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Tuesday, May 21st, 2013 |
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European Central Bank will decide to become — or not — The Bank of the Euro
Luis Miranda
September promises to be a decisive month for the Euro zone. It is expected that the European Central Bank will decide to become the Euro’s grand daddy and it also may be the time when Spain will be handed over to the bankers. At this point, the second outcome seems a sure thing, while the first has found significant opposition. Until now, the German Central Bank — The Bundesbank — rejects that monetary policy be put at the service of fiscal policy to reduce their financing costs. Germany doesn’t want to deal with everyone else’s debt. This week alone will be decisive in trying to solve the disaster created with the poor management of the sovereign debt crisis in the euro zone. As most people know, the banks have made it clear that the way they’ll solve the problem will be by creating more debt in order to buy up the independent nations in perpetuity. The ECB has reacted rather strongly, at least in public, regarding its intention to go all the way to save the Euro zone. The bank’s president, Mario Draghi, said back in July he would do “everything necessary to preserve the euro. And believe me, it will be enough.” By saving he meant saving it for the bankers who intend to become sole owners of the region. Germany, it seems, still remembers the trauma the country experienced due to hyperinflation last century, so the president of the Bundesbank, Jens Weidmann, has not hesitated to manipulate the main German taboo: buying government debt amounts to starting up the machine to print money and set a ceiling to the types of Spain and Italy in the secondary market. This would cause anyone’s stomach to ache. This confrontation between Draghi and Weidmann sums up the complexity in the form and substance of what is at stake. The situation is much more complicated than, for example, the American crisis of 1987, where the U.S. Federal Reserve open the lending window and encouraged anyone in need to borrow. The same scenario was seen after 2008 when the crisis got worse in the United States. In reality, the policy of lending cash fresh from the printing press has not stopped since the FED’s creation in 1913. The discount window for the big banks and large corporations remains open until today and as a consequence, the American currency has lost over 90% of its real value. In the case of the Euro, the situation is completely different but also similar to the United States. How’s that? Well, the Federal Reserve Bank is a private institution, that does not belong to the US government, but that does determine what monetary policies are adopted and implemented. The FED, just as the ECB work for the international banking cartel now in power anywhere there is a Central Bank scheme, which utilizes the directives from the IMF and World Bank. The difference between the ECB and the FED, is that its members represent countries — 17 in total — while the FED is governed by Governors who are spread around the US territory. Now who is staking its credibility is Mario Draghi. As part of the public was on vacation in August, three committees with senior officials from each of the seventeen members of the ECB central banks worked like ants preparing a document with all the options (and objections). The French Prime Minister Jean-Marc Ayrault, said yesterday in support of Draghi “It is not fair that Spain or Italy, which make considerable efforts are paying such high interest rates on its debt” and therefore deemed it necessary to address deep reforms in the lending and payment system. How about the bankers renounced to all the payments that the countries have to make on a debt that is not theirs, but that was created illegally by the politicians in those countries and the bankers that dictate the policies they follow? The question now is whether the ECB will use its first to last shot by reducing its rate from 0.75% to 0.50%, as it is expected to do in October, according to European analysts. It is expected the more actions are taken by the ECB once the bailout account is approved by the German Constitutional Court on 12 September. Delivered by The Daily Sheeple Contributed by Luis Miranda of The Real Agenda. Luis R. Miranda is the Founder and Editor of The Real Agenda. His 16 years of experience in Journalism include television, radio, print and Internet news. Luis obtained his Journalism degree from Universidad Latina de Costa Rica, where he graduated in Mass Media Communication in 1998. He also holds a Bachelor’s Degree in Broadcasting from Montclair State University in New Jersey. Among his most distinguished interviews are: Costa Rican President Jose Maria Figueres and James Hansen from NASA Space Goddard Institute. Leave A Comment... |
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v.8
The last 2 paragraphs almost exactly quote “Atlas Shrugged”, when did fairness enter into economics. Where I grew up the expression “Time to pay the piper” was based on rules, you spent your money, had your fun, now start to get back to work, earn more money.
How can you obligate to a debt, sign a .note, and then bitch because you didn’t budget correctly, and now have to choose between hamburger and white bread, or alpo and saltines?
I understand we are tied to the global markets, and by being the reserve currency of the world we were sheltered from most of the storms, but MAN UP, AND STOP WHINING ABOUT IT.
YOU DIDN’T SAY STOP WHEN IT WAS IN YOUR FAVOR, SHUT UP AND SWALLOW THE BITTER PILL.
Rant Off, thank you
Man up and pay up only works if the interest rate is low and eventually the debt will be paid off. A debt of 30% is impossible to pay. How much income do the banks expect to make churning out debt? The people do not wish to be debt slaves and do not,have a choice they are forced into the system.
Maybe if they got rid of a debt based economy thete could be an actual recovery.
Moody’s just helped them make up their minds…
Since we no longer have gold to rein in government spending, the market sets the interest rates on the long end in an attempt to do the same thing. This sort of works. When countries have spent too much money, the market raises their borrowing rates in an effort to reduce their borrowing. The US has been protected from this, probably via intimidation, and is not paying the interest rate that it should based upon the amounts borrowed and the fundamentals of the US economy. Being the World Reserve Currency and having the ability to print as many US dollars as the Fed thinks are needed allow us to greatly exceed the amount that we should be able to borrow at low interest rates. Without these crutches, US interest rates would also be like Spain or Italy today. Without the spending curb from high interest rates, the Fed and gov feel free to spend unlimited amounts of money. This is likely due to the fact that they understand that it will never be repaid, so why not spend, spend, spend?
ECONOMIC COLLAPSE!
It’s Obama’s fault.