25 August 2012


Regular reader should recall musings in the recent past that Germany, and to a lesser extent France, are intent on punishing their victims in the Euro Crisis. To wit, that these exporting dependent economies, the aforementioned Germans and French, dumped output onto their lesser compatriots in the Eurozone. They were able to pull this off, for some period of time, so long as the Euro itself remained stable; a Greek Euro was as good as a German Euro. And that equality could last only so long as the Germans and French propped up the PIIGS, but indirectly. Overt support, now necessary, irritates the Man on the Street Citizen in Germany and France, either because they're just too stupid to figure out the scam, or were in on it.

Now that they're no longer able to buy up the surplus output, the Germans and French want to maintain their economies by extorting funds (money being fungible) from the lesser countries by other means. Our downtrodden Banksters have been busy inventing ever more overt ways to extract funds (almost entirely profit, of course) from the saver to borrower money stream now that the "crisis" has been averted and stricter (although not by much, thanks to Bankster lobbyists) regulation, but most knucklehead consumers (and regulators) refuse to accept that Banksters need to be brought to heel. The past week has also included reporting that China, as predicted here, has an excess output problem too. "It's the distribution, stupid."

Not too surprisingly, today brings confirmation of German and French perfidy.
They include the German and French banks that lent Greece money and fueled the Spanish housing bubble...
Again, the Germans and French sought higher than domestic (in their perspective) returns, since their own economies couldn't pay extortionate returns. The Spanish housing bubble, not motivated by government, was the result of the exporting countries, Germany particularly, seeking unrealistic returns on profits gained by dumping output into those self same countries. Heads I win, tails you lose economics. Even if Germans and French (and American Banksters) manage to convince citizens and regulators that all this is sustainable, collapse happens in due time. Without a foundation of income distribution, capitalism collapse of its own extortion.
The circle of perpetrators could also include the fickle bond investors who underpriced the risk of Greek debt before 2010 and whose volatile reaction to even minor events has lately been wreaking havoc with Spanish and Italian borrowing costs and, by extension, those countries' economies.
There's a reason some, including humble self, have screamed bloody murder that bondholders got off scottfree during The Great Recession. It was their greed for unsustainable returns on idle money that caused the crisis. Yes, idle money. When I was kid, the term "idle rich" was in common English, and was synonymous with "coupon clipper", also common English. The latter doesn't refer to folks who take out Pampers discount coupons from their daily newspaper, but to the fact that bonds pay a "coupon value", and in the olden days one literally removed a perforated tab from the margin of the bond (the coupon) for redemption for moolah.
In fact, Gerhard Schröder, the German chancellor until 2005, was one of those calling loudest for the rules to be watered down so he would not have to cut government spending.
The quote refers to the fact that Germany didn't want new restrictions back in 2005 that they're now demanding against the PIIGS. I wonder how to spell hypocrisy in German?
"It was German government decisions and German banks -- and Austrian banks and Dutch banks and Finnish banks -- who lent the money to all these countries," Adam S. Posen, a United States economist who is an external member of the Monetary Policy Committee of the Bank of England, said on BBC television this week.
Finally, he drops the Truth Bomb, asserted here for some time.
Germany lent the money so it could be used to buy German exports, Mr. Posen said. "Germany has been running a scheme in their own interests," he said.
I think he's pointing out that the Emperor is quite naked. Cool.

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