CAN THE EUROPEANS DO IT?
Talking with business executives and Swiss bankers leaves one with the impression that people in Europe are counting on their past, and ignoring the present. Europe and the U.S. have gone through extreme turmoil and stress in the last Century. They have also gone through a period of extreme luxury.
The stress was in the two World Wars and the Great Depression of the 1930′s. The luxury was in the Welfare State of 1970 to 1990. During that period they accumulated trillions of dollars worth of debt. And, they accumulated millions of non-European inhabitants who do not share the genes nor the culture of Europe.
The old European culture was one of self-reliance and hard work, even in the face of poverty. The new European culture is one of reliance on the Government and the avoidance of poverty, even if it means taking on the mantle of socialism.
This change in political attitude must make a difference in the future of Europe and the U.S. Socialism, which is simply a term that describes a society in which the public has abdicated its power to Government, has been an unsuccessful economic solution wherever it has been tried in the world (With the exception of China, so far).
WHAT EUROPE FACES TODAY
The economic challenges facing Europe today is not its immense and almost incalculable debt, but rather, the ingrained attitude of its citizens. If you have an individual or a family willing to struggle through adversity for decades, almost any economic problem can be solved.
But, if that individual or family wants a “quick fix,” then the solution will be a cover-up of the problem and a move to a lower living standard. We see this standard across the World wherever we see poverty. That is why the desperate immigrants leave their homelands and migrate to Europe and America. They are seeking a solution to their poverty, although they are, unwittingly, part of its cause.
In their own countries they cannot fight he entrenched forces of big business and corrupt government. When they arrive at their new home, they find similar forces and they give up. They could make a difference but its much easier and more pleasant to take the road of least resistance.
The forces that are facing the mixed group of Europeans and Americans and their new immigrant population is the Institutionalized Financial Industry. Big Banks live hand in hand with Big Government.
EUROPEAN DEBT
The exact figure is unknown, but good estimates are 2.6 Trillion dollars. This figure represents Government or Sovereign Debt. The European Union and its political leaders are paralyzed with the fear that Governments, such as the Greek or Spanish government, will default when the bonds come due and the banks ask for their money.
Such a default would quash the Euro! Without the Euro, exports and imports would halt, as there would be no way to pay for the goods in a stable currency.
EURO FALLS
Today, the Wall Street Journal summarized the European currency problem:
TOKYO (Dow Jones)–The euro dropped to fresh multi-year lows against the dollar and the yen in Asia Monday as investors dumped the risk-sensitive common currency on concerns that European debt woes and weak global share markets would push it lower this week.
The common currency also marked a record low against the Swiss franc, fueling speculation that the Swiss National Bank could step into the market later in the global day to staunch further falls.
Concerns over Hungary’s finances, stoked Friday by a Hungarian official comparing the country’s problems to those of Greece, also continued to weigh on the euro. Hungary isn’t a euro member. But debt problems there could hurt the common currency by highlighting the risk of sovereign downgrades in eastern Europe, where many euro-zone banks have investments, dealers said.
“Hungary is the new villain on the scene, and it’s hurting the euro just by making people expect that the sovereign debt issues are going to spread further,” said an executive director at a major Canadian bank in Tokyo.
We can easily see the spread of the debt across Europe, now striking Hungary in Eastern Europe.
EUROPEAN SOLUTION
The European solution sounds like a typical Teenager : “I’m sorry, Dad, but I’ll change.” Of course change never happens. Can Europeans and Immigrants to Europe change a behavior pattern that has prevailed during their entire life time? Totally unlikely!
We have seen it throughout history: The Greeks, the Romans, the French, the Spaniards, and, most famously, the Brits, whose flag covered the entire globe. They all went down and never returned. The EU and the US will go down and never return.
No worries, we still have Asia!
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