Spain appears poised to become the next Greece in the ongoing European Union (EU) implosion, as Spaniards are withdrawing record amounts of funds from Spanish banks to avoid a potential insolvency situation. According to the New York Times (NYT), the equivalent of $94 billion was withdrawn from Spanish banks in July, an amount that equals seven percent of the country’s overall economic output.
Though stronger overall compared to Greece in terms of economic diversity and debt levels, Spain is undeniably on a downward economic spiral that is sending many of its people and their money to other countries like England, Germany, and Singapore, where economic conditions are much more favorable. Just like in Greece, there is a growing fear among Spaniards that their nation could revert from the euro to its former currency, pesetas, which would greatly devalue their personal wealth.
If anyone thought the bad blood between Germany and the rest of the insolvent proletariat, aka the part of the Eurozone which is out of money (most of it), and which has been now confirmed will be supporting Obama (one wonders what the quid for that particular quo is, although we are certain we will find out as soon as December), complete collapse of the Greek neo-vassal state of the globalist agenda notwithstanding, had gone away, here comes former ECB chief economist Juergen Stark to dispel such illusions. In an interview with Austrian Die Presse, the former banker said what everyone without a PhD understands quite well: “The break came in 2010. Until then everything went well…”Then the ECB began to take on a new role, to fall into panic…. Together with other central banks, the ECB is flooding the market, posing the question not only about how the ECB will get its money back, but also how the excess liquidity created can be absorbed globally. “It can’t be solved by pressing a button. If the global economy stabilises, the potential for inflation has grown enormously… It gave in to outside pressure … pressure from outside Europe” Why, whichever bank headquartered at 200 West, NY, NY might he be referring to?
He added that “panic” about the eurozone breaking up was “nonsense” but that the only way to end the crisis was for member states to bring down their debts and implement structural reforms to boost economic growth.
“Governments have recognised that returning to budgetary discipline is indispensable. Markets focus much more on whether states will be able to service their debts in five years’ time,” he said.
Mr Stark quit in late 2011, following in the footsteps of former Bundesbank head Axel Weber, who stepped down earlier in the year from Germany’s central bank because of unease about the ECB’s policies.
Mr Weber’s successor Jens Weidmann was the only member of the ECB’s policy-setting governing council to vote against the bank’s new programme earlier this month.
“Weidmann’s arguments … should not be made light of,” Mr Stark told Die Presse. “The way in which his position has been publicly commented upon by the ECB leadership has crossed the line of fairness.”
And speaking of continuing takeover of the world by a few not so good banks, a loud warning that the advent of globalist influences (i.e., bankers) is taking over Europe and that the “destruction of Europe’s democracy is in its final phase” comes not from some European (or American… or Zimbabwean) fringe blog, but from the 71 year old president of the Czech Republic, someone who certainly knows about the difference between communism and democracy, Vaclav Klaus. In an interview with The Sunday Telegraph, “Václav Klaus warns that “two-faced” politicians, including the Conservatives, have opened the door to an EU superstate by giving up on democracy, in a flight from accountability and responsibility to their voters. “We need to think about how to restore our statehood and our sovereignty. That is impossible in a federation. The EU should move in an opposite direction,” he said.”
OMT IS ILLEGAL AS IT VIOLATES ARTICLE 123 (1) OF THE TFEU, WHICH CLEARLY PROHIBITS THE ECB FROM ESTABLISHING A “CREDIT FACILITY … IN FAVOR OF NATIONAL GOVERNMENTS.”
According to Mario Draghi, OMT, or Outright Monetary Transactions, is a program of conditional bond buying targeted at specific countries to restore the perception of the euro’s irreversibility and stability, and repair a broken monetary policy transmission mechanism. Once launched, OMT has no ex ante limits, it is within the ECB’s price stability mandate, and it can be halted or interrupted based on achievement of its objectives or non-compliance with conditions imposed upon the targeted national government.
I would posit that OMT is much more than what the party line states. Here are some alternative interpretations for your consideration. I challenge you to refute the logic of any of them.
A Dutch girl had a most memorable, if unpleasant, birthday party when some 3,000 people showed up in her small hometown. The crowd – attracted by her invitation, which accidentally went viral – looted shops and clashed with riot police.
Six people were reportedly injured overnight in the town of Haren in the north of the country, as violence raged across the normally sleepy community. A car was set on fire, several shops looted and street signs and lampposts vandalized.
Dutch police eventually broke up the crowd, which was throwing stones, bottles and flower pots at the officers. Some 20 people were arrested.
The rioting was the culmination of an online campaign, which started when a girl posted a video invitation to her 16th birthday party on her Facebook page and forgot to mark it as private.
The news went viral, and several sites dedicated to the forthcoming event popped up. The party was dubbed “Project X Haren” by some, in reference to a US-made comedy film about a similarly disastrous incident.
There is a common problem underlying the economic troubles of Europe, Japan, and the US: the symbiotic relationship between politicians who heed narrow interests and the growth of a financial sector that has become increasingly opaque (Igan and Mishra 2011). Bailouts have encouraged reckless behaviour in the financial sector, which builds up further risks – and will lead to another round of shocks, collapses, and bailouts.This is what we have called the ‘doomsday cycle’ (Boone and Johnson 2010). The cycle turned in 2007-8 and was most dramatically manifest in the weeks and months that followed the fall of Lehman Brothers, the collapse of Iceland’s banks and the botched ‘rescue’ of the big three Irish financial institutions.
The consequences have included sovereign debt restructuring by Greece, as well as continuing problems – and lending programmes by the IMF and the EU – for Greece, Ireland, and Portugal. Italy, Spain and other parts of the Eurozone remain under intense pressure.
There is a reason why we called the graph of youth unemployment in Europe ‘the scariest chart’ as quite simply, it is the leading indicator for what most call ‘social unrest’ – but some would call ‘uprising’. In somewhat stunning news today, not only do a majority (54%) of Greeks no longer trust any political party, but the popularity of the ultra-nationalist Golden Dawn has risen dramatically since May. According to Ekathimerini, the popularity of Golden Dawn’s leader Nikos Mihalolioakos has risen ten points since May to an incredible 22%. More than 1 in 5 Greeks now support the neo-nazi party as the general disillusionment with mainstream political parties – who are seen as lying to get votes – grows stronger. 85% believe that the new measures planned by the government to take affect them personally or another member of their family and 68% are against the terms of the EU’s bailout. Via Skai.gr:
The stunning performance (absolute and relative) of the Golden Dawn party relative to the rest of Greece’s political parties is truly concerning…no on par with PASOK!!
Ongoing grand plans to flood the economy market with money have reminded Bundesbank’s Jens Weidmann of the scene in the play Faust – when the devil (Mephistopheles) ‘disguised as a fool’, convinces an emperor to issue large amounts of paper money – which solves the kingdom’s financial problems in the short-term but ends rather badly in rampant inflation.
As The Telegraph notes, without specifically mentioning Mario Draghi’s bond-buying programme, he said: “If a central bank can potentially create unlimited money from nothing, how can it ensure that money is sufficiently scarce to retain its value?” He added: “Yes, this temptation certainly exists, and many in monetary history have succumbed to it,” Mr Weidmann warned.
Although the remarks were in context – Frankfurt is currently marking the 180th anniversary of the death of Goethe – they defy calls by leaders for Mr Weidmann to tone down his criticism of the ECB, particularly at a febrile moment in the crisis.
Back in 2010, everyone’s favorite truthsayer in Europe – MEP Nigel Farage – opined on who exactly was Herman Van Rompuy – the new EU President. Claiming HvR’s charisma approached that of a damp rag, we noted at the time that this was indeed slanderous to all the hard-working damp-rags out there. Well, given the EU’s need for cash – by any route possible – it seems they have chosen to start building a mountain of fines. As AP reports, the EU parliament fined Nigel EUR2980 for his self-expression.Here is the dreadful moment of truth…
BRUSSELS (AP) — How much does it cost to tell the one of the EU’s top officials he has “the charisma of a damp rag?” About €3,000, or close to $4,000, as a European member of Parliament has discovered.
In 2010, Nigel Farage, an anti-European Union member of the EU Parliament, rose following a speech by Herman Van Rompuy, the president of the European Council. As Van Rompuy listened, Farage, a Briton, added that the former Belgian prime minister came from “pretty much a non-country.”
The Parliament docked Farage €2,980 — 10 days’ expenses. Farage appealed to the European Court of Justice. It ruled this month that he filed his appeal too late and would also have to pay Parliament’s legal expenses.
The decision was posted on the court’s website on Monday.
“Everything will collapse” is the consequence Gloom, Boom, & Doom’s Marc Faber sees from the Fed’s latest ‘stimulus’ (and the fallacy and misconception of how money-printing can help employment). In a wondrously clarifying interview on Bloomberg TV this morning, Faber explained why he was ‘happy’, since “the asset values of his holdings will go up” but as a responsible citizen he is worried because “the monetary policies of the US will destroy the world.“ It truly is class warfare under a veil of ‘its good for you’ as he notes: “the fallacy of monetary policy in the U.S. is to believe this money will go to the man on the street. It won’t. It goes to the Mayfair economy of the well-to-do people and boosts asset prices of Warhols.” Congratulations, Mr. Bernanke.
Must-watch (or read the transcript) – it is truly remarkable.
Faber on more Federal Reserve stimulus:
“It is difficult to tell what will happen.I happen to believe that eventually we will have a systemic crisis and everything will collapse. But the question is really between here and then. Will everything collapse with Dow Jones 20,000 or 50,000 or 10 million? Mr. Bernanke is a money printer and, believe me, if Mr. Romney wins the election the next Fed chairman will also be a money printer. And so it will go on. The Europeans will print money. The Chinese will print money. Everybody will print money and the purchasing power of paper money will go down. And I don’t like bonds. I don’t particularly like equities, but I think equities are a better space to be in than bonds.”
If only the Fed or ECB could print another Spain with the same facility that they engage in currency destruction, (and make no mistake: yesterday’s “open-ended” Fed easing, is today’s ECB “open-ended” intervention, is tomorrow’s BOJ, is Sunday’s PBOC, etc.), now might be the time. Because things in Spain, no matter what one is told, are getting progressively worse. The reason: on one hand the continuing surge in regions and total debt, both of which jumped in Q2, on the other hand Spanish bank borrowings from the ECB soared to €389 billion in August, a new record, and up from €376 billion, just as TARGET2 liabilities rose to a new record of €429 billion as well, explaining where that surge in German TARGET2 claims went, on the third hand housing prices collapsed by 14.4% in Q2, the most ever, and tying all the hands together was that the Spanish economy contracted. But please ignore the details. Focus on the important things, such as the surge in the Ibex, the S&P, consumer confidence, gold, crude, etc, however long these continue. Because unless there is such a thing as a free lunch, with every incremental injection, all Bernanke proves is that the underlying reality is far worse than what is telegraphed to the people.Back to Spain, and its soaring debt…
Spanish government debt rose to 75.9 percent of its economy in the second quarter of the year according to figures published by the Bank of Spain.
The figure is up 9.2 percent year-on-year and is the highest ratio in at least 22 years. The total debt ascended to €804 billion ($1.0 trillion), up €99 billion year-on-year, Spain’s central bank said in a statement Friday.
Central government spending increased by 4.4 percent to €617 billion, representing 58.3 percent of GDP.
“NOT ONE TERRORIST IN A HUNDRED….A THOUSAND…..IS REAL”
(EDITOR’S NOTE: Wikipedia’s report on Operation Gladio is reproduced below. This is a threatened document, an important part of our history. Help preserve it.)———-
The original article was written several years ago. Since that time, Gladio units have reappeared in Norway with the Anders Breivik/Norwegian Police slaying of 77 and have become active across Europe under the guise of the anti-Islamic and ultra-nationalist banners.
America used Libya, during part of the Cold War, as a base for Gladio operations. American special operations forces stationed there to be activated if Europe fell to a Soviet onslaught were said to be IRA terrorists undergoing training by Libyans. If one stops and thinks, the idea of a Libyan training the IRA in bomb making had to seem more than a bit ironic.
How many Americans have heard of Operation Gladio? Many ask, how could simple Arabs or even Israel, put together an organization capable of 9/11?
If, as 78% of Australians indicate in a recent Herald Sun poll, America planned 9/11 herself, how did a democracy lose its way?
How did America’s intelligence and defense groups become terrorists? When did it happen and why? The answer isn’t simple, it started decades ago, when the world was at the edge of obliteration and two systems, or what we then believed were systems, fought for the hearts and minds of the world.
Today, all that sounds childish. A mature look at the Cold War looks more like two rats fighting over a corpse. Then, however, some saw it as “light and dark,” clear as that. Many believed the Soviet Union would drive its tanks through Europe like a knife through hot butter. To fight this “eventuality,” NATO built a terrorist organization of massive proportions. The remaining cells of Operation Gladio, one of the greatest disasters of military ignorance in history, are busy today.
We call some of them “Al Qaeda.”
Operation Gladio is the heart of world terrorism, alive and well, and built by NATO, built by the United States and used against America and the world. Gladio, created to save us from communism, quickly became a terrorist organization itself, murdering political leaders, rigging elections, terror attacks to blame on one group or another. The “medicine” became the disease. It is now killing us.
Germany’s top constitutional court rejected efforts to block a permanent euro-area rescue fund, handing a victory to Chancellor Angela Merkel, who championed the 500 billion-euro ($645 billion) bailout facility.
The Federal Constitutional Court in Karlsruhe dismissed motions that sought to block the European Stability Mechanism, while ruling Germany’s 190 billion-euro contribution can’t be increased without legislative approval. The court said Germany can ratify the ESM if it includes binding caveats that it won’t be forced to assume higher liabilities without its consent.
“We are an important step closer to our goal of stabilizing the euro,” German Economy Minister and Vice Chancellor Philipp Roesler told reporters in Berlin after the ruling today. “It has always been the goal of this government” to establish a “clear limit and to include parliament in all important decisions.”
Europe’s chicken or egg problem is about to strike with a vengeance. As a reminder, the biggest paradox of the recently conceived “make it up as you go along” bailout of Europe is that “in order to be saved, Spain (and Italy) must first be destroyed“. Sure enough, the markets have long since priced in the “saved” part with the Spanish 10 year sliding to multi-month lows, but in the process everyone forgot about the destruction. Because as has been made quite clear, secondary market bond buying will not be activated without a formal bailout request by a country, in essence admitting its insolvency, and handing over domestic fiscal and sovereign control to the IMF and other international entities. As a further reminder, many, Goldman Sachs especially, had hoped that Spain would request a bailout as soon as Friday. To wit: “With a large (and uncovered) redemption looming at the end of October (and under pressure from other Euro area governments), we expect Spain to move towards seeking support.” Alas, as we expected, this is now not going to happen, and the pricing in of the entire “saved” part will have to be unwound as Spain is forced to accept being “destroyed” first. To wit: “I don’t know if Spain needs to ask for it,” Rajoy told parliament in a debate session, referring to an international rescue for Spain.”And ironically the further the market prices in salvation, the more unrealistic a bailout request becomes. In the meantime Spain is running out of cash, and what has been a buying euphoria may well becoming a selling revulsion as the market realizes that without the ECB’s explicit bond buying support, there is no reason to buy the bonds of a country with 25% unemployment, a massive budget deficit, an imploding housing market, and insolvent banking system. But who cares about details in a centrally-planned world.
Spain continues to study the price it will have to pay for seeking help from the European Central Bank’s bond-buying programme but improved market conditions may make aid unecessary, Prime Minister Mariano Rajoy said on Wednesday.
“I don’t know if Spain needs to ask for it,” Rajoy told parliament in a debate session, referring to an international rescue for Spain.
MEP Nigel Farage provided a much-needed dose of reality to the peculiar pontifications of Barroso’s state of the union speech last night. Concerned at the fanaticism of Europe’s ever more concentrated power-base, summed up by his interpretation of Barroso’s call for a federal union of states (cue Darth Vader music): “while the nation state should continue to exist, it mustn’t have any democratic power,” the Englishman goes on to deride Mario Draghi’s unlimited money bazooka – though we suspect Farage’s belief that “money doesn’t grow on trees” will soon come into question day after day. Super Mario as much as implied that he “will fight to the last German taxpayer to keep the Mediterranean countries, that should never have been in the Euro, in there,” but for a sense of just how ludicrous things are becoming in the EU, this clip is important as he reminds us of Monti’s (monstrous Mario) recent statement that “nation-state democracy will bring down the European Union.” Farage fears this rumbling facade over a crisis could go on for a decade, we can only hope not – one way or another.
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