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Soros Thinks The Unthinkable About Europe

Tyler Durden's picture




 

In a lengthy, honest, and somewhat gloomy op-ed in The New York Review Of Books, George Soros follows a similar tack to our post yesterday with regard to the current crisis and its origins in and similarities to the 2007/8 subprime crisis in the US. He then steps into discussing possible resolutions and does what any and all Keynesian-clowns are unable to do - think the unthinkable in order to reach a tenable solution.

In just four steps, he outlines how the unthinkable could be possible but critically (as we are well aware) explains the German-centric nature of any resolution (and the change of heart required to get there). A bona fide taxing-and-borrowing central treasury under a new treaty seems the approach-du-jour for Mr. Soros and while it may have merit as an 'unthinkable' idea, he ends with the threat that [his approach] "is the only way to forestall a possible financial meltdown and another Great Depression".

The Start

The euro crisis is a direct consequence of the crash of 2008. When Lehman Brothers failed, the entire financial system started to collapse and had to be put on artificial life support. This took the form of substituting the sovereign credit of governments for the bank and other credit that had collapsed. At a memorable meeting of European finance ministers in November 2008, they guaranteed that no other financial institutions that are important to the workings of the financial system would be allowed to fail, and their example was followed by the United States.

 

Angela Merkel then declared that the guarantee should be exercised by each European state individually, not by the European Union or the eurozone acting as a whole. This sowed the seeds of the euro crisis because it revealed and activated a hidden weakness in the construction of the euro: the lack of a common treasury. The crisis itself erupted more than a year later, in 2010.

 

The Current

Risk premiums that must be paid to buy government bonds have increased, stocks have plummeted, led by bank stocks, and recently even the euro has broken out of its trading range on the downside. The volatility of markets is reminiscent of the crash of 2008.

 

Unfortunately the capacity of the financial authorities to take the measures necessary to contain the crisis has been severely restricted by the recent ruling of the German Constitutional Court. It appears that the authorities have reached the end of the road with their policy of “kicking the can down the road.” Even if a catastrophe can be avoided, one thing is certain: the pressure to reduce deficits will push the eurozone into prolonged recession. This will have incalculable political consequences. The euro crisis could endanger the political cohesion of the European Union.

 

There is no escape from this gloomy scenario as long as the authorities persist in their current course. They could, however, change course. They could recognize that they have reached the end of the road and take a radically different approach. Instead of acquiescing in the absence of a solution and trying to buy time, they could look for a solution first and then find a path leading to it.

 

The unthinkable (and just four steps)

To resolve a crisis in which the impossible becomes possible it is necessary to think about the unthinkable. To start with, it is imperative to prepare for the possibility of default and defection from the eurozone in the case of Greece, Portugal, and perhaps Ireland. To prevent a financial meltdown, four sets of measures would have to be taken.

 

First, bank deposits have to be protected. If a euro deposited in a Greek bank would be lost to the depositor, a euro deposited in an Italian bank would then be worth less than one in a German or Dutch bank and there would be a run on the banks of other deficit countries.

 

Second, some banks in the defaulting countries have to be kept functioning in order to keep the economy from breaking down.

 

Third, the European banking system would have to be recapitalized and put under European, as distinct from national, supervision.

 

Fourth, the government bonds of the other deficit countries would have to be protected from contagion. The last two requirements would apply even if no country defaults.

 

The Problem

All this would cost money. Under existing arrangements no more money is to be found and no new arrangements are allowed by the German Constitutional Court decision without the authorization of the Bundestag. 

 

[Any solution] would presuppose a radical change of heart, particularly in Germany. The German public still thinks that it has a choice about whether to support the euro or to abandon it. That is a mistake. The euro exists and the assets and liabilities of the financial system are so intermingled on the basis of a common currency that a breakdown of the euro would cause a meltdown beyond the capacity of the authorities to contain. The longer it takes for the German public to realize this, the heavier the price they and the rest of the world will have to pay.


The Solution

There is no alternative but to give birth to the missing ingredient: a European treasury with the power to tax and therefore to borrow. This would require a new treaty, transforming the EFSF into a full-fledged treasury.


The Alternative

...a possible financial meltdown and another Great Depression.

 

Read the full article here.

 

While it does seem apparent that our European brethren are pricing (sovereign debt and the entire capital structures of European financials) for the kind of scenario that we, Jefferies, Bass, and now Soros are concerned with, US equity market participants remain calmly aloof to the unfolding quagmire - if only they could look back and consider how Lehman impacted the rest of the world.

 

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Thu, 09/15/2011 - 02:38 | 1672138 Peter K
Peter K's picture

The ultimate ASSCLOWN talking his book.

Thu, 09/15/2011 - 02:56 | 1672153 i-dog
i-dog's picture

Exactly! It's TPTB's wet dream to have a european central bank with unlimited printing ability, too.

We can only hope that we can prompt the collapse of the EZ (and EU) back to sovereign nation states, and national currencies, to deny them their 'base camp'.

Thu, 09/15/2011 - 03:07 | 1672173 Fiat2Zero
Fiat2Zero's picture

I love his approach "it is unthinkable, but you know, we really need to do this or DISASTER.  Oh and by the way it will be Germany's fault if it doesn't happen."

Fucking dark sith lord.

Someone pull the pin on the EU grenade already, I'm getting tired of hearing these bozos talk.  Let's get to the Greater Depression.

Thu, 09/15/2011 - 08:43 | 1672652 TheEmperor
TheEmperor's picture

ECB: "This is a crisis!  We must vote the ECB emergency powers to deal with these issues"

Palpatine: I love the ECB, I love democracy, the power you grant me will be returned once this crisis is abated!

<incessant cackling>

Palpatine to ECB:  I am sending you my apprentice, Darth Bernanke, he will instruct you in the power of the printing press.  He is your new master!

Thu, 09/15/2011 - 11:38 | 1673539 mkkby
mkkby's picture

It was obvious to most ZH readers that this is what would happen.  The people may resist, but they will be voted down by their own politicians.

I would just add that the Fed will be bailing out Europe until this is put in place.  The same bankers that own Europe own the Fed and have been wanting this political "solution" in Europe all along.

The only question remains, can we make money on it?

Thu, 09/15/2011 - 03:43 | 1672233 Snidley Whipsnae
Snidley Whipsnae's picture

Soros has taken a page from Paulsons book... 'give us the $700 billion or their will be rioting in the streets'...

Screw the azz hat... Maybe a melt down will rid us of the banker parasitic scum.

Thu, 09/15/2011 - 04:15 | 1672257 GoldBricker
GoldBricker's picture

Reminds me of a 1970s National Lampoon cover

http://en.wikipedia.org/wiki/National_Lampoon_%28magazine%29

Thu, 09/15/2011 - 03:50 | 1672240 theMAXILOPEZpsycho
theMAXILOPEZpsycho's picture

I don't fear a depression, nor do the public - where already there. We fear more powers given to the bankers. Mark my words: europeans will not stand for this without blood on the streets.

Thu, 09/15/2011 - 07:06 | 1672409 wandstrasse
wandstrasse's picture

nobody can give bankers more power. they have already all power the world has to offer. population is check mate.

Thu, 09/15/2011 - 07:43 | 1672457 stewie
stewie's picture

I'm not sure about that.  Sheeples will be sheeples.  

Thu, 09/15/2011 - 08:54 | 1672697 Belarus
Belarus's picture

Mark my words: europeans will not stand for this without blood on the streets.

Germans. So expect it to get noisy as the DAX starts to free-fall again. 

Thu, 09/15/2011 - 05:37 | 1672327 Oh regional Indian
Oh regional Indian's picture

But perhaps the base camp is intended to be US/Canada/Mexico?

I think this is meme planting from the memers.

Overall, i think they will not be denied unless one of two things happen:

1) Massive with-drawl from the system by a mass of people (60-70% of first world)

2) Something even more radical like the world turning vegetarian overnight. That will leave them no death energy to feed off. Of course the meat-lovers here (of which there are plenty) will junk this to death, but, just for a moment....think... ;-)

ORI

Tipping points

Thu, 09/15/2011 - 11:40 | 1673547 mkkby
mkkby's picture

You are EFFFING batshit.

Thu, 09/15/2011 - 06:13 | 1672353 Idiocracy
Idiocracy's picture

Soros is a huge Michael Bolton fan

Thu, 09/15/2011 - 02:42 | 1672140 Doofer
Doofer's picture

Don't trust that sucker...

Thu, 09/15/2011 - 03:08 | 1672175 Drag Racer
Drag Racer's picture

I bet glen beck will say the same thing on his next show on fox... oh wait, never mind.

Thu, 09/15/2011 - 03:23 | 1672194 Religion Explained
Religion Explained's picture

Your comment is stupid, forest.

Thu, 09/15/2011 - 06:32 | 1672370 Sophist Economicus
Sophist Economicus's picture

That's because he is too

Thu, 09/15/2011 - 02:43 | 1672141 english serf
english serf's picture

Although the uk is not in the euro, if you let the voters here anywhere near a referendum, it will be a crushing vote to leave the euro area. The banksters and the Elite know this, and are frantically running around trying to protect the status quo.

 

Thu, 09/15/2011 - 03:35 | 1672186 gojam
gojam's picture

Atleast Soros is proposing a solution. Only one problem, it's not going to happen. The EU, and the Eurozone specifically, are almost designed not to be able to act quickly.

It's rather like an oiltanker, it'll take it a long time to stop, let alone about face.

As my fellow countryman english Serf has said above, the distrust of the EUtopian plan in the UK has spread across Europe. The people of Europe no longer believe that an integrated Europe is afair Europe.

If Governments try and impose an undemocratic solution, they'll be more civil unrest and possibly revolution.

Thu, 09/15/2011 - 05:15 | 1672297 reload
reload's picture

Which is why Cammeron has broken his pre election promise to hold one. I for one will not forgive or forget.

On a lighter note, the last paragraph of the article from `The Independant` may make you spill your coffee.

http://www.independent.co.uk/news/world/europe/angela-merkel-undermined-by-outspoken-mps-2354986.html

Thu, 09/15/2011 - 05:44 | 1672334 DirtMerchant
DirtMerchant's picture

Go Silvio! that friggin funny!

Thu, 09/15/2011 - 05:29 | 1672319 Freewheelin Franklin
Freewheelin Franklin's picture

Which is why - UKIP conference draws record numbers

http://www.ukipmeps.org/news_349_UKIP-conference-draws-record-numbers.ht...

Thu, 09/15/2011 - 02:44 | 1672143 choorles
Thu, 09/15/2011 - 02:45 | 1672145 CEOoftheSOFA
CEOoftheSOFA's picture

I guess good old fashioned austerity is out of the question. 

Thu, 09/15/2011 - 02:45 | 1672146 CEOoftheSOFA
CEOoftheSOFA's picture

I guess good old fashioned austerity is out of the question. 

Thu, 09/15/2011 - 02:48 | 1672150 mc_john
mc_john's picture

" he ends with the threat that [his approach] "is the only way to forestall a possible financial meltdown and another Great Depression".

Soros is arrogant and talks as if we are all ill-informed idiots. anyones with two working brain cells know we have been in a meltdown and great depression for three years. besides being a shoe-polisher for the illuminatti, soros is just a usless eater.

Thu, 09/15/2011 - 03:09 | 1672177 Fiat2Zero
Fiat2Zero's picture

Soros excelled at turning in his Jewish neighbors to the Nazis.  No shit.  In his own words, this was one of the most "exciting times" of his life.

The guy actually likes having a dog collar on and sniffing out his friends to the Nazis.  Unbelievable.

Fucking-dark-sith-lord.

Thu, 09/15/2011 - 03:40 | 1672229 UGrev
UGrev's picture

No shit.. I can't wait to read the headline "Maniacial 'Sith Lord' Billionaire Found Dead from Aparent Feltching Experience Gone Awry".. 

Thu, 09/15/2011 - 04:45 | 1672277 macholatte
macholatte's picture

 

Felching with a Gerbil

http://www.youtube.com/watch?v=W0pNeDMowCY

Thu, 09/15/2011 - 06:16 | 1672357 UGrev
UGrev's picture

that one.. never.gets.old...ever..HHAAHAH

Thu, 09/15/2011 - 05:19 | 1672305 Dugald
Dugald's picture

If this is the truth, why have mossad not taken him off the board?????

Thu, 09/15/2011 - 03:12 | 1672184 chirobliss
chirobliss's picture

Soros ... talks as if we are all ill-informed idiots. anyones with two working brain cells know we have been in a meltdown and great depression for three years. besides being a shoe-polisher for the illuminatti, soros is just a usless eater. 

 

Thanks for the illuminating confirmation of his well held opinion.

Thu, 09/15/2011 - 02:48 | 1672151 JJSF
JJSF's picture

"There is no alternative but to give birth to the missing ingredient: a European treasury with the power to tax and therefore to borrow. This would require a new treaty, transforming the EFSF into a full-fledged treasury."

 

 Ah Yes.. If only we give more power to a central taxing, banking authority with no allegiences to any particular nation-state (to which these vampires will undoubtedly have back door access) all our problems will be solved.

Thu, 09/15/2011 - 03:25 | 1672200 Religion Explained
Religion Explained's picture

Can we say soros needs the osama treatment, complete with burial at sea? or is that over the top?

Thu, 09/15/2011 - 03:42 | 1672230 UGrev
UGrev's picture

You are too kind.. 

Thu, 09/15/2011 - 02:52 | 1672154 doomandbloom
doomandbloom's picture

these 80 year olds have ruined us...all they are keen to see is perpetuation of their way of working

Thu, 09/15/2011 - 08:00 | 1672495 Mitzibitzi
Mitzibitzi's picture

My mate said much the same thing yesterday.

OK, they probably believe that central global governance is an improvement over what we have now. And it might be, if it was allowed to happen naturally and organically over time (I'd guess that would take at least another century, probably more), instead of being violently forced upon the world to benefit a bunch of sociopaths who want to see it in their lifetimes simply because they desire the power of life and death over the entire human race.

I think the key difference between a good man and an evil one is actually pretty simple;

A good man wants his children to inherit a world that's better than the one he himself inherited, and will try to help the course of that improvement by his deeds.

An evil man simply wants his children to inherit the world. (Though preferably one that he has shaped to his personal design, of course).

Thu, 09/15/2011 - 02:56 | 1672155 agrotera
agrotera's picture

 "Spookie Dude"  words create expletives in my head.  Don't you just love this guy (NOT)! I guess Obama got his imperative tone from the Spookie Dude--pass this plan now, bail out Europe now, they say.

Thu, 09/15/2011 - 02:55 | 1672160 caerus
caerus's picture

the man is a failed philosopher...reflexivity is a joke

Thu, 09/15/2011 - 02:56 | 1672161 baten
baten's picture

[Any solution] would presuppose a radical change of heart, particularly in Germany. The German public still thinks that it has a choice about whether to support the euro or to abandon it. That is a mistake. The euro exists and the assets and liabilities of the financial system are so intermingled on the basis of a common currency that a breakdown of the euro would cause a meltdown beyond the capacity of the authorities to contain. The longer it takes for the German public to realize this, the heavier the price they and the rest of the world will have to pay

Fucking stupid Germans - you dont know whats best for you.

Let Papa Soros enlighten you...

Thu, 09/15/2011 - 02:56 | 1672163 vegas
vegas's picture

Classic Soros, only the world is all to aware of this asshat's modus operendi. How long are you George? And, lest we forget that you are the world's foremost expert in forex insider trading, if these ideas are even remotely implemented, how much do you gain?

Thu, 09/15/2011 - 03:00 | 1672167 Radron33
Radron33's picture

Yeay! New puppet show!

Thu, 09/15/2011 - 03:05 | 1672170 economicfreefall
economicfreefall's picture

The politicians refuse to see that their whole European Union project is a disaster and is literally falling apart. Instead of doing the right thing by abolishing the whole idea and making themselves unemployed in the process, they desperately hold on to their newly acquired powers. By understanding history we know what that means. Increasing their powers is the only way for failed leaders to hold things together a little bit longer.

Putting Greece, Spain, Italy and all the other countries with huge debt and fiscal problems under the same fiscal umbrella as the stronger economies of the north is not a solution. It's just a guarantee that the nations with sounder economies will soon join the rest.

http://www.economicfreefall.com/

Thu, 09/15/2011 - 03:08 | 1672176 SlipperyPete
SlipperyPete's picture

"There is no alternative but to give birth to the missing ingredient: a European treasury with the power to tax and therefore to borrow. This would require a new treaty, transforming the EFSF into a full-fledged treasury."


So is he basically saying that they will have to print their way out?

Thu, 09/15/2011 - 03:11 | 1672183 Fiat2Zero
Fiat2Zero's picture

Doubling down on a closer, more perfect union.  Integration to bring everything under the globalist umbrella.  They are control freaks.

Do not trust the fucking-dark-sith-lord.

Thu, 09/15/2011 - 03:20 | 1672191 ricksventures
ricksventures's picture

You dont get the final picture:

 

here is what he wants:

1. Print until hyperinflation kicks in

2. Once the hyperinflation kicks in, watch it to break apart, riots etc.

3. Create sides, like the southern EU and northern EU

4. Watch them point first fingers, than guns at each other (who is more pissed the greek commie or the german "by the book" employee of the month" ?)

5. Secretly in the middle of the night (Rothschild style) finance both sides, their guns and get ready for blood spilling (blood = new debt, new teritorries etc = new wealth, BUT ONLY FOR THE CHOSEN FEW)

 

ITS TIME TO DO WHAT NEEDS TO BE DONE, send the "bankers" a present, YES they have the power, but the belong nowhere, we know who they are and the final solution will be done, even if half the world was destroyed by nukes, but there will be no more soroses

Thu, 09/15/2011 - 04:29 | 1672267 the tower
the tower's picture

I actually heard THE LIST is being made, I wonder when it will start to surface? 

 

I hope it will have photos and addresses on it...

Thu, 09/15/2011 - 04:29 | 1672268 the tower
the tower's picture

I actually heard THE LIST is being made, I wonder when it will start to surface? 

 

I hope it will have photos and addresses on it...

Thu, 09/15/2011 - 06:42 | 1672381 e-recep
e-recep's picture

Guillotine them ALL!!

Thu, 09/15/2011 - 09:57 | 1673070 krispkritter
krispkritter's picture

Nope. Woodchipper. No chance of the zombied f'ers coming back then. And we could use the chum to get in some fishing from one of the superyachts freed up by their, uh, exit...

Thu, 09/15/2011 - 03:10 | 1672178 ricksventures
ricksventures's picture

There is a solution, its the final solution

 

Soros plays the game of both sides, just like Rothshilds, Goldman Sachs etc. etc.

 

NO MORE LIVING ON CREDIT AND SPENDING MORE THAN WE CAN AFFORD and also, no more soros, blanksteins etc

Current burocrats of EU need to be all "photographed" by the wall for the crimes against Europeans. Merkel, Sarkozy they all need a BIG picture

Arabs are ready, r u ?

Thu, 09/15/2011 - 03:10 | 1672179 island
island's picture

Just talking his game.  IF he is depending on the German people to change their minds, I do believe he will regret that decision.

Take away all the financial games, and you still have a world filled with resources.  We then get to create a new, and hopefully better, way to distribute them. 

Thu, 09/15/2011 - 03:10 | 1672181 lolmao500
lolmao500's picture

So basically, BEND OVER?

- Give up all sovergnity OR

- Lose everything you've got into a depression

Third option : arrest the bankers, hang them, default on all the fake debt.

Thu, 09/15/2011 - 03:23 | 1672196 Bruce Flea
Bruce Flea's picture

Or realize his Depends is probably backed up, and ignore him...

Thu, 09/15/2011 - 03:22 | 1672193 Hephasteus
Hephasteus's picture

George. Have a tall cool glass of shut the hell up.

Thu, 09/15/2011 - 03:25 | 1672195 crashguru
crashguru's picture

I am missing "Nationalize the banks" in his "solution", but that would be more than one can expect from this World Government sucker. Maybe he realizes that there are not many places to hide for his billions.

Thu, 09/15/2011 - 03:25 | 1672199 jmc8888
jmc8888's picture

Or instead of giving the monetarist banksters what they want, including Soros, the people could demand Glass-Steagall.  Let the rest burn.

 

Soros's way leaves the banksters in control and above everyone nation in Euroland.

 

His idea is complete bullshit, and even then would do nothing to actually solve the crisis...just find a mechanism for more bailouts....of fraud.

 

Glass-Steagall (worldwide)

Thu, 09/15/2011 - 04:10 | 1672201 Reptil
Reptil's picture

This whole threatening stance is now pathetic.

 

edit: cut some mud

Thu, 09/15/2011 - 03:26 | 1672207 FlyPaper
FlyPaper's picture

TRANSLATION: Give up your sovereignty OR ELSE YOU'LL FALL INTO THE ABYSS OF THE GREAT DEPRESSION~!!   Just like the banker/treasurer Paulson and the TARP. 

This, of course, Soros' plan for a united socialist/marxist Europe where he and his rich cronies are in charge.

Its bad enough that the ECB routinely breaks its charter through monetization of PIIGS debt; can you imagine what a European Treasury would do (think the US Federal government without constraints) born out of a crisis?

I hope the Europeans understand these bastards ARE NOT WORTH LOSING THEIR DEMOCRATIC PRINCIPLES FOR.  

Time for a major redo of the global financial system.

 

Thu, 09/15/2011 - 03:36 | 1672219 slackrabbit
slackrabbit's picture

 

“Those who desire to give up freedom in order to gain security will not have, nor do they deserve, either one.”

 

boy does that sum this whole mess up! 

 

Thu, 09/15/2011 - 03:35 | 1672221 Tic tock
Tic tock's picture

Just create new european currencies with exchange-rates based on the interest-rates of their national bond/ debt. .. is that so new, difficult, or complicated.

What i don't get, is how, in this case Soros, would suggest that the interconnectivity is too strong to let the Euro fail - when people manage to solve trade issues through 'mediums of exchange' - it sounds like he's keen to protect the current banking and financial system: newsflash- look  around, one sixth of the US in poverty - that's your precious financial system, massive inequality, massive. .

..and there are other ways, of course there are other ways, to solve the problem. But the problem isn't that governments spend too much, or that banks are out of money, or that Central Banks somehow have access to unlimited amounts of money to give anyone they like. The problem is that too many hard-working and honest people have gone to ground without the ability to continue their progeny.   

 

Thu, 09/15/2011 - 03:36 | 1672222 belsebub
belsebub's picture

There is no alternative but to give birth to the missing ingredient: a European treasury with the power to tax and therefore to borrow. This would require a new treaty, transforming the EFSF into a full-fledged treasury.
The problem, Mr Soros, is that there is Zero, zip, nada, no chance whatsoever that we, the people of the nothern countries, will accept this so called ingredient. The lack of political will is just mirroring the will of the people, and that will is darn obviuos...

Thu, 09/15/2011 - 04:00 | 1672251 FunkyOldGeezer
FunkyOldGeezer's picture

The Eurozone needs to remain united for one thing and one thing only, WWIII.

Oil is running out and it's at the point where THAT commodity becomes increasingly difficult to buy in large enough quantities that the real shit will hit the fan. I guess the EU effectively has about 10 years or so to get tooled up, assuming everything else remains equal. Streamlined, unchallenged money creation is required to wage war.

Maybe this current financial war is WWIII, or maybe it will come down to a bloc of countries waging real, dirty war on other blocs. Either way, Europe needs to be united to fight it.

We won't know until history is written.

 

Thu, 09/15/2011 - 04:14 | 1672255 honestann
honestann's picture

Oh what a surprise.

The clown who wants a one world government claims the solution is to centralize more power.

Up yours, George.

Thu, 09/15/2011 - 04:14 | 1672256 Djirk
Djirk's picture

Exactly right, if any of the PIIGS default or take a haircut it will impact the liquidity of even the solvent DE, FR and NL banks. Regardless of wether it is a euro, lira, drachma, etc.

If these PIIGs dod go back to the currency there would be an instant haircut via currency devaluation.

One piont he left out is that the PIIGS, esp Greece need to realize thier politicians and bankers caused this mess and now austerity is required. It is not the Germans fault but thier own countrymen/women.

This will be ugly before it gets better

 

 

Thu, 09/15/2011 - 04:27 | 1672266 jeff montanye
jeff montanye's picture

sacrifice democracy and freedom because disentangling euro based accounting is too complex?  aww, go on, give it a try.  and remember:  the bondholders, stockholders and current management are the first to make a sacrifice, not the last.  see how far that gets you.

Thu, 09/15/2011 - 04:52 | 1672283 theprofromdover
theprofromdover's picture

Soros, still thinking with an old-worlde mentality.

He thinks things can stay the same, all you have to do is get rid of democracy (all right quasi-democracy).

He needs to start thinking blue-sky. Everything is going to change: money, financial robbery cliques, power-bases, media, peoples attitudes to authoritarianism, the works.

It is true that the dumbasses in European corridors of financial and unelected power can dream of their single European empire, but they cant implement it, no matter how much scare-mongering they crank up in the next few months.

As many posters have said, the people are not afraid of an induced depression; and there is an entire generation of people coming up who really dont give a sh*t about the rules.

Sowed the wind, well reap the whirlwind.

Thu, 09/15/2011 - 08:25 | 1672587 MarketWatchTerrorist
MarketWatchTerrorist's picture

That's because the younger generations have nothing to lose.  The Boomer parasites have squandered the world's wealth and concentrated all of it into their hands.  Even now most of them are just hoping to make it to the "finish line" (their death) before this shit falls apart.  Most of them that are vaguely aware of the shit storm that is coming will tell you that straight up - they just want to spend all of their money, live in comfort, and let their descendants worry about the problems they created.

 

I don't respect the intelligence of these younger generations, but I do take hope in their sheer irreverence.  It seems they simply do not give a fuck.  I hope it stays that way.  I'd hate to see them be bought off with cheap fiat dollars and iCrap trinkets.  Another generation of rebels turned into a bunch of corporate whores and parasites, like the Boomers.

 

Gen-X is mostly a bunch of push overs, they are as self interested as their Boomer parents but without the compulsion to micro-manage everything; the compulsion to tyranny.  For the most part they just want a pay check and keep their heads down.  They won't step into the power vaccum that will be left when the Boomer Parasites finally start dying enmasse.

 

Which means there is a chance to right this ship.

Thu, 09/15/2011 - 04:58 | 1672288 FunkyOldGeezer
FunkyOldGeezer's picture

There has been a very interesting programme on BBC, where film clips from 70 years ago and more have been shown.

What they show are a crumbling empire and in some detail, the abject poverty that most of the working class members of that crumbling empire lived in. Lest we forget, we've only had half-decent standards of housing, sanitation, public health for a relatively short time... and now, you guys want us all to go straight back to the dark ages, just so you can be proved right?

Is everyone on here an economic/moral nihilist?

Thu, 09/15/2011 - 05:30 | 1672320 reload
reload's picture

FOG, Whats your point? are you suggesting that if the nation states of Europe do not cede the right to levy taxation to a central, unelected cabal of bankers and pen pushers that we will return to the dark ages? please explain.

Thu, 09/15/2011 - 05:24 | 1672310 FunkyOldGeezer
FunkyOldGeezer's picture

Although the uk is not in the euro, if you let the voters here anywhere near a referendum, it will be a crushing vote to leave the euro area. The banksters and the Elite know this, and are frantically running around trying to protect the status quo.

In that case, we'd deserve all we got, following our exit.

The Eurozone is far from perfect, but neither is the UK. If we'd been in the Euro, we would have been the first domino to fall, as our own finances are shakier than almost all the rest put together. Just look at our debt per capita ratio. We went on a spending spree like there was no tomorrow. Look at OUR housing bubble. Look at OUR total lack of manufacturing and exports.

If anyone has been living in cloud cuckoo land, we come a very close second to the USA. Need I say more?

 

Thu, 09/15/2011 - 05:38 | 1672329 reload
reload's picture

So what you are saying is that - if the UK had been in the Euro - it would already be toast, like Ireland. I agree. Therefore the fact that the UK has an independant treasury and central bank is good! Centralising the setting and collection of taxation to an unected commission,  would be truly awful. The last vestiges of democracy would be gone.

Thu, 09/15/2011 - 05:42 | 1672332 Robslob
Robslob's picture

 

 

 

I never thought I wold see the day that the Socialistic states of Europe became our last stand for freedom against Bankers?

 

Fuck..its over....

Thu, 09/15/2011 - 05:54 | 1672339 parangwarrior
parangwarrior's picture

"As many posters have said, the people are not afraid of an induced depression; and there is an entire generation of people coming up who really dont give a sh*t about the rules"

who really don't give a sh*t about the rules

you're talking bout my generation right?
man, they do not have the slightest clue what they're up against..

im a gen y, and was "trained" to rebel....

Thu, 09/15/2011 - 17:24 | 1674854 falun bong
falun bong's picture

oooh, yeah, Gen Y, trained to rebel.

Is that why there have been *No* protests in the streets of the USA? The country that has seen the biggest Bank Heist in History? Trillions of taxpayer dollars to bail out billionaires, bomb foreign countries, and pay giant bankster bonuses.

No rebellion at all where it counts most. Hey, did you see Jerseylicious last nite?

Thu, 09/15/2011 - 06:16 | 1672350 FunkyOldGeezer
FunkyOldGeezer's picture

Most posters on ZH appear to want the entire banking sector and the ruling elites to crash and burn. Most of them also live in the USA and appear to think they would somehow be immune from any ill effects, especially if the Eurozone goes first. My point is that, if this were to happen, those of us further down the greasy pole (everywhere) would suffer far worse than the ruling classes. Revolutions would undoubtedly occur. Revolutions rarely end well or fundamentally change anything. Meet the new boss, same as the old boss. It would indeed be a return to the dark ages akin to a Mad Max world, possibly for the rest of (human) time. Don't get me wrong, I totally abhor the way I and everyone else has been laid before the altar of capitalism as sacrificial offerings to the politicos and power elites and sold the false dawn we now live in, but I don't see any alternatives that would necessarily be any better. Anarchy (as proposed by many on these boards, falsely in the name of Gold/Silver ownership) is a total non-starter. That would be like what we currently have on steroids. Dog eat dog, bullet fighting bullet only with no sense of wrongdoing or remorse. Is that really the world people want?

To not try and find a solution to Europe's problems is possibly the start of that slippery slope. Anti-Europeans are effectively seeing no further than the end of their noses. Divide and rule (by USA, China, BRICS whoever).

Society as we know it, is always just a hair's breadth away from chaos, anarchy and mob rule, i.e. no rule whatsoever. We have a very fragile existence. The food supply chain, for example, is only good for 3 to 5 days before it would totally shut down.

My other point is simple. That's why Europe needs to become a single entity, so far as money creation is concerned. To have half a chance of surviving the coming chaos if and when, but especially when the oil begins to really run out. WWIII

Thu, 09/15/2011 - 06:40 | 1672378 nmewn
nmewn's picture

In every community there will be total anarchist's.

I believe what most ZH'ers want (if I may be so bold) is a return to the rule of law & its proper enforcement and individual national sovereignty. There is nothing fair about Germans (or any other nations people) paying for the bad habits of Spain or Greece.

What the bankers & elites of Europe tried to do was make one country out of many who have varying interests, ethics and objectives as differing societies & cultures will always have.

The US has basically one culture. An amalgamation of many but still one. The day when a Frenchman thinks and comports himself like an Italian or Greek is the day you will have a united Europe.

Good luck with that ;-)

Thu, 09/15/2011 - 08:19 | 1672559 Eugend66
Eugend66's picture

The only economy big enogh to shore <b>HUGE</b> amounts of money is/was the US. It will be a dog eat dog for these leftovers. The EU is indebted, but far less than those TBTF.

0.02c of mine.

Thu, 09/15/2011 - 08:39 | 1672621 falak pema
falak pema's picture

The current US trend has basically one culture : Hey world! We are making you an offer you can't refuse. We know where that has led us all...

People in glass houses...Not that I defend EU ponzi, far from it. But a united states of Europe could emerge out of this crisis or subsequent ones.

I know, its a long way to Tipperary...or to Saint-Jacques de Compostelle!

Thu, 09/15/2011 - 08:15 | 1672543 MarketWatchTerrorist
MarketWatchTerrorist's picture

If the EU crashes and burns, the New World Order goes with it.

 

If the U.S. federal government crashes and burns, liberty may have a chance of being restored to the people.

 

Governments ARE the problem.  They are not the solution.

 

We must restore limited, sovereign governments that respect the rights and will of their people.  This globalization, internationalization, "international law", U.N. controls, Continental Unions, and the New World Order are anthithetical to self determination and individual liberty.

Thu, 09/15/2011 - 12:04 | 1673653 mkkby
mkkby's picture

Geezer, the problem is YOUR SOLUTION WON'T WORK.  All you'd be doing is trading your individual freedoms for another layer of gov.  Take money and productive capacity from countries that had self control, and give it to those that acted foolishly and more corrupt.

The problem is ALL DRUNKS EVENTUALLY FALL DOWN.  If you keep giving them more liquor, you are hurting, not helping them.

The world has had many, many depressions.  There were isolated incidents of civil unrest... but Civilization didn't collapse into mad max.  That is just a scare tactic.

Tell me.  Would you like to bail out your neighbor after he maxes out his credit card on wild vacations and luxury items, while you worked hard and saved?  He's not going to die if you say no, declare bankruptcy, get a damn job, AND DON'T DO IT AGAIN.

Thu, 09/15/2011 - 06:15 | 1672355 Uncle Henry
Uncle Henry's picture

First you create the solution, then the problem for which the solution is the only reasonable alternative.

 

Thu, 09/15/2011 - 06:53 | 1672393 sqz
sqz's picture

Precisely.

Thu, 09/15/2011 - 06:28 | 1672362 bvrulez
bvrulez's picture

Bullshit! Instead of keeping alive this fucked up financial economy, this is what has to be done: http://www.faz.net/artikel/C30638/standpunkt-eu-superstaatsgruendung-aus...

Thu, 09/15/2011 - 06:29 | 1672364 floor
floor's picture

I think the world would have been a lot better off today when more "Lehman's" had failed in 2008.

And that Soros guy does not seem to understand that the different nationalities of Europe are not likely to deny and betray their origins like he did.

 

Thu, 09/15/2011 - 08:10 | 1672531 MarketWatchTerrorist
MarketWatchTerrorist's picture

They can solve that the same way they are "fixing" America and its population's resistance to the New World Order - via mass immigration.

 

If Europeans do reject the New World Order they will simply increase Muslim immigration to muddy the demographics (in more than one sense) and destroy these "origins" (cultures, ancient in some cases) you speak of.

Thu, 09/15/2011 - 06:46 | 1672383 paulie
paulie's picture

"European treasury with the power to tax"

Sure why not ?
I guess bunga bunga looks a lot better now.

paulie

 

Thu, 09/15/2011 - 06:50 | 1672389 e-recep
e-recep's picture

I am sick and tired of this threats. I already live like in a depression. I don't mind my bank account, I want to see bankers like this son of a bitch publicly executed.

Thu, 09/15/2011 - 06:56 | 1672396 oogs66
oogs66's picture

it has become so tiring listen to all these dire threats just so the rich can stay rich

Thu, 09/15/2011 - 07:11 | 1672416 AngryVoter
AngryVoter's picture

Reminds of the Paulson pander.  Save the banks or you will all be thrust into abject poverty.  Just like Iceland.  Ooops, guess it didn't play that way.  Screw the banks, they made bad decisions let them fail.  Bring on the writedowns and speed up the recovery.

Thu, 09/15/2011 - 07:18 | 1672422 Dr. Engali
Dr. Engali's picture

I wouldn't expect any less from a good central planning communist.

Thu, 09/15/2011 - 08:08 | 1672523 MarketWatchTerrorist
MarketWatchTerrorist's picture

He's not a communist.  He is a tyrant that, like all tyrants, desires global domination.  He is an architect of the New World Order, which will allow a few dozen neo-feudal aristocratic families to dominate humanity forever under their heel.

 

Call a spade a spade, and don't be confused about what exactly this man is.

Thu, 09/15/2011 - 07:32 | 1672426 NuYawkFrankie
NuYawkFrankie's picture

Re "Soros thinks The Unthinkable about Europe"

Pssstt.... hey Georgie, I know you've only got everyones best interests at heart, but better run along now before those ugly rumors start about you being a shill for the bankstas and Europe gets to thinking the unthinkable about George Soros. 

Hey, almost forgot, Have a nice day ;)

Thu, 09/15/2011 - 07:24 | 1672430 FunkyOldGeezer
FunkyOldGeezer's picture

What is democracy? It isn't what you or I really think iit is, or should be, is it?

In 42 years of being able to cast a vote, I have never seen the person I would vote for installed as my representative, so guess what, I don't bother anymore, preferring to spoil my vote as an act of protest. If I wanted to run for MP as an independent, I am effectively excluded due to the amount of money I would have to first be able to raise, in order to run an effective campaign. The party system is an anathema to democracy and most of the time ensures the wrong people get the jobs. That politics is now a career and moreover, one in which potential prime ministers and ministers can have had no other job other than in politics, is also totally NOT in my or anyone else's democratic interests.

To think that a minority party (in terms of overall votes cast) can end up having an overall majority in parliament is a total disgrace and 180 degrees, diametrically opposed to what I might look upon as democracy.

How about you?

Thu, 09/15/2011 - 07:43 | 1672456 twotraps
twotraps's picture

I could be wrong here but if the European Union comes together, creates a treasury and backs up the banks.....won't they have the same problem the Fed has in that they need to maintain the illusion for the citizens and the world that the currency and balance sheets actually matter??  An enormous chunk of govt and business seems to have no consequences for their actions........yet we do.   Otherwise, what is the value of whatever currency you think you have in whatever bank?  Potentially its Zero no matter what that fucking bank statement says, right?  Honestly, could the New European Treasury or the Fed/US Govt really tax us all more and have it matter??  If everyone, I mean everyone, world-wide was taxed at 100% one year....how much time would that buy?

Thu, 09/15/2011 - 08:05 | 1672510 MarketWatchTerrorist
MarketWatchTerrorist's picture

Good post.  Everyone paying even a modest amount of attention to the state of affairs in the world has now noted that the elite can and do conjure up seemingly unlimited amounts of money out of thin air with the stroke of a keypad.  They conjure up more "wealth" in 2 seconds than your entire family line will own in the next thousand years.

 

The illusion is becoming difficult indeed to maintain.  We slave away our life blood in exchange for what amounts to nothing.  Meanwhile, the international banking elite live as KIngs as they slowly finish building their New World Order which will allow their descendants to continue to be astride the globe as Gods while the rest of humanity toils in the dirt for the benefit of their masters.

Thu, 09/15/2011 - 08:18 | 1672553 twotraps
twotraps's picture

thanks and I agree with you, I dont' fret about changing it or if any of this is reasonable or not.....just wonder about what can be done?  Is it better in the end to own things, land and hard assets because at least you 'own' something?  The currency as digits in the bank could get reduced in many ways and I imagine if there is enough price pressure or turmoil that your recently bought land or assets will drop in value.........but I will still have something to sell eventually, whatever currency or denomination its in later.  What do you think?

Thu, 09/15/2011 - 08:36 | 1672611 MarketWatchTerrorist
MarketWatchTerrorist's picture

No matter what number of fiat dollars you "have", that value occupies the same amount of space in some bank's database.  You may have $1 denoted in that database, or $10,000,000 - it makes no difference whatsoever.  It's all monopoly money stored in some database somewhere.

 

With physical assets at least you have something tangible that cannot be conjured up out of thin air by the banking elite.

 

America is headed down the same road as Russia.  Throughout Russias history the people learned several times that banks and governments cannot be trusted.  Even with their renewed economy in recent times people do not store money in banks.  They buy cars, jewelry, fur coats, and other tangible things.  They know that anything in a bank can and probably will be seized by governments.  They know the real value of fiat currencies always ends up at 0.

 

Assuming you are in a country you intend to stay in, and believe it is politically stable, I think putting a sizable portion of your net worth into assets (gold/silver, land, etc.) is a worthwhile decision.  Of course if you think you can gamble in the Wall Street casino and win, then that is always an option as well.  I'm out of that game myself.  There is too much uncertainty and the markets are clearly 100% artificial and manipulated.

Thu, 09/15/2011 - 09:27 | 1672899 twotraps
twotraps's picture

thanks again, we are on the same page.   For now I intend to stay in the states, Chicago....not sure about the stability thing, trying to concentrate on what I can actually do about it and I appreciate your insight.

Thu, 09/15/2011 - 12:03 | 1673651 Nightblade
Nightblade's picture

My thoughts are that real assets are the only safe place to be.  I have moved out of cash except for the minimum required to survive for several months in case I lose my job.  I bought land, a house, gold and silver, started storing food - just since 2008 I have completely switched my exposure away from currency and paper assets as much as possible.  I still have an IRA but that is mostly gold miner stocks.  My next plan is to learn gardening so I will be able to live healthier.

Thu, 09/15/2011 - 07:44 | 1672458 MarketWatchTerrorist
MarketWatchTerrorist's picture

All these comments and not one mention of what this is...

 

This is the New World Order, and nothing else.

 

Disappointment, bitchez.

 

George Soros is predictably pushing for more consolidation of power, more destruction of sovereignty, and generally more control for himself and the rest of the small handful of elites that are setting themselves up to rule humanity forever under their iron heel.

 

I especially like the pedantic arrogance he expresses when speaking of the Germans.  "The problem here is not that the Germans have a choice, because they don't - the problem is that they think they have a choice and it is causing them great distress."  He's right, though.  The people of the world have no rights, no liberties, no freedoms.  The Europeans have no choices to make.  They are ruled by unelected administrators that are chosen by the few dozen aristocratic families that are setting themselves up to enslave humanity forever under the heel fo the New World Order.

 

And I have news for you - they're working hard to destroy the United States and our Bill of Rights.  The North American Union is not a conspiracy theory anymore than the European Union is a conspiracy theory.  We're just a few decades behind.  50 million more Mexicans in the U.S. 30 years from now ought to solve the problem of American sovereignty and the U.S. constitution once and for all.  This is a long term game that these several dozen neo-feudal aristocratic families are playing.  And they are winning.

 

The problem here isn't that you're free, it's that you think you are.  But the iron boot of the New World Order will crush such delusions from the souls of your descendants.  More forced drugging, more social engineering, more brainwashing via compulsory public school "education."

 

Conspiracy?  Facts, bitchez.

 

The European Union and a Pan-European central government was a "conspiracy theory" for decades.  Then it happened.  Then they gave up their soverengty.  And now they're going to give up any semblance of control over their own economies.

 

Totalitarianism, bitchez.

Thu, 09/15/2011 - 07:45 | 1672462 Youri Carma
Youri Carma's picture

"European banking system would have to be put under European, as distinct from national, supervision." This is the Ultimate Bankster (NWO) take over!!!! BS!!!!

 

0 - FORCE MAJEURE! - Call Void All Bankster Bogus Derivative Debts! Because paying off these trough fraud induced debts have become a technical and practical impossibility.

Thu, 09/15/2011 - 07:46 | 1672464 tradewithdave
tradewithdave's picture

Pinky and the Brain to be replaced by new Saturday morning cartoon... George and the Honest Op Ed. 

Here's the sponsor of the new cartoon... it's an exciting new kid's cereal called Scrambled Pegs... you get a free Euro in every box!  

http://tradewithdave.com/?p=7959

Dave Harrison

www.tradewithdave.com

Thu, 09/15/2011 - 07:52 | 1672476 somethingelse
somethingelse's picture

reading this post brings to mind a Borg drone cutting itself off from the collective and trying to survive as it once was as an individual organism...removing its Borg implants is tricky for survival.

Thu, 09/15/2011 - 08:02 | 1672505 QuietCorday
QuietCorday's picture

There is no way on earth that the people of Europe will accept an EU treasury that has the ability to tax.

It beggars belief all this. Even the basis of Soros's argument is flawed. To say the euro crisis is a direct consequence of the crash of 2008 is so blinkered, I almost want to eat my own desk.

Europe's problem, instead, is a direct consequence of the faultline at the heart of European social democractic "tentacles everywhere" politics: ie. where the state is made to become a pseudo-benevolent paterfamilias whose power base rests on doling out "the family's cash" left, right and centre to its favourite children and silly pet projects, regardless of who actually did the work or took the risk in the first place.

The European sovereign debt crisis would have manifested eventually without the crash of 2008. Reason being that a hellova lot of Europe's countries are, structurally, a socio-economic mess that cannot fund themselves without magic pixie dust.

Thu, 09/15/2011 - 08:06 | 1672508 falak pema
falak pema's picture

I am not a globalist. I learnt that by reading history and realising that since Alexander's days, syncretism was an impossible construct. The nation state, however, born during the Renaissance age, is NOT the final democratic answer to this ongoing dilemma of civilization; as the European nineteenth and twentieth centuries have taught us, spawning as inevitable hubristic economic collateral their colonial systems in less developed territories.

Before we burn Soros at the stake for being a globalist shill, a turncoat, machiavelic opportunist,, with a sulphurous past of his youth under Nazi occupied Hungary; keeping in mind he was BORN in 1930, which makes it very unlikely that he be a collaborator like that guy in that excellent movie "the Music box" by Costas-Gavras...one should recognise that his boyhood experiences were fed by the ravages of Armageddon. 

Those who have lived through it don't EVER want to go back there, nor see their off-springs living that again. The memories are too vivid and the deprivation of life and liberty, of man's debasement of man, too deeply imbedded under their very living skins, for its stench to be forgotten too easily. Auschwitz and Treblinka are like Hiroshima and Nagasaki, never to be forgotten or else we are but worms not so called specimens in 'the image of God'.

So the first lesson all Europeans must remember is never to invite war back onto the continent. Unless it is to defend basic life and liberty. Whatever we may feel about this corrupt current EU construct, and its banksta trusts, we must never forget this fundamental truth of history. 

The current populist mood of roll back of continental construct, is bringing to the forefront the same xenophobic and jingoistic sentiments that prevailed in the Europe of 1914 to 1945. By unleashing the hounds of nationalism we may be feeding the fires of Armageddon. 

Deconstruct of the banker ponzi and chastising its surrogate political class buried under the weight of accumulated debt to which there is no perceivable issue, except profound financial cleansing and economic depression, should not deter us from maintaining the good aspects of the continental construct, by reinforcing democratic institutions at the federal european level, precisely to avoid future wars. I believe that is the legacy that USA's great historical leaders bequeathed to the world, Abe Lincoln and FDR. 

That doesn't mean we have to buy the US Oligarchical industrial cum service sector legacy. Nor let Eu be dominated by similar monolithic structures that run every walk of industrial life as corporate transnationals answerable to no one. 

Thu, 09/15/2011 - 09:12 | 1672790 QuietCorday
QuietCorday's picture

Lovely argument, falak. The problem is that the the jingoist and xenophobic sentiments of 1914 to 1945 were formed from the fallout of circumstances that are very similar to the ones we now see manifesting again today: debt (mostly extraordinary liabilities to another "group"), the loss of autarky and the desire for political self-determination.

What Soros, essentially, is arguing for is the creation of, fundamentally, a new pseudo-European Empire, led by Germany, in a mould somewhat akin to a combination of the old Austro-Hungarian and German Empires, pre-1914. When you think of the "Central Powers", you then also possibly have a reason why Soros is so supportive of allowing Turkey into the EU. To my mind, much of the EU federal consolidation drive seems to be a desire to return to the model of Europe pre-1914. I wouldn't put it past Soros to think the wrong people got the upper hand in 1918.

But this perspective kinda makes sense for Soros. He was born in Hungary in 1930 and will have been constantly made aware of the loss of "glorious Europe" and the "Age of Stability" that existed for decades for his countrymen prior to 1914. Again, you also have to remember that Soros is from a Jewish Hungarian family, and the glory days of European Jewry were intrinsically tied to the socio-cultural environment created by this political model.

But an empire is an empire. You will always have someone that wants to cede, and, in Europe, where people are so culturally, socially and linguistically different, this threat is ever existent. 

Moreover, Soros appears to want to create this pre-1914 construct in a climate akin to the economic meltdown of the 1930s. To me, this is like combining the socio-political semtex that led to the first world war and the second world war in one enormous bomb and dropping it over Europe to see how many countries and people it will take out.      

"Democratic institutions at a European federal level" is an oxymoron. There never have been any, and there aren't any now. And they do not avoid wars; rather, they create them.

Thu, 09/15/2011 - 08:18 | 1672554 sharkbait
sharkbait's picture

more fodder for the 'Soros as Antichrist' grist mill.

Thu, 09/15/2011 - 08:57 | 1672714 GoldmanBaggins
GoldmanBaggins's picture

Read between the lines. Georgie makes it clear there will be no let up in the crisis until "they" get what they want. In fact the crisis is likely to appear to get worse and will then actually get worse up to and until they can sell euro bonds. That is what "they" wan't. That is what "they" will get. The timeline is up to the opposition which is crumbling. Then it's back to the US for more destruction.

Thu, 09/15/2011 - 08:58 | 1672719 FunkyOldGeezer
FunkyOldGeezer's picture

Do you believe another massive war is inevitable?

If you don't, then Europe as a mish mash of X sovereign states might be better.

If you do, a united Europe is absolutely essential for the survival of ALL Europeans.

The next big war won't be about individual countries. It will be about powerful blocs of countries, fighting for what they want. 500 odd million with a common cause will go a lot further in securing what they need, than a disparate coalition.

BTW: I hope I'm wrong, but human nature and history being what it is...

Pure pragmatism, that's all.

 

Thu, 09/15/2011 - 09:18 | 1672830 reader2010
reader2010's picture

Soros just partially revealed the real motivation behind all the noise. 

Thu, 09/15/2011 - 16:36 | 1674628 Paul67
Paul67's picture

The only solution is for nations to begin paying off their debts by introducing a new debt free sovereign currency as the bonds come due and to cover expenses above tax revenue.

 

Trade between nations will be conducted as it is now but with Gold being used to cover any net deficits with the rest of the world via floating gold price in the local currency.  Basically excess goods/services flow in the opposite direction of gold flows.  In such a system no nation need go into debt ‘ever’ therefore no nation is owed money by any other nation as a result ending the trade/fiscal deficit catch-22.

 

At the end of each year each nation would either have to export as much as it imported, covered the difference with Gold at the local currency rate per oz and/or had inflation tax away the earnings within a nation.  There would be zero ability to pass the buck to other nations or future generations.

 

Eventually, gold does its magic in which its price in terms of the local currency rises to such a high level that the trade imbalance reverses regardless of the currency manipulation that is attempted by either the excess importing or excess exporting nations.

 


For example would China give the USA 50K of stuff for an oz of gold?  Not likely, at some point excess production leaves a nation holding one big cube of metal acquired at premium price in exchange for real stuff.

  Consider it self-inflicted fiat.

 

As Warren Buffet correctly discerned all the gold in the world (67 ft cube) at current prices would buy;

 

 all the US farmland, plus 5 Exxons with a $1 Trillion of fun money to spare.  What would you rather have?  A 50K/oz 67ft cube of gold or all the assets in the world?  I think even Dr Evil would choose all the World’s assets over all the World’s above ground gold.

 

In this way the manipulation of the currency supply within a nation is isolated from global trade with gold playing a vital role of preserving the value of past excess production for a time in order to be spent later as the goods/services flow naturally reverses (ie the surplus producing nation kicks back a bit and sends gold back to countries it formerly made more stuff for in the past).

Thu, 09/15/2011 - 20:54 | 1675711 whiskeyjim
whiskeyjim's picture

Gee, I wonder why the Progressive financier Soros is suggesting more top down taxing authority and power solution. That is weird! And on the contrary, Mr. Soros' opinion is not unthinkable. Everyone has been talking about some version of it for quite some time. His article is published all over the place. I responded at Project Syndicate with what I thought was a rhetorical post. Notice how I kept the snark out of it:

This opinion is a popular one. But let us consider this scenario.

What if Los Angeles went bankrupt? Like Greece, it has about 10 million people in a wider alliance of more than 320 million. What would such a failure do to the value of the dollar in the long run? Would we kick them out of the US dollar as a solution to their problem, so they could devalue their own currency in an effort to preserve the lion's share of their structurally bankrupt government?

Likewise, would the answer to their economic hardships be that Texas taxpayers bail out the folks living in Los Angeles? Who would suggest such an answer and why would they do so?

More pertinent to the above article, should the US government inform its citizens that it needs even more power to tax in a special treasury operation that would allow it to bail out California, New York and other states who have for years ignored their fiscal inevitabilites for reasons frighteningly similar to the case studies of Greece and Italy?

Some readers may object to the comparisons of the EU to the USA. I suggest that the differences underline the reasons why the answers must still be the same.

Certain government philosphies inevitably fail. Fortunately, forgiveness and renewal is a part of life. And even corrupt governments like Russia have shown a remarkable aptitude to recover when ill-conceived spending and loans are finally ended.

These continual bail-outs can be described in one clear, technical financial term: BULLSHIT.

The controlling classes have a wonderful way of so contorting a problem that they eventually fly up their own asshole with the solution. Mr. Soros, as usual, provides the illustration.

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