Excerpt:
"This is not politically sustainable, as anyone who remembers Germany’s own experience with World War I reparations should know. A populist backlash is inevitable. The Commission, the ECB, and the German Government have set the stage for a situation where Ireland’s new government, once formed early next year, rejects the budget negotiated by its predecessor."
This may hit at about the same time as the US Tea Party Congress is shutting down the US government due to the national debt limit being hit. 2011 looks like it will be an "interesting" year.
The key here may be whether the citizens of Ireland will really understand what they have been committed to pay, and then whether they will vote, via a new government, to reject it, consequences be damned. I don't know much about the economic understanding of the citizens of Ireland, but here in the USA, I believe the politicians could easily dupe the voters into accepting this type of thing by claiming we "all have to sacrifice", or "we can't leave this to our grandchildren", or some type of similar nonsense theme.
I read another report that had this loan package at fully 50% of Ireland GDP. When Iceland obtained a referendum vote on a similar package for their government due to their bust banks, they rejected it with 93% of voters voting "no", and that package for them was a bit less than 50% of their Iceland GDP. But of course Iceland is not part of the European Monetary System.
7 comments:
Read this in conjunction with economic historian Ravi Batra's The New Golden Age: The Coming Revolution Against Political Corruption and Economic Chaos (Palgrave Macmillan, 2007).
Prof. Batra predicted this early and seems to have this right so far. I would say that Iceland was the first demonstration of an entire population rising up and saying a resounding no to the proposed rip-off. More is coming, and probably to a neighborhood near you.
Why is the Euro too high ?
When we subsidized their commercial paper in 2008, then probably also their stimulus of $600 billion Euro ?
And this is where folks like WelfareWarfare don't get Mike's syntax - that the Euro should be getting lower if not splitting apart acccording to the rules of the game.
However we know the game is rigged and that's why in-paradigm is not following through since the "states" of Europe are really not acting like "states" nor are being treated as such.
Interesting - The Belgium funnel grinds French torture and German masochism into a modern version of the "Treaty of Versailles" which forced Germany into the austerity, hyperinflation, and reparations of the 1920's.
The objects of this weapon are those who were stupid enough to join the Eurozone.
Goog,
I have to admit that I often discount your concerns about some of the "old" political/racial issues in Europe that no doubt were behind the great Holocaust.
But I must admit, and I almost cannot believe what I read these days, that they are indeed trying to implement the same sort of "screw deal" as Versailles was now against these countries on the periphery of Europe....
You are correct: the elites in Europe havent learned anything, they at their core, these elites are the same type of people as they were in the 1920s & 30s. They refuse to understand the concept of "win-win". Where do these people come from?
Perhaps as Tom posits above, the just of Europe can stop this politically before it turns to pure nationalism and violence.
I don't mean to be so mean.
The Europeans are way more ahead so as not being fascist with respect to real SS squads and all that. Leave that to South America, Asia, and then maybe USA.
What I am skimming over is the institutionalized version which is only an outline of the really physical brutality of almost 70 years ago.
However, KristalNacht was an insurance scam - the Nazis broke windows of Jewish stores and then the Jews went to get their insurance policies cashed in. SO the Nazis had to revoke the insurance and not pay out.
Therefore, we have something similar here. There were no physical shops busted, but there were lines of credit and businesses directly demolished by the revocation of the LOC's.
The CDOs and all that "wmd" stuff in the real economy was a way to overvalue the real economy and balloon it's value which was way more "printing" than what the Fed does since the Fed is not adding the money supply in very long term wavelengths.
Finally, we are here to cash in our "insurance policy" which consists of our U$D USA sovereign currency and monetary policy to stimulate and correct things.
However, the Republicans are blocking effective action which tandamount to the Nazi's preventing the Jews to receive their claim value on the destruction of their shops during KristalNacht.
There shall never been anything compared to the real KristalNacht, that's for sure. However, we must never forget this event and not propagate selfishness or debase history for unnecessary attention or make a money machine out it.
With that said, the current situation should be monitored with history as a guide to protect people's fundemental rights that they had when they had their own currencies and monetary policy.
FDIC ? and the other one FDJC or whatever ?
The most amazing thing to me is how seemingly so many Americans have been let to believe this country's broke. lol They mindlessly compare the government's debt to household debt and say it's unsustainable. The problem is, most families own homes with mortgage debt at at least 3 times annual income. Add to that car loans and credit card balances, and this situation has always been sustainable for the vast majority. This is even true now.
Of course, but government can also tax and expand the money supply, so this comparison makes the opposite point of the one some Chicken Littles think they're making.
The coming Kristal Nacht?
Michael Hudson:
"The wealthy want just what bankers want: the entire economic surplus (followed by a foreclosure on property). They want all the disposable income over and above basic subsistence – and then, when this shrinks the economy, they want the government to sell off the public domain in “privatization” giveaways, and they want people to turn over their houses and any other property they have to the creditors. “Your money or your life” is not only what bank robbers demand. It is what banks themselves demand, and the wealthy 10 per cent of the population that owns most of the bank stock. And of course, the wealthy classes want to free themselves from the share of taxes that they have not already shed. The flat-tax ploy is their godsend.
"Here’s how I think the plan is intended to work. Given the fact that voters have already rejected the flat tax in principle, it can only be introduced by fiatunder crisis conditions. Alan Simpson, President Obama’s designated co-chairman of the “Deficit Reduction Commission” (the euphemistic title given to what is in reality a “Shift Taxes Off Wealth Onto Labor” commission) already has suggested that Republicans close down the government by refusing to increase the federal debt limit this spring. This would create a fiscal crisis and threat of government shutdown. It would be a fiscal 9/11, for the Republicans to trot out their “rescue plan” for the emergency breakdown of government.
"The result would cap the tax shift off finance and wealth onto wage earners. Supported by Blue Dog Democrats, President Obama would shed crocodile tears and sign off on the most right-wing, oligarchic, anti-labor, anti-black and anti-minority, anti-industrial tax that anyone has yet been able to think up. The notorious Flat Tax would fall only on wage income (paid by employees and employers alike) and on consumer goods (the value-added tax, VAT), while exempting returns that accrue to the wealthy in the form of interest and dividend income, rent and capital gains.
"If you think I’m too cynical, just watch …"
http://www.counterpunch.com/hudson11252010.html
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