.
Sunday, March 24, 2013

On the Circus in Europe

 

I’m flabbergasted that Cyprus is the cause of the circus in Europe. Cyprus was an avoidable problem in my opinion. That view is supported by the fact that all of the words, actions (and threats) by the deciders in Northern Europe have been decidedly negative. There was no “Can Do” talk. All I heard was, “We won’t do” or “Here is a deadline” – “Here’s a gun to your head”.

Two possibilities – Either this was a completely bungled effort in Brussels. Or this this was a deliberate effort to weed out the weak members of the EU. If the intent was the latter, this will not stop will little Cyprus.

Next week there will some broad confusion following the resolution in Cyprus. Either Cyprus is out of the Euro zone by Wednesday, or the +E100k depositors are going to get whacked big. There is no soft landing potential any longer.  If the folks in Brussels and Berlin who are pulling the strings are really serious about stabilizing the Euro zone they will respond with a series of “positive” measures next week. Things that might be considered to ring-fence Cyprus include:

 

- Doubling the deposit guaranty to E200.

- Creating a Transaction Account Guarantee. This would insure all accounts that were related to the settlement of goods and trade. (protect the economy)

- Financial measures – From some minor stimulus stuff, to monetary measures like LTRO or a cut in % rates.

 

These would be “calming” steps. They would be proactive in that the intent would be to get ahead of any contagion. We could also see “nothing” from Brussels. That silence would be a “tell” that “they” don’t want to resist gravity any longer. The most significant sign would be if capital controls were established more broadly in Europe over the next few weeks. These will scare the crap out of folks, especially those in Spain and Italy.

 

- Restrictions on the amount of withdrawals at an ATM.

- Restrictions on money transfers.

- Restrictions on the ability to acquire foreign exchange (Dollars Swiss Francs, etc)

 

Three possibilities. “They” either (1) act in a coordinated way to head off any problems, (2) do nothing, or (3) they turn up the heat with more scary stuff, and the SHTF.

I’m not sure what comes next, Door #1 might buy some time. Doors #2 &3 are trouble. Bad odds.

++

 

 

The Circus

 

ThreeRing

 

Europe looks like a three ringed circus to me. Think of it, the tent is packed with awe stuck patrons. In the center stage is a clown show. Slapstick comedy. Clowns running clumsily with their big shoes carrying rubber mallets, chasing after other clowns who have buckets filled with confetti, ready for a water fight. A riotous scene that many in the audience cheer and applaud. But there are also those in the audience who fear clowns – the reasons vary – the results are the same. They are revolted by the antics of the clowns. The clowns are the politicians and technocrats in Berlin and Brussels.

 

joker-girl-stephen-king-it-clown-scary-131665

 

 

On one side is a smaller ring. This one has a large metal cage, in it are a bear, a lion and a dozen “little people”. The wee ones are dressed in funny, colorful outfits. They carry miniature whips and are desperately trying to get the beasts to perform the hoop jump and barrel rolling tricks. The lion swats with a paw, knocking the bear off its perch and onto one of the little ones. A rescue squad of more little people comes up with a stretcher and carries off the “injured”. Some children watching are crying, they think the little one has been crushed. Mothers try to soothe sobbing children with, “Don’t worry, it’s only make believe”.

 

Screen Shot 2013-03-23 at 2.48.28 PM

 

In the final ring is the high wire act. The famous Estes family from Milan is the main attraction. Three generations are balanced on a small wire. The family forms a pyramid three levels high. A young boy, the youngest Estes, climbs to the top and does a handstand. Most in the audience stand and cheer at this amazing feat, others turn their heads in fear. There is no safety net below the Estes family. How could they take such risks with their youth?

 

RackMultipart20120921-12691-16u5jcy_grid_6

 

Off to the side of the final ring are a troop of actors.  Some are dressed in brown shirts, others white. The stage has a back drop of the famous  fortress in Toledo, The Alcazar.

Toledo-Alcazar antes del incendio

 

The circus show is a re-enactment of the 1936 Siege of Alcazar. This battle was the start of the Spanish Civil War. The Brown shirts, led by Franco and armed by Germany defeated the defenders. The battle was fought over the control of a munitions plant. There were many heroes.

 alcazar -bk

 

 

Few in the circus audience understand (or care) about this portion of the show. But some of the older ones do remember, others know that this siege was an important step to a much larger war.

 

-1

 

 

Comments

  1. ryan_langemeyer says:

    I’ve lately become a proponent of “pushing the bus over the cliff”, in order to get through the worst of what’s coming next sooner, and get on with what can come after. Watching the slow motion collapse of Cyprus is more painful than I expected. It brings up some of my fears of how hard this will be for so many people, possibly myself. And still, I feel the need to push that bus, destroy the existing financial system. And hopefully, (please G_d) hopefully there will be a cultural memory of how we all got here. Then, as society rebuilds itself, that memory will serve to provide a new and sane direction for the way we choose to live.

    • Unfortunately the ones wishing to “collect” the countries of the world into common control are driving the bus towards the cliff at the speed they wish. Has the “one” to save us all arrived yet at the bottom of the cliff in the ambulance with his miracle cure? The bus driver has his feet on the accelerator or the brake, To him his timing is crucial. He’ll simply jump out the door at the edge and calmly climb down and collect up the goods.

    • Unfortunately, there is no cultural memory. Never has been, never will be. Take any society throughout history. Rome is the classic, but there are modern examples: think NYC after 9/11. We are right back to where we were as a culture on 9/10.

    • Well, How would you feel if it was World War IV. I’ve been looking at “Victory at Sea” and other DVDs about the WWII and I am aghast at the capital destruction and death and dislocation of people. War MUST be avoided. It is very cavalier to suggest pushing the bus off of the cliff. Be careful what you wish for.

      • Europe cannot avoid war by sticking its head in the sand and pretending the current system is economically viable. The banks are insolvent, the EU leadership (in Brussels) is a costly joke that Europe cannot afford, and the Euro is based on accounting fraud.

        Constantly lying to people, stealing money, giving them false hope (instead of real hope which was possible before), a giant uncaring government preoccupied with their own benefits — this is the recipe for starting armed conflict in every part of the world

        And it is the recipe by which the Eurocrats will cause war in Europe. Shut down Brussels, or clean your weapons — those are Europe’s two remaining options now.

  2. BK. Thanks for doing all the work to inform us on developments in europe.Could you tell us what you think about the effects a lot of that euro money fleeing to dollars and how,and if so,the dollar rising as a flight to safety,what it would do to US stocks and bonds?Of coarse the FEDS policy not withstanding. Thanks

    • Bingo. Exactly why the dollar has been going up as well as the Dow. If you lived in Europe, where would you put your money? Japan too maybe, although the Japanese are so xenophobic they will probably go down with their ship.

  3. I know this is not the right place for this article but I just found it. I also know this subject will be coming back soon.

    Social Security Disability http://apps.npr.org/unfit-for-work/

    Most are not unfit for work and are doing it to suck the system dry.

    • Oh course, and with affirmation from the government. DI is now what – 6-8% of the eligible work force. And the increase has been in what type of disabilities – mental stress and depression. And why? Because it is almost impossible for the DI officer to refute that diagnosis. DI is a joke but just one more way to make us sheeple. Go ahead, I dare you to try it. Find yourself a disability lawyer in a nice reputable town – say Detroit. Tell him you suffer from depression and want to file for DI. Any odds on whether he even asks you to verify a work history – smells a little like subprime.

    • backwardsevolution says:

      Joe – that Social Security Disability article was unbelievable! Even children are getting it. Very worrisome.

  4. henk horlings says:

    I mail from Holland (the little neighbour of Germany) I have read all your blogs, quite often it’s about US items. This time is different, it’s Europe and you are wrong.Since the bail out of Greece and the haircut of 75% the Cyprian government knows its banks are bankrupt.
    Still these banks give 7% interest on normal bank accounts. In the rest of Europe it is 1,5 to 2% and inflation running at 2,5% Everybody who excepts 7% interest knows he must run extra risks. If these accounts would be bailed out by the rest of Europe the northern European account holders would be losing money at home (interest – inflation= negative) and have to bail out people who got 7% a year.
    This cannot be explained to the account holders here.
    Two weeks ago after 6 months of negotiations they reached an agreement 9,9% and 6,75% which is under 2 years of Cyprus interest only. That should have been acceptable to everybody. This was fair and could be sold to everybody. The Cyprus government gave most probably in to threats. There is no extra crisis in Europe over Cyprus. Cyprus is death in the water and they can thank themselves for that.
    They could have had everything last week, a reasonable haircut of 6,75 and 9,9 a one time tax.
    And the banks could have gone on. Cyprus could have gone on. But these are politicians, The cannot do the things in the interest of the country. They do what is best for themselves first.
    Sometimes politicians must do the proper thing even if it is not understood by there electorate.

    • As much as the Cypriot model may have been unsustainable, 1) there is something called deposit insurance, it is one of the fundamental pillars of modern banking (or at least, it was until the troika reneged on it last Friday), and 2) if it was such a problem they never should have been allowed entrance into the EU. Can’t have it both ways.

      • henk horlings says:

        To Riversteiner
        Yes there is deposit insurance, but it is an insurance from the country to their own banks.
        So let Cyprus save it banks, no problem with us. The problem is it cannot. But there is no rule that than the other Euro counties should save the banks in Cyprus. We did not save the banks in Greece or Spain. We have lent the money to Spain so Spain could save its own banks.
        But if we lent all the money they need to Cyprus they will never be able to pay it all back. So we cannot.
        In the end if Cyprus does not accept that they should find 1/3 of the money themselves they will go bankrupt. And no Mr. Karsting no hell will break loose in the rest of Europe. We understand Cyprus choose so themselves. This is one of. It shows all the others what will happen if they do not pay there own bills and reject reasonable help for a reasonable price.
        We will regret the hardship the people of Cyprus will face, but it is in most part their own doing.
        Had they accepted the agreed deal a week ago they could have had a reasonable future with a little bit smaller banks but still a lot of jobs.

    • Henk Horlings—It is great that a European is expressing their point of view on the Cyprus event. I would like to hear more European perspectives. The rate of interest expresses the risk involved in lending money. Yes, the 7% interest is a lot more return in Cypress than in Germany. However, just because one get more interest doesn’t mean that the depositor doesn’t deserve it and should, therefore, be happy to give some back.

      The depositors knew that it was risky, but the 100,000 Euro assurance that these accounts were protected, made depositors feel safe. There should never been a guarantee. The ECB is trying to change the concept of bank deposits to financial investments and Cypress may be the test case. All of the Eurozone may have to worry that their bank deposits may be used to indemnify the banker’s losses if this succeeds.

      Why should the citizens of Germany or Holland, who are prudent, be asked to bailout Cypress with their hard earned money? They shouldn’t. The Cypress banks should be reorganized or liquidated. The bankers should be held responsible.

      All the Euro banks are insolvent and you can take that to the bank. This is all FINANCIAL REPRESSION, a way to reduce the debt. The tides going out and we will soon discover that we’re all swimming naked!

      • henk horlings says:

        Homer, I am sorry but I don’t agree
        Most European banks are solvent. The ones with problems have a reason.
        Irisch banks had too much money in the housing bubble, when it burst they went under.
        The Spanisch banks the same but in slow motion.
        The Cyprus banks had too much money invested in Greek paper. They lost 75% in the Greek haircut. And are really broke.
        The best proof is Iceland, there the banks all went bankrupt. But now all assets are nearly sold
        and most creditors will be paid in full. The banks were still more or less solvent but could not stand agains a bankrun. As no bank can.
        With banks it is as with equity, if they have time, they will always win.

        • Henk Horlings–They are not solvent (the ability to pay all just debts). Spain, Portugal, Italy, France, Greece, Cypress are all basket cases (insolvent). They cannot pay their just debts without printing the Euro to extinction. All money in Holland or elsewhere is debt. The Euro citizens are up to their eye balls in debt. That is the problem world wide, too much debt. Debt is the financial “black hole”. Anything resembling wealth (fiat money especially) is sucked in to it, never to be seen again.

          Iceland is better off today after their austerity are the reports that I see. Telling English bankers to “eat it” (eat the losses on Icelandic debt) lifted a great burden off Iceland. Their economy is improving.

  5. Bozo the Clown says:

    Let’s tax your savings and see if you think that’s reasonable. Maybe your wooden shoes are too tight?

    • henk horlings says:

      I would gladly loose 2 years of interest in order to help save my country.
      In fact we are doing this already
      Because of artificially low interest rates we are sending interest due on savings accounts over to the government. They don’t have to pay the interest that the people (including pensioners) with savings lack
      For example: my mother who is 85 years old gets a pension. This pension did not get an inflation correction over the last five years. 2/3 of higher pension got a haircut of 8% this year. She now has 15% less buying power than 5 years ago. All government employed run the same fate. We all accept this because we understand that jobs come first. But it would be unfair to ask us to pay for all the others as well. Many pensioners in Germany cannot get by and have to work till old age to let end meet. In Holland its better thanks to our system. So we are beeing robbed of our savings and we accept it as the least horrible thing.

      • Henk Horlings—But don’t you realize that you are not saving your country (the people, your friends and neighbors), you’re saving the bankers and politicians at your expense. Your patriotism is misplaced, your interest are not interest of the banker and politicians. You are being taken advantage of. They are using your memories of when Holland had represented the interest of the people and secretly substituted the interest of the bankers and politicians. Look up FINANCIAL REPRESSION on Wikipedia.com. and find out what is really happening to your country. How much say did Henk Horlings have in whether Holland should join the European Common Market?

  6. Henk Horlings, Your last post comes to the crutch of the matter.Big Gov’t nanny state or not.In one post you spoke of Cypriot pollititions being threatend (coerced).In US many here lament the disappearing of self-reliance to Gov’t and dislike saying it but it is already gone.Only the appearence is there.The young know it.Thats why the party in power in US is the ones who promise the most freebees.We all know that the US Gov’t told the banks here what they were going to do in 2008 crisis.The only thing saving US is it is still the worlds reserve currencey.Especally with energy being priced in dollars.If that changes,game over for US.,and posably europes defence ie NATO.I really apprieciate your input on the european situation sir.Please continue to keep us informed.

    • henk horlings says:

      I agree we help the bankers. Too many mistakes were made, we all have to pay for that.
      But what is the alternative? It is the same everywhere. Too much debt.
      I feel there is only one way out. And that’s inflation. We all have to inflate our way out of this mess.
      Not only we in Europe but the US as well. We might have less money, but money isn’t everything
      Better all on a job for 40.000 than half of the people on the dole and the other half 80.000 that the Dutch feeling.

      With the bank people it’s weird. If a company makes a loss, staff will suffer, have to get less money.
      With banks this seems to be different. They get subsedised by big government and they get the money from us. In the crasch after Lehman, it could not be done otherwise. Now government is learning and it lets the bankpeople (the customers who created the problem and the banks themselves) pay part of the bill. And then other people say that is an irresponsible thing to do. (sorry bruce) It is not.
      They made a start in Cyprus to put the blame where it belongs and that according to Europe is the way to go. Only help the people who want to help themselves.

      • Henk Horlings—LIsten to this! http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2013/3/24_Dr._Paul_Craig_Roberts_files/Dr.%20Paul%20Craig%20Roberts%203%3A24%3A2013.mp3

        We Americans have a conflicting views of government. Two different camps, those who look to government for the sustenance and those who don’t trust government. It is a historical thing. I know that Germany and the Netherlands have a view of government different than our own. You have been under socialism much longer and come to accept it. You have been made promises by your leaders, but I believe those promises will not be kept. Socialism will fail as it always has where ever it has been tried. You know that socialism was tried here in the 1600, imposed by the Dutch companies that sponsored colonist in the new world. It failed. Socialism fails because it is a violation of the 7th commandment. “Thou shall not steal.”

        There is always an alternative, but we avoid it because it involves pain. The alternative is to recognize the errors and commit to doing the right thing to recognize historical actions the promote over time the best for everyone. That is what the 10 commandments are, a historical statement of what works best for society when people follow these rules. Iceland repudiated the debt. They took the pain. They will be better off for it.

        The greatest good for the greatest number of people is what you are saying. But pray tell what is your definition of good. It might be different than my definition of good. That is the fly in the ointment. True good has legs, as they say. It endures. Your experiment with socialism is only decades old, hardly enduring. The pain that your country and the Euro zone is experiencing (financial repression) does not bode well for this grand experiment.

        Hyperinflation is one solution, repudiation is another, financial repression is a third and world war is the fourth. There is no easy out as Ludwig von Mises said. Henek thank you for your posts.

  7. Henk Horlings — The entire bloated government nanny-state G7 (Europe, US and Japan) is breaking under its own unfeasable cost structure. You sound like an intelligent person, but you destroy your credibility when you suggest it is merely 2 years interest to save your country.

    Two years interest won’t even pay off past spending sprees, never mind make the bureaucracies economically feasible going forward — even the criminals in government know that. The US Fed (mostly Bernanke) has been stealing from US savers with artificially low interest rates since (at least 1998) — it is widely accepted (outside Fed circles) that the Fed’s decision to keep rates too low for to long was a major factor in causing our housing bubble. Stealing for two years didn’t cut it; stealing for 15 years hasn’t cut it.

    Japan is now in its third lost decade. Zero interest rates, stimulus spending to benefit political cronies, lying constantly (Fukashima is under control… just like the US subprime contagion)

    Europe has all the problems of the G7, plus the EU is built on top of accounting fraud. None of the Mediterranean countries ever met the conditions of the Maastrict treaty. Not Cyrpus, not Greece, not Italy, not France, not Spain, not Portugal. None of them.

    Built an unsustainable cost structure on a foundation of accounting lies and you get the EU.

    The rest of the G7 is the proverbial one eyed man in a village of the blind … we are “only” choking on an unsustainable cost structure. But Obama is trying to Europeanize the US, so we might catch up to the stupidity of Europe soon.

    We can argue about the when, but not the if. The EU’s cost structure guarantees failure — it is only a question of how much subsidy they can extract from idiots to prop the status quo up.

    German citizens (not Merkel) already said they will not write an unlimited check. Actually, they said this at least 20 years ago and have been repeating it ever since. Even if the German people supported Merkel’s unlimited EU subsidies (and not one opinion poll supports this notion) — the fact is that Germany cannot (is not able to) subsidize all the economic failure around Europe.

    The EU leadership has now stooped to robbing its own citizens to keep their bureaucratic lifestyle going — a move that destroys trust in the system and will only hasten the collapse of the EU. Note that this endgame happens regardless of what Cyprus does or doesn’t do.

    • henk horlings says:

      I agree, it will blow, softly over time with inflation or more violent with a bang.
      We can not go on like this. Our population will shrink.
      One of the many reasons we cannot grow our way out of this either, maybe a few can on the expense of others. But a sustainable growth of 3% over the next 50 years is just not feasible.

      • Either Cyprus and Greece get ejected from the EU very soon, or else history suggests continent wide war. Lets hope the people of Europe ignore the Eurocrats and kick Cyprus out next week … if not, I would expect war in a year or two. Not saying war is inevitable, just looking at Europe’s long history and doubting that this time will be different.

        (Cyprus and Greece will be first to go, but that doesn’t rule out additional departures)

        Inflation won’t work — not even appearance wise. Inflation never does work, but sometimes and in mild forms, it can create the appearance of working … nullifying some debts. The level of inflation that Mediterranean countries “need” would also break the economic model of northern Europe (Germany and economic satellites) — creating a second set of basket case members. Inflation would create a second problem, without actually solving the first.

        Really dumb “leadership” in Brussels (and the ECB) has reduced Europe’s choices to two: jettison the bad countries or go to war. Given the spectacularly stupid decisions Brussels has made to date, I am very fearful of Europe’s future over the next decade or two.

        • Bozo the Clown says:

          I think henk horlings is really BK in disguise, he’s writing all these bizarre comments to boost readership on his blog

  8. Bruce:

    It’s all ok now. No need to panic. All is well. Really.

    It’s no longer any form of ‘Tax” – it’s now a “Bank restructuring”, where even Parliament doesn’t have to take a vote.

    And in other news, Nicos Anastasiades just reached ‘Top 5′ selection status in international ‘Dead Pool’ gaming circles.

    • henk horlings says:

      This is Henk, I’am very sorry but I’aM who I am (not Bruce) You should know by my Henklish.
      I went to bed last night at half past eleven. That’s why I was gone.

      You have only two parties that matter, and see what happens. Discontent all over.
      We in Europe are 17 countries we argue a lot, amazing because we haven’t even an own language but in the end we do the right thing. If you call the best for most people socialist its okay with me.

      In Cyprus they don’t have to vote, so nobody is to blame, therefore we hope, nobody gets killed.
      But follow the news in 6 months. Another success of democratie. If we stay healthy, have a roof over our hat and food for our spouse we will go on being irresponsible and socialists. This year my village celebrates it’s anniversary of city rights, we got them 600 years ago. Not bad for socialists he.

      Have a nice day.
      henk.

  9. The only winner i see with all of this in the end is China.They will NOT accept the west’s IOU’s forever.When they stop it will leave us all to fight among ourselves.China may already have stopped which may be why fed is buying apx. 80 billion a month of US tresuries.Its not the race to the bottom that hurts us,but the sudden stop that scares the hell out of me for my family.Thanks to all the folks input here.I learn a lot.

  10. Henk – Thanks for your contributions to this. You have an interesting perspective on this story.

    It sounds to me as if you are willing to let the Euro bus run you over. You are happy that your mother is losing value from her pension. You are fine if you get no return from money that you have. You want inflation, even though that will eat you (and everyone else in the EU) for lunch.

    So Henk, you are a socialist. I wish you well. But I’m not optimistic for you. You may be celebrating today, wait a few months before you drink all the Champagne. You have Spain and Italy that will rear their ugly heads in the coming months. And you in Amsterdam will again have to reach into your pocket to pay for it.

    I would support all this if I thought there was a chance in 100 that the Euro experiment would succeed. But it won’t. It is doomed. Cyprus was the best chance the EU had to restructure. But instead you chose to sustain something that is not sustainable.

    Please keep reading, and please keep the comments flowing. Your perspective on things is most welcome.
    Bruce Krasting

    • henk horlings says:

      I know I run the risk nobody will read this anymore, but….

      I am not a socialist, in Holland I am a liberal democrat. I am working class, mechanical engineer, just a little bit better off than average. But above all I am a realist. If you make mistakes, you pay for them. If your country makes mistakes, or your leaders, the people pay (except for the 1%)
      In Europe we are used to see the government as part of us, they are stupid, yes sometimes, but we know, if we ourselves would be in charge we probably would not do a better job.
      The government is not the enemy. On average our politicians are OK, although not perfect. We are no socialists; we had the first stock market in the world (and the first crash). We think we have the best of both: capitalism and socialism.

      Do I agree that we lose money in our pension schemes, of course not. Do I like to be run over by the Euro bus? No not at all. But I am a realist by nature and an optimist by choice.
      My conviction, we will prevail, the euro is here to stay. We will adapt. We are 17 countries, 170 political parties. We do not think in black and white, in red and blue, in democrats or republicans. We have to forge coalitions all the time. It looks messy, but it works in the end. If everybody can join in the discussion than everybody will carry part of the burden in the end. But if you give in too quickly, then parts of the people will be left behind and are discontent.

      Look at Cyprus: The deal a week ago would have been better for the economy and for the population. A swift clean cut. But the people would have been discontent and blame the government to bully them into a deal. Now they have a worse deal, worse for the economy, and worse for the working man in Cyprus. More people will lose their jobs. But people blame the Germans and no longer their own stupid politicians and bank ceos. Last week there was unrest, revolution, now there is acceptance. That’s part of the democratic process as well.

      In 5 years time there will be the united economies of Europe. Were all banks are interconnected. They are supervised by the ECB. If one bank goes bankrupt the others will have to bail it out. The banks will check each other, like the countries will.
      We will do it slowly so not many are left behind. It looks indecisive, but it works. We will make it work. And it’s better than to have a civil war to get united.
      This way we will grow to be the United States of Europe. We will have to, or be crushed by the US, and the BRICS. In the end this will be the win, win, win situation. Maybe we loose a few (Cyprus, Greece, and Portugal) Not Italy, that’s an industrial sleeping giant, they are far better than France. They need reform, they have to reform and they will, as always in the end.
      That’s our democracy.

      Do I agree that we lose money in our pension schemes, of course not. Do I like to be run over by the Euro bus? No not at all. But I am a realist by nature and an optimist by choice. In the end we will help our neighbors because we know that’s the best way to help ourselves.

      Do you Americans agree to go to war in Afghanistan an Iraq? For what you all will be paying, in more than one way, for the next 50 years. Are you OK with the downfall of the middle class. For the rich paying less tax than the other 99% Run over by your friends from Goldman Sachs?

      I guess we are not that different.

  11. So at the “last minute”, maximum fabricated drama for the media crews / maximum self importance for the Eurocrats, Brussels called their own bluff. While the population of Europe is fed up with perpetual bailouts of political cronies, the politicians themselves like the status quo and benefit from it.

    But borrowing billions from the future doesn’t solve anything — it just delays the inevitable. The Eurocrats have shown their hand: they are willing to steal from ordinary depositors if they think they can get away with it. Trust in the system is gone, debt/leverage is even higher than it was when it caused the markets to seize up.

    So Greece is solved for ever. Ireland is fixed. EFSF will take care of everything even though it is funded by bankrupt countries. Spain is solved for ever. Portugal is solved. ESM, also funded by bankrupt countries, will eventually replace EFSF. Greece is solved for ever (again). Cyprus is solved. Italy has a clown for PM (perhaps literally). France has a guy who’s thinking is stuck in the 1960s. It is only a matter of months before the next flare up happens. The EU got lucky this time (if one considers corruption as luck) — but there are limits to how many times they can game the outcome and still have a functioning economy.

    You can smell the stability whenever you stand down wind of the sewage plant

  12. Henk Horlings–says, “I am not a socialist, in Holland I am a liberal democrat”. In America a liberal democrat (progressive) is a socialist. I suspect it may be the same in Holland.
    Why is the 1% indemnified from paying for mistakes? Is it because they run everything?
    Paying for mistakes is the consequences of actions taken. Everything has consequences intended and unintended.

    Henk Horlings–says, “In Europe we are used to see the government as part of us”.
    Which is what I was saying. Your government is part of the 1%. Your faith in government is misplaced. Without the compulsion of government socialism could not exist because it is a philosophy that is inherently un-human, it denies self interest. Try as you might you cannot get a square peg in a round hole. The whole of the world acts in their self interest. It is built into the model. Socialists aim is to convince you that your self interest is in serving their self interest. They do this with propaganda and bribery and if that fails they resort to badges and guns. This is why socialism is a violent philosophy. Stalin 45-60 million dead—-Mao 25 million dead–Hitler 15 million dead–on and on. War and more war! Socialism always fails, but not before it does great damage to civilization.

    Henk Horlings –says, “…but we know, if we ourselves would be in charge we probably would not do a better job.” Studies have shown that central planning is doom to failure.
    It failed miserably in the Soviet Union. Socialist look to central planning to stay in power. One reason is that socialism has no means of price discovery, a fatal flaw. How is one to decide value in term of scarce resources? The more people making decisions even, flaw decisions, the better the outcome over central planning. Studies have shown this. This is why “free marketism” is better than central planning. Henk you would do a better job!

    Henk Horlings–say, “The government is not the enemy.” Government, the way it is practiced today, is the enemy. It’s Fascism. Fascism does not represent you. You have very little say in matters that concern you. Henk–says, “We think we have the best of both: capitalism and socialism.” Crony capitalism and Socialism go together. That is what you have in Holland, no matter how much lipstick you put on a pig it is still a pig. “Free marketism ” is the antithesis of Crony capitalism and Socialism. “Free marketism” is liberty. Socialism is slavery.

    Henk Horlings–say, “In 5 years time there will be the united economies of Europe.” YES, YES, YES. This was the EU objective from day one. The destruction of sovereign states with the power exercised by central planner in Brussels.

    To sum up, Cyprus would be better off leaving the EU in the long run. The debt problems of the EU is going to be very painful to bear. No point in adding to their present problems and prolonging the agony.

  13. BK HENK HOMER BUBBA, and all,facinating disscustion ,Ever hear of the Civil War?Wonder what history will call the war before the United States of Europe truly becomes as one.Simply,its akin to a gang.They always say once you join if you leave,your dead.Cypress is Russia’s foothold in the Mediteranium and gateway to the Middle East.Bet Russia wants Cypress out of EU but,EU will never let it happen.The money part of it is interesting though its the power struggle winner where the money will be.Russia’s markets are doing quite well lately,EU,not so good.Investment wise the US seems the best place to be.I do hope the EU can get their act together soon.

  14. My last post on this piece,

    Clark, Homer, Bubba Joe, Bruce,…….Read all your comments, thanks.

    We do not agree on all arguments, and that’s nice. Thanks again.

  15. Immediately after study several of the blog posts on your webpage now, and I really like your way of blogging. I bookmarked it to my bookmark site list and is going to be checking back soon. Pls have a look at my internet site too and let me know what you believe.

    [url=http://redbottomshoes12.metroblog.com/]christian louboutin sale[/url]

  16. Sanction is fast after the giver become sure that one is suitable, then
    he must anticipate see the bucks in his account ahead of 24 hours.
    As the very name refers, these loans are sanctioned on same day of application without ant tedious documentation.