Waiting For The Other Shoe To Drop

Spring is here and we will soon start spring training for America’s sport, Baseball.  It the words of Chico Escuela, Baseball been very very good to me.  I do miss Gilbert Morris and Mr Bill, but times change and the world changes with those times.  So many intellectuals set so much stock on a unified Europe, a way to end all wars and insure peace for a thousand years.  First a trade union then an monetary union, and finally a political union.  But it seems that no one ever stopped to ask the vox populi what their expectations were each time.  I think the old Kingston Trio song, Merry Minuet, applies to Europe just as strongly today as sixty years ago.  The French hate the Germans, the Germans hate the Poles, Italians hate the Yugoslavs, South Africans hate the Dutch, and I don’t like anybody very much.  The sad truth is that nationalism, past grievances, language differences, history, philosophical approaches to political solutions, well, just about everything that can go wrong has.  Murphy’s Law has triumphed again.

So we see the EU in the form of its commissioners and other merchant flesh peddlers take every effort to stop, stifle, and throttle Syazira dead as the proverbial doornail.  You see, the enemy is the very populace of each country that dares to believe their individual votes for their government members and policies actually matter.  I know, most of you have never heard of Nigel Farage let alone even listened to his speeches in the EU parliament.  These representatives who are for the most part unelected, I think Britain is one of the few countries that actually elects their EU Parliament representatives, do not reflect the will of the people but the will of a few bureaucrats.  Seems to me we once fought a most deadly war against taxation without representation.  Well, Europe is really just muddling through and all will be well because there is not alternative.  Once the Greeks understand that they owe the bankers everything, they’ll come around and due their duty or obsequiousness while they genuflex before the ECB, the IMF, and the EU Commission.  Meanwhile the socialists and the communists try to show that the EU can borrow its way to wealth.  If the cannon, From each according to his ability to each according to his need was actually practiced Europe might stand a chance of breaking even.  But that never is the way of the free lunch, is it?  Someone else always pays until the pocket book runs out.

So let us recap the runs the hits and the errors, and oh boy, have there been errors.  First is the trade union where we all agree to drop tariffs only to find that inefficiencies in some of our economic areas are driven to ground buy better economic efficiency in the other countries.  Cheating starts to occur, usually through government subsidies.  But that costs tax payer money.  Well, don’t worry, we will borrow our way to wealth.  Meanwhile much of our own industry migrates to other countries and in the case of Europe, they have managed to outsource a great deal of their own manufacturing.  Remember when each country made its own shoes?  Then the shoe making moved to those countries where labor was cheaper such as Italy and then Spain?  Who makes Europe’s shoes now?  Look to Indonesia and India.  Well, no problem, we will just get the labor unions to keep wages lower and productivity higher and we can not only export to all the EU countries but to Asia and the United States.  Did anyone say Germany?  Not only that, but we will lend them money to buy our goods.  Did anyone say Germany?  Ah, the Fourth Reich is in charge, just ask finance minister Schnauble.

Then we let countries with less developed economies and with cheaper national currencies join the EMU, the monetary union.  Do you know what that does?  It inflates purchasing power briefly while making exports to the other EU countries more expensive.  Without the cheaper currency such a country loses its competitive edge.  But hey, you have confidence that the EU will muddle though.  People have to have jobs in order to buy stuff, do you not understand that basic principle?  Yes, the government can give out welfare and a lot of it and in the most stupid way.  But where does that money come from?  If your people are use to playing the cheating game with government tax collections how do you expect to increase tax receipts to pay for all the free lunches the government is buying?  And let us not even talk about the rich and their ways of not only not paying any tax but ripping off the public treasury while sending their money to Bern.  Yes, there is a Disneyland just outside of Paris but it is not the entire EU.  Besides, Fantasy land was never more than one fifth of the old Disneyland.  I haven’t been since 1974, so I can’t be sure.

Meanwhile the private bank lending ratios are are close to 80 to one and the bad debt is estimated to be as much as 15 to 20 percent.  Can you say bankrupt?  Can you say insolvent?  Now the ECB thinks that it is not enough to have negative interest rates, meaning that if private banks want to park cash with the ECB they must pay a quarter percent to do so.  Meanwhile the ECB want to buy government bonds that most banks must hold to assure their safety of investment or else buy high risk high return and hope they don’t get burned.  But see, there is a fudge factor and the EU will muddle through.  All the reports say that Germany crushed Syazira at the bargaining table and continues to do so.  I’m sorry, what did the Greek voters want last election?  Relief and to stay in the EMU.  And what are they being shown today, each day, by the EU commissioners?  That the Greeks need to get out of the EMU.  Can’t blame Syazira for that lesson.  The government bought time in order to change the minds of the Greeks that they must leave the EMU and perhaps the EU as well.  And if they must leave, then all debts are off.  That is the one thing that the EU cannot let happen and yet they are determined to drive Greece out.  You cannot behave the way that the EU has and expect any different behavior on the part of the Greeks.  But the EU will muddle through.

You see, all this hard ball playing is designed to show Podemos and Five Star that revolt is useless, that Spain and Italy, and Portugal must remain in the EMU for their own good.  Yet it is not for the PIGS own good but that of Germany, France, Belgium, and the rest who have squandered what unity they once had for the greed of their bankers.  It is about saving banks that are already insolvent, already bankrupt, already dead in the water.  It can’t happen, it won’t happen, it will never come to pass even in a wet dream.  And I haven’t even touched on inflation and deflation.  The depression will be televised.  So what team do you favor this summer?

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