Well-known British economist Ambrose Evans-Pritchard concurs with Mauldin; he writes:
Pritchard describes the economic and political situation that is facing the EU:
UKIP (United Kingdom Independent Party) leader Nigel Farage agrees with Pritchard, asserting that the EU has become a Völker-Kerker - a "A PRISON OF NATIONS", to borrow a term used about the old Austro-Hungarian Empire.
But if the Euro's PRE-DETENTION CELL is bad, the PRISON HOUSE that the poorer nations of the euro-zone - Portugal, Ireland, Greece and Spain - are locked up in is just as bad.
Mauldin - like Pritchard - blames much of the turmoil that's going on in Europe today on the creation of the euro; confining his remarks to Portugal, Ireland, Greece and Spain (all present euro-zone states), Mauldin says:
Again, kind of like a teenager promising that he would get a job and pay his parents back for the purchases he was making on their credit card - all the while knowing that the prospects of his getting a good job to pay back his parents were pretty much nil.
Mauldin goes on:
What that means is that the Greek nation - AS A NATION - will go BANKRUPT, and that will leave the banks in those nations - principally Germany, France, Switzerland, etc. - that extended the Greek government and the Greek people the credit they have been using "holding the bag;" going back to our analogy (see above), that means that the parents of our teenager will now be forced to pay their child's debts, and if they can't, they may go bankrupt as well.
Now, in all of this you must understand that when the euro was created, it was created without a central bank; what that means is that there is no overall, governing institution (like the Federal Reserve in the United States) that the private banks in the "euro-zone" can go to help them in this matter; the debt falls entirely ON THE BANKS OF THE INDIVIDUAL nations that lent Greece the money. THAT MAKES FOR SOME PRETTY HARD FEELINGS INSOFAR AS THE INDIVIDUAL BANKS IN GERMANY, FRANCE, SWITZERLAND, ETC. ARE CONCERNED; THEY ARE LEFT AS PRIVATE BANKS HOLDING GREECE'S DEBT, WITH NOWHERE TO GO TO FIND RELIEF.
HERE IS WHERE IT GETS BAD
That kind of an attitude is not calculated to make Germany very popular in the minds of most in Greece. Mauldin goes on:
THE GREEK GOVERNMENT GRUDGINGLY AGREES TO
Riots protesting the Greek austerity regime forced on Greece by what the Greek people say is the GREED of Germany, France and Switzerland.
Bankruptcy: Nothing left!
"The dire predicament [see above] is the one where Greece cuts its budgets and more or less willingly enters into a rather long and deep recession/depression. THE DISASTROUS PREDICAMENT [see below] IS WHERE THEY DON'T MAKE THE CUTS AND ARE ALLOWED TO DEFAULT. That means the government is plunged into a situation where it has to cut the entire deficit to what it can get in the form of taxes and fees, immediately. As in, right now ... since - like a bankrupt person - they will no longer be able to borrow money on the international market."
Now, stop and think what that would mean!! That's analogous to telling someone who has a monthly budget of $5,200 (30% of which he has been financing off his generous father-in-law's credit, and another 30% off his wife's job) that his father-in-law is going to cut him off, and his wife has lost her job; that he now has to finance his budget entirely on his own. There goes the house, there goes the car. And there goes his future as well because he had taken his present job on the promise that if he could survive on the pittance he was making while he was "interning" (so to speak), in two years he could triple his income. SO NOT ONLY IS HIS "PRESENT" SHOT, BUT HIS "FUTURE" AS WELL - and what is true for our analogous "budgeteer" is true for Greece. In this instance, Greece will be reduced economically to the status of a "Third-World" country, and her people to a state of penury, AND THE HATRED ALL THIS WILL GENERATE IN THE GREEK PEOPLE TOWARD GERMANY AND THE OTHER RICHER NATIONS OF THE EURO-ZONE WILL BE MONUMENTAL.
The old German Mark for which growing numbers of Germans want to exchange their euros. Germany had agreed to become a member of the euro-zone on the condition that no nation would be bailed-out if they got into trouble.
"If Germany bails out Greece, Ireland -- which is actually making such cuts to its budget -- can legitimately ask, 'Why not us'? And will Portugal be next? And Spain is too big for even Germany to bail out. At almost 20% unemployment, Spain has severe problems. Its banks are in bad shape, with large amounts of overvalued real estate on their books ..."
Mauldin puts this debt into perspective; he says that if this contagion spreads, it will -
"... BANKRUPT THE BULK OF THE EUROPEAN BANKING SYSTEM."
Interestingly, Socialist Prime Minister José Luis Rodríguez Zapatero has ordered Spain's official intelligence agency, the National Intelligence Center (CNI), to investigate whether certain Anglo-Saxon countries (meaning America, Britain) are conspiring to undermine the Spanish economy. According to the center-left newspaper El País, which is close to the Zapatero government, the CNI is investigating "whether attacks by … [these countries] are being driven by market forces and challenges facing the Spanish economy, OR WHETHER THERE IS SOMETHING MORE BEHIND THIS CAMPAIGN."
Very obviously, this is the kind of talk that generates HATRED for the so-called "Anglo-Saxon" countries which the debtor nations of the euro-zone blame for their troubles; and not only that, but for encouraging Germany to bail on the euro-zone. But here one must admit that it wouldn't be too much of a stretch to suspect that American neo-conservatives are involved in an attack on the stability of the euro. Please see our article, "The Neo Conservatives."
"The Frankfurter Allgemeine Zeitung warned the chancellor yesterday that offering Greece [and eventually Spain, Portugal, Ireland and even Italy] any kind of bailout WOULD BE A BETRAYAL OF THE GERMANS WHO SO RELUCTANTLY TRADED IN THEIR BELOVED MARKS FOR THE EURO. 'If the no-bailout clause of the Maastricht Treaty is going to be abandoned, then the last anchor of a stable euro will be destroyed', warned the front-page editorial in the conservative newspaper. 'Chancellor Merkel has to be hard now so that the euro doesn't become soft'."
In all of this, Spain is the elephant in the room; it is, as Mauldin suggests, too big for even Germany to bail out. Soeren Kern, Senior Analyst for Transatlantic Relations at the Madrid-based Grupo de Estudios Estratégicos / Strategic Studies Group, writes:
"Spain is in the throes of the worst economic crisis in its history. Reeling from the collapse of a debt-driven construction boom, Spain has posted seven consecutive quarters of negative growth. According to the latest figures released by Spain's National Statistics Agency, Spanish GDP fell 3.6 percent in 2009. The International Monetary Fund (IMF) says there will be no positive GDP growth in Spain until 2011, at which point it will still be below 1 percent.
"At the same time, Spain now has the highest unemployment rate in the European Union. Nearly 20 percent of working-age Spaniards (or 4.5 million people) were without a job at the beginning of 2010. That compares with an average rate of 10 percent among the 16 countries that use the euro currency. [once again, one must remember how "unemployment" is counted, not only in the United States, but throughout the Western World. The real number of unemployed in Spain is probably DOUBLE this number. [Please see our article, "A Permanent 30 Percent Unemployment Rate."]
"Spain is also facing an exploding budget deficit. The collapse of the labor market, which has resulted in a steep drop in tax collections, and the Zapatero government's haphazard (and spendthrift) policy response of increasing unproductive public sector spending skyrocketed the deficit to nearly 12 percent of GDP in 2009 (or five times higher than in 2008).
"The combination of negative GDP growth, rising unemployment, and a high deficit has raised concerns about the sustainability of Spain's finances. Indeed, Standard & Poor's, the credit rating agency, recently lowered its outlook on Spain's sovereign debt from "stable" to "negative." S&P, which had already lowered Spain's rating, cited the risk of a "prolonged period of below-par" economic growth and "persistently high fiscal deficits."
Portugal's situation is very much like Spain's, only worse - and they too are blaming a sinister group of Germans and Anglo-Saxons for their troubles. Fernando Teixeira dos Santos, the leader of Portugal's largest opposition party, said Portugal had taken over from Greece as the main victim of the "animal spirits" of financial markets that were often "irrational" - meaning, of course, that they were being manipulated by the Germans and the Anglos-Saxons. What Santos is doing here is echoing the views of Spanish Prime Minister, José Luis Rodríguez Zapatero
Then there is Ireland. Irish journalist Brian Coll writes:
"The joke told around Ireland's watercoolers and in its office canteens in January went like this: "What's the difference between Iceland and Ireland? One letter and six months.
RIOTS IN ICELAND
The Icelandic financial crisis is a major on going economic crisis in Iceland that involves the collapse of all three of the country's major banks following their difficulties in refinancing their short-term debt and a run on deposits in the United Kingdom. Relative to the size of its economy, Iceland's banking collapse is the largest suffered by any country in economic history.
"The gag, which refers to the implosion of Reykjavik's banks last October and the subsequent political crisis, was a wry reminder of Ireland's financial fall from grace. But one reason people laughed was they believed things in Ireland would never get that bad.
"A month on, though, and the joke's looking less funny and more like an accurate prediction. Ireland's banks are edging ever closer to the brink of meltdown, and some analysts say six months looks a little too generous.
"According to Ray Kinsella, an expert in financial institutions based at University College Dublin, a run on Irish lenders is very likely ... Irish voters are now venting their rage. On Feb. 21, the country saw its biggest public demonstration in a generation as 120,000 people took to the streets of Dublin. Most were civil servants protesting a levy on public-sector pensions, which the government says will save the country $1.2 billion.
"Unions are currently balloting members on a planned general strike ... with the head of the country's trade-union umbrella group warning of a 'DOOMESDAY SITUATION should the government fail to introduce a recovery plan that gains the support of social partners. Irish voters may be angry, but they're likely to get a whole lot angrier."
Protests in Dublin
Commenting on the shaky condition of the euro, Philipp Bagus, a professor at Universidad Rey Juan Carlos, Madrid and a visiting professor at Prague University, writes:
"The euro has [generally] been sliding against the US dollar for weeks. Concerns about the public finances of eurozone countries Portugal, Ireland, Greece, and Spain, the so-called "PIGS," [which stands for Portugal, Ireland, Greece and Spain; some say PIIGS, and include Italy] have emerged in financial markets ..."
"THE FUTURE OF THE EURO IS DARK ... In Spain, official unemployment is approaching 20% [in real terms, 40%] and public deficit is 11.4% of GDP. Portugal announced a plan to privatize national assets as its deficit is at 9.3% of GDP. Ireland's housing bubble burst with a deficit of 11.5% of GDP."
Bagus asks himself rhetorically,
"What is the future of the euro?"
Bagus sees only two possibilities; he writes:
The Stability and Growth Pact is finally enforced [which would mean that the "debtor nations [i.e., the PIIGS] would enforce drastic austerity measures on their populations]. UNFORTUNATELY, STRONG POLITICAL RESISTANCE MAKES THIS POSSIBILITY UNLIKELY.
The more conservative member states refuse to continue bailing out the more profligate ones. THE ECONOMICALLY STRONGER STATES FORCE THE WEAKER ONES TO ENTER BANKRUPTCY AND THEN FORCE THEM OUT OF THE EURO-ZONE, OR ALTERNATELY, THE STRONGER STATES LEAVE THE EURO-ZONE THEMSELVES.
Then, of course, there is the possibility that, according to Bagus, countries could do nothing and simply continue to increase their deficits; eventually that will result in HYPERINFLATION - AN UNTHINKABLE NIGHTMARE INSOFAR AS GERMANY IS CONCERNED.
LEFT: German housewife burning German marks to heat her home during the German hyperinflation of the early 1920s; at the height of the hyperinflation, the American dollar was quoted at 4.2 trillion marks and the American penny at 42 billion marks. It destroyed the savings of the German people, and reduced most Germans to a state of penury worse than many of the nations of today's so-called "Third World."
The German hyperinflation of the early 1920s is a NIGHTMARE the Germans never want repeated. As far as the Germans are concerned, if Portugal, Ireland, Greece and Spain (and possibly even Italy) want to go this way, so be it; but the Germans will bail even If that means they will be painted as an "Uncle Scrooge," and once again branded as the "bad boy" of Europe.
Economist Brian Rich agrees with Bagus insofar as what's happening with the euro; he writes:
"For the better part of 2009 the U.S. dollar was the world's most hated currency. But the tables have turned AND THE EURO HAS TAKEN OVER THIS UNENVIABLE TITLE."
"Germany faces a terrible dilemma. Either Europe's paymaster [i.e., Germany] agrees to underwrite a Greek bail-out [which will probably develop into a bail out for the other weaker economies in the euro-zone] ... or the euro will start to unravel, and with it Germany's strategic investment in the post-war order."
By agreeing to bail out Greece (and the other weak nations of the euro-zone), Germany will have to agree to HYPER-INFLATE the euro, and there is no chance that Germany will ever agree to this (see box above). THUS, GERMANY IS FACED WITH A "NO-WIN" SCENARIO; EITHER -
FORCE THE WEAKER NATIONS OUT OF THE EURO-ZONE,
LEAVE THE EURO-ZONE ITSELF.
Axel Weber, chief of the German Bundesbank
"... bequeathing the legal carcass of the EMU [i.e., euro-zone] to the Club Med bloc ..."
"This is the only break-up scenario that makes much sense."
As if to confirm this fact, Bundesbank chief Axel Weber recently said,
"Politically it's just not possible to tell [German] voters that they are bailing out another country so that it can avoid painful austerity measures that they [i.e., the German] themselves have had nothing to do with ..."
The French are as concerned over the fate of the euro as are the Germans. Sam Fleming and Tim Shipman report:
"Claims that the euro could be headed for total collapse are particularly striking when they come from one of the oldest and largest banks in France - a core founder-member."
Fleming and Shipman continue:
"THE EUROPEAN SINGLE CURRENCY IS FACING AN 'INEVITABLE BREAKUP' A LEADING FRENCH BANK CLAIMED yesterday. Strategists at Paris-based Société Générale said that any bailout of the stricken Greek economy would only provide 'sticking plasters' [band aides] to cover the deep-seated flaws in the eurozone bloc.
Société Générale in Paris
"In a note to investors, SocGen strategist Albert Edwards said: 'My own view is that there is little help that can be offered by the other eurozone nations other than temporary, confidence-giving 'sticking plasters' before the ultimate denouement: the break-up of the eurozone'. He added: 'ANY HELP GIVEN TO GREECE MERELY DELAYS THE INEVITABLE BREAK-UP OF THE EURO-ZONE.' The alarming claim came a day after European Union leaders promised 'determined and co-ordinated' action to shore up Greece's tattered public finances ..."
The French bank's warning was echoed by Mats Persson, Director of the Open Europe think-tank. He said:
"The eurozone is facing a fully-fledged crisis. THE GREECE EPISODE HAS MADE IT PAINFULLY CLEAR HOW FLAWED THE EURO PROJECT WAS FROM THE VERY BEGINNING."
What all this means is that Europe is facing a number of EXTREME dangers that threaten to plunge the continent into CHAOS:
FIRST, Europe is fractioning along a rich / poor dividing line that is pitting Northern Europe against Southern Europe - what the northern European countries derisively call the "Club Med" nations.
SECOND, it threatens to further divide East Europe from West Europe.
THIRD, it is creating a MASSIVE unemployment crisis that threatens to plunge all the nations of Europe into "class-warfare."
FOURTH, it threatens to re-ignite a huge socialist revival in Europe.
FIFTH, it is forcing the elites in Europe to embrace fascism as an answer to a left-wing revival.
SIXTH, as the elites in Europe begin to fan the flames of fascism in order to stave off the threat of a "socialism run amuck," it will ignite a KULTUR-KAMPF (culture war) against all foreign intruders within the borders of Europe's individual nations, and most especially the Muslims in their midst - all of which will "play into the hands" of America's "neo-conservatives." [Please see our article, "The Neo-Conservatives."]
THIS FRACTIONING IS NOT SOMETHING THAT ONE CAN WISH AWAY; NOR CAN IT BE "PAPERED OVER." IT IS INEXORABLE IN ITS PROCESS, AND THERE IS NOTHING THAT CAN STOP IT.
AND IN THE MIDST OF ALL THIS CHAOS, AMERICA'S HATEFUL FORM OF CHRISTIANITY WILL CREEP INTO EUROPE AND BEGIN TO ESTABLISH STRONGHOLDS IN DEFENSE OF ITS FASCIST ALLIES - AND IT IS ALREADY HAPPENING. [Please see our articles, "The God-Men of America's New World Order System" and "Luciferic Christianity."]
More next time!
God bless all of you!
We pray that you will remember the Word of God:
"IF WE HAVE SOWN UNTO YOU SPIRITUAL THINGS, IS IT A GREAT THING IF WE SHALL REAP YOUR CARNAL [MATERIAL] THINGS?" [1 Cor. 9:11]
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