  There is no other way.  Default is a horrible way to do this because there is so much debt that it will lock up credit markets and creidtor recovery will be horrible.  Inflation, extension of term, and forebearance is a better way.  At the same time, there needs to be severe and painful enough penalties on debtors to make sure that they avoid being deadbeats when it is at all possible to service their debt.  

Wed, 12/07/2011 - 11:47 | 1954878 allerheiligen
allerheiligen's picture

Check out Frank Schäffler, Germany's Ron Paul:

http://www.youtube.com/watch?v=8lUp-hc5WPc&feature=youtu.be

Wed, 12/07/2011 - 11:49 | 1954884 Sophist Economicus
Sophist Economicus's picture

Chuck, let me fix your equations:

 

Government reckless spending = Serfdom for the people

'Democracy' = Serfdom for the minority

 

 

Wed, 12/07/2011 - 11:51 | 1954887 Catullus
Catullus's picture

Seems like a functioning democracy to me. This is how they eventually end up. A politician promises the world, they continue to get elected, and as the bill comes do they blame everyone else and reform the system before it collapses. Seems as though it happens once a generation under this unstable regime.

You might have meant under functioning societies where property rights are acknowledged. Then maybe there wouldnt be a wholesale plundering of people's wealth to backstop the idiotic promises of the self-serving (democratically elected or not) elite power brokers.

No matter. Debt union does is equal debt serfdom which is why all government debt equals slavery.

Wed, 12/07/2011 - 11:50 | 1954891 slaughterer
slaughterer's picture

Can't wait for the "thunbs up" photo op in two days.  

Wed, 12/07/2011 - 11:56 | 1954912 SheepDog-One
SheepDog-One's picture

Thumbs will be up what? The peasantry's asses?

Wed, 12/07/2011 - 11:52 | 1954897 Racer
Racer's picture

Stock and bond market gearing up to celebrate the enslavement of generations... yeah while the debt serfs are not allowed any say in the massive intrusion in their lives

Wed, 12/07/2011 - 12:11 | 1954908 SheepDog-One
SheepDog-One's picture

Now for this plan to 'work', the debt slaves simply need to be forced to increase their production by 4X, with the knowledge theyll always be debt slaves, in order to keep the few multi billionaires in their lifestyle....certainly there will be no revolt, nah.

Wed, 12/07/2011 - 11:56 | 1954913 Sudden Debt
Sudden Debt's picture

Funny thing happend a few days ago in my country.

Our politicians agreed a law where the tax inspection can demand all the details about somebody's accounts and which allows them to get full disclosure.

Our politicians where confinced that would be so fair and solve so many conflicts about people who don't pay the taxes they should.

SUDDENLY!!!

THE TAX INSPECTION WANTED TO SEE THE ACCOUNTS OF THE MINISTER WHO SIGNED THAT LAW!!!!

(that minister is accused of inside trading... and seems to be gotten a LOT RICHER these last few years)

AND SUDDENLY!!!!

HE FOUND THAT LAW TO BE A BAD THING!!!

(he signed it and it was his law to begin with....)

 

These people don't give a rats ass about the common people. They do what they don't want to happen to themselves. They think they are above the law.

They should be shot. 10 times in a row to make sure....

 

Wed, 12/07/2011 - 12:05 | 1954951 Few
Few's picture

They should be shot. 10 times in a row to make sure....

I wouldn't waste bullets however it is tempting. Skinning them alive in a brine solution seems more fitting.

Wed, 12/07/2011 - 13:31 | 1955344 the tower
the tower's picture

No, they really should be shot. Seriously. Anyone who works in the upper echelons of a bank (central banks included), weapons- or tobacco multinational should be shot.

Wed, 12/07/2011 - 12:12 | 1954975 wisefool
wisefool's picture

See the USA. Mitt Romney Repblican presidential candidate in waiting. http://www.csmonitor.com/USA/Elections/From-the-Wires/2011/1026/Why-won-t-Mitt-Romney-make-his-tax-returns-public

They would tell us non-sophisticated people to hate the game, not the player. Okay. I hate the game and I am not playing it anymore. If you dont like banks, dont take loans. If you dont like the absurd taxation scheme ... well ... expect a gun pointed in your face. Welcome to the party my euro freinds!

Wed, 12/07/2011 - 12:44 | 1955107 Abitdodgie
Abitdodgie's picture

You surfs sit around and bitch about this rule and that rule , just become a sovereign, then guess what all this shit does not apply to you , or you can carry on bitching about it and doing nothing.

Wed, 12/07/2011 - 12:46 | 1955121 Odin
Odin's picture

You spelled "serf" wrong bud.

Wed, 12/07/2011 - 12:52 | 1955147 Abitdodgie
Abitdodgie's picture

Sorry my bad

Wed, 12/07/2011 - 11:58 | 1954918 unununium
unununium's picture

No problem with a single currency.  It's a good idea.

UNLESS you plan to debase it, and want to control who benefits from that debasement.

Just sayin'.

Wed, 12/07/2011 - 11:58 | 1954919 JS1234
JS1234's picture

And what will they do if a member state doesn't balance their budget?  Punish them by giving them even more money?  It is the core states that have the most to lose by letting a debtor default.

Wed, 12/07/2011 - 11:58 | 1954921 RobotTrader
RobotTrader's picture

Crude oil imploding, CRB Index failed to u-turn yesterday, now charging to new lows.

Where is the "hyperinflation?"

What happened to "Peak Oil"??

No wonder Lowe's and other Big Box retailers are so strong.

Wed, 12/07/2011 - 12:01 | 1954937 SheepDog-One
SheepDog-One's picture

Wheres the Santa Claus rally?

Wed, 12/07/2011 - 12:05 | 1954945 SheepDog-One
SheepDog-One's picture

MomoFaded declares oil 'imploded' at $100.30, proving he's brain damaged, he also calls for DOW 15,000 but refuses to explain why oil was at $25 a barrel when the DOW peaked at 14,000+...cant have it both ways, prepare for equities implosion.

Wed, 12/07/2011 - 12:11 | 1954982 Spitzer
Spitzer's picture

Oil is up 35% off the low in a short time. You expect another 35% right away ?

Wed, 12/07/2011 - 12:29 | 1955040 kito
kito's picture

@robo--much better today, as you are sticking with your brilliant hindsight calls. i believe just yesterday you called a bottom in commodities....but alas, that was a prediction on your part, which, as usual, was wrong.......

Wed, 12/07/2011 - 11:58 | 1954923 jmcadg
jmcadg's picture

AAARRGGGHH! I can't listen to Bloomberg Radio anymore.

Unadultered hopium bullshit. Where do they drag these morons up from?

The US is immune, do we really have to talk about Europe again,

because, well, it's so irrelevent. Housing starts are ready to soar, forget the foreclosure stock.

Why isn't everyone long NETFLIX. Tsh, tsh, barbarous relic. Iran, where's that - off the coast of Australia?

Fuckin' hell. Give me strength.

Wed, 12/07/2011 - 11:59 | 1954932 jmcadg
jmcadg's picture

RobotTrader, go listen to Bloomberg Radio you fucktard.

Sorry, you're already hardwired in.

Wed, 12/07/2011 - 12:10 | 1954977 SheepDog-One
SheepDog-One's picture

No shit, that Roboblurb was just the top of the hour Bloomberg news report regurgitated here? 

Figures.

Wed, 12/07/2011 - 11:59 | 1954933 Cangoroo
Cangoroo's picture

Problem is, the population is totally paralysed. It is all to similar to a natural disaster. Cannot wait to see until France and Germany break the new austerity rules and render them obsolete.

Wed, 12/07/2011 - 12:01 | 1954938 Caviar Emptor
Caviar Emptor's picture

Let me shortcut you to the answer: 

Fiscal Union = guaranteed social/political revolution

On the one hand you have Spain with 22.8% officially reported unemployment (about 5 million claimants). You are talking about an entire generation with no means to support itself. And no prospects despite "recovery". 

Who/How are they going to be supported? And why? What is the outcome of such a plan? Are the Euro countries with a still viable export surplus going to expend it all to support 5 million unemployed in Spain? 

Sadly, even if they had the most charitable of impulses it would still be futile as the cost structure of the global economy keeps rising and rising, leading to a worsening of poverty. And without total support can there be any doubt that social/political revolution would soon be in the air?

Spain is the poster child for the failures of the global economy

 

Wed, 12/07/2011 - 12:25 | 1954952 hedgeless_horseman
hedgeless_horseman's picture

 

 

Fiscal Union = guaranteed social/political revolution

Are you speaking of the same Europeans that saw their neighbors dispossessed and herded on to trains, yet still didn't revolt?  I wish it were true, but I am afraid you are wrong.  

Europeans are too well fed.  I was just over there, and everyone seems pretty fat and happy.

Wed, 12/07/2011 - 12:31 | 1955046 kito
kito's picture

man, that greek food looks goooooood........

Wed, 12/07/2011 - 12:39 | 1955080 Caviar Emptor
Caviar Emptor's picture

Hedgless, that's exactly my point. Faced with the possibility of impending ruin, which Europeans will be in the mood to trade what's left of their financial security in exchange....for what exactly? Happy banks in Portugal? Happy pensioners and unemployed in Spain? Tyler even commented today on a country I think is a good example of overly rosy perception (especially here in the US): Denmark. They are heading very shortly to the same situation as Ireland and the PIIGS. Don;t even look at Eastern Europe. And for that matter, don't look too closely at Germany East of Berlin

Wed, 12/07/2011 - 13:14 | 1955263 JR
JR's picture

Hedgeless: Just to say, historical accounts now indicate that prior to the invasion of Poland, Germans were extremely fearful and opposed to war. And after the invasion, only a minority were duped with the Nazi propaganda about Poland attacking first. Germans were depressed and confused about the Nazi purpose: later to be supportive through mass police surveillance, strong arm tactics, and German casualties as the war continued.

Wed, 12/07/2011 - 13:24 | 1955307 hedgeless_horseman
hedgeless_horseman's picture

 

 

Some good reading on this important topic.

They Thought They Were Free: The Germans 1933-45

 

Suddenly it all comes down, all at once. You see what you are, what you have done, or, more accurately, what you haven’t done (for that was all that was required of most of us: that we do nothing). You remember those early meetings of your department in the university when, if one had stood, others would have stood, perhaps, but no one stood. A small matter, a matter of hiring this man or that, and you hired this one rather than that. You remember everything now, and your heart breaks. Too late. You are compromised beyond repair.

 

http://www.press.uchicago.edu/Misc/Chicago/511928.html

 

Wed, 12/07/2011 - 12:08 | 1954966 SheepDog-One
SheepDog-One's picture

Oh, it will all work fine! Just as soon as they convince 99.9% of Europeans that they are now $1/day forced labor debt slaves for all eternity and generations.

Wed, 12/07/2011 - 12:09 | 1954968 Cangoroo
Cangoroo's picture

Correct. In addition the welfare reforms in Germany created a huge stock of people who are actually on the dole. Estimates state as many as 7 m without proper work. So the situation could be a wee bit better and in France it is even worse.

Wed, 12/07/2011 - 12:35 | 1955063 Caviar Emptor
Caviar Emptor's picture

The nub of the problem. Perceptions are poor even within so called "solid" nations. Would they trade away what's left of their security?

Wed, 12/07/2011 - 12:05 | 1954944 JS1234
JS1234's picture

Europeans are so psychologically traumatized by the 20th century that they are all begging for the abyss of extinction.  The EU exists to exterminate all the ancient ethnic groups of Europe.  I keep looking for some groups to declare that they don't want to go silently into the night to no avail.  Who was it who said the the UK is the only virgin on a continent full of rape victims?

Thu, 12/08/2011 - 02:40 | 1957541 the tower
the tower's picture

JS1234, you obviously have never been to Europe, and know nothing about Europe. You probably don't even have a passport.

Wed, 12/07/2011 - 12:07 | 1954961 apberusdisvet
apberusdisvet's picture

"They" love to breed chaos, and that's why war is being planned and actively fomented; but it may come back to bite them in the ass.  China is the wild card.

Wed, 12/07/2011 - 12:10 | 1954976 JR
JR's picture

Speaking of legal fraud and the Road to Serfdom, Karl Denninger yesterday warned of the “very real” risk for customers with money in the bank of losing it all, insured or not  – a risk as real as “customers of MF Global have now discovered ‘the hard way.'”  Here is Denninger in Let’s Make the Clawback Risk REAL:

I want to make absolutely sure it doesn't go over your head because if you're wrong about this you could lose everything in your bank and investment accounts -- every single dime.

FDIC / SIPC insured or not.

Recently Bank of America transferred a bunch of derivatives into their banking arm.  "A bunch" means somewhere around $80 trillion worth.

Now pay very careful attention, because part of the bankruptcy "reform" law in 2005 placed derivative claims in front of depositors in a business failure - including a bank failure.

What JP Morgan is claiming in the MF Global case is that the derivative trade (which is exactly what a "Repo to Maturity" trade is - it's a derivative) is entitled to preference in the case of MF Global over those who had cash there for safekeeping either as a margin deposit or just as free cash as you would hold free cash in a bank.

If a major bank blows up this very same claim, supported in existing Bankruptcy Law with the changes signed by George Bush in 2005, will be used to steal the entirety of your bank account, and if you detect the impending blowup shortly before it happens -- say, 90 days before -- you're still exposed to the risk through clawback!

I have often referenced how that "reform" law in 2005 was used to screw you blind as a consumer, all under the name of the "ownership society" and "responsibility."  The truth is that this "reform" law was a raw example of financial******that was intended to and did assault you, the common consumer in America, for the explicit purpose of benefiting large financial institutions. …

A cascade failure of several large banks would easily result in loss claims that would exceed the entire US GDP; for obvious reasons virtually none of that would actually be paid or recovered and in the case of you, the average person, your reasonable expectation of recovery in such an event is zero. … (Full details on The Market Ticker)

http://market-ticker.org/

Wed, 12/07/2011 - 12:32 | 1955050 Caviar Emptor
Caviar Emptor's picture

@JR: great post. I've been withdrawing more cash than I need every time I go to my TBTF for the past 3 months. Even with FDIC, there are too many technicalities between you and your money. MF Global was a disastrous warning: not only was cash locked up but customers couldn't even go into cash if they had active futures trades on (!). In other words, total disconnect with their money as if they were already dead. If they even survived that, they may see pennies on the dollar in 5 years

Wed, 12/07/2011 - 13:05 | 1955220 JR
JR's picture

Greetings Caviar. I intend to follow suit. Hopefully, today I will have time to see how this affects 401(k)s.  This is absolutely the limit.

Wed, 12/07/2011 - 12:14 | 1954985 youngman
youngman's picture

Do they really think the Greek Shop owner who has been hiding his income for years is going to just start paying huge taxes now because some German said so...lol....this talk is all clouds.....and it will never rain on down to the people on the streets....this Mother Nature you can fuck with...

Wed, 12/07/2011 - 12:20 | 1955009 boiltherich
boiltherich's picture

In a functioning democracy, then those who reaped the gain (the banks) would actually be exposed to the risk that accompanied their gain. But sadly, the EU is not a democracy except as a simulacrum propped up for PR purposes. The risk and the gain have been neatly separated by the Eurocrats and the toady figurehead leadership (Merkozy et al.).

As a result the gain remains safely private with the banks while the risk and losses are shifted to the taxpayers and citizens of the EU, who must now make good on those stupendous losses while remaining exposed to the risk of future default.

><><><><><><<>><><><><><><><><><><><><><><><><>

You can substitute USA for EU and it would be just as true. 

Wed, 12/07/2011 - 12:21 | 1955012 Kaiser Sousa
Kaiser Sousa's picture

cue broken record.....

UNTIL THE PEOPLE GROW BALLS AND PUT A MOTHER FUCKIN CAP N THE ASS OF THESE BANKER OWNED BITCH MADE POLITICIANS AND THEIR MASTERS AINT A FUCKIN THANG GONNA CHANGE....

PERIOD...........................................

Wed, 12/07/2011 - 12:33 | 1955056 BennyBoy
BennyBoy's picture

Wed, 12/07/2011 - 12:35 | 1955065 BennyBoy
BennyBoy's picture

Coming To A City Near You

Wed, 12/07/2011 - 12:39 | 1955084 jmcadg
jmcadg's picture

Europeans are too well fed.  I was just over there, and everyone seems pretty fat and happy.

You are certainly right, mind you last time I was in the States, there were some pretty fat fucks scoffing down burgers served up on trailers.

Wed, 12/07/2011 - 12:44 | 1955109 Odin
Odin's picture

Good article... They will not get away with it without serious world war though... There is going to be such a huge, world wide uprising once real austerity kicks in that they will have to kill the lot of us before this would work.........which I would not put past these god damn megalomaniacs...

Wed, 12/07/2011 - 12:47 | 1955126 marcusfenix
marcusfenix's picture

on a related note Halliburton subsidiary KBR is seeking sub contractors to provide for catering, fence and barrier construction, medical services and human waste trash removal among others at fema and us army core of engineers facilities across the five US fema zones. the story is the result of an email being released by an unnamed government source to the alt. media in which KBR is seek companies which have the ability to construct barriers and fencing for a 300 person facility with in 36 hrs and a 1000 person facility in 72 hrs along with all other services needed to house large amounts of Americans for extended periods of time-

Exclusive: Government Activating FEMA Camps Across U.S.

this is just one link of many on the subject.

laugh it off and dismiss it out of hand at your own peril.

we are watching what all the "tin foil hatters" and NWO "conspiracy nuts" have been trying to warn us about for decades, as many stated the end of independent national sovereignty would begin with an engineered global finical crises and the fall of Europe into a mini bankster owned and bureaucrat run new euro order and would progress from there.

we are next, and it seems that the federal government is prepping for the backlash...  

Wed, 12/07/2011 - 13:01 | 1955191 Atomizer
Wed, 12/07/2011 - 13:16 | 1955275 Georgesblog
Georgesblog's picture

This will do for Europe what the New Deal did for the United States. That was the agreement that locked the people into a debt game that they could not win. Now, the Federal Reserve joins hands with the ECB to go forth and conquer.

http://georgesblogforum.wordpress.com/2011/11/02/the-daily-climb-2/

Wed, 12/07/2011 - 14:52 | 1955621 Snakeeyes
Snakeeyes's picture

I think it is dawning on everyone. Even Germans who will get stuck bailing out the PIIGS almost single handedly. With US help, of course.

 

Rumble on The Rhine – Uncertainty About The Eurozone Treaty (Italy, Spain and Belgium Yields UP)

http://confoundedinterest.wordpress.com

 

Wed, 12/07/2011 - 16:21 | 1955928 Totentänzerlied
Totentänzerlied's picture

"[...] and also socialism, which would require wiping out the wealth of the banks and bondholders via nationalization, a process that would at least return surviving assets and control to an elected government."

HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA

Oh wait, he's serious! HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA

"an elected government"

"functioning democracy"

YES THAT'S THE ANSWER! bahahahahahahahahahahahahaha

Wed, 12/07/2011 - 18:26 | 1956522 theyenguy
theyenguy's picture

Fiscal unity was God's design and choice from eternity past and bible prophecy of Revelation 13 and Daniel 2 communicates that a credible sovereign stands in the wings, and that he and his banking partner will come to rule through a New Stability Compact, for a New Europe, that will be never be voted on.

Bible prophecy is more authoritative than Austrian economic thinking of Mises, Rothbard and Hayek, and it foretells that out of sovereign armageddon, that is a credit bust and world investment breakdown, a new global economic and political regime will arise, Revelation 13:1-4.

At the appointed time,not any human action, fate will open the curtains, and onto the Europe’s stage will step the Europe’s New Charlemagne Revelation 13:5-10, together with his banking partner, Revelation 13:11-18. They will not be elected; rather destiny Ephesians 1:1-11, will bring them forth in a Eurozone coup d etat, to provide order out of chaos, Revelation 6:1-2. These sovereigns will develop the Eurzone into a type of authoritarian revived Roman Empire.

Greeks cannot be Germans. The former are of the olive state and are club med. The latter are of the industrious state and are hard working. Yet all will be one in a stability union led by a capable governor, The Sovereign, and an adept banker, The Seignior, which literally means top dog banker who takes a cut. These will provide seigniorage, that is moneyness; and the former countries of the democratic age, will exist as vassal states.

And these two will provide the seigniorage of diktat, as the seigniorage of fiat money, that existed under the Milton Friedman Free To Choose floating currency regime, is history. The word, will and way of these two will provide a new moneyness, and the people will be amazed and follow after it, placing their confidence and trust in it, giving it their full allegiance, Revelation 13:3-4.

David R Reagan writes that sovereignty will be sacrificed as a Federal Europe is formed. “German Foreign Minister Joschka Fischer repeated his call for a European government in July, 2000, and said the European single currency, the Euro, was “the first step to a federation.” He added that he wanted a “powerful president.”1 Fischer said his aim was “nothing less than a European parliament and a European government, which really do exercise legal and executive power,” to operate under his powerful president. More sinisterly, he welcomed the progress made in removing the “sovereign rights” of nations which he defined as control of currency and control of internal and external security. In summary, Fischer said, “Political union is the challenge for this generation.”2 … (1 and 2 Ibid, “German Foreign Minister floats idea of elected EU president,” The Financial Times, July 7, 2000. This article was a report on a speech by Joschka Fischer to the European Parliament’s constitutional affairs committee.)

Greeks cannot be Germans. The former are of the olive state and are club med. The latter are of the industrious state and are hard working. Yet all will be one in a stability union led by a capable governor, The Sovereign, and an adept banker, The Seignior, which literally means top dog banker who takes a cut. These will provide seigniorage, that is moneyness; and the former countries of the democratic age, will exist as vassal states. German will not be going its separate way, rather it will be a powerful overlord in the Merkel, Sarkozy, and van Rompuy future as Robert Wenzel writes On Its Way: The United Europe of Germany, where Merkelism, the bold strategy of Angela Merkel to establish a New Europe as a stability union, that is a fiscal union, governs as Nordic leaders rule over their fiscally profligate Latin peers for the security and stability needs of Europe.

A fiscal union is the union that binds all together in debt servitude. Some call for nations to assert their sovereignty, others believe that the electorate will vote for independence. But the only choice that matters is the one that God made from eternity past to establish his son Jesus Christ as sovereign over planet earth, Revelation 2:26-27. And now, the whole earth, in nature, in politics, and in economics, is in revolt asserting its resistance. Yet God’s Sovereign Will, Ephesians 3:1-11, has given sovereign authority to the Clarion Call of the Club of Rome, and leaders, such as Angela Merkel, Nicholas Sarkozy and Herman van Rompuy, who are working through its authoritarian mandate to establish fiscal rules which bind the EU together as one.

The development of German dominance of the Eurozone, as well as the concept of a fiscal union, is abhorrent to UK Conservatives as they have been joint rulers of the world with the US for over 150 years. But God is working sovereignly through Daniel 2:31-45, which communicates a progression of kingdoms. The world is moving from the two iron kingdoms of the UK and the US, to the ten toed kingdom of regional global governance.

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