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Guest Post: The European Tinder Box

Tyler Durden's picture




 

Submitted by Moraymint of The Needle blog,

I wonder if harsh economic realities could transcend generally accepted logic.  The common perception of unravelling events relies, by and large, on politicians remaining in close control of events and in particular in tight control of their societies.

 

But when institutions start running out of cash and people don’t get paid on a grand scale (which must now be well and truly on the cards in saying the coming 1 – 3 years, if not within the coming months), then politicians’ grand economic and political plans can rapidly turn in to the proverbial ‘ball of chalk’.

Like many people I struggle to discern the details of unfolding events over the coming months.  However, my age and instinct tell me that Europe’s political elites are losing control of their own societies even now.  There are more than 18 million people unemployed in Europe today and, for as long Europe’s political class stays on its current course, that unemployed rate will climb and climb.  That’s a really bad state of affairs; indeed, it’s life-threatening.

Eventually, I judge that the smouldering European tinder box will burst forth in to flame and thence on to conflagration.  At which point all bets are off.  No amount of logical and neat arguments about how politicians will engineer a European superstate without an explicit democratic mandate so to do will counteract the incandescent rage that could grip a critical mass of European citizens going without work, going without shelter, going hungry and living without hope.

It’s this ‘direct action’ by angry citizens that would scupper the controlled, totalitarian formation of a European superstate, I believe.  But I accept that I may be quite wrong in this and that the Europeans could well end up stumbling like lambs to the slaughter when it comes to their political masters implementing acoup de continent’ and forcing the formation of the United States of Europe on 495 million people.  God help them if it happens that way.

And if it does, there would need to be revolution in the UK to prevent our own political class from stitching us in to that self same socialist-fascist nightmare that would be the nascent USE.

Frankly, with each passing day now I can barely believe what the European political class is doing and getting away with.  It’s both scary and shameful and made so much worse by the benign way in which our own ignorant and cowardly political class just goes with the flow. Europe is on the verge of being raped and our own politicians don’t know where to look, still less what to do.

 

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Tue, 07/31/2012 - 19:28 | 2666817 zilverreiger
zilverreiger's picture

One more european panic article and I want my zh subscription money back!

Tue, 07/31/2012 - 20:13 | 2666957 SilverTree
SilverTree's picture

Buzz off.

Tue, 07/31/2012 - 21:03 | 2667092 Vet4RonPaul
Vet4RonPaul's picture

Buzz Fuck off.  Fixed it for you.

Tue, 07/31/2012 - 23:18 | 2667466 jeff montanye
jeff montanye's picture

i'm a non vet 4 dr. paul.  i've heard that fascism is crony capitalism plus murder.  

obama is clearly a crony capitalist.  and he claims the power to both teach constitutional law and murder u.s. citizens by executive order without appeal and far from a battlefield.

and i thought that bush was the worst president the u.s. would ever have.

Tue, 07/31/2012 - 21:49 | 2667189 max2205
max2205's picture

One word : Euro SNAP

Wed, 08/01/2012 - 07:14 | 2668006 andrewp111
andrewp111's picture

This isn't 1933. The Euros have benefits much more lucious than SNAP. As long as the unemployed masses are sucking on the Welfare State, an explosion will not happen, and could even provide the mechanism for creation of the USE. Just think - if the EU level of government took over all welfare and pension programs so that its States could stay solvent, the formation of a fully sovereign USE would become irreversible.

Tue, 07/31/2012 - 19:38 | 2666824 francis_sawyer
francis_sawyer's picture

Time to call on God's Chosen ones to provide expert leadership in this time of crisis... I don't pretend to be that smart (nor I attempt to profiteer from bad or unsolicited advice), but I do have a self determinant bone about me... So whether I succeed or fail, I've already arranged a plan for myself (& therefore, thanks, but no thanks, for your ideas as they apply to me personally)...

Tue, 07/31/2012 - 19:33 | 2666834 AurorusBorealus
AurorusBorealus's picture

Unfortunately, flames and the exploding forth of the coming man often lead to totalitarianism as surely as bureaucratic dictatorship.  Sure Europe may have its reign of terror on the Eurocrats... but what monster will lead it?

Tue, 07/31/2012 - 20:28 | 2667002 TahoeBilly2012
TahoeBilly2012's picture

Obama

Tue, 07/31/2012 - 23:20 | 2667473 jeff montanye
jeff montanye's picture

to call obama a monster insults monsters.

Tue, 07/31/2012 - 19:34 | 2666836 Plumplechook
Plumplechook's picture

This so-called crisis is being run by and for banksters. They were burned by the credit crunch, by their own reckless lending to a housing bubble and to spendthrift governments. Declaring themselves too big to fail, they demand policies whose sole virtue is to see their loans secured, at whatever cost to the European economies.  Record unemployment in Greece and Spain means nothing to them as long as they are able to preserve their balance sheets. 

Tue, 07/31/2012 - 21:49 | 2667191 caconhma
caconhma's picture

"This so-called crisis is being run by and for banksters." Yes and No.

To bribe the entire society, banksters and their politicians created a welfare state. Well, such economic model cannot function in a long run since, as time going on, there are fewer and fewer incentive to be productive and/or work at all.

Furthermore, for a very long time, the 3rd-world countries provided the USA and Europe with huge amount of goods and services keeping a slavery status for its own citizens. Now, this model does not work anymore. Developing countries want something valuable in return but the West is incapable of doing it anymore. Now, there is a problem with "the world open trade" policies. Somebody must produce all these goods at competitive prices and the West cannot do it anymore.

As for banksters, well, they do not understand what they are doing and have no ideas of the consequences of their actions. Presently, their plans are directed to

-     Aggressive wars to subjugate other countries and enslave their citizens and

-     Establishing fascist/ totalitarian states within their own countries (in North America and Europe) governed by a new super race of their own tribesmen

The present Western banksters empire was built up on superior high technologies and brainwashing of its own citizens. But recently this propaganda/brainwashing model disintegrated to filth and perverting of its own citizens making them incapable of performing even simple tasks. Just look at their top managers such Obama, Clinton, Romney, GWB, and other Western leaders. They are extremely corrupt and nearsighted.

The all French saying: in a country of blind people, a one-eye man is a king. Well, the present bankster kings and queens are also blind people.

Tue, 07/31/2012 - 21:59 | 2667213 Plumplechook
Plumplechook's picture

Some good insights Coconhma.  But let me tell you why I believe we are  four years into a twenty year slump.  Because global capitalism has created a transnational, corporate welfare state which transfers wealth from taxpayers to a kleptocratic elite. It works like this:
 
Method 1: Taxpayers pay for not only the infrastructure on which the private sector depends, but also the state-funded research carried out by the military and public universities to develop technology such as the jet engine, the desktop computer, the internet, nuclear power and GPS. This technology gets handed over to the private sector, which proceeds to make vast profits from it. Then, even though the last 30 years have seen drastic and worldwide reductions in corporation tax and the top rates of income tax, the corporate kleptocracy evades taxes by hiding offshore up to £20 trillion of its profits (an amount equivalent to almost a third of annual global GDP), whilst governments cut spending and charities open food banks to provide for the victims of this criminality.
 
Method 2: Until their private sectors are able to compete globally, capitalist economies such as the US (from the 1830s till the 1940s) and Britain (from the 1720s till the 1850s), reject the free market and develop their economies through state intervention, using protectionism, subsidies and capital controls. The ruling elites in countries such as Japan, Singapore, Taiwan, France, Austria and Finland follow the lead of the world’s two biggest economies. Then, as soon as they have gained a competitive advantage, these beneficiaries of corporate welfare inflict market liberalisation on developing countries with disastrous effects. Thus, having increased by 37% between 1960 and 1980 as a result of interventionist economic policies, the GDP per capita of sub-Saharan Africa fell by 7% in the years 1980-2000, as countries which borrowed from the IMF were forced to cut spending, privatise their state-owned industries, deregulate their financial sectors and remove trade barriers. And at the same time that they were wreaking havoc in Africa, the free market prescriptions of the Washington Consensus were also failing in the developed countries, where average, annual GDP per capita growth fell from 3.1% during the 30 years before 1975 to 2.1% during the 30 years of neo-liberalism which followed.
But slowing GDP growth and stagnating median incomes didn’t stop wealth from being shovelled upwards ever more quickly. In the US for example, the 18 years preceding the 2008 financial crash was one of only two periods in the country’s history when the share of total income of the top 1% exceeded one fifth. The other was the 8 years before the Great Depression.
 
Method 3: Governments have to subsidise employers who don’t pay their employees a living wage. In the UK, for example, the government spends £23 billion per year on the tax credits it pays to working families. Then there’s the £4 billion per year in housing benefit given to households with at least one person employed. And, to keep wages low and its workforce compliant and insecure, the private sector needs an army of unemployed – again financed by the taxpayer. As Margaret Thatcher’s chief economic adviser in the 1980s, Alan Budd, admitted to The Observer in 1992:
“….......... the 1980’s policies of attacking inflation by squeezing the economy and public spending were a cover to bash the workers. Raising unemployment was a very desirable way of reducing the strength of the working class. What was engineered – in Marxist terms-was a crisis of capitalism which re-created a reserve army of labour, and has allowed the capitalists to make high profits ever since...........”
 
Method 4: Instead of retaining monopoly control of the money supply, governments allow private banks to create money, which is conjured up on a computer screen and used to speculate, fuel asset price inflation, pay bankers’ bonuses and create an endless debt spiral as more and more money has to be printed to enable the repayment of interest. Then, when the asset bubble finally bursts, governments have to spend trillions of pounds of taxpayers’ money to prevent the financial system from imploding and national economies from disintegrating. Finally, to add insult to injury, governments have to borrow what should be their own money back from the same banks to which they have given the power to create money out of nothing – and pay high interest rates because of an economic crisis which the banks themselves have caused.
 
And worst of all, while the beneficiaries of the corporate welfare state drain the global economy at the expense of taxpayers, the media organisations and politicians they own lecture the poor and unemployed, endlessly moralising about their fecklessness and lack of responsibility. In doing so, they only confirm what most people already know – that capitalist democracies really are the best that money can buy.

Tue, 07/31/2012 - 22:30 | 2667304 Lednbrass
Lednbrass's picture

The UK government spends 23 billion on tax credits it "pays"? This is conceptually bizarre and can only make sense under one hideous and dangerous premise- that earned money belongs to the government in the first place and letting people keep their money equals governmental expenditure and payment to them.

Wed, 08/01/2012 - 02:00 | 2667776 indygo55
indygo55's picture

Very good reply. This is why I come here.

 

Wed, 08/01/2012 - 05:26 | 2667947 ebear
ebear's picture

1. Collect underpants

2. ?

3. Profit!

Tue, 07/31/2012 - 19:37 | 2666843 cherry picker
cherry picker's picture

A few weeks or so ago I saw on this site a line of Greeks waiting for free vegetables and fruit.

Wait till a man or woman sees their children going without and the parents helpless to provide.

Then the pols and CEOs and warmongers at the top wil see what wrath they will unleash and they will murder to keep their citizens at bay, as every other government will not hesitate to use deadly force to prevent fragmentation of it's empire.

With unemployment at over 24% in two countries and 11.2% in Europe overall and rising, who gives a damn about Euro, Brussels or the unelected beaucrats who would be kings and queens.

Tue, 07/31/2012 - 19:47 | 2666876 BurningFuld
BurningFuld's picture

Greece is now completely powerless to stop what is coming. Just wait until the USA is in that position. Don't think it's coming??  Less than 5 years boys and girls.

Tue, 07/31/2012 - 19:57 | 2666908 Haager
Haager's picture

From where on earth do you receive that optimism? 5 years...

Tue, 07/31/2012 - 19:47 | 2666877 nmewn
nmewn's picture

Its a powdah keg!!! We sittin on a powdah keg heya!!!

I just like sayin it ;-)

Tue, 07/31/2012 - 20:10 | 2666945 francis_sawyer
francis_sawyer's picture

You must be from New England... Because if it was TRULY a "powdah" keg, you'd be calling it a POWDER keg... :-)

Tue, 07/31/2012 - 20:59 | 2667082 Lednbrass
Lednbrass's picture

Sheesh, no need to insult the man like that.  I believe he is from the actually useful section of the country, he certainly doesnt think like one of those people.

Tue, 07/31/2012 - 19:52 | 2666895 TrainWreck1
TrainWreck1's picture

they'll just print more money that is worth less.

everywhere.

Tue, 07/31/2012 - 19:59 | 2666914 Hype Alert
Hype Alert's picture

Poof!

Tue, 07/31/2012 - 20:01 | 2666918 JohnG
JohnG's picture

 

 

Unpaid workers is already happenning in Spain:

http://howestreet.com/2011/09/navarra-region-spain-bankrupt-year-money-p...

 

Tue, 07/31/2012 - 20:06 | 2666934 John_Coltrane
John_Coltrane's picture

Thank god for the underground economy.  So, the official unemployment is likely higher than stated officially, but the hidden income from the underground economy and natural human ingenuity will likely overcome this problem  The issue for the statist is that the underground economy is not taxed.  That's what I like about it.  Starve the beast.

Wed, 08/01/2012 - 04:19 | 2667895 nicxios
nicxios's picture

amen for the underground economy!

Tue, 07/31/2012 - 20:09 | 2666942 TahoeBilly2012
TahoeBilly2012's picture

Some say the world in controlled by masters of ancient wisdom. Is it a coincidence that all this happening as the major military powers converge on the remaining petro resources in the Mid East? Was the debt based binge planned to collapse in the West just in time to permit out out war? It all sure seems a little crazy, but you might think some of these problems would force the US political class to negociate a workable peace with the remaining powers, and I don't see that happening.

The only really odd thing is if this was all planned, why would our Corp's outsourced so much to China and given them such rise in military and industrial might? Maybe they really aren't very well planned out or in control and maybe Europe really is about to breakup and I say it could all bring peace to the world if we can stop the insanity in the Mid East.

 

Tue, 07/31/2012 - 20:56 | 2667056 magpie
magpie's picture

There is always occult significance, e.g. turn on your astrological followers but then be annihilated.

I refrain from pointing out a current example since i am uh compromised.

Tue, 07/31/2012 - 20:16 | 2666956 Miles Kendig
Miles Kendig's picture

Europe is on the verge of being raped and our own politicians don’t know where to look, still less what to do

- Moraymint

Bull shit!

The politicians are not only cheering this gang rape of their societies, they've gone and outlawed condoms and blood tests as those undermine confidence while ensuring a blessing from their popes also known as the cherry poppin daddies in elite pedophiliac circles. 

Tue, 07/31/2012 - 20:20 | 2666977 XitSam
XitSam's picture

"...the proverbial ‘ball of chalk’."

I'm not familiar with this proverb.  Found on the internet is 'Cockney rhyming slang for walk' but no proverb.

Wed, 08/01/2012 - 04:00 | 2667888 moraymint
moraymint's picture

XitSam ... sorry about that ... it's a phrase used in the British armed forces inter alia meaning something that is inherently unworkable, or unsustainable, or will just fall apart ... a contradiction in terms ... try making a 'ball of chalk' (dust) and see what happens ... hope that helps!

Tue, 07/31/2012 - 20:34 | 2667018 q99x2
q99x2's picture

Since you guys don't know I'll tell you.

You create a digital signature currency that regular people are willing to accept for exchange of goods and services and let the Open Source Community manage it.

Done. That is all. Fixed. Bankster free world. Live happily ever after.

Tue, 07/31/2012 - 21:03 | 2667093 Offthebeach
Offthebeach's picture

A virtual bank. Say 20 investors deposit pool $1k each. 200 borrowers borrow unsecured $100 each @ 12%. Borrowers get rates half of banksters, investors after losses get multiple of bank rates. Borrowers develop E-bay feedback credit ratings to borrow more. Investors can decide what pool to join as they desire profits and risk.

Tue, 07/31/2012 - 23:46 | 2667533 cliffynator
cliffynator's picture

And then we bundle those deposit pools into larger, more diverse pools. Let's call them something else. I don't know what, though, they're loans, so it should be something to do with debt obligations. let's get back to that. And then we could parcel those back into something I'll call "tranches" (a term I picked up during my France days) and resell them for profit to intelligent, sophisticated investors. Flipping loans made of money that doesn't exist for instant profit. I just made this stuff up on the fly, I'm a genius! /Sarc But no your idea's good too!

Wed, 08/01/2012 - 04:57 | 2667905 Offthebeach
Offthebeach's picture

The point is to extinguish the banks and break the bank political nexus.
Somehow. Kind of along the idea of Bitcoin, or Khan Uand on line learning is threatening gov approved rent seeking.
I know two people who's best returns presently are in lending. I don't see why the many small depositors, who have their deposits fractionalizes 20-30 times, and have to bail out theses banks
Why can't we cut out the banks and profit ourselves? Plus reduce/ weaken the influence / corruption of the welfare /warfare /finance state. What are we, knee crawling, bootlicking medieval serf sold into some modern day royalty? ( Well, yeah...but..)

Tue, 07/31/2012 - 23:54 | 2667553 Coreadrin
Coreadrin's picture

I think if bitcoin gets up in value enough you will see decimalization taking place.  Digital cash is pretty amazing, and of course competition between them is all the better, but you still have to sacrifice the market-selected hard money backing in exchange for dropping the risk of a siezable central depository and central clearing house (i.e. there is no GOD of the money system, but you lose 5,000 years of history).

Who knows, though.  I dabble in them over on the Gox from time to time, last run up did pretty awesome by me.  Might we see another speculative blowoff?  I don't know. For the sake of the 500 bitcoins I picked up <3.00 I damned well hope so :)

All you need for something to be legit is voluntary participation on both sides.  bitcoin has that all around.  The real question is staying power, and so far we are cresting year 2 while the world's money systems are melting down.  not bad.

Check out lendingclub - it's pretty cool, totally p2p, extremely discretionary (96% of apps currently refused), and there is even a secondary trading market on the notes you can flip to for a small profit if you don't mind letting someone else ride out the yield.  I hope other sites like this spring up and alternate currencies are adopted for it, like Pecunix gold and bitcoins.  Could get some seriously interesting play happening, and circumventing the entire snakepit just feels so damned right.

Wed, 08/01/2012 - 02:13 | 2667790 TraderTimm
TraderTimm's picture

Regarding how BTC can be sub-divided, you can represent every person in the United States using 0.0000001 fractions with only 3.1159 BTC

(US Census: Jul 1, 2011  311.59 Million Population)

The kicker? That isn't the smallest amount you can divide 1 BTC into. You still have one more decimal place to go.

Wed, 08/01/2012 - 05:14 | 2667916 Offthebeach
Offthebeach's picture

Cool. I wonder what % of savors and borrowers. That are need to leave conventional finance to cause them to collapse. Of course banks could just go to borrowing( bailouts ) from governments and just lend to governments or government fascist corporations. Nah, never happen in a free society.

Tue, 07/31/2012 - 21:14 | 2667118 Gloppie
Gloppie's picture

You ment Bitcoin http://bitcoin.org/about.html

It's no coicidence that our current fiat-based rigged scheme that serves as money is in the throws of failure while at the same time a more honest system is emerging. 

Buckimnster Fuller said that you can not fight existing systems, you just need to invent a better one and let it take over.

 

Tue, 07/31/2012 - 21:13 | 2667112 Hype Alert
Hype Alert's picture

(Reuters) - Joblessness in the euro zone hit on Tuesday its highest level since the single currency was born, a further sign of economic desperation as hopes erode that the bloc will be saved by its central bank this week.

http://feeds.reuters.com/~r/reuters/businessNews/~3/pG_VcAbaROA/us-eurozone-economy-idUSBRE86U0CT20120801

Tue, 07/31/2012 - 21:15 | 2667121 Vet4RonPaul
Vet4RonPaul's picture

With regard to " Europe is on the verge of being raped ...",

it is more accurate to say Europe, and especially Germany, is about to raped by the banksters again.    Read your history and read it from multiple sources; avoid school text books and msm.  The systems are now clearly breaking down in significant ways multiple times a week and the duct tape is melting.  A free market could have survived but this is anything but a free market and the level of interference is now past the tipping point to bring it back into an efficiently functioning market.  I'm hunkered down and will be waiting for about a 70% drop before coming back in (remember stocks kept going down for 2 years after the great depression's crash).  Romney and Obama both work for the banksters.

Tue, 07/31/2012 - 23:23 | 2667478 Sandmann
Sandmann's picture

The European Construct has been built on shackling Germany to French control.  Britain has been the sidekick to French policy  and has simply proven German superiority for which Germany must be punished

Tue, 07/31/2012 - 23:11 | 2667428 TNTARG
TNTARG's picture

It's just insane.

It's hard to believe the kind of subhuman subspecies are running the House.

Why is that? How much money do they need? How long until deadly riots on the streets? It's already happening in Greece with the new nazist on the block. It's already happening in Spain. It happened in Argentina, 30 died and 300 were wounded in december, 2001 (I was there).

At a certain point those guy are gonna need to hide themselves for years to come. This revoltig reality will change. Hope for the better but it isn't predictable. I'm pretty amaze, all those philosophers, all that History just to reach the Present? Fu..! They haven't read or they've read and didn't understood a fuck... Shit!

Tue, 07/31/2012 - 23:16 | 2667463 jonjon831983
jonjon831983's picture

It's always when things grow desperate that the groups that have been off the radar for some time will come back to whip the crowds into a frenzy...

Tue, 07/31/2012 - 23:45 | 2667531 Missiondweller
Missiondweller's picture

"formation of a European superstate"

Ever heard the term "Balkanization"??????

The EU will die and dozens of new countries will be born as old countries break up by region. The exception: Germany. Which will then be considered a "Superstate" among small states.

 

 

Wed, 08/01/2012 - 00:14 | 2667598 QQQBall
QQQBall's picture

Read the "Shock Doctrine" - some really bad juu juu is coming. And as to Europe only - forget it, 'Merikans are getting raped too.

Wed, 08/01/2012 - 05:32 | 2667930 Floodmaster
Floodmaster's picture

The State is the economic exploitation of one class by another, young Europeans are beginning to see the result of their parent's debt debauchery.

Wed, 08/01/2012 - 10:06 | 2668433 WhiteNight123129
WhiteNight123129's picture

There is no Federalism in sight in Europe in the short term, instead Germany is this time around freeing the citizens of Europe to a little extent by forcing other governments of Europe to shrink. As much as we people from other nations outside of Germany in Europe suffered in the XXth century in part because of Germany, this time around, thank you Germany for forcing our local feudal rulers to cut their spending habits.

 

Wed, 08/01/2012 - 10:27 | 2668543 shovelhead
shovelhead's picture

Tipping point?

Simple.

Live rounds replace rubber bullets. The gloves come off and the wake up call won't be silenced by a snooze button.

Remember Kent State?

http://hierographics.org/yourhistoryonline/kentstateshootings02.gif

 

 

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