The European Debt Crisis is making the equity markets go up and down like a Yo-Yo, as traders react to every bit of news coming from the politicians that are the puppets of the European Power Groups.
The European Power Groups are the Banks of Europe and the giant Trading Corporations. They own and pay off every European politician, from Merkel to Sarkozy to Cameron. The European Power Groups, like their counterparts in the U.S., are out to rob the Europeans of every last Euro they have.
The reader may wonder: “How does anyone know that there are Power Groups in Europe?”
Then ask yourself:
- Why are European soldiers, healthy young men, dying in Afghanistan?
- Why are the leaders of France, the U.K. and Germany so closely related, in background and in even in ethnicity.
- Why are they so worried about their banks and not their citizens?
One can easily see that these politicians are interested in “Big Money” not in the citizens of their country.
TWO MAJOR FACTORS
There are two major factors affecting the economy of all European countries and the EU and the Euro.
1. Competition from Asia and Latin America.
2. Chronic Borrowing.
The European countries are not immune to economic competition from countries where the labor force is enormously cheaper than the European labor force.
The European labor wants to live like royalty. They want and love the so called “Welfare State”, where they work little and have enormous benefits.
Forty years ago, this was possible. Today, it is impossible, because of the “Open Door”, “Free Trade” policy of the EU. This “Free Trade” policy replaced the “Protectionism” policy that made Europe rich in the 1960’s to the 1980’s.
“Free Trade” is excellent for banks, but not good for workers. European workers cannot compete with Asians.
Germany is doing well, because they still manufacture products that are under patents or require special machinery that the Asians do not have.
This is a form of “Protectionism” provided by technology and patents. This form of Protectionism will disappear within 20 years and the Germans will have to compete with the Chinese and they will lose.
European banks have been making enormous profits by selling loans and bonds to European governments who have been funneling that money to their friends and to their voters in order that they can stay in power.
Now the banks are in trouble as the populations of the southern periphery of Europe continue to live well with borrowed money. Within less than a decade, these people will have to return to the old living standards of Europe that existed before the Second World War.
Worse yet, they have additional populations from the Middle East that are not integrated into the language and culture of Europe. This lack of cultural and linguistic integration will become a major problem as it will reduce the efficiency of the manufacturing industries and the service industries; whilst simultaneously raising the cost of health care and social welfare, including retirement.
The European Power Groups have led Europe into a deteriorating financial and social situation, and no amount of money from the people in the form of taxes (all money comes from the workers) will correct the situation.
I predict that there will be social uprisings throughout Europe as the pain enters society. What we are seeing in North Africa and the Middle East will be replicated in Europe.
Since the Europeans are fairly intelligent, they may begin to instill “Democracy” into their governments by dismissing their representatives and using the cell phone and the internet as the method of passing laws.
We shall see.
Here is an example of what the Banks are doing with a problem that will not disappear, but will grow larger with time:
Europe’s Biggest Banks Face $30B Greek Writedown
By Gavin Finch and Liam Vaughan, from Bloomberg
“Europe’s biggest banks stand to lose 20.6 billion euros ($29.7 billion) on their Greek government bonds after lenders in the region pledged to contribute to a new rescue package for Greece.
Banks will voluntarily agree to write down the value of their Greek securities by 21 percent as part of the bond exchange and debt buyback program, the Institute of International Finance said in a statement today. Europe’s 90 biggest banks hold about 98 billion euros of Greek debt, according to the European Banking Authority.
European leaders are trying to contain a debt crisis that started with Greece from engulfing Spain and Italy. The Greek aid package, which requires banks to contribute 54 billion euros, followed weeks of discussions among banking officials as well as meetings with European Union leaders during the emergency summit in Brussels yesterday.
‘Banks should be able to digest any haircuts on Greek debt, and it is already priced in to their shares,’ said Andreas Plaesier, a Hamburg-based banking analyst at M.M. Warburg. ‘What was really key was supplying capital to Greek banks and stopping the possible chain reaction to lenders outside the country that hold Greek banking assets.’”
Dr. Pinna says:
The above article gives the reader a snapshot of only a tiny part of the problem: Greece. Italy, Spain, Portugal and Ireland will be next.
And who will support them? The Northern taxpayers.
For how long? Forever? I don’t think so…