Were America's Assets Looted Years Ago?

From Washington’s Blog


Forbes' Merrill Matthews argues that the multi-trillion dollar social security trust fund was looted years ago:

Either Obama and Geithner are lying to us now [in saying that social security checks won't go out if the debt ceiling isn't raised], or they and all defenders of the Social Security status quo have been lying to us for decades. It must be one or the other.


Here’s why: Social Security has a trust fund, and that trust fund is supposed to have $2.6 trillion in it, according to the Social Security trustees. If there are real assets in the trust fund, then Social Security can mail the checks, regardless of what Congress does about the debt limit.


***


Social Security status-quo defenders have assured us for the past 25 years that Social Security is fully funded—for the next 25 years, or 2036. So if there are real assets in the Social Security Trust Fund—$2.6 trillion allegedly—then how could failure to reach a debt-ceiling agreement possibly threaten seniors’ Social Security checks?
The federal government has borrowed all of [social security] trust fund money and spent it ... And the only way the trust fund can get some cash to pay Social Security benefits is if the federal government draws it from general revenues or borrows the money—which, of course, it can’t do because of the debt ceiling.
[T]he president is telling the truth now in the sense that he is conceding there’s no money in the trust fund to pay benefits; but he and other Social Security status-quo defenders have been deceiving the public for decades.

Indeed, as the following excerpt from the 1998 Senate Budget Committee session shows, Senator Hollings alleged that the government had already been "borrowing" from the social security fund:

U.S. FEDERAL RESERVE BOARD CHAIRMAN ALAN GREENSPAN: .....making sure that surplus is there.


U.S. SENATOR ERNEST F. HOLLINGS (D-SC): Yeah, making sure that surplus is there. I'm telling you, Dr. Greenspan, that's music to my ears.


GREENSPAN: Well, I remember you taking this song a long way over recent years, and I must say, Senator, a number of us were skeptical that was even discussable, figuring we would never get to unified surplus that we said which you were preaching was very interesting, scientifically sound, but unrealistic. I apologize.


HOLLINGS: Well that's all right, because your Greenspan Commission report in section 21 says just exactly what you're saying here. That was in 1983; here now, in 1999, on page two, "simply put, enough resources must be set aside over a lifetime of work to fund retirement consumption." Now that section 21 said set it aside. President Bush, in section 13 3 01 on November the 5th, 1990 signed that into law. And we making headway. Let's understand, though, that we're still running deficits. 'Cause I'm not going along with this monkeyshine about unified. 'Cause unified is not net, the debt still goes up, is that correct?


GREENSPAN: If you're...it depends on whether or not you wish to create the savings...


HOLLINGS: I'm not asking what you're trying to create. The simple fact is the debt has been going up at least $100 billion for the last several years.


GREENSPAN: Outside, on budget, that is correct.


HOLLINGS: That's right, on budget, you're spending a hundred billion more than you're taking in.


GREENSPAN: Correct.


HOLLINGS: And this president's budget spends another hundred billion more than we take in.


GREENSPAN: I haven't seen it yet.


HOLLINGS: You haven't seen it? You're testifying about it now.


GREENSPAN: I haven't seen the budget. You haven't seen it either.


HOLLINGS: Well, you know his plan. Look you think he's going to spend less than a hundred billion more?


GREENSPAN: I will wait to see what the numbers look like.


HOLLINGS: Well, the truth is...ah, shoot, well, we all know there's Washington's math problem. Alan Sloan in this past week's Newsweek says he spends 150%. What we've been doing, Mr. Chairman, in all reality, is taken a hundred billion out of the Social Security Trust Fund, transferring it over to the spending column, and spending it. Our friends to the left here are getting their tax cuts, we getting our spending increases, and hollering surplus, surplus, and balanced budget, and balanced budget plans when we continue to spend a hundred billion more than we take in.


That's the reality, and I think that you and I, working the same side of the street now, can have a little bit of success by bringing to everybody's attention this is all intended surplus. In other words, when we passed the Greenspan Commission Report, the Greenspan Commission Report only had Social Security in 1983 a two hundred million surplus. It's projected to have this year a 117 million surplus. I've got the schedule, I'll ask to put in the record the CBO report: 117, 126, 130, 100, going right through to 2008 over the ten year period of 186 billion surplus. That was intended; this is dramatic about all these retirees, the baby boomers. But we foresaw that baby boomer problem, we planned against that baby boomer problem. Our problem is we've been spending that particular reserve, that set-aside that you testify to that is so necessary. That's what I'm trying to get this government back to reality, if we can do that.


We owe Social Security 736 billion right this minute. If we saved 117 billion, we could pay that debt down, and have the wonderful effect on the capital markets and savings rate. Isn't that correct? Thank you very much, Sir. Thank you, Mr. Chairman.

Ron Paul has called for an audit of Fort Knox, based upon the suspicion by many that the gold was sold offyears ago:



Separa

And on September 10, 2001, Secretary of Defense Donald Rumsfeld said:

According to some estimates we cannot track $2.3 trillion in transactions.

Were America's assets looted years ago? Or are these mere conspiracy theories (see this and this)?

Two Examples of Fascism Run by Banks

From Activist Post

the national debt system of The New World Order

Ethan Jacobs, J.D.
Activist Post

The United States and other countries of the world are becoming more fascist as New World Order globalists rush to complete their fascist world government by late 2012.  According to Italy’s former fascist dictator and MI5 asset, Benito Mussolini, “fascism should rightly be calledcorporatism, as it is the merger of corporate and government power."  The following examples demonstrate fascism/corporatism within the banking structure of the United States.

JP Morgan and Bank of America

JP Morgan and Bank of America obtain profits by issuing government funded food stamps/subsidies.

JP Morgan is the largest processor of food stamp benefits in the United States.  JP Morgan has contracted to provide food stamp debit cards in 26 U.S. states and the District of Columbia.  JP Morgan is paid for each case that it handles, so that means that the more Americans that go on food stamps, the more profits JP Morgan makes. 

Currently, approximately 44.2 million Americans (1 in 7) are receiving food stamps, which means JP Morgan will continue to reap great profits in addition to their regular derivatives and fractional reserve bankingscams.

Not to be left out, Bank of America and Visa struck a deal with the State of California:

"The Employment Development Department (EDD) Debit Card^SM from Bank of America is the new and more efficient way of delivering California State Disability Insurance (Disability Insurance [DI], Paid Family Leave [PFL]), and beginning July 8, 2011 Unemployment Insurance (UI) benefit payments…The EDD Debit Card^SM can be used everywhere Visa® debit cards are accepted."

Of course, using the fascist debit card is subject to bank fees.  Therefore, rather than issuing checks directly to recipients, California chose a debit card system that will guarantee fees and profits paid to B of A and Visa.

The Federal Reserve

The Federal Reserve banking system is privately owned.  Its shareholders are private banks.  It creates money out of nothing and loans it to the government with interest, thereby transforming citizens into collective debt slaves called “taxpayers.”  The Federal Reserve is not held accountable by Congress, which is supposed to have the power of the purse, and openly admits such.

The Federal Reserve Act was written in secret during 1910 on Jeykll Island by the following banksters and their minions:

1. Nelson W. Aldrich, Republican "whip" in the Senate, Chairman of the National Monetary Commission, business associate of J.P. Morgan, father-in-law to John D. Rockefeller, Jr.;

2. Abraham Piatt Andrew, Assistant Secretary of the United States Treasury;

3. Frank A. Vanderlip, president of the National City Bank of New York, the most powerful of the banks at that time, representing William Rockefeller and the international investment banking house of Kuhn, Loeb & Company;

4. Henry P. Davison, senior partner of the J.P Morgan Company;

5. Charles D. Norton, president of J.P. Morgan's First National Bank of New York;

6. Benjamin Strong, head of J.P. Morgan's Bankers Trust Company; and

7. Paul M. Warburg, a partner in Kuhn, Loeb & Company, a representative of the Rothschild banking dynasty in England and France, and brother to Max Warburg who was head of the Warburg banking consortium in Germany and the Netherlands.

Congress and President Woodrow Wilson committed treason in 1913 by passing the Federal Reserve Act, which meant that the U.S. government would now borrow money from private banks at interest.  

Also in 1913, the Internal Revenue Service started to collect income taxes under the 16th Amendment, which for the most part is used to pay interest on the national debt to the private banks that own the Federal Reserve.

The Federal Reserve owners also profit by making favorable loans to the their private banks and allies:

Credit Suisse, Goldman Sachs and Royal Bank of Scotland each borrowed at least $US30 billion ($29 billion) in 2008 from a Federal Reserve emergency lending program whose details weren't revealed to shareholders, members of Congress or the public…Units of 20 banks were required to bid at auctions for the cash. They paid interest rates as low as 0.01 per cent that December, when the Fed's main lending facility charged 0.5 per cent.

In essence, such loans are “free money” to giant banks.  Even the least savvy investor could turn a profit if they were loaned billions of dollars at 0.01 percent interest.  Small banks and individuals need not apply for such “borrowing programs.”

Approval ratings are another indication that Congress and CFR/Bilderberg Obama clearly represent corporate/banking interests and not the will of the people.  Currently congress has 18 percent approval rating, while Obama’s is below fifty percent.

In conclusion, JP Morgan and Bank of America profit from government assistance programs.  The Federal Reserve is a private bank that loans money to the government, thereby enslaving its citizens with the national debt.  These two examples of fascism in the United States banking structure form the basis for ushering in the New World Order. 

Fortunately, we as a people can easily remove these fascist systems.  The largest banks must be boycotted and the Federal Reserve System abolished like previous and more open forms of slavery.

Ethan Jacobs is founder of Beachday Surfwear.  He holds a Juris Doctor and Bachelor of Arts degree in Political Science.  Ethan’s passion is researching and writing about important issues to defeat every form of tyranny over the mind of man.

PEOPLE POWER IN GERMANY WRECKS HAVOC WITH ELITE PLANS FOR AN EU FINANCIAL UNION

From Case about Bird Flu 

By Jane Burgermeister

* ECB, EU and IMF increase preasure on Germany to agree to EU treasury, debt pool and tax collection
*Widespread popular opposition in Germany to the eurozone bankster bailouts has reached critical mass: German financial expert predicts end of the euro currency bloc brought about by popular uprisings or the markets
*Cost of insuring Germany’s national debt soars to new heights as eurozone debt crisis laps at Germany’s borders
*EU summit on Thursday sets scene for new confrontation; elite and people split ways


Plans by the elite to use the growing debt crisis engulfing the eurozone to push through an EU treasury, tax system and bigger debt pool are meeting tough resistance from the people in Germany, where scepticism about the euro and the bankster bailouts has reached new heights.


Thanks in large part to the independent media, a critical mass of people in Germany and elsewhere across Europe have come to understand that the eurozone bailouts are a subterfuge for transferring the wealth of tax payers to American, German and French banks under the pretext of having to make interest payments on fractional-reserve, paper banking debts. Financial expert Dirk Müller is even a predicting popular uprisingsto end the euro experiment.


Reuters reports that the grassroots opposition in Germany is so strong that it limiting the options of the autocratic German government led by Angela Merkel to sideline the people and parliament ahead of a key summit on Thursday to decide what to do about the growing debt crisis in Greece.
“Recent opinion polls suggest three quarters of Germans have little confidence in the euro currency, compared to less than half in 2008 before the sovereign debt crisis took hold. Two thirds either oppose more aid for Greece or think it won’t work,” says Reuters.
Reuters points out that the spectrum of people opposing the bailouts encompasses all groups of society.
“Such views are supported not just by populist politicians or the tabloid press, but university professors like those who are now challenging the legality of the euro-zone bailouts in the German Federal Constitutional Court in Karlsruhe.”


So vocal is the opposition that even mass circulation Bild has been forced to give space to the arguments of economists like Hans Werner Sinn — who went on a talking tour and hired a PR expert to spread the message — to retain a last vestige of credibility among readers.
“Hans-Werner Sinn, head of the Ifo think-tank that compiles Germany’s top economic indicator, warned in Bild — a tabloid read by 12 million of Germany’s 80 million people — that Greek and Portuguese aid “will be at the expense of Germans’ living standards.”
“German pensioners will be among the first victims of these bailouts,” said Sinn.
This grassroots opposition in Germany is making it impossible for the elite arrogantly to alter the political and financial architecture of the EU in summits to enable it to become a financial super state collecting taxes without any accountability to voters.


Financial expert Dirk Müller in an interview with Michael Mross predicted the imminent collapse of the eurozone, arguing that the point has been reached where people will no longer tolerate the taxes, low wages, low standards of living being piled on them by the elite for their profit.
He said that either the financial markets or an uprising by people would put an end to the transfer of wealth under the pretext of having to pay interest.
It is measure of anger felt in Germany that a sober financial expert like Dirk Müller is openly talking about an uprising by the people against the tax burden imposed by the brazenly criminal elite.


The German government has already committed 68% of  tax payer revenue for debt and refinancing payments for American, German and French banks as part of the various eurozone bailout funds so far. But there is wide spread recognition that not even this sum will be enough to stem the tsunami of demand by private banks for interest to be paid on fractional reserve, paper bank debt.


Faced with a refusal by German people to guarantee more eurozone debt and sign up for Eurobonds and enlarged European financial stability facility, the EU, IMF and ECB officials are scrambling to find some way of keeping the transfer of wealth to the elite going by inventing new subterfuges and stepping up the bullying of an increasingly reluctant Chancellor Angela Merkel, who can see the political writing on the wall and who is in coalition with a more eurosceptical FDP.


In a drastic attempt to keep the show on the road, elite puppet and Bilderberg SPD shadow finance minister Peer Steinbrück today offered cross-party SPD support for the disastrous eurobonds and EU financial government, underlining the way the left/right political paradigm has become obsolete: party chiefs across the political spectrum all dance to the tune of the banks and corporations.


Pressure is also being piled on the German coalition government to give the go ahead to the establishment of a centralised finance ministry and Eurobonds EU at an emergency summit this Thursday by the European Central Bank.


Yesterday, the ECB again threatened to cut off liquidity to insolvent banks in Greece if a default or debt restructuring occurs there . Default or restructuring is considered necessary by economists to allow Greece to recover economically but a default will stop the transfer of wealth to an super rich elite under the pretext of the need to pay interest on debts.
The ECB threatened to cut off liquidity to bounce Ireland into penal EU and IMF “debt death spiral” bailouts at high interest rates, which are choking off economic growth and burdening eurozone tax payer.


And the ECB ordered Portugal’s central bank to cut off liquidity to banks force the Portuguese government into an EU, IMF bailout .
Under the terms of the bailout, EU and IMF officials also install a financial bureaucracy of occupation to suck out the taxes and assets of a country, leaving eurozone tax payer’s to make up the interest payments to banks when the country’s themselves are so economically wrecked that they cannot afford them.


Last week, the eurozone debt crisis underwent a massive escalation when it moved beyond the peripheral countries of Greece, Ireland and Portugal to the core economies, engulfing Italy and lapping even at Germany’s borders. The cost of protecting German national debt soared this week to new heights in a sign that the markets have grasped  that Germany’s economy is facing a meltdown due to the sheer amount of eurozone debt it is expected to service.
German economist Hans Werner Sinn said Greece is  insolvent – and the current measure of piling debt on more debt is just prolonging Greece’s inevitable insolvency.
So far, Denmark – not part of the euro currency bloc and with a relatively low national debt — is the only country in Europe to have put failed banks through an insolvency procedure.
Financial expert Dirk Müller said a break-up of the eurozone into two blocs could be a way out of the debt crisis, which has its roots in the loss of competitiveness and deindustrialisation of the southern European countries. These joined the euro at an exchange rate which was too high to remain competitive. High ECB interest rates are now further squeezing the southern European economies.


Ireland’s gigantic souvereign debt is solely due to the guarantees that the government gave for the losses of insolvent banks.
A break up of the eurozone into two currency blocs of comparable economies could allow for a recovery in competitiveness as long as measures are taken to put failed banks into insolvency and reorder the financial system.
Another alternative to a euro zone break up would be for Germany to quit the eurozone and adopt the D Mark.


The Germans — who never had a chance to vote for the euro or the Lisbon Treaty — clearly will not accept the establishment of a financial union serving only the interests of a tiny elite.
With so little political support, it is impossible to see how the ECB, EU and IMF can continue with their euro project in its current form.


Their brazen violation of no bailout out and debt purchases clauses as well as their dictatorial style has undermined the political credibility of the ECB, EU and IMF. It has become plain even to supporters that the EU has nothing to do with peace, solidarity or equality. It is bank controlled machine for looting the people.
 No amount of false flag ops, false flag right wing nationalist parties stoking wars with Arabian countries and no amount of Europol secret police are going to contain the anger of 400 million people who see their pensions, savings, jobs being taken from them by a brazenly criminal elite.


The few people apart from tourists attending the pompous state funeral in Vienna, Austria, on Saturday of EU puppet master Otto Habsburg underlined the lack of any popular support for the elite’s project of a fourth Holy Roman Empire as a front for a bank and corporate take-over of Europe.
The Habsburg empire was built on a  totalitarian bureaucracy, secret police and propaganda much like the EU today – but the Habsburg’s could never find the alchemical formula to persuade the people  for any length of time that lumps of clay were gold.
To err is Habsburg.

THIS LITTLE PIIGSIE WENT WEE WEE WEE

From The Burning Platform,  18th July 2011 :

Interest rates are surging across Europe this morning. The wheels are coming off this apple cart loaded with sticks of dynamite. Look at the interest rate changes for the PIIGS in the last year. The market has spoken. These countries are insolvent. The banks that foolishly loaned them money are insolvent. The debt will never be repaid. At these interest rates, there is not enough austerity to go around. Expect more street violence. Expect more lies from politicians. Expect more coverups from the banks. This will not be resolved in a pleasant manner.

BUG MEET WINDSHIELD

ITALIAN 10 YEAR BOND

SPAIN 10 YEAR BOND

IRELAND 10 YEAR BOND

PORTUGAL 10 YEAR BOND

GREECE 10 YEAR BOND

Webster G. Tarpley, Ph.D.: Hillary Clinton Recognizes the Al Qaeda-Based Benghazi Rebels as the Governing Authority of Libya; GOP Protests; Federal Officials Have Been Impeached for Much Less

From PressTV, Sun Jul 17, 2011  

Heavy clashes between forces loyal to Libyan ruler Muammar Gaddafi and revolutionaries have broken out as anti-regime forces are pushing towards the capital Tripoli.

Meanwhile, the embattled Libyan ruler has once again rejected calls to resign and leave the country, saying that he will never leave the land of his ancestors who fought Italian and British colonialists.

This comes one day after officials from some 40 countries met in Turkey to discuss ways to force out Gaddafi and reinforce opposition fighters.

Press TV has conducted an interview with American Author and Historian, Webster Tarpley to further discuss the situation in Libya.

Press TV: Dr. Tarpely, first of all let's start with the direction NATO has taken with regards to the War in Libya. If you can please open that up for us a little bit. It has been quite a while, but yet the opposition fighters still are not making advances in a more rapid fashion that might be expected of them.

Tarpley: I would have to take issue first of all by or with your terminology. You called the Benghazi Rebel Council 'the revolutionaries.'

There are a lot of people in Tripoli area of Libya who would say that the current Gaddafi regime is the revolution and that these rebels that are attempting to overthrow him are actually the counterrevolution.

If you look at their support for monarchies and if you look at the support from imperialism and colonialism, I think there is a strong case but obviously the events of today above all, a very severe military defeat for those rebels in their attack on Brega, where their assault has been thrown back with heavy losses comes in the wake of this meeting of the contact group in Istanbul, Turkey yesterday which was the scene of really an astounding action, a real act of folly, I think, where the United States and thirty other countries have decided now that this Benghazi Rebel Council is the legitimate government of Libya.

They are going to try to loot the frozen Libyan assets for the purpose of convoying that money into the pockets of people like [President of the rebel council, Mustafa Abdul] Jalil, [the rebel's military Chief of Staff Abd Al Fattah] Yunis, and [Head of the Council's Executive Bureau, Mahmoud] Jibril, and [Senior Rebel Commander Khalifa] Hafter and the rest of the visible leadership of that group.

The problem that it raises is of course that it is very well known that in the military arm of the rebellion we have a very strong representation of Al-Qaeda terrorists.

People who according to the US officials definition of the US government are terrorists that would include somebody like [Abdel-Hakim] Hasadi of [the city of] Darnah, somebody like ... also of Darnah and Borhani of the Libyan Islamic Fighting Group [LIFG] and the United States has actually facilitated the arrival of lots of foreign fighters be they from Afghanistan or Pakistan, really the entire greater Middle East.

People have been streaming in there to join the rebel side and of course this has not escaped the attention of the opposition forces here in the United States especially in the House of Representatives you have a significant Republican majority who are extremely distrustful in particular Congressman Michael Turner, Republican of Ohio, has taken the lead in denouncing the US government decision to recognize these rebels yesterday saying it is totally premature because you still do not know who they are and of course you do not.

Of the members of the Libyan Rebel Council, the Benghazi Rebel Council only about one third of them are known, the rest of them are secret and the story is that they are threatened by Gaddafi but others would also argue [that] they are being kept secret because they are from Al-Qaeda, they are people who have been to Guantanamo Bay or prisoners of war.

Press TV: Dr. Tarpley, these are definitely perplexing details that you just mentioned. I want to talk to you about the issue of arms. Who is providing the opposition forces with arms, and is the issue of providing arms something that contradicts resolution 1973, or has that resolution just turned into a document that exudes various subjective interpretations as time goes by?

Tarpley: Well, the resolution itself of course violates the UN charter but that does not stop the French in particular but also the British and the US and other NATO countries from violating this resolution.

In particular we know that the French have set up kind of an airlift into these south western mountains, southwest of the capital Tripoli. They have been flying in and playing loads of weapons. That is a blatant violation of the UN Security Council resolution which provides for an arms embargo on everybody.

We also know that the US and the British have been shipping in weapons across the Egyptian border into that stronghold of Cyrenaica [an ancient region of northeast Libya bordering on the Mediterranean Sea] or the Benghazi, Darnah and Tobuk area.

So they are violating the US resolution. It is going to be interesting to see. The recognition of the rebels is designed to open the door to give them money but that will also violate the UN Security Council resolution.

So we are at a point now where the international anarchy could hardly be greater and I would just recall to [US Secretary of State] Mrs. Clinton [that] she may be in the position now of giving material support to Al-Qaeda and people have been impeached in the United States for less.

So Secretary of State can be impeached just like any other officer of the executive branch and there maybe some Republicans in the House who are thinking in those terms right now.

MSK/HGH

Eurozone crisis: markets in turmoil, eurocrats in denial. Or in Tuscany. Or in...

From Mail Online - Euroseptic: Mary Ellen Synon in Brussels:

This is my column from today's Irish Daily Mail.


Here are some illuminating nuggets; or you could call them some ‘Oh, my God!’ eurozone statistics. They are from Simon Johnson, a former chief economist at the IMF and now a member of the US Congressional Budget Office’s panel of economic advisors. Even before last week’s market turmoil – and what is most likely going to be this week’s continued turmoil -- Prof Johnson was doing his sums on the eurozone debt crisis. He was asking, ‘Could Italy be the next European domino?’
In among his figures are these: Italy, perhaps on the brink of sovereign debt default, has close to two trillion euros in debt outstanding. But the entire euro system – that is, the European Central Bank plus the 17 central banks sharing the euro – has a combined balance sheet of only 1.9 trillion euros.
OMG.
Consider those figures, then look at how the Italian two-trill compares with the entire GDP of Germany, the Netherlands, Finland and Austria. The total sum is about €3.5 trillion. So, according to Prof Johnson, you will see ‘Europe does not have enough fiscal firepower to handle an Italian crisis.’
And yet an Italian crisis is just what we have. Nothing less than €500bn, and possibly one    trillion, is going to impress the markets on this one. But the EU can’t come up with that kind of money, not even with the help of the IMF, and the markets know it.
Tom Stevenson, an investment director at Fidelity International, wrote this in the Daily Telegraph on Saturday: ‘Italy has become a proxy for hedge funds betting on a break-up of the eurozone. The markets are trying to force the issue, weary at the politicians’ failure to tackle the long-running sore at the heart of the European crisis.’
Which is why the next few days in the markets may be dramatic. The pretence that any of the PIIGs countries can be saved from default by piling more debt and austerity on these struggling economies and calling it a ‘bail-out’ is over. It is no longer a question of whether Greece and other eurozone countries will default on their debt, but when, and which banks are going to get hit worst by the losses.
And yet a sovereign default – which would be the starting pistol for a eurozone break-up -- was not included as part of the European Banking Authority stress tests which were released on Friday after the markets closed. We will see when the markets open this morning just what investors think of that EU attempt to fudge the threat of default.
More, we will see what financial analysts found over the weekend in the statistics released on individual banks, especially in relation to asset disclosure. Stand by for market attacks on any country with banks whose assets the analysts have decided look dodgy.
Indeed, stand by for attacks on the eurozone as a whole. As Mr Stevenson says, the markets have now had it with the months of bungling by Brussels: investors can no longer   believe (if any of them still do) that the EU leadership will solve this crisis. Mohamed El-Erian, the chief executive of Pimco, the largest bond dealers in the world, wrote last week in the Financial Times: ‘Europe lacks the political and technical leadership needed finally to catch up with this damaging crisis.’
Instead of political and technical leadership, we just get more meetings. Last week it was the eurozone finance ministers, followed by the EU finance ministers, and this Thursday an ‘emergency’ summit of the heads of state and government of the EU. It is supposed to agree to save Greece (again) but this time with private investors taking some of the pain and lower interest rates and longer pay-back times for the Athens government.
Note to EU leadership: Greece was yesterday’s crisis, and if you think today’s crisis, which is to say, the going-over-a-cliff vast economies of Italy and Spain, are going to be saved from default by the tweaks made to the deal for the small economy of Greece, you are wrong again.
Yet the leadership insist this meeting will be an ‘emergency’ summit that will stop the Greek problem leading to contagion across the rest of the eurozone. ‘Emergency?’ The fact that the EU leaders were not in Brussels over the weekend, signing up to the agreement before the markets were ready to open today, shows they haven’t grasped how quickly events may move this week. They have no sense of urgency.
Yet in market terms, it is a very long time from this morning until Thursday evening. Market days are like dog years, seven times longer than Brussels days: between now and Thursday investors can make a lot of decisions on how much eurozone debt to dump. Not that I actually think that form of words worked out by the finance ministers will make any difference to the debt problem, but the EU wants the markets to think it will. Hanging around to sign it for ten days after it was drafted last Monday just confirms to the markets that there is no political and economic resolve at the top.
So this week the markets could rip up a big chunk of what’s left of the eurozone project. I don’t know if they will, but I do know that this idea the EU leaders and eurocrats are putting around that the ‘permanent’ solution to Greece and the rest can wait until September, after the holidays, is absurd. Do they imagine that investors with billions in eurozone assets are going to put their decisions on hold until President Sarkozy and Carla get back from the South of France?
Investors have already been warning Brussels that they will not wait. Peter Clarke, the chief executive of the Man Group, the biggest hedge fund in the world, gave an interview to the Telegraph last week in which he warned: ‘Until very recently, everyone has been assuming that the eurozone would come up with a solution for the peripheral countries’ debt that would provide sufficient certainty for the markets to be able to move on.’
‘What’s happened over the last few weeks is that the timeline for that has been compressed. The markets have been clamouring for clarity that has not been forthcoming, and in situations where there’s uncertainty people tend to reach their own conclusions and the markets get very volatile.’
‘I’ve been saying for a while that they [the peripheral countries] haven’t got until the end of the calendar year, but that they’ve probably got the summer. But now I think they’ve probably got some of the summer. You wouldn’t want to see the current situation perpetuated across August and into September.’
And yet that is just what we will see, no matter what sort of ‘solution’ is signed by the EU leaders on Thursday. This thing will drag on through August and into September. Then what the EU leadership will come up with as a permanent solution will be to turn the EU into a fiscal transfer union. They will claim the crisis is so severe that fiscal union is the only solution.
Put aside for the moment that that would mean the surrender of what is left of the financial and economic independence – in other words, the national sovereignty -- of the members of the eurozone.
In other words, it would mean rule of this country, in a phrase from the Greek economist Yanis Varoufakis, by ‘a junta of foreign officials.’
That would be repulsive enough, even if a new centralised EU fiscal regime showed some economic skill. But just consider how badly-judged every decision by the EU leadership has been, not just since the beginning of the eurozone financial crisis, but since the beginning of the eurozone itself. In particular, Italy and Greece should never have been admitted. There can be no reason to expect that once Brussels has control of a unified fiscal zone its economic judgement will be any better.
So this fiscal union which will be proposed for the eurozone would mean more than just government of this country by a foreign junta. It would mean government of this country by a Brussels regime which lacked technical expertise and political leadership: it would be not just a junta, but a bungling junta. No wonder the markets want out.