Anger Over Debt And Poor Governance
January 19, 2012
European politicians, bureaucrats, bankers and assorted other lose more and more credibility each day as we are inundated each day with more lies and deliberate misdirection regarding the course of financial events within the European Union.
The key to solving the debt crisis is Germany. The Greek debt crisis is worse today than it was two years ago. 65% of Germans want out of the euro zone and the euro and want to return to the Deutschemark, but for more than two years their political representatives have denied them that. Finally breaks in the political armor are beginning to appear. All efforts to fix the Greek problem have been futile. If the Federal Reserve hadn’t stepped into the breach a couple of weeks ago who could guess where things would be now. The CDU, Christian Democratic Union, Mrs. Merkel’s party is in serious trouble because she has operated in opposition to her own constituency in trying to keep the euro afloat, at the expense of her fellow Germans. That was duly reflected in the election this past year. In spite of banks having $1 trillion at their disposal those funds will last a year or so unless fractional banking is employed. Policymakers continue to convene, but continue to come up with little concrete policy. As we said in this publication more than two years ago and on Greek radio, television and in editorials that the only solution for Greece was default, a return to the drachma and for the Greeks to solve their problems on their own. Greek debt is unpayable and Greeks do not believe they should be responsible for it. Bankers and politicians caused these problems, not the man and woman on the street. This latest infusion of funds by the Fed should carry European banks this year through the trauma of Greece and perhaps others leaving the euro. The Ponzi scheme widens and deepens.
This past week we heard from the CDU deputy floor leader Michael Fuchs and Bavarian sister party member the CSU, which is where the real conservatives hail from, that member states are unable to commit to necessary reforms. They should begin on the opportunity to leave. Mrs. Merkel and Mr. Sarkozy said they would insure that no country leaves the euro. Pressures are building to allow Greece to leave the euro by voters and eventually that won’t be denied. As you can see, just as in many other countries, the leadership controlled by others from behind the scenes and those leaders do just the opposite of what the voters want.
For more than two years Greece has been in the debt limelight along with Portugal and Ireland. Spain and Italy are next in line. Their bond offerings are increasing as they prepare to roll debt. Spain doesn’t have any trouble selling bonds having sold double what it needed last week and about 1/3rd of its annual needs. They sold $12.7 billion of $45.6 needed on the year; all told Spain needs $75 billion.
Italy needs $226 billion. Next month is a big one for Italy as April is for Spain. The credit lines now available to the 523 banks should cover any problems all the sovereigns have, but all they have done is put off the inevitable and solved next to nothing.
The ECB, loaded with a trillion-swap line from the Fed has lent out $842 billion of which 70% has been redeposited at the ECB. Laughably ECB president Draghi says he sees stabilization and is ready to act on quantitative easing.
German and French politicians are talking about their transaction tax, but the voters do not like it at all. Almost all the politicians are saying, yes a tax, but for all of the EU. This is what the Illuminists have been pushing for over the past 15 years. Only they want it to be a worldwide tax.