Wednesday, February 26, 2014

German Moves vs. Euro

The euro was supposedly saved in 2012 by massive money printing. If massive money printing is required and needed at the ready, then is it really saved or death just delayed? I vote for death just delayed. Moves make it look like Germany agrees with that point of view. While many pundits wrote in 2011 and 2012 about a possibly Greek exit from the euro (Grexit), a few others wrote about a possible German exit (Gerxit). Havign written recently on German-Anglo tension, it is safe to say Germany sees the game changing and is moving for next steps.

In "The Trumpet" link above, the talk is of a German court sheathing the money printing sword the ECB has held, preventing euro meltdown since 2012. It is serious business in the eyes of that writer. It is really a claim to sovereignty as the Germans do view that court as a proper authority. If the ECB or a trasnational authority overrules it or tosses the decision aside, it could set up a constitutional crisis for an area with no formal constitution. Timed right, this would be a crisis as nationalist feelings are enflamed. They are now, but give it a couple of years and more national failures, and the flames will be roaring.

This move is interesting and shows the writer's myopia and faith in the system by ending with "a full blown crisis is now inevitable, and that crisis will force Europe to unite like never before". The writer never considers the possibility that the Greater Europe project will end or regress; always moving in one direction. Just looking at Germany's moves would paint a different picture. Germany is pulling its gold home. Not just from the US but from the UK and France. The trust is gone. France is sliding into basket case status with Spain, Italy and Greece already reliant on the global wave of monetary printing to stay afloat. In all of these European set ups for bailouts, France and Italy have to kick money into the kitty for Spain and Greece. What happens when they can't? More stress on Germany, Netherlands and prudent nations? This is a lose-lose situation for Germany. The writer of that essay could look at Germany pulling in gold and blocking more bailouts as a move to force a crisis and unite all of Europe.

That is one way of looking at it, and even the author failed to account for the gold moves or German attitudes. Other views could be Germany wants to physically hold their gold because they know the other nations have "lost" theirs in the great global gold leasing game. If a crisis comes and Germany is a gold superpower with their holdings, they can write the rules of any new euro set up and kick members out. No more Mediterranean free riding. Germany may also be collecting their gold for an eventual exit from the euro if, or when, the ECB and eurocrats overrule their court. Considering the debt ratios, the thing that saved Britain vs. the PIIGS in the financial crisis was that they were out of the euro. It's not like Germans are high on immigration or the euro right now.

At some point, the Germans must calculate how nearly everyone else is enjoying lower interest rates by hooking onto the German freight train. Germany needs markets for their goods, but there will be other markets to sell to if they only freed themselves from being an American province (Russia, China, etc.). The author only sees one direction: more centralization. This does not have to be the case. Ruling regimes do what it takes to stay in power. Merkel and company must see the writing on the wall for the dollar and by extension the euro. Just looking at Germany's statements and moves in synthesis would lead one to a different field entirely, btu the media does not want that. More centralization, more power in fewer hands, more control by eurocrats, and never consider that what has been done by progressives can be undone.

1 comment:

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