Spoke Joe Brusuelas,
Brusuelas Analystics; Joe Bel Bruno, WSJ; John Tamny, RealClearMarkets, re the "audacious"
intervention fo the Eurozone 27 countries to push a bailout package of €750 billion into the conversation about the survival of the euro and the
EU.Brusuelas tells me that Jean-Claude Trichet's ECB is buying euros and Greek debt, and that other central banks such as the
Fed, the BOJ, are coordinating the swaps in a worldwide
collaboration to hold off the bond vigilantes another week. This is similar to what was done during the 2008-2009 crisis to keep dollars circulating to European banks.The Greek bonds are now out of the
market, taken onto the ECB balance sheet though they are likely worthless.Brusuelas argues that this is risky
behavior by the ECB.Joe Bel Bruno
notes that the US market is vastly oversold and will rally for starters to
compensate for the EU/ECB intevention.The bond vigilantes will wait at the smoke shop.John Tamny notes that the EU package
includes €250 billion from the IMF, which means as much as €100 billion of US taxpayer guarentees - all offered by POTUS - likely in
conversations with Angela Merkel over these last days.I asked John Tamny if the politicians
have learned anything useful since the TARP bailout of the bankers in October
and November 2008, and he answers, "No."Will the bailout work?The
question is the risk.The bond vigilantes
never truly sleep, and the Greeks will soon be joined by the UK in that pool of water
called dire straits.
Watching Deutschland.
Meanwhile, Angela Merkel, much in the negotiation to rescue the euro, loses a local election that may lead to her losing her coalition advantage in the Bundesrat. Merkel plays rough, fast and sharp. The German people look to be rejecting her internationalism, her willingness to lead with German taxpayers. The German government coalition is now as fragile as the UK coalition hopes to be. What can go wrong with the EU fix? Berlin and London for starts. Merkel was in Moscow briefly to watch the V-E parade. Odd behavior -- celebrating the 65th anniversary of smashing the Berlin that Europe now depends upon.
The big political battle of our time is the struggle between Left and Right. The Left is winning. It’s late in the fourth quarter, the score is tied and the Left has the ball on the Right’s three-yard line. Merkel knows how the game will end. By calling for a time out now – by agreeing to bail out Greece - she intends to postpone the inevitable, hoping to no longer be on the field when the final score is announced. In German it’s called Realpolitik.
The Left seeks the total collapse of world currencies. By beggaring the middle classes, they intend to bring about the chaos that would usher in totalitarian state communism. Bailing out Greece at this point merely kicks the can down the road. Further bailouts are all but inevitable. This will anger the German populace to the point of turning its rage against Merkel’s right-of-center party. Leftists will take up the reigns. The next time the issue of the PIIGS needing money arises, there will be no hesitation about what to do. Neither will there be any incentive for any individual nation to pursue economically sound policies. The Euro will collapse, followed by societal upheaval. In the people’s frenzy to save themselves, they will seek out scapegoats. As Batchelor often says, “There will be blood.” The perceived ‘rich’ will be targeted and sacrificed on the altar of ‘Social Justice (and Merkel will be permitted to sit by, knitting).
After the revolution, people will be starving and begging for leadership. Strongmen will emerge and rewire the West into a series of cooperative communist dictatorships in which economic principles no longer apply. Cronyism, brutality and ideology will be the new world currency.
Here's the thing I find interesting about the North Rhine - Westphalia election results yesterday. It is my understanding that Merkel's coalition is center-right. Yet, the angry voters who handed her a drubbing yesterday were most likely angry over the fact that Germany's policy wasn't conservative enough. Am I right? In the U.S., when we had TARP, the anger was about equal from the far left and the far right. (I define far right to be anybody more conservative than John McCain for purposes of the last sentence.) But, since Merkel is already as far right as you can go in Germany, there's no room to maneuver to her right, so all the far-right voters who are angry with her have no choice but to vote for one of the more liberal parties in order to voice their displeasure.
It's analogous, but not identical, to seeing Bernie Sanders and Ron Paul team up to go up against POTUS in the Audit-the-Fed amendment. And I think we'll be seeing a lot more of this lately.... the status quo has gotten so bad, that you'd almost rather see a Bernie Sanders win to shake things up a bit. Of course, you don't want him to be in there for very long, once the shaking is done. But his head sure serves well as a battering ram to break down the castle doors....
Cronyism, brutality and ideology are the current world currency. When has it been otherwise? The parting on the right is now a parting on the left ......
The big political battle of our time is the struggle between Left and Right. The Left is winning. It’s late in the fourth quarter, the score is tied and the Left has the ball on the Right’s three-yard line. Merkel knows how the game will end. By calling for a time out now – by agreeing to bail out Greece - she intends to postpone the inevitable, hoping to no longer be on the field when the final score is announced. In German it’s called Realpolitik.
The Left seeks the total collapse of world currencies. By beggaring the middle classes, they intend to bring about the chaos that would usher in totalitarian state communism. Bailing out Greece at this point merely kicks the can down the road. Further bailouts are all but inevitable. This will anger the German populace to the point of turning its rage against Merkel’s right-of-center party. Leftists will take up the reigns. The next time the issue of the PIIGS needing money arises, there will be no hesitation about what to do. Neither will there be any incentive for any individual nation to pursue economically sound policies. The Euro will collapse, followed by societal upheaval. In the people’s frenzy to save themselves, they will seek out scapegoats. As Batchelor often says, “There will be blood.” The perceived ‘rich’ will be targeted and sacrificed on the altar of ‘Social Justice (and Merkel will be permitted to sit by, knitting).
After the revolution, people will be starving and begging for leadership. Strongmen will emerge and rewire the West into a series of cooperative communist dictatorships in which economic principles no longer apply. Cronyism, brutality and ideology will be the new world currency.
http://peterkoelliker.blogspot.com/
Here's the thing I find interesting about the North Rhine - Westphalia election results yesterday. It is my understanding that Merkel's coalition is center-right. Yet, the angry voters who handed her a drubbing yesterday were most likely angry over the fact that Germany's policy wasn't conservative enough. Am I right? In the U.S., when we had TARP, the anger was about equal from the far left and the far right. (I define far right to be anybody more conservative than John McCain for purposes of the last sentence.) But, since Merkel is already as far right as you can go in Germany, there's no room to maneuver to her right, so all the far-right voters who are angry with her have no choice but to vote for one of the more liberal parties in order to voice their displeasure.
It's analogous, but not identical, to seeing Bernie Sanders and Ron Paul team up to go up against POTUS in the Audit-the-Fed amendment. And I think we'll be seeing a lot more of this lately.... the status quo has gotten so bad, that you'd almost rather see a Bernie Sanders win to shake things up a bit. Of course, you don't want him to be in there for very long, once the shaking is done. But his head sure serves well as a battering ram to break down the castle doors....
Cronyism, brutality and ideology are the current world currency. When has it been otherwise? The parting on the right is now a parting on the left ......