Tag Archives: EU

International Currencies Increasingly Rejected in the Face of Inflation

International Currencies Increasingly Rejected in the Face of Inflation

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Currency collapse is hardly something new. Especially when that currency is backed by nothing. In G. Edward Griffin’s seminal work, The Creature From Jekyll Island, he states that once the “business of banking” by fiat began:

This led immediately to what would become an almost unbroken record from then to the present: a record of inflation, booms and busts, suspension of payments, bank failures, repudiation of currencies, and recurring spasms o economic chaos. (pg. 184)

Since this story of banking is so oft-repeated, there are also a fair number of examples of how prosperity — or at least stability and self-sufficiency — was restored afterward. In nearly every case, it came from desperate, but determined individuals who shrugged off the shackles of central banking, and either returned to the currency they used previous to government hijacking, restored pre-money barter systems, or created something entirely new.

The modern-day, planet-wide collapse of fiat currencies is providing additional real-time examples of how forsaken citizens are taking matters into their own hands. Let us look at just the two most affected: Greece and Spain.

Greece

It is a travesty that the nation where democracy and gold-backed coinage was first developed should become the poster child of a whirling black hole of debt and dependency brought on by autocratic rule. Regardless, despite the austerity riots filling city streets to make demands, there are indications that some communities are finished with demanding anything from a provably corrupt government that is literally foreign to their best interests.

The video below illustrates the rebirth of diverse means of exchange such as time banks, barter networks, barter currency, and “priceless” commodities in Greece:

Spain

The Daily Mail reports on a town of 3,000 called Villamayor de Santiago, where “rebellious” locals have reintroduced the peseta in a project to thwart the failing euro after inflation has driven up the price of essential goods 43 per cent. The cost of bread is up by 49 per cent, milk 48 per cent, and the price of potatoes is up 116 per cent. All while a third of this small town is out of work.

Around 30 shops in the historic town, 75 miles south-east of Madrid, started accepting pesetas last month after urging customers to dig out any old notes and coins they had forgotten about.

(…)

News quickly spread, and shoppers from neighbouring villages and towns have been flocking there to spend the old currency.

After a one-month field test, the enthusiasm for the plan has ensured its renewal. Meanwhile, four other Spanish towns have reintroduced the peseta, as the country goes through an employment crisis worse than that of Greece, and the country’s credit rating has been knocked down another two notches.

America

The two modern examples of Greece and Spain, echo America’s own colonial history. Following China, America was the second location in the world to test fiat currency at the behest of the British Empire. The story is fully recounted in Chapter 8 of The Creature From Jekyll Island and is well worth a full read, but the salient point is that once colonists were repeatedly subjected to hyperinflation and depression through the overprinting of money, as well as having been subjected to broken promises and tyrannical rule by the Bank of England through the removal of coins, barter became a means of exchange and survival. Tobacco was the first commodity, but nearly anything of intrinsic value served equally well in restoring a semblance of power to individuals as a means for their self-determination.

Later, the colonists who disobeyed government dictates brought out their limited supplies of hoarded coins and re-built from the ground up using sound economic principles. Those colonies which used sound money, such as Massachusetts, won trade from fiat-money colonies like Rhode Island.

As Griffin states:

After the colonies had returned to coin, prices quickly found their natural equilibrium and then stayed at that point, even during the Seven Years War and the disruption of trade that occurred immediately prior to the Revolution. There is no better example of the fact that economic systems in distress can and do recover rapidly if government does not interfere with the natural healing process. (pg. 160)

And Ben Franklin proclaimed that King George III taking away the ability of the colonies to create their own currency was the true reason for the Revolutionary War:

The colonies would gladly have borne the little tax on tea and other matters had it not been that England took away from the colonies their money, which created unemployment and dissatisfaction. The inability of colonists to get power to issue their own money permanently out of the hands of George III and the international bankers was the prime reason for the Revolutionary War.

And this is the good news: what’s old seems to be new again; citizens within collapsed economies are once again turning their backs on centralized international government, ignoring their unjust policies, and instead are returning to the far simpler and more logical means of self-sufficiency and prosperity — their own inherent community strength built upon real production and trade between individuals. In short, decentralization.

Americans would do well not to forget that the actions taken by individuals in other severely collapsed countries are those also entrenched in America’s history. Let us all observe closely, then, how the first dominoes that have fallen in the latest cycle of depression are choosing to right themselves; for it would be at our peril to ignore history, and the momentum that already has pushed others toward the same foregone conclusion.

Our forgetfulness is perhaps the root cause of our repeated inability to sustain ourselves, until another collapse scenario forces us to take action.

For an instructive case study in the risks imposed on nations by international banking interests, as well as how anyone can survive the inevitable aftermath, please view the story of Argentina below:

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Contingency Plan

British draw up plans to protect citizens across Europe from mass-rioting if Euro collapses

As the Italian government struggled to borrow and Spain considered seeking an international bail-out, British ministers privately warned that the break-up of the euro, once almost unthinkable, is now increasingly plausible. Diplomats are preparing to help Britons abroad through a banking collapse and even riots arising from the debt crisis. The Treasury confirmed earlier this month that contingency planning for a collapse is now under way. A senior minister has now revealed the extent of the Government’s concern, saying that Britain is now planning on the basis that a euro collapse is now just a matter of time. “It’s in our interests that they keep playing for time because that gives us more time to prepare,” the minister told the Daily Telegraph. Recent Foreign and Commonwealth Office instructions to embassies and consulates request contingency planning for extreme scenarios including rioting and social unrest. Greece has seen several outbreaks of civil disorder as its government struggles with its huge debts. British officials think similar scenes cannot be ruled out in other nations if the euro collapses. Diplomats have also been told to prepare to help tens of thousands of British citizens in eurozone countries with the consequences of a financial collapse that would leave them unable to access bank accounts or even withdraw cash. Fuelling the fears of financial markets for the euro, reports in Madrid yesterday suggested that the new Popular Party government could seek a bail-out from either the European Union rescue fund or the International Monetary Fund. There are also growing fears for Italy, whose new government was forced to pay record interest rates on new bonds issued yesterday. The yield on new six-month loans was 6.5 per cent, nearly double last month’s rate. And the yield on outstanding two-year loans was 7.8 per cent, well above the level considered unsustainable. Italy’s new government will have to sell more than EURO 30 billion of new bonds by the end of January to refinance its debts. Analysts say there is no guarantee that investors will buy all of those bonds, which could force Italy to default. -Telegraph

In an interview, former Dutch politician Frits Bolkestein predicted the “inevitable” breakdown of the Euro. He says Eurobonds would be a “disastrous” idea, saying…”That means that the Netherlands must pay more interest. I have calculated that thing up to seven billion euros per year. Each year, we already have problems to eighteen billion cut in four years.” And he says he would not “shed a tear” if Italy left. Ultimately he sees the emergency of a “Neuro” comprise of Germany and other Northern European economies. –Business Insider

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The EU’s architects never meant it to be a democracy

The EU’s architects never meant it to be a democracy

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By Christopher Booker

So, as headlines scream that vain bids to save the euro threaten us with “Armageddon”, the EU’s ruling elite has toppled two more elected prime ministers, to replace them with technocratic officials who can be trusted to do Brussels’s bidding.

The new Greek prime minister, Lucas Papademos, was the man who, as head of Greece’s central bank, fiddled the figures to enable Greece to get into the euro (against the rules) in the first place – before being rewarded with a senior post in the European Central Bank. He is no more democratically elected than Mario Monti, who will most likely be Italy’s new prime minister and had hurriedly to be made a “senator for life” to qualify him for the job. Monti’s main qualification is that, as a former senior EU Commissioner, he has long been a member of the Brussels elite himself.

One of the few pleasures of watching this self-inflicted shambles unfolding day by day has been to see the panjandrums of the Today programme, James Naughtie and John Humphrys, at last beginning to ask whether the EU is a democratic institution. Had they studied the history of the object of their admiration, they might long ago have realised that the “European project” was never intended to be a democratic institution.


The idea first conceived back in the 1920s by two senior officials of the League of Nations – Jean Monnet and Arthur Salter, a British civil servant – was a United States of Europe, ruled by a government of unelected technocrats like themselves. Two things were anathema to them: nation states with the power of veto (which they had seen destroy the League of Nations) and any need to consult the wishes of the people in elections.

As Richard North and I showed in our book The Great Deception, this was the idea that Monnet put at the heart of the “project” from 1950 onwards, modelling his “government of Europe” on precisely the same four institutions that made up the League of Nations – a commission, a council of ministers, a parliament and a court. Thus, step by step over decades, Monnet’s technocratic dream has come to pass.

The events of last week were by no means the first time that an elected prime minister has been toppled by the Euro-elite. The most dramatic example, as we also showed in our book, was in 1990, when Mrs Thatcher had emerged as the biggest obstacle to the next great leap forward in their slow-motion coup d’etat, the Maastricht Treaty, creating the European Union and the single currency. Following her ambushing at a European Council in October 1990, when she was outnumbered 11 to one, the trap was sprung. An alliance between the European elite, led by Jacques Delors, and our own Tory Europhiles, led by Geoffrey Howe and Michael Heseltine, brought her down within weeks.

They had disposed of the greatest political obstacle to the onward march of their project just as ruthlessly as they were later to brush aside all those referendums expressing the objections of the French, the Dutch and the Irish to their Constitution. The one thing for which there has never been any place in their grand design is democracy. What a pity the Today programme didn’t wake up to that years ago.

The BBC reveals how Blair’s ‘multi-billion-pound gaffe’ may triple our electricity bills

I would not have wished it on anyone to sit through last Monday’s laborious Panorama, entitled “Who’s Fuelling the Rise in Your Fuel Bills?”, but two things about it were remarkable. One was that it was the first BBC programme, as far as I know, to admit that electricity from wind turbines is “eye-wateringly more expensive” than that from conventional power stations. According to one estimate cited by Panorama, Chris Huhne’s wish for us to spend £200 billion on renewable energy in the next nine years could triple our electricity bills, pushing millions more households into “fuel poverty”.

The programme’s other startling feature was an interview with Sir David King, formerly Tony Blair’s chief scientific adviser. This confirmed that in March 2007, the prime minister had made “a multi-billion-pound gaffe” when he signed us up to the European Council’s historic commitment that, by 2020, the EU would derive 20 per cent of its energy from renewable sources. What Blair did not realise, as he and the EU’s political leaders argued “until two or three in the morning” without their technical advisers, was that “energy” includes many things, such as gas for heating, which cannot be derived from renewables.

A Treasury official explained to Panorama that they had worked out that Britain could not hope to generate more than 15 per cent of its electricity from renewables. But Blair recklessly signed up to a target which meant that 32 per cent of our electricity would have to come from renewables, which would be fantastically expensive were it even feasible. By the time King and Blair’s other advisers learnt what he had let us in for, it was too late.

The programme ended with the ineffable Mr Huhne assuring us that “the overall effect of government policy will be to lower bills”. Even the BBC was clearly not convinced.

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Germany Warns of War

Merkel wants ‘permanent’ supervision of Greece, warns of war

By Valentina Pop

Brussels – Peace should not be taken for granted if the euro fails, German chancellor Merkel told MPs ahead of the eurozone summit where an increase of the bail-out fund firepower may lead to Germany’s own state assets being taken as collateral.

In a dark blue jacket reflecting the mood in and about the eurozone, Merkel abandoned her usual cautious rhetoric warned outright of a war.

“Nobody should take for granted another 50 years of peace and prosperity in Europe. They are not for granted. That’s why I say: If the euro fails, Europe fails,” Merkel said, followed by a long applause from all political groups.

“We have a historical obligation: To protect by all means Europe’s unification process begun by our forefathers after centuries of hatred and blood spill. None of us can foresee what the consequences would be if we were to fail.”


“It cannot be that sometime in the future they say the political generation responsible for Europe in the second decade of the 21 century has failed in the face of history,
” the chancellor continued.

She was asking for the parliament’s “political” green light on a negotiation mandate for the EU summit, beginning later today in Brussels. The summit is seeking to increase the firepower of the €440 billion-strong European Financial Stability Facility (EFSF) to stop the sovereign debt crisis spreading to countries like Italy and ultimately, France.

The Bundestag approved the measure by a large majority, with 503 members in favour, 89 opposing and four abstaining.

German ‘risks’

While stressing that Germany’s contribution to the EFSF loan guarantees would continue to be capped at €211 billion, she said she could not exclude there may be “risks” for Germany linked to the EFSF increase of firepower. Her own party colleagues had demanded that she clearly excludes German state assets, such as the central bank’s gold reserves, to be put as collateral for the EFSF lending power.

“Nobody can clearly estimate if there will be such risks. What I can say is that we cannot exclude it,”
she said, insisting that the current situation is pushing European leaders into “uncharted territories”.

“Not to take these risks would be irresponsible. There is no better and more sensible alternative. Europe and the world are looking at Germany,” the chancellor said.

Looking ahead to the summit, the chancellor repeated her long-standing stance that “there is no silver bullet, no simple solutions. We will still deal with these topics for years from now.”

She repeated her insistence that the EU treaty had to be changed, in the medium term, to be more strict on countries breaching the euro deficit rules.

“Where does it say that any treaty change has to take 10 years or that there should be no more changes after the Lisbon Treaty,” she asked.

EU leaders last Sunday agreed to have an evaluation presented to them in December by council chief Herman Van Rompuy about the possibility for a “limited” treaty change.

‘Permanent supervision’ for Greece

On the three euro-countries currently propped by EU-IMF loans, Merkel said Ireland was on “the right path”, Portugal showed it could implement the promised reforms, while Greece was still “at the beginning of a long road.”

For the first time, as opposition MPs noted later on in the debate, Merkel had words of praise for the ordinary Greek citizens feeling the brunt of the austerity measures demanded by international lenders. “People in Greece have to stomach a lot of sacrifices. They deserve our respect and also a sustainable growth perspective in the eurozone.”

According to the latest report of the so-called troika, consisting of experts sent from the European Commission, the European Central Bank and the International Monetary Fund, Greece will need even higher debt restructuring and losses for private lenders compared to what EU leaders had agreed upon on 21 July.

“But debt restructuring alone does not solve the problem. Painful structural reforms have to be made, otherwise even after debt restructuring we’re back to where we are today,” Merkel warned.

That’s why, she said, Greece would have to be “assisted” for quite some time. “It’s not enough that the troika comes and goes every three months. It would be desirable to have a permanent supervision in Greece,” she said, adding that this issue would be brought up at the summit.

In return for what seems to be an unprecedented sovereignty loss in an old EU member state, Merkel promised German investments and mentioned a meeting of local representatives from Germany and Greece in the coming weeks.

“We want Greece to be back on its feet again as soon as possible and will do everything we can to this end,” she concluded.

Her junior coalition party, the Liberal Free Democrats (FDP), had less sympathy for Greece, however. Rainer Bruederle, leader of the FDP group, said that the troika had given Athens a “D” and that “nobody expects Greece to turn into an A student over night,” as it was now just like eastern-European transition countries 20 years ago.

Sticking to the teacher-pupil metaphor, Bruederle urged Greeks to “do their homework” and said the country could not be funded endlessly like a “bottomless pit”.

The leftist opposition was outraged, with Die Linke leader Gregor Gysi pointing out that austerity has forced 27,000 small and medium enterprises to go bankrupt in Greece and that teachers earn as little as €1,000 a month. “What more do you want from them? Do you want them to starve to death?” he said.

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The United States Of Europe: The New Superpower and the End of American Supremacy

They Want A “United States Of Europe” But They Are Going To Need A Massive Financial Crisis In Order To Get It

Courtesy The American Dream

Are we about to see a huge push for a “United States of Europe”? As the sovereign debt crisis in Europe continues to spiral out of control, suddenly this term is popping up in the New York Times and in major newspapers all over Europe. So is this by accident? Surely not. The truth is that there is an overwhelming consensus among the political and financial elite of Europe that a “United States of Europe” is what would be best for the eurozone. However, they are likely going to need a massive financial crisis in order to reach their goal. Right now, the citizens of the countries that make up the eurozone are overwhelmingly against deeper European integration. Without experiencing a massive amount of financial pain, they are unlikely to change their minds any time soon. So who is going to win in the end? Unfortunately, the clock is ticking because Greece is on the verge of defaulting on their debts and several other countries are not that far behind. If Europe does not decide on a course of action soon, the euro is going to collapse and financial institutions all over Europe are going to come crashing down.

Up until now, EU leaders have been handling this crisis by putting out one fire after another. This has been going on for a couple of years, but these bailouts cannot go on indefinitely. Instead of fixing things, “kicking the can down the road” has only delayed the pain and made things even worse.

The EU as it is currently structured simply does not work. The political will for more bailouts is rapidly drying up and politicians in Europe are only going to be able to “extend and pretend” for a little while longer.

Something needs to be done.

But instead of admitting that the euro was a massive mistake and returning to national currencies, most of the top politicians in Europe believe that “more Europe” is the answer.

Mario Draghi, the incoming head of the European Central Bank, is totally convinced that Europe needs to integrate much more deeply….

“To cope with this, we must have a treaty change. The aim of this effort should be a quantum leap up in European economic and political integration.”

Do you notice that he is not just advocating small changes in the way that Europe works. What Draghi wants is “a quantum leap” in European integration.

His predecessor feels the same way. Jean-Claude Trichet, the departing head of the European Central Bank, is also very much in favor of much deeper European integration….

“The crisis has clearly revealed the need for strong economic governance in a zone with a single currency”

Of course one of the biggest proponents of a “United States of Europe” has been Herman van Rompuy. In a recent article, the Telegraph made the following eye-catching statement….

Herman van Rompuy is ready to run for a second term as EU president, at the head of a “United States of Europe”

Of course he would not be doing it for “personal glory”. In the same article, he is quoted as saying he wants another term because “the work is not finished” and that he needs new powers in order to get it done….

Mr Van Rompuy has announced he is willing to take on the “unfinished” euro zone debt crisis with new powers setting an “economic government” in Brussels.

Top politicians in the UK are even promoting the idea of much deeper European integration. Even though he insists that Britain will not join the euro, UK Prime Minister David Cameron is now publicly endorsing the idea that the eurozone form a “United States of Europe” in order to save the euro according to a recent article in the Daily Mail….

David Cameron was branded an EU ‘enthusiast’ by Tory Eurosceptics last night as he said Britain must let eurozone countries move towards a United States of Europe with a common economic policy.

The Prime Minister admitted he was not sure whether Germany and other countries had the political will to prevent a break-up of the single currency, but insisted they must be allowed to try – even if that meant closer integration.

It is funny how whenever there is a crisis in Europe, the answer that we are always given is that “more Europe” is the answer.

For example, Antonio Borges, director of the International Monetary Fund’s European unit, recently stated the following….

“To put the crisis behind us, we need more Europe, not less. And we need it now.”

In the past, European leaders were always very hesitant to use the words “United States of Europe”. But now it seems like that term is flying around all over the place.

It is almost as if they want to start getting us conditioned to the idea.

For example, just check out what former German Chancellor Gerhard Schroeder said recently. He has been one of the biggest cheerleaders for a United States of Europe….

From the European Commission, we should make a government which would be supervised by the European Parliament. And that means the United States of Europe.”

So if all of these top politicians want this, why can’t they just do it?

Well, there are some problems.

Right now, the EU treaties don’t really allow for a “United States of Europe”, and the recent decision by the German Constitutional Court has put up some huge roadblocks.

For example, the German Constitutional Court seemed to kill off the possibility for any kind of “fiscal federalism” in the near future when they made this statement in their recent decision….

The Bundestag’s budget responsibilities may not be transferred through open-ended appropriations to other actors. In particular, no financial mechanisms can lead to meaningful fiscal burdens without prior approval”

Not only that, but the court also clearly rejected the notion of “Eurobonds”….

“No permanent treaty mechanisms shall be established that leads to liability for the decisions of other states, especially if they entail incalculable consequences”

By using this kind of language, the German Constitutional Court has put up some massive roadblocks in the way of a “United States of Europe”. It is probably going to take a new treaty in order to get it done.

But right now, the citizens of Europe don’t want anything to do with a new treaty that would allow for a “United States of Europe”. If such a treaty was put up for ratification at this point, it would be soundly defeated.

For example, a recent poll found that 76 percent of the German people are opposed to any further German financial aid for Greece.

In addition, another recent poll found that German voters are against the introduction of “Eurobonds” by about a 5 to 1 margin.

German Chancellor Angela Merkel is having a hard enough time just keeping support for the current Greek bailout together. According to reports, there are 25 members of her own coalition that plan to vote against the revamped EFSF. At this point it is unclear whether it will pass or not.

As noted above, the political will for more bailouts is dying. But without more bailouts, Greece will default and several other eurozone nations will follow. It could also mean the potential for at least a partial collapse of the euro.

But if there is a massive financial crisis in Europe, it may start changing the minds of the voters about much deeper European integration.

You see, once people start feeling severe pain, often they will start considering things that they would not have considered before.

But let us hope that European voters never change their minds. Deeper European integration may stop the current financial crisis, but it would also mean a tremendous loss of national sovereignty.

A Daily Mail article entitled “Rise of the Fourth Reich, how Germany is using the financial crisis to conquer Europe” contained the following sobering assessment of what deeper economic integration for Europe would mean….

This would entail a loss of sovereignty not seen in those countries since many were under the jackboot of the Third Reich 70 years ago.

For be in no doubt what fiscal union means: it is one economic policy, one taxation system, one social security system, one debt, one economy, one finance minister. And all of the above would be German.

Right now, the EU is a terribly undemocratic institution. Individual voters have next to no power over the control freaks that run things in Brussels. Every single day, the EU becomes a little bit more like the former USSR.

The last thing that the people of Europe need to do is to give the EU more power.

But that is exactly what the elite of Europe want.

They want a “United States of Europe”.

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EU to ban cars from cities by 2050

EU to ban cars from cities by 2050: Cars will be banned from London and all other cities across Europe under a draconian EU masterplan to cut CO2 emissions by 60 per cent over the next 40 years.

Bruno Waterfield
By Bruno Waterfield, Brussels

The European Commission on Monday unveiled a “single European transport area” aimed