End Game: The Euro As a Concept Is Finished

Thursday, December 30, 2010
By Paul Martin

by Phoenix Capital Research

Thanks to the blizzard, holidays, and so forth, EVERYTHING that occurs in the markets this week is largely irrelevant. Once the holidays end, we’ll be back to reality in short notice.

What’s reality?

The reality is that situation in Europe has literally reached a fever pitch. We have now progressed to the “contagion” point in which the entire system is at risk versus individual countries. To whit, Ireland has only just been bailed out and already Spain, Italy, Portugal, and Belgium.

What’s truly odd is the fact that anyone is surprised by this turn of events. We played out this exact same drama from 2007-2008 in the US. Throughout 2007 to 2008 Ben Bernanke and Hank Paulson assured us that the Financial Crisis was largely “contained” and would not “spill over” into the US economy.

This charade was maintained even as contagion spread. I recall (as I’m sure you do) that with each successive bailout the problems were deemed solved. At one point we had weekly proclamations that “the worst [was] over” from various Wall Street CEOs.

Then the whole thing came crashing down.

The clear conclusions to draw from that period in the US are:

1) Each successive bailout will produce smaller and smaller effects until systemic risk hits all at once

2) The world’s central banks are in fact powerless to stop systemic risk once contagion hits

3) The powers that be will do everything they can to maintain the illusion of control despite the clear fact contagion is spreading

4) To the unthinking masses, things will appear to be alright right until we’re literally in the eye of the storm

We now see the same drama unfolding in Europe. It is clear to anyone with a thinking brain that Greece, Ireland and the like will never pay their debts off. Moreover, the European Central Bank (ECB) will not be able to do anything to stop the now accelerating collapse.

Indeed, consider that while Greece and the ECB proclaimed “all is well” for five months, the Euro nose-dived from December (when Greece first caught headlines) until June when the ECB announced a $1 trillion bailout.

The Rest…HERE

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