Fascinating new evidence has emerged this year to show that Titanic was not only going far too fast when it entered a known field of icebergs, it also had a raging fire in the coal hold that eventually sealed its fate. While some think the Titanic analogy in relation to the eurozone is overdone, it now looks like it could be uncannily accurate.
One thing that has been notable (at least, to me it has) over the last few weeks is that, the more the EU racks up the denial-propaganda heat on the EU and its eurozone, the more objective observers with little or no axe to grind are coming out into the mainstream media to remind investors just how big the mess is on a number of levels.
The single currency
The more basic stuff goes back at least twenty years, to the period where trouble was stored up for the future by fanatical federalists cutting every corner and pulling out all the stops to get EMU (the prototype single currency) up and running. Several eminent economists on continents ranging from Australia and the US to the UK and Europe itself made very sound predictions at the time about coming disaster, and they did so saying two related things:
- It would offer Germany a cheap, fixed currency leading inevitably to its economic dominance
- It would point up the economic consequences of imposing one rigid means of exchange on 18 varietal cultures, leading generally to Southern/South Eastern Europe falling behind.
Just to add more weedkiller to the poisonous formulation, the key European leaders not only ignored the advice; they also first, ignored all the data showing that several member States were nowhere near ready to join the eurozone based on agreed criteria; and then second, were implicated in several corrupt deals on commodities – as varied as German butter, Italian wines and Greek olive oil – to cloud the existence of stark differentials in both export and industrial development.
For once, the economic naysayers proved to be soothsayers. Messrs Hollande and Muscovici shrink from the limelight about their own book on the subject of cultural difference (fancy that) but it proved to be spot on….as did the musings of Lawson and Thatcher et al in relation to Germany’s dominance. The Mark from around 1963 until the creation of EMU was the most reliable, performance-related currency on the planet. But only massive debt forgiveness by the victors after the Second World War enabled that outcome.
Both the realities in that last paragraph explain why lectures from Hollande and Merkel today – when joined by hypocrisy from Draghi at the ECB – evoke so much hatred of the EU’s prime movers among the so-called ClubMed nations….and those of us Brits in the Brexit camp.
I make these points not to be nihilistic, but rather to level the playing field of media coverage that has been so bombed, excavated, deliberately over-watered and then tilted for good luck by Brussels, Wall Street and Berlin obfuscation and mendacity since 2010. A very real outcome of nihilism is being encouraged (and indeed made inevitable) by the EC’s refusal to recognise that – even as the SS Eunatic set sail – there was a raging fire in the hold.
Econo-fiscal amateur-night opportunism
But that was then and this is now: long after that and long ago, the SS Euatic hit three icebergs in a row – and none of them was a lettuce. Corruption Iceberg bumped against the forward hold in mid 2010, when – thanks to blatant illegality in lending by Goldman Sachs, and flagrant embezzlement of said borrowing by the Greek Rightist élite – George Papandreou (having won the election against those very borrowers) quickly discovered the country had a debt which by its very nature was way beyond the ballpark in terms of ezone rules.
Having missed the fire in Hold 3, this relatively small berg would’ve been relatively harmless – had not former German Interior Minister Wolfgang Schäuble decided to steer SS Eunatic towards a second iceberg by (a) refusing to cancel the order placed by Greece with Germany (under NATO pressure) for two submarines costing €150bn, and (b) persuading George Papandreou to exaggerate the size of debt in order “to make the other ezone States take the problem seriously”. Papa is on the whole a nice bloke, but not blessed with the world’s best brain. Wolfie Wheelchair, on the other hand, is a devious shit on a mission to become Eurofinanzführer….and he wanted a vassal State with which to frighten the rest of ClubMed.
Thus, Opportunist Iceberg smashed slap-bang into the fire-ravaged hold with such force that even the 1st Class London passengers noticed it….which must have been very forceful indeed, given that London wasn’t on board.
The consequences of this were clear at the time, but once again Wolfpack Squabble the human U-Boat threw grappling hooks out to Opportunist Iceberg, the better to have it bash again and again into the ship’s weakened hull.
Seven years on, Wolfie and his eurogrope creature Jeraboam Dunghillbloke are still at it, socio-economic vandals with nobody in the modern annals of business coming close to their level of arrogant neo-racist stupidity. Data released yesterday showed another contraction in the Greek economy, alongside an “unexpectedly” steep fall in exports during March. Why was this unexpected, we ask ourselves: equally predictable was a whopping €1.5bn of capital outflow, showing an acceleration to €3.9bn since the start of 2017. The gdp of Greece has now fallen 40% since Spring 2010, and a quarter of the population is unemployed.
Not much to Bank on
But even this is as little compared to the Brussels-am-Berlin decision to do nothing at all about the eurozone’s shambolic banking system. Although from 2009, Wall Street had opted to change a few things in the US equivalent, B-am-B chose the Zero Action Option. So SS Eunatic increased speed into the fog and collided head-on with Banker Iceberg. And among those rooting for the icebergs, this third monster will indeed prove to be the banker when it comes to sending the euro to the bottom.
Yesterday, independent economic analyst Shaun Richards wrote an eloquent piece on his site inviting eurogrope in particular and Brussels in general to have a reality transplant in relation to the Portuguese bank Novo Banco, the less than worthy ‘good bank’ successor to Banco Espirito Santo.
Meanwhile, Deutsche Bank has launched its capital increase to raise €8bn at a discount of 35% compared to the share price before the capital increase was confirmed. The entire sum will be used to strengthen its balance sheet. This will result in a dilution of approximately 50% for shareholders, as the total share count of Deutsche Bank will increase to 2.07 billion shares.
And Credit Suisse finds itself forced to face the need for a €4.3bn capital increase after years of losses.
Moving slightly south to Italy, Veneto Banks confirmed yesterday a €6.8bn capital shortfall, suggesting that the Italian elephant is now exceedingly noticeable in the room, in that he is dropping humungous amounts of malodorous dung suggesting that things in Italy are now veritably close to finito Veneto.
Type ‘eurozone banking’ into this site, and you should (WordPress willing) find posts from me over the last two years highlighting the bewildering range of banking accidents waiting to happen in Austria, Spain, Italy, Greece, and several niche but important areas in Germany. (Modesty and Presidential ire forbid me as a resident of France from including two large banks here in the A&E category).
Why is any of this relevant to Britain’s own ongoing fire in the hold – viz, the inability of ignorant and ideologically blinded Leftists and Secret Remainers to grasp just what an ethical obscenity, financial black hole and illiberally illegal unit the European Union is?
The answer is twofold:
- No other developed country on the planet has such an economic gdp imbalance in favour of banking, financial services, and globally marketed fiscal advice as the UK.
- We too have fragile banks and an aversion to effective regulation…both the inbred children of ill-advised lustful intercourse between City Masters of the Universe and Westminster whores.
I realise there is little or no point to this sign-off appeal, but I’ll make it anyway.
I passionately urge all those trying to sabotage, slow down and even reverse the UK decision to leave the European Union to think again….because the longer we remain, the more likely we are to wind up picking up a gigantic tab for the gorging hubris of the federalists.
I do not deny that some of those engaged in negotiating with the EU – which is not a State, and has never filed accounts, let alone had them audited – are overconfident plonkers of the first order. But I am asking those with a brain and an open mind to accept that Brusselian megalomania and Frankfurt sociopathy have destroyed the European dream to which many of us signed up in 1975.
Nor do I present the same rosey picture of the future depicted by gargoyles like Liam Fox and Boris Johnson. It is going to be tough. But very soon, it’s going to be tough for every human being around the globe…and in that sort of backs to the wall context, aren’t we Brits supposed to be not only grittily determined, but also more humanely communitarian?
I leave you with that introspective challenge. And to be brutally frank, I don’t care a monkeys if it ruins your weekend: better one ruined weekend than a slide into not being allowed weekends at all.
The Slog 