Category Archives: Europe

Gormless Geithner

Debt, Economy, EU, Europe, Federal Reserve Bank, Federalism, Inflation

In June of 2009, US Treasury secretary Timothy Geithner drew loud laughter from amused Chinese students when he made ludicrous claims about American solvency. “Chinese assets are very safe,” he assured students at Peking University, who wanted to know how exposed China was, given that it was the biggest foreign owner of U.S. Treasury bonds.

The Europeans are not as good-natured about Geithner as these Chinese youngsters were. The US treasury secretary told “Europe’s leaders to stop bickering and take control of the debt crisis that has brought ‘catastrophic risk’ to financial markets.” (Via FT)

Pot. Kettle. Black was the retort of Maria Fekter, Austria’s finance minister:

“I found it peculiar that even though the Americans have significantly worse fundamental data than the eurozone, that they tell us what we should do and when we make a suggestion…” (FT)

It is natural for Geitner and the administration, who are undeterred in their “vulgar Keynesianism,” to worry about the healthy “ongoing conflict between governments and the central bank” in Europe. For one thing, Europe is being more fiscally prudent than the US; it is making us look even worse than we are. For another, the EU may be on the verge of decentralizing—or even dissolving. … The “Great Centralizers” in DC would not embrace that development.

Also obvious is the Irish Finance Minister Michael Noonan’s fondness for Geitner’s “leverage plan” for the EU. That’s probably code for liquidity. Ireland is one of the EU’s “PIGS” states. Europe’s profligate states are Portugal, Ireland, Greece, and Spain. (And now Italy.)

UPDATED: Euro-Bondage & The Next Tier of Tyrants

Constitution, Debt, Democracy, Economy, EU, Europe, Federal Reserve Bank, Foreign Policy, Nationhood, Political Economy

The following is excerpted from “Euro-Bondage & The Next Tier of Tyrants,” my new WND.COM column:

“On Wednesday, Sept 7, patriotic Germans received bad news. A group of jurists and economists had petitioned the German Constitutional Court in Karlsruhe. Their case was that Germany’s ‘participation in the euro rescue fund packages’ undermined the democratic and property rights of German citizens, as elected officials had little say in these deals.

The high court rejected these arguments, although it did crack a Teutonic joke: Presiding judge Andreas Vosskuhle recommended that, in the future, the people’s representatives get more involved in deciding how the money of constituents is distributed.

The contagion of the sovereign debt crisis in Europe has been exacerbated by the financial collectivism imposed by the Eurozone and the wider European Union (EU), whereby the more productive member-states foot the bill for their profligate neighbors. The latter “PIGS” states are Portugal, Ireland, Greece, and Spain.

And now Italy; it is teetering because of the Italian government’s liabilities—compounded, as in Greece, by the insatiable demands of an ever-accreting oinks sector.

A world perfected by global central planners is one in which wealth consumers live at the expense of wealth creators; where the rich are coerced into paying for the poor, the North for the South.

In this increasingly centralized dispensation, financier-cum-philanthropist George Soros holds sway. Soros has generally acted against the sovereign coin, and as a proxy for centralized power and bankers.

Just last year, Soros attempted to muscle Germany’s Chancellor Angela Merkel into printing and inflating her country’s currency—perhaps not to Weimar-Republic levels, but to Obama banana-republic standards …”

Read the complete column, “Euro-Bondage & The Next Tier of Tyrants,” now on WND.COM.

My new book, “Into the Cannibal’s Pot: Lessons for America from Post-Apartheid South Africa,” is available from Amazon.

A newly formatted, splendid Kindle copy is also on sale.

UPDATE: Americans have just heard their insufferable president propose $400 billion more in deficit-spending, to be paid for not by cuts to government but by a future, slowdown in the rate of the growth of government, over ten years.

How bad are American federal policy makers? Put it this way: The European Central Bank is more prudent than the Federal Reserve Bank, by far: It has raised interest rates over the last few years. Moreover, as bad as the Eurozone’s bailout culture has become, debtor countries have been forced to commit to austerity measures as a condition of bailout. Any parallels in the US?

Another point in favor of the Europeans: the EU is more likely to dissolve than these United States.

UPDATED: Mañana: Manna Will Fall From DC Heavens (Bunk Obama)

Barack Obama, Debt, Economy, EU, Europe, Federal Reserve Bank, Journalism, Media, Political Philosophy, Regulation

Streamed into American living rooms, almost hourly, is an ad with MSNBC commentator Rachel Maddow. In the ad, Maddow, whose version of a tinfoil hat is the hardhat, has taken up a position at the foot of the Hoover Dam. Face turned upwards, with childlike faith, she seems to be expressing hope that money will fall like manna from the DC heavens, and that the government will build another such giant dam. Rumor has it that the Messiah will deliver. Mañana.

More to the point, the American cognoscenti, monetary movers-and shakers included, are agreed: The make-work projects of a bankrupt government can cure a country’s economy. Perhaps they don’t know that the money to make work is either stolen (taxed), printed (theft by stealth), or borrowed (fraud if you can’t pay it back).

Among these people a consensus exists: National bankruptcy could never befall the US, because it has a printing press—a paper Pantheon where magic money is manufactured. And we are all expected to believe, based on the divination of the animal spirits, that an abundance of paper, and not production, will produce prosperity.

No less a moocher than the Greek Finance Minister seems to understand that to fix his country’s finances he must privatize industries, cut public-sector wages, and implement a range of labor-market reforms.

He gets it, but not Rachel Maddow. She’s waiting for BHO to deliver. Tomorrow.

UPDATE (Sept. 8): BUNK OBAMA. Please don’t expect a run-down of Zero’s latest plan to spend more money without incurring any more debt. That’s the administration’s claim for its latest political shenanigans.

I’ll be bunking Barack’s speech.

“Illinois Republican Rep. Joe Walsh was the first to announce his intentional absence last week, saying he didn’t want to act as a ‘prop’ for Obama’s speech.” Others have followed, including Ron Paul, who had set the precedent for skipping presidential extravaganzas.

How low have we fallen: The White House is touting
an enhanced live stream with charts, graphs, and quick stats at WhiteHouse.gov/live.” Yippee. ONLY NEXT WEEK will the president divulge how he intends to pay for the purported $400 billion in deficit-spending he will be proposing, shortly.

If the guy meant business, he’d repeal ObamaCare and all the thousands of pages of other regulation he has signed into law since his pox-full presidency began. He’d adopt flat, very LOW, corporate and individual tax rates. And he’d stop stimulating his package in public. It’s obscene.

Euro-Bondage

Debt, Economy, EU, Europe, Federal Reserve Bank, Inflation

If European Keynesians—the “fattened aristocracy of economic experts”—have their way, northern Europeans will soon be working for Southern Europeans (the more productive Europeans are already subsidizing and bailing out their profligate neighbors). Angela Merkel and Nicolas Sarkozy will have to resist “the idea of collective liability, often referred to as ‘eurobonds,’ [which] has been floated various times since last year.” “A full fiscal union, underpinned by eurobonds,” is tantamount to full-throttle debt monetization, in conjunction with a policy of inflating the currency in-unison.

Merkel’s Finance Minister Wolfgang Schäuble is working against the better instincts of his Boss (Merkel) and supports an integration of Europe’s “national economic policies,” so that they can “act as a single borrower.”

Conservative politicians in Germany and other northern European countries have previously dismissed the proposal as a violation of the European ideal, in which countries cooperate but remain responsible for their own fiscal affairs.

In the prescient “Adieu to the Evil EU,” you an read a better description of what the EU (generally supported by American neoconservatives) aimed to achieve. And has pretty much accomplished.

The EU “endeavors to herd Europeans by stealth into a supranational European State and… block off all the exits. This it intends to achieve by rigid central planning and harmonization of laws across the continent. In the absence of political and economic competition, the bureaucrats of Brussels will be free to rule and regulate; tax and inflate the money supply at will. This is what the rejectionists, including the cheese eating surrender monkeys, have defeated…for now.”

As I wrote in 2005, “An overarching tier of tyrants—the EU—to European governments will benefit Europeans as a second hangman enhances the health of a condemned man.”