Why Europe Will Lead the Charge to Eliminate Cash – the Next Step in a Global Meltdown
By: Martin Armstrong
GoldSeek.com
Thursday, 21 May 2015
Europe will lead the world into Economic Totalitarianism because government is now desperate to retain the euro. If the euro collapses, so will Brussels. The government exists solely because of the euro.
The key is the fatal design of the euro. Failure to consolidate the debts of all individual member states has been the worst possible mistake perhaps ever made in this post-Great Depression era of New Economics, where government lawyers assume they can just write a law and it will be followed, as if they were some new modern dictator.
Because of the failure to consolidate the debts, the reserve of the banks had to be politically correct to conform with Brussels, holding a piece of all member state debts. That meant that the defaulting in part or in whole of individual sovereign debts of member states undermined the banking system. This would be as if in the U.S. bank reserves were made up of state debts. If one state failed, everyone would scramble to sell to the banks who had the most.
Since Brussels will not reform, as Einstein correctly put it: “You cannot solve current problems with current thinking. Current problems are the result of current thinking.” This whole idea of negative interest rates is just following the same Keynesian concept that lowering rates will stimulate demand. The missing element is CONFIDENCE. If you do not believe you will make even 1%, you will not pay 0%. While they keep lowering rates to stimulate borrowers, they are wiping out the elderly who now cannot live from their savings, reducing their spending, and destroying the entire idea of pensions and retirement (the social contract). The lack of CONFIDENCE prevents new businesses from forming and therein results in the lost generation of youth who cannot find a job. The elderly are forced to work, so there becomes a shortage of jobs, resulting in higher unemployment among the youth.
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