May 15, 2012 at 7:59 pm #3333wp_adminKeymaster
[article]260[/article]May 15, 2012 at 10:47 pm #3337jalParticipant
Ambrose is allegedly of the mind that there is NOTHING worse than a break-up of the EU, so therefore the Europeans must now relinquish their sovereignty and their freedoms to elite bankers, politicians and bureaucrats for all of eternity. He admits that the Germans were placed into this position “without their permission”, but then goes on to argue that they must accept their “fate” anyway. He also seems to think that his initial outcries against the EMU now justify his reckless suggestions to take the experiment to its logical extreme, which is, in fact, very EXTREME.
Please don’t listen to this nonsense from Ambrose. He is wrong, wrong, wrong – a million times over. There are other alternatives to full-fledged subjugation and destitution for the European people, and no one is saying that these alternatives will not come at a heavy cost. They will be very costly to the European people, but they will also be COSTLY for the malicious European bankers and politicians who have forced everyone else into this dreadful situation.
Its not all black and white.
There will be changes.
All countries have some form of Equalization programs within their borders.
This will be a big change for EU.
A country being relegated to the status of a “Province”.
Equalization payments are cash payments made in some federal systems of government from the federal government to subnational governments with the objective of offsetting differences in available revenue or in the cost of providing services.
They are generally calculated based on the magnitude of the subnational “fiscal gap”: essentially the difference between fiscal need and fiscal capacity. Fiscal capacity and fiscal need are not equivalent to measures of fiscal revenue and expenditure, as making them so would induce perverse incentives to subnational governments to reduce fiscal effort.May 15, 2012 at 11:02 pm #3338YesMaybeMember
Oh, come on, Ashvin! Of course we’re all stuffed! Didn’t you just write a FUBAR piece?May 15, 2012 at 11:59 pm #3339
Don’t worry, either way it goes Ambrose won’t be hanging around for the denoument. He disappeared for a couple of months last year into the Chilean Andes. Doubtless hanging out in the Rothschilds Bunker drinking 500 year old Pinot Noire while stuffing some Chilean cocaine up the nose of some wannabee Ford Model.
Ambrose has been getting progressively more Euro-centric as this insanity has continued, and he is either losing his marbles or he is taking hefty bribes from Nathan Rothschild to further spin up his shit this way.
Goes in the Heaving the Technicolor Yawn bin.
PS: BTW gang, I updated the Newz Page on the Diner, looks cooler now and includes features from the DD Video Jukebox as well.May 16, 2012 at 12:12 am #3340
Just a few random thoughts:
– What AEP half-proposes is a federation. Why not? I’m sure the people of Arkansas are grateful to be amalgamated with Virginia, New Jersey and other ‘wealthy’ states. What Arkansas has ceded is the ability to conduct independent foreign- and defense policies. The remaining policy options either parallel other states or the central government.
– Federation has real advantages: Florida is not required to buy submarines from Connecticut, Californians need not indenture themselves to buy cars from Alabama on credit @ bankrupting terms. All the states gain without advantage being taken.
– The US can create currency by simply issuing it, the country can never be bankrupted by firms withholding dollars. Period. The EU cannot do this, there is no EU treasury.
– The EU cannot offer a risk-free lending product that can compete with the US Treasury security. Ironically, such securities are endorsed here on TAE! Europe is negligent. It has willfully abandoned a multi-hundred TRILLION dollar market. WTF???
– The EU management cannot lend in the event finance refuses to do so. The absence of the structure to make that ultimate bid is bankrupting the various EU states now. On purpose? Perhaps, but the current crop of finance specs is certainly taking advantage. By simply refusing to lend … Greece, Spain, Ireland … next, France then Germany are ruined as credit disappears. All EU states are dependent upon outside/exogenous sources of credit.
– So is China, btw …
– AEP does not understand central banking. The Bank of Japan has tried to generate inflation for 20 years by way of various easing programs including (ongoing) QE and has failed miserably. The CB cannot create new money and as deflation/deleveraging carries on available assets to buy/lend against disappear.
– Federating is a stop-gap measure regardless of its effectiveness.
– All the crises are taking place at the same time and are interrelated. Ours is an energy crisis first. We have lived beyond our energy means for four centuries, now the bills are due both in energy and credit terms. Because ‘money’ is not a natural resource it can be offered in quantities exceedingly large but only to put the energy house in order and nothing more.
– What credit can buy is conservation. There is no technical exit from energy-resource bankruptcy, only a slower rate of ruin.
– Europe is in the process of becoming car-free. Why? B/c cars do not pay for themselves or for the fuel that is wasted by their use. Call this ‘conservation by other means’. Our market economy is re-pricing inputs, it is at the same time repricing credit used to obtain the now-expensive inputs. The market is pricing non-remunerative activities beyond affordability. This process is ‘energy deflation’, much like debt-deflation (Fisher). Whatever the price of energy is at any given time, it is too expensive to be simply spent.
The world has been able to ‘go off’ gold or break currency pegs and end debt arbitrage and deleveraging. To end the energy version we must go off petroleum. This going off process is underway in Europe right now, under everyone’s noses. When the post-petroleum economy finds blessed equilibrium all EU states will have access to what resources exist within their precious sovereign boundaries: within those of Greece, those of France, those of UK, etc.
The problem is not so much at the government office but at the end of your driveway.
What to do?
– Federate in form if not in substance: put a computer in an office in Brussels and institute a Europe-wide fuel import fee. Petrol would be taxed to price petrol @ fifteen euros per liter. The fiscal entity would issue new bonds to replace those issued by states including Germany’s. This would solve both the funding crisis as well as work on the energy variety. The motorists would hate but the cars are going regardless.
What Greece (and others) can do:
– Individual state treasury issue new euros into circulation,
– Declare a borrowing moratorium. Once in a hole stop digging.
– Perform a forensic analysis of exiting debts (Alexis Tsipras has promised to do this if he can form a government). Repudiate odious- fraudulently obtained and dead money debts.)
– Repudiate all debts taken on to finance energy consumption and bankrupt all such lenders. Where’s the liability, babe? Floating in the atmosphere: let them repossess CO2!
– Use new euros to retire govt debt as it comes due (blowing up banking at the same time.)
– Use new euros to put Greek citizens back to work: how many shops have closed? How many pensioners are destitute?
– Austerity for government agencies and wealthy.
– NOTE: Brussels will counterfeit euros and try to flood Greece with them: let them try! This ‘fake money’ can be used to retire debts not repudiated. Excess euros can be swapped for debt by Greek central bank: a euro shortage can be met by Greek central bank selling debt it has in its portfolio.
– Greece bans private automobiles and imposes 100% import fee on petroleum/products.
– Prepare for a ‘Nato occupation’.May 16, 2012 at 12:37 am #3341ashvinParticipant
By focusing only on the energy issues, you are ignoring the inherent functions of wealth extraction and oppression embedded in the system of capitalism itself (granted, its fossil fuel industrial nature must be considered, but not exclusively), including the political and monetary systems of “democratic republics”, “federations” and credit-based fiat currencies that spring forth from it.
What Arkansas has ceded is the ability to conduct independent foreign- and defense policies. The remaining policy options either parallel other states or the central government.
This is false. Anyone paying attention to legal trends in the US over the last century, and especially the last few decades, should realize that the states have lost almost all control over their ability to make unilateral policy decisions in ANY field. Thanks to the Supremacy clause, Interstate Commerce Clause, interpretations of the 14th amendment, and many other such things, the 10th Amendment doesn’t exist anymore and the states have lost all sovereignty.
Yes, there have been economic benefits of federation, as in it has made it easier to maintain a consumerist, exponential growth capitalist economy, with a healthy dose of imperial warmongering sprinkled on top. I disagree with you about your rather benign view of central banking systems and puppet governments, and agree much more with Triv on that issue.
If Europe wants to emulate the US (whose states are just as broke as Greece), and perhaps extend its prison sentence by a few more lifetimes, then it should by all means do what AEP proposes or “half-proposes”. My argument is that the LAST thing the Europeans should willingly do is emulate the US setup, even if it comes at great short-term costs to avoid doing so. Fortunately, I believe there are some forces within Europe that feel the same way, or at least half-feel the same way.May 16, 2012 at 1:11 am #3342
@Ashvin: By focusing only on the energy issues, you are ignoring the inherent functions of wealth extraction and oppression embedded in the system of capitalism itself (granted, its fossil fuel industrial nature must be considered, but not exclusively) …
I haven’t ignored anything of the kind, I’ve simply observed a hierarchy that exists but few desire to acknowledge.
Given zero-debt and benign, paternal democracies, the world would still be bankrupt at the point of complete ruin. It is entirely built around burning stuff for fun: we have too little left to burn. Finance is simply an enabler of resource waste: it has succeeded only too well.
There is a relatively successful federation and a collapsing pseudo federation. Which is preferable under current conditions?
The US version is defective but right now is the tallest mast on the sinking ship. The US states are indeed having many problems and are subordinate (to some degree) to the center however Montana is not being arbitraged against Louisiana, nor is Pennsylvania being denied funding because Harrisburg cannot repay businesses in Washington State. Greece is ruined by German financiers for no reason … well, there is a reason:
Europe’s petroleum consumption is being exported to the United States: an advantage of the federation over the alternative. There is reason why gas prices here and crude prices elsewhere have declined: Spain is going bankrupt. You think I don’t give the crooks enough opprobrium? My god man, the system robbery is much bigger than you think:
– Federation is not a panacea but it is better than what is underway. It buys some precious time. What to do with it is another issue all together.
🙂May 16, 2012 at 1:16 am #3343
ashvin post=2955 wrote:
If Europe wants to emulate the US (whose states are just as broke as Greece), and perhaps extend its prison sentence by a few more lifetimes, then it should by all means do what AEP proposes or “half-proposes”. My argument is that the LAST thing the Europeans should willingly do is emulate the US setup, even if it comes at great short-term costs to avoid doing so. Fortunately, I believe there are some forces within Europe that feel the same way, or at least half-feel the same way.
I agree with Steve that the underlying reason for the credit collapse is energy deficit on the one hand, and with Ashvin and Triv on the other hand that Central Banking and Federation is first off going to do nothing but delay the collapse and beyond that is simply a nightmare in the making.
Far as there being some forces in Europe fighting this, there is of course Nigel Farage and the UK Independence Party. He may not be perfect, but compared to that other Brit Prep School Twirp AEP, he is a positive Saint.
REMay 16, 2012 at 1:37 am #3344andrew_not_the_saintMember
The United States of Europe / centralized budget is (fortunately) never going to fly in practice. Even if the people of Europe were somehow to renounce their nationalistic streaks there’s a huge practical problem to unification – immobility. Due to language barriers, the number of people who are willing and able to migrate between EU countries is a fraction compared to the US (intra-state).May 16, 2012 at 2:54 am #3345GhungParticipant
EU Federation? I like it, Steve…. Greecissippi, Spainabama, Italitucky (GO Gatto – sciopero! … doesn’t have quite the same ring 😉 , Portufornia. We can even loan’em Bernanke for a while .May 16, 2012 at 3:37 am #3346ashvinParticipant
[quote=steve from virginia post=2956]
– Federation is not a panacea but it is better than what is underway. It buys some precious time. What to do with it is another issue all together. 🙂
Who are we buying time for? As you know, time has only worked for the benefit of concentrated (Some Call It “Evil”) interests throughout the last few centuries (and some would say even longer). Here’s a question: why are such a huge portions of the global population actually starved for resources, and forced to leverage their existence against waste-based economies that are consuming themselves and the surrounding environment? I’d say a BIG reason has been because they have been held up at gunpoint for centuries, and Federation in one part of the world (the West) has made that easy to do in other parts of the world (I now use that term loosely to mean centralized economic/political coordination between sovereign states, but also the explicit federation found in the US).
‘d like to take this opportunity to comment on an oldie but a goodie from the Indian environmentalist, Vandan Shiva. In her brief article for Odewire, “Two myths that keep the world poor”, Shiva tears apart the logic of Harvard economist and neoliberal (-feudal), economic “shock therapy” advocate Jeffrey Sachs with all the force one would expect from the God of destruction. It was in response to a book written by Sachs called The End of Poverty: Economic Possibilities of Our Time, which featured all the nonsensical arguments that “liberal progressives” like to spout off in magazines and on television these days.
They proffer the same kind of fundamental myth that Nietzsche identified crawling through the bowels of modern religions such as Christianity – if one toils hard enough on Earth, and accepts one’s designated roles in society, he/she will be rewarded in Heaven. If that is God’s [Blankfein’s] given truth, then there is no need to radically alter the system or fight for justice/equality, right? Shiva first explains why global poverty is not a function of people being “left behind”, as if they had been ten minutes late to the train station, but rather of people being held up for nearly all their wealth/resources at gunpoint.
Theoretically, you could be right about European federation buying the people time to work out some issues. Practically, history shows us that you won’t be right, because that time will only be used to make a lot more people a lot more miserable than they already are. It is actually an explicit part of the NWO agenda, and that’s saying something.May 16, 2012 at 4:57 am #3347einhverfrMember
First, I think there are some genuine insights in the article. The fact is that the Euro is doomed specifically for the reason stated— it is a currency without a monetary policy, and a monetary union without a real central bank or a loss of local financial sovereignty. Yes, this could be stopped by getting rid of the European countries’ sovereignty. Yes, I think *everyone* is aware of this. I don’t think however *anyone* wants this, and for good reason, as Ashvin pointed out.
Moreover, I think the costs for Greece dropping out of the EMU are greater than he suggests. If Greece drops out, they could continue to use Euros and just simply default on all their debt, or they could switch to the dollar and default, or they could issue drachmas and default. Either way they will have trouble raising bonds on international markets but they might not have to raise bonds on international markets. There may be other ways of financing spending in the short term, such as looking back to the war bonds campaigns in the US during WWII, and the like, and encouraging Greeks to help out their country by lending the government money. Now the Euro is almost as valuable to Greece if they are outside the ENU than if they are inside it. However if Greece drops out this encourages Ireland, Spain, Portugal, and Italy to do the same, and pretty soon the EMU begins to shrink in from the periphery relatively quickly, and the value of EMU membership goes down.
Remember, EMU membership is primarily important because it means that international trade within Europe doesn’t have to go through multiple forex exchanges, and given that the USD is the world’s reserve currency, this process is fairly US centric which adds both time and cost to exchanges. (Note that if you wire money in MYR from Indonesia (currency is IDR) to Malaysia (MYR), the wire goes through New York because it is converted into USD in the middle. I have personal experience with this…..May 16, 2012 at 6:52 am #3349rapierParticipant
Prichard first entered the mainstream in the US by performing a dirty and valuable service to the purveyors of Clinton scandals. He would take the latest salacious rumor cooked up by the army of professional Clinton hunters and publish them in the UK. Stuff nobody in the MSM in the US would touch since it was just rumor. At least they wouldn’t touch it until it was published in the UK by the guy with 3 names. Given this patina of respectability the rumor got fed into the MSM.
Don’t get me wrong I have no torch to carry for Clinton but the entire Whitewater and offshoot ‘scandals’ and the impeachment were an exercise in propaganda and disinformation. A successful attempt to control public discourse and really the population. Prichard was a knowing cog in the machine to his own great benefit.
One would be hard pressed to make a coherent case that he is serving any particular interest group with his financial reporting over the last couple of years but every story by him should be read with the question of who that might be in mind.May 16, 2012 at 9:07 pm #3361
On the ideological level, federation is defective because it is patently unfair.
On the practical level it provides a tool like a hammer, that the current alternative is structurally incapable of providing. Federation — with or without any attendant organizing meme — allows the EU components to offer risk free securities. This would shelter the individual states from speculative attacks on their currencies (that all coincidentally are called ‘the euro’).
Federation cannot build an empire because the resources to do so have already been spewed out of the world’s tailpipes.
By providing the risk-free security, Europe can compete with the US for capital instead of helplessly watching it flow overseas.
If the Europeans are unwilling or incapable of federation (which to me seems the easiest and most comprehensive approach at the least cost) then the other alternative is for individual EU sovereigns’ treasuries to simply issue fiat euros as Lincoln’s Treasury issued greenback dollars.
I suspect this approach would be far more destabilizing than federation. After all, the introduction of greenbacks accompanied the US civil war (not that one caused the other, of course). Government issue would undermine the existing finance system, the ongoing lending strike on the part of finance would accelerate with uncertain consequences.
Most likely is EU states will issue their own native non-euro currencies at par w/ euros. This would be bank-financed debt money not fiat issue. Debt money would not scare the horses (but will amplify capital flight). There are many other complications with this including immediate loss of GDP/currency parity will vanish instantly. One reason: the need for hard currency to buy fuel not only from producers but on the street. Local currency will be increasingly discounted as the hard currency becomes scarcer and drains to oil producers. At the same time, the increasing/self-amplifying shortage of hard currency in ALL the states will mean a sharply diminished flow of petroleum to them. This means more business failures, less credit and fewer dollars/euros/whatever$ available to be spent for fuel.
Here is ‘energy-deflation’ much like Fisher’s debt-deflation. Regardless of the diminishing nominal price of fuel, the real price is always unaffordable.
It is possible that energy deflation is underway right now. If it is you better prepare yourself.
If Greece issues fiat it goes up against the establishment. The debt money system has advantage of organizational power. Greece issues and all the other EU countries will line up against it (until they are forced to issue themselves). If Greece issued drachmas, the EU finance will counterfeit drachmas and flood Greece with them.
If the system breaks down while ‘money-transition’ is underway there is zero capital available to start over. If EU carries on as current, the system will break down and there will be zero capital available to start over: this is the time that needs to be bought.
I like Vandan Shiva, but all redistribution arguments need to be thought through. The current system is troubled because it has succeeded, not because it has failed. It is indeed succeeding right now, we humans are dissatisfied with outcomes.
The trend is away from redistribution, in fact redistribution is guaranteed to fail. The ‘masses’ of India, Syria or Egypt will never have flat screens or Acuras, the more violent they become the farther away these things go. As Dick Vodra told me a few months ago, “US energy policy is the Patriot Act”.
We will have conservation.
The alternative is conservation will be driven down our throats by the force of events.
If we choose conservation we have control over our own destiny. Getting rid of the cars — by fiat — would be inconvenient. Our cars are fun toys … they don’t pay for themselves by way of their use. Not only that, their use does not pay for the fuel, either. We have had to borrow for fifty years to afford them. Our toys themselves have bankrupted us, not the means by which the toys have been allocated.
We can live without the cars and the crap that goes with them, because they are child’s toys and because they cannot pay their own way. If we choose ‘door number 2’ and conservation is imposed, our going broke (and giving up the cars anyway) will be the least of our concerns. We cede control to ‘Ma Nature’: we are one crop failure away from going from 7 billions to 2 billions, in the blink of an eye.May 17, 2012 at 6:30 am #3366Peter LyonMember
All these ideas for Greece are very nice but ignore two basic problems. First, Greece does not have a government that can make any decisions about anything, and might not in June either when the next round of austerity is meant to be decided. Secondly, most of the people of Greece don’t accept that they are part of the problem, instead they blame the government for the whole thing. If they don’t accept they are part of the problem, they won’t support any solutions that require personal sacrifice (EG paying the taxes they are required to in order to support the system). And there is not enough time for any of these ideas to go through a shakedown and be implemented. In short, it is going to be messy.May 19, 2012 at 12:53 pm #3394AndrewPMember
Federation makes sense for the EU, and is probably the only way the EU will be able to successfully fight over the scraps of diminishing fuel resources in coming years. A strong federation will create a power greater than the US, and will allow the EU to wage wars of conquest. While cars will not pay for the fuel that feeds them, wars certainly can. The EU wan wage war more efficiently than the US because there will be no extraneous ideological pretentions – they will simply grab the oil.May 19, 2012 at 1:22 pm #3396
AndrewP post=3008 wrote: Federation makes sense for the EU, and is probably the only way the EU will be able to successfully fight over the scraps of diminishing fuel resources in coming years. A strong federation will create a power greater than the US, and will allow the EU to wage wars of conquest. While cars will not pay for the fuel that feeds them, wars certainly can. The EU wan wage war more efficiently than the US because there will be no extraneous ideological pretentions – they will simply grab the oil.
Regardless of whether Federating the EU “makes sense” or not on an Economic Level (and I do not think it does), it is a Political Improbability of EXTREME proportions that such a Federation can occur now.
There are MASSIVE structural imbalances in the various economies constituting the EU, and moreover there is no historical narrative to draw them all together, and beyond THAT you even have Language differential between these countries. You know French people speak FROG, and Germans speak KRAUT and the Bloody English speak a bastardized form of the English Language also. LOL.
Eurocrats wish to take this melange and Homogenize it into a Federation, but good grief on a political level where you make some pretense toward “Democracy” that Dog just won’t HUNT. Krauts are not going to willingly take a hit to their standard of living to keep Greek Pensioners solvent here.
What they ARE trying to do is strip all pretense at Democracy OUT of the Eurotrash States so they can ARTIFICIALLY “Federate” that which is not “Federatable”. This is WORSE than forcing a Jew and a Catholic to marry each other and find some common ground for the marriage, they are trying to force a Polygamous Marriage of numerous conflicting Faiths, complete with some Underage Girls being married off to Sugar Daddies they DESPISE.
All basically done with “Good Intentions” which would be to kep Eurotrashland as a “Competitive” enough large entity to keep playing with the Big Boys of Russia, China and the FSofA. You can SEE the wheels turning in the mind of a Eurocrat, “If we could just get a new World Order WORKING here we could COMPETE with the FSofA, china and the Ruskies for the last of the remaining cheap Oil!”.
Sadly for the Eurocrats, this DREAM is highly unlikely to come TRUE at this point. It most CERTAINLY will not occur through any political process even REMOTELY “democratic”.
These guys bet their Wad on the Euro, and it was just a VERY bad bet to begin with. It cannot be salvaged and it will not be.
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