Death of the Euro
Vindictive eurocrats, a happy Mario Draghi, a predictably exposed Christine Lagarde, and a wise but powerless DSK
O Lucky Man
HOW THE AMERICAN PENCHANT FOR REGIME-CHANGE DELIVERED US INTO DYSTOPIA
It hasn’t taken long today for the strutting “We can handle a Greek default” faux-confidence to evaporate among the engorged egos of the euroélite. On the whole it is becoming hourly more obvious what small, mean-minded and vindictive goblins the eurocrats all are. Juncker’s petty little address – laced with self-pity, riddled with fantasy but devoid of remorse – reveals this rubber-spined brothel-creeping bitch as a man with neither dignity nor style.
Dijesslbleom’s response was made of similarly flimsy dissembling: the classic over-promoted prefect blamestorming his way from topic to topic, condemning an elected Member State government for having spotted the game plan – humiliation piled on top of debt slavery – and proclaiming the Great Offer “removed from the table” in a pathetic tone of how very dare they.
But what we’ve seen today is precisely what would’ve happened had Varoufakis walked out of the ambush set for him, three weeks in on February 19th, after the Muscovici solution had been de-tabled by the Draghi/Schäuble/Drizzleloon axis of Wehrmacht diplomacy.
On February 19th, The Slog opined ( https://hat4uk.wordpress.com/2015/02/19/berlin-outright-rejection-of-syriza-loan-extension-proposal/ ) that a Greek walkout would’ve ‘vastly increased the cost of sovereign borrowing’. So far today, Portugal’s 5-year bond yields have leapt by 17%, default insurance rates in Europe have careered off the scale, Eurobank stocks fell 5%, and the euro has zoomed back down to 1.40 versus Sterling.
The usual suspects – notably Reuters and the WSJ – put a brave face on this, showing that German Bund yields fell and there was a flight to US Treasuries. No shit, Sherlock? What the Hell else did they expect to happen? No doubt egged on by Yannis Stournaras and his bumboy Hugo Nixon Dixon, Reuters in particular talked of Greek stocks and bond yields in meltdown and liftoff respectively. No shit Sherlock? What the Hell else did they expect to happen? But none of that matters to the real Greeks, whose concerns now involve how to make the meagre amounts of cash available to them buy enough food for the week. If you’re skint already, markets and borrowing rates come very low down in the importance hierarchy.
However, one person tonight is, I suspect, a happy man….for he is not a politician, bureaucrat, nervous derivatives player, ordinary citizen or health practitioner, but a central banker.
As I’ve been saying for eight months now, Mario Draghi has all the bases covered. Greece may be proving truculent and using some silly plebeian ruse to give Brussels-am-Berlin the finger, but so what? He has a cheap currency, oodles of not yet dry QE euros to make it cheaper still and bail out exposed eurobanks, and more ability than any other European to do WTF he wants without fear of electorates, Brussels or Jens Weidmann. Mario has what every psychopath craves: absolute power and zero responsibility.
The flight back to US Treasury bonds ticks all the Wall Street boxes for the time being, and keeps him in good odour with Washington. So too does a euro still edging steadily towards $ parity…. and thus in line with the Dolleuro scenario. That working title for the buck-in-Europe strategy may have ghastly onomatopaeic echoes of Delorean, but this is of little concern to Supermario: even if that never comes off, as of tomorrow morning Greece becomes Europe’s Argentina, and he has lots of ways to wield further the baseball bat in order to make life even more unbearable in a nation for which he has little fondness anyway. True, he is ‘owed’ some €120bn by the Greek government, but what is that other than an entry in the ledger, to be transferred to the ‘negative assets’ column available to all those living in the Swiftian land of Oxymoronia, aka the Central Banking system?
In short, whether the euro implodes or succeeds against impossible odds, to Draghi’s mind he is the laughing sandboy: quids in, on the crest of a wave, on the up and in the pink.
In and to his mind, that is. But Mario had an unpleasant reminder last month of how radicals can penetrate security and then jump on his desk. He did look very scared indeed when that happened.
That said, he is way ahead of Lagarde the Lowgrade lawyer, another over-promoted chancer who now finds herself staring forlornly at the glaring blot on her IMF copy book. For the IMF is an instrument of American foreign policy, not a central bank; and the very first default write-off in its history is about to happen on Fifi’s watch.
Perhaps Dominique Strauss-Kahn can gain a certain contentment in the autumn of his largely destroyed career from Chrissie the airhead’s dénouement as the engineless aeroplane. We cannot be certain about that: but going back to another Slog obsession from 2011, as time passes it becomes clearer and clearer exactly why DSK was moved out of the game by the corporatocracy.
Think about it: DSK wasn’t only an IMF boss unimpressed by the idea of collaboration in US hegemony, he was also a shoe-in French Socialist Party candidate about to be handed the falling off a log job of defeating Nicolas Sarkozy. Without the invented New York hotel maid sex-assault smear, M. Strauss-Kahn would’ve gone from being a pain in the State Department arse at the IMF to being a cancer in the Eunatic/US imperialism, and a man who would without question have resisted the siren calls of the Draghischäuble on pretty much every issue.
Cynics may wish to shout me down on this one, but Google DSK News, and you will be rewarded with more sagesse in half an hour than has emanated from the Troika over the last five years. The latest of these can be found at https://uk.news.yahoo.com/strauss-kahn-suggests-temporary-halt-203519636.html#HGXf0F2 where the silly sex pest but brilliant economist can be heard appealing for a temporary end to Greek debt repayments.
Régime change has for many decades been the MO of choice for the United States. Over and over again – in Europe, the Middle East, Russia and Asia – for more than half a century now, America has meddled in, muddled the realities of, and then left behind a trail of dysfunctional destruction for the citizens in, pretty much everywhere from Andalucia to Zaire.
At long last, new alternatives to this hegemoni horribilus are emerging. But the world desperately needs contrarian US politicians to start educating the American populace on the subject of how a once all-powerfully missionary Church needs to withdraw peacefully into more benign and less interventionist role. There is, after all, no percentage in gaining control of a world ruined by GM lunacy, energy blindness, unsustainable inequity, and nuclear exchange.
The Slog
joe on Wed, 1st Jul 2015 9:40 am
The worst thing about this, is that it will never be recorded properly in the history books. In 2007/8 ‘we are all keynesians now’ started, and never really ended. A generation of neoliberalism and ‘third way’ corporatism nonsense has brought us to this nadir in global affairs. I would suggest that greece should leave the euro, deflate it’s economy and then go back to work slowly reforming just as Britain did after it left the then exchange rate mechanism (erm) but Greece does not have many friends globally, only Mr putin has the will to help with his message, ‘we are orthodox brothers’. That message has caused Ukraine to implode, it’s likely they will destroy Greece too by quietly backing neo-nazis and far left leaning nationalists, making each stronger until they fight each other. I listened to a Plutocrat on cnn or something and he referenced the other nations that voted ‘yes’ to Europe. Portugal did it under a worse threat then Greece has. Ireland was forced to vote AGAIN when it voted to REJECT the Treaty of Nice (even Saddam couldn’t do that), because it eroded national democracy and put countries in exactly the bad position they are in now. Banksters don’t like to loose.
penury on Wed, 1st Jul 2015 9:42 am
Perhaps this is true, perhaps partially true, again so what? If there is no cure then the patient is terminal, the world is terminal, just a long slow decline.
joe on Wed, 1st Jul 2015 9:59 am
I don’t think of it as decline, rather, a restoration of our understanding of the world in which we live. The 2nd half of the 20th century was the biggest orgy in history we danced, ate and killed, we laughed and grew up and always things will be better than when our parents were born. The story of human politics in the 20th century was that government promised it’s people a better life than before (progressivism). All that Napoleon Bonaparte could offer Europe was justice in their sad and short lives. Right now Greece and other nations are finding out that you can’t have progress and justice, you must choose.
J-Gav on Wed, 1st Jul 2015 10:50 am
Joe – Yup on the way Portugal, Ireland and Greece got into Europe but don’t forget the French “petit oui” vote and the Danish “No” on Maastricht.A few years later nearly two-thirds of France opposed it but was denied a new referendum. You don’t vote right? We got the answer – Vote again and get it right this time you ignorant sons-a-bitches!
Plantagenet on Wed, 1st Jul 2015 11:40 am
Trying to blame the US for Europe’s problems is silly.
The Europeans have brought this on themselves.
apneaman on Wed, 1st Jul 2015 11:46 am
Planty? You been inhaling a bunch of that wildfire smoke?
peakyeast on Wed, 1st Jul 2015 1:31 pm
I concur on the votes concerning EU.
They implemented 5 “exceptions” in vote number 2. 5 Expeptions that only about 2% of the population cared about.
And so they moved the vote from about 51% against to 51% for (from memory).
Besides that: The votes is being questioned: Because it requires 66% for in order to give away any supremacy/ decisionmaking. They only got 51% and today we can hardly decide anything ourselves – at least when journalists asks the danish politicians why this and that has to be done…
So either all the politicians are lying about what we cant do or the vote was illegal.
Either way it STINKS.
Hello on Wed, 1st Jul 2015 1:44 pm
Plant, you’re funny.
Don’t you realize already that EVERYTHING is the fault of either
1. the US
2. big corporations
3. successful people
Don’t break with forum tradition. *smile*
Davy on Wed, 1st Jul 2015 2:01 pm
Hello, this is from David Korowics “How to be Trapped”
But we need to be clear, the large-scale predicament and the emergent socio-economic
stresses that we are beginning to experience has very little to do with fraud, corruption and the greed of a tiny few. It has a lot to do with our human civilization running into limits. As socio-economic stress deepens and uncertainty rises we can expect anger spreading in severity and scale in the coming years. Uncomprehending rage turned outwards and inwards, fantasies of catharsis through revolution, extremism and authoritarianism, aggressive power/productive asset accumulation and scapegoating are just some of destructive behaviors we’re likely to see.
As societies face increasing challenges in the years ahead, and governments and
international institutions fail to hold together our web of expectations, we can expect a lot more anger and more people feeding it. Some form of dis-orderly economic contraction is almost certain and nothing will change that. As economist Colm McCarthy noted, anger is not a policy. In fact we know very little about how a society might practically and dynamically furnish large and bewildered populations with the basics of food, healthcare, critical services, security and governance in the context of a complex society falling apart.
Apneaman on Wed, 1st Jul 2015 2:22 pm
Davy, folks are already feeling it. I tried to get my 70 year old aunt one of those portable ac units that you can roll from room to room – all sold out.
June 2015 Smashes Heat and Rainfall Records in U.S.
http://ecowatch.com/2015/07/01/june-heat-rainfall-records/?utm_content=buffer3bdaf&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer
Apneaman on Wed, 1st Jul 2015 2:24 pm
Future Oceans? Nobody Gives A Shit
http://www.declineoftheempire.com/2015/07/future-oceans-nobody-gives-a-shit.html
Apneaman on Wed, 1st Jul 2015 2:25 pm
“Heartbreaking” Scene Unfolds At Greek Banks As Pensioners Clamor For Cash
http://www.zerohedge.com/news/2015-07-01/heartbreaking-scene-unfolds-greek-banks-pensioners-clamor-cash
mike on Wed, 1st Jul 2015 2:50 pm
In our local town here in the UK, there was a family firm that decided it would be a good idea to benefit from the global economic espansion that was taking place before 2008. They went to a major bank with and got a massive loan supposedly provided to espand the busisness. This firm is run by a happy go lucky lot who saw nothing wrong in conning the bank with false figures of how much collateral they had and with a fantasy business plan. Thge bank was suitably impressed and provided the loan, and what did the family that ran the firm do? They partied. They lashed out in providing flash Beamers and Rollers to all their quite extensive family relatives. They bought a yacht and harboured it in the marina in Monte Carlo harbour. They bought a couple of big villas high on the hillsides with wondrous views over the sparkling Mediterranean. They ate in the best restaurants, lavished jewellery and mink and haute couture clothes on all the womenfolk in their entourage. Nothing was too good for them. Ski-ing in Gstaad, summers on the Riviera, stalking in the Highlands, seats at Wimbledon, into the Royal Enclosure at Ascot, they enjoyed the high life.
Then the bank came demanding their money back. And of cours, the family nfirm was totally unable to pay back. They were skint. headed for carey Street. Headed for the debtors’ prison to join Micawber.
And how do folk react round here? as far as they are concerned, the firm are local heroes. The bankers are – well there is a word in British English that rhymes with bankers and that means masturbators, self abusers. And bullies. And money grabbers. Legal mafia men. All the sympathy is with the family firm, and the hope is that the bank will lose an awful lot of dosh nover this affair, and perhaps themselves go into liquidation. It doesn’t help that the bank is German, and everybody remembers how nasty the Germans once were and how they are a load of unimaginative humourless dully superiffcient toilers who pulled themselves up by their bootstraps after 1945 and who purged themselves from the foulness that had infected their body politic in the days of Mr Hitler.
It is the story of the ant and the grasshopper really.
HARM on Wed, 1st Jul 2015 4:57 pm
“successful people”
Meaning of course, talented rich sociopaths who are spectacularly “successful” in enriching themselves at everyone else’s expense.
Oh, wait, I forgot that financiers and CEOs work 400x harder and are 400x smarter than the rest of us pond-scum, so clearly have “earned” their outrageous compensation.
HARM on Wed, 1st Jul 2015 5:00 pm
The money quote:
“condemning an elected Member State government for having spotted the game plan – humiliation piled on top of debt slavery – and proclaiming the Great Offer “removed from the table” in a pathetic tone of how very dare they.”
Tsipras knew Greece was being handed a live grenade with the pin pulled, and wisely chose to throw it away. To do anything else would have been political suicide –and many more years of “austerian” misery for ordinary Greeks. The IMF and World Bank are little more than loan sharks in expensive suits.
HARM on Wed, 1st Jul 2015 5:01 pm
As JHK is fond of saying, “what cannot be repayed, won’t be”.
BobInget on Wed, 1st Jul 2015 5:34 pm
When Greece was Nazi occupied during WW/2 not paying taxes was a form of non violent protest.
By 1947 getting accustomed to not paying taxes wasn’t difficult. Then, US intervened to prevent Communists from taking power.
Another good excuse to withhold taxes.
Almost yearly another ‘insult’ to founders of democracy.
Before E Union, Greeks cut Drachma value just enough to attract dumb tourists who knew no better then to pay any sales tax when asked.
Sadly those collected taxes went directly back into ‘the business’.
One excuse I never tired of hearing, “Paying those lazy bums (the government) only makes things worse”.
BobInget on Wed, 1st Jul 2015 5:38 pm
I would love to read:
“Go to Greece, Hell no, its gotten too popular”.
Makati1 on Wed, 1st Jul 2015 8:32 pm
Joe, you assume that there will be someone writing a history. I doubt it. Anyone living after the crash will be totally focused on surviving. The internet will be history. Books will no longer be printed. Look around you and see what is really necessary to keep you alive. THAT will have priority. Many seem to think that we will have a slow decent like Heinberg projects. I think it will be more like that projected by McPherson of a runaway train gaining speed until it slams into the wall of extinction. If you are under 40, you may get to experience it all in your lifetime. We shall see.
Makati1 on Wed, 1st Jul 2015 8:34 pm
As for the EU: That was a stupid idea to start with. Take a region with countries that have been fighting each other for over 2,000 years and try to make them one happy family in a few years. LMAO!
apneaman on Thu, 2nd Jul 2015 12:35 am
US Hedge Funds Get Bailed Out if Greeks Pass Bailout Referendum (1/2)
https://www.youtube.com/watch?t=126&v=U_AnI5dutGk
Northwest Resident on Thu, 2nd Jul 2015 1:55 am
George Soros once said that there are great evils lurking in Europe waiting to be unleashed.
The EU and the Euro were a desperate attempt to bind these ancient and “evil” animosities under a single controlling entity, with the hope and plan being to mitigate the bloodshed and strife that the producer of two vicious world wars would surely experience as economic collapse plays out.
All that military equipment being sent to different countries bordering Russia? Don’t be fooled by the propaganda. That equipment and the new security forces being raised by the EU are for one purpose only — to control riots and pogroms in European countries once they begin, which they surely will.
We are on the verge of entering a new, brutal, deadly and chaotic world order.
Europe will burn. So will the Middle East. So will Asia. So will South America. And so too will North America.
The fires have already started and are burning out of control in some places while simmering in others.
There is no escaping the hardships that are coming, only dealing with them and hopefully scaling down to a lifestyle supported by reality without too much collateral damage.
Please fasten your seat belts and raise your seats to the upright position. Take-off is moments away.
Davy on Thu, 2nd Jul 2015 2:23 am
The world has changed. Europe has changed. Europe is not the continent it once was. The nationalistic animosities are still there but the continent is not capable of the wars of the past. People that talk of the dark past do not understand the changes that have overtaken the world.
Globalism has delocalized all locals. Globalism has taken the wind out of nationalism. Europeans are going to pull together because the rest of the world has become a much bigger threat. I have an Italian wife and a Spanish daughter. I have lived and worked in Europe. I do not see the ghosts of world wars past rearing their ugly head.
That does not mean I don’t acknowledge the dangers on the eastern front. I do not see internal civil war in Europe at least until the global system enters an endgame collapse. Civil war will be possible everywhere once the global world implodes with a human population with 6BIL too many people.
joe on Thu, 2nd Jul 2015 8:22 am
The trend of unification is overwhelming at the moment. I have no doubt that greece will stay in the euro. Merkel realises that the consequences of any other outcome will be blamed on her. But she somehow has to work with the ECB who really don’t need to change their position. So the political side must convince the creditors who are nations as well but mainly the ECB/IMF that getting money back is not as important as getting agreement at this time. Europe must be seen to deal fairly, even if they are not, and Tsipiras must be cast as a wild socialist who has no clue and everything is his fault. I’m expecting a yes vote a ‘suprise’ result. Not such a suprise after a week of no banks. This is economic war guys, this is how it looks.
simonr on Thu, 2nd Jul 2015 12:17 pm
Hi Dave
You are right, and a non doomer message as well 🙂
I am working in Ireland, growth rate (annual) 4%
We have been through (and some cases going through) austerity, but even the most jaded I know are admitting we are coming out the other side.
I hope Greece stays with us, but either way, (apart from grey haired middle England) their is no real appetite to pull Europe apart.
Simon
apneaman on Thu, 2nd Jul 2015 12:57 pm
Hopium to the bitter end
joe on Thu, 2nd Jul 2015 10:45 pm
It’s not hopi um, it’s the fact that they have all the power, and there is nothing greece can do about it. Imagine, a privately owned central bank has forced a country to close it’s banks and is not allowing them to have money. Imagine the Fed did this to UTF? And most Europeans are cheering and saying ‘hope greece stays with us’. They don’t see the regime in Europe for the facists they are.
joe on Thu, 2nd Jul 2015 10:46 pm
I meant, imagine the fed did this to Utah?
Davy on Fri, 3rd Jul 2015 2:58 am
I recommend this article to get the flavor of the deceit at the top of these global institutions: http://www.zerohedge.com/news/2015-07-02/how-greece-has-fallen-victim-economic-hit-men
I also recommend another equally important systematic view from Korowics in his PDF “How to be Trapped” available here: http://www.davidkorowicz.com/
“But as believers in Man’s progress we seem to have taken on the role that Paley once ascribed to god- that is, as the creators of the complex globalised economy it is therefore designable and controllable and potentially perfectible if only the right people and ideas were in the cockpit. We find all sorts of confusion arising from this when attempts are made to take linguistic dominion over the economy by confusing complex interdependent emergence with intentional design (as in, the economy is capitalist/ neoliberal/ socialist, or, we need to change ‘the monetary architecture’). So even without getting into details about irreversibility in complex systems or the myriad practical problems with a controllable de-growth, the power of the belief in its possibility seems, to me at least, to represent Titanic hubris ///////// We’re part of an integrated globalised society hitting financial and ecological limits and this is starting to challenge peoples’ habituated expectations. There’s been a clear emergence of tensions and anger in many parts of the world since the global financial crisis began. The effects of the crisis, and responses to it have made people angry at the financial sector, governments, the “One Percent”, international institutions or capitalism itself ///////// But we need to be clear, the large-scale predicament and the emergent socio-economic stresses that we are beginning to experience has very little to do with fraud, corruption and the greed of a tiny few. It has a lot to do with our human civilization running into limits. As socio-economic stress deepens and uncertainty rises we can expect anger spreading in severity and scale in the coming years. Uncomprehending rage turned outwards and inwards, fantasies of catharsis through revolution, extremism and authoritarianism, aggressive power/productive asset accumulation and scapegoating are just some of destructive behaviors we’re likely to see. The stakes involved in such transitions mean that it’s important to interrogate our anger, and question its foundations. That’s why I’d argue that in the rich part of the world there has been a huge amount of self-righteous finger-pointing that is not only delusional but may well be detrimental to how we deal with the collective challenges ahead.”
I am acknowledging a little of both views in the above. We are economic hit man at the same time we are all part of a snake eating its tail. We can no longer discard or decouple and still remain dependent locals in a common global.