Monday, July 23, 2012

Quick Update On The Predation And Corruption-Driven Crisis In Spain And Europe

The March 19, 2012 turn date I mentioned quite a few times earlier this year is holding up quite nicely as the beginning of the process of the end of the system as we know it.   It was the exact date of the bond market high for Europe before it started selling off substantially since.  Today Spain is in the news.  Again.  Back when it seemed completely improbable that this crisis would become as severe as it is, I surmised Spain would be the first to leave the Euro currency.   Years later and that still hasn't happened.  But, have faith.  Greece and Ireland are small economies and the predatory central planners are able to rig these economies for some period of time to give an illusion of stabilization.  Spain is a behemoth economy and the ECB is not capable of bailing the country out under the European Financial Stability Facility (ESFS).  In other words, the shit is about to hit the fan.  Probably no later than the end of the world - December 21, 2012.  :)

The ESFS fund is essentially a financed bond sale available as short term loans to member states in need.   There is some question to its legality under current EU treaties.  Eventually the issue of legality could very well come into play.  Possibly when member nations refuse to honor their ESFS obligations.  If the facility is illegal, and it most likely is, then there will be no recourse within the court systems for nations who refuse to honor their obligations. 

Beyond that, the ESFS is a short term facility being incompetently misused for systemic and unrecoverable crises.  Crises that are unrecoverable without massive change to the EU/ ECB construct or the disbandment of the EU/ECB  slave state.   Regardless of whether it is legal, one could easily classify the ESFS as a Ponzi scheme.  While it is a “Euro” facility the reality is it reports into the toads in Germany, the IMF and the ECB.  To receive a loan, a member nation must agree to anti-democratic foreign debt enslavement terms and conditions.   (We have talked repeatedly about how the IMF is used as a tool by the U.S. to prey upon and loot the citizens of corrupt and impoverished nations, so this type of criminality is nothing new.  It's now simply high profile because there is reasonable transparency given democratic states are involved rather than the behind closed doors pilfering of poor and corrupt nations as has been the prevailing form of economic looting and serfdom employed by the U.S., that is now being employed by Germany and France.)

There are some massive structural problems with the ESFS.  And, under the current European crisis, it is clearly a very high risk facility that isn’t accurately reflected in the bond yields of France or Germany.  Yet. 

The ESFS is guaranteed by Euro area member states in proportion to scale and size; Germany being the largest and France not far behind.   Once nations receive loans from the ESFS, they are no longer required to guarantee loans to other member states.   Hahaha.  No joke.  You can't make this stuff up.  Where I come from, this is called a cluster f$ck.  In other words,  at some point we could have borrowers backing the debt of other borrowers – a Ponzi scheme of debt that is no different than using a credit card to finance more debt on a second credit card.   You know, like the Ponzi scheme of the Federal Reserve and its broker dealers that simply passes debt back and forth in a similar illusion of stability. 

The total funds available to the ESFS are a paltry $440 billion euros.   Greece alone is getting $100 billion of that.  (Equivalent to about $5 trillion if the U.S. were pulling the same Ponzi scheme.  For comparison, our stealth bailouts have been more like $25 trillion and could easily reach double or triple that if the Fed monetizes debt... which I have said they ultimately will.)  If the ESFS ceiling is lifted with greater bond sales, rates will rise further in anticipation of an eventual default or failure on some level of the EFSF.  In other words, there is absolutely no way this facility is ever going to work as this crisis continues to metastasize.  Italy, Spain and others will eventually come groveling to the ESFS.  Well, if the euro lasts that long as constructed.   Recent comments made by some financial yoyos, like Niall Ferguson, that the failure of the euro currency is too great to allow to happen are delusional and completely wrong.  Continuation of the predatory, anti-democratic euro currency as constructed are too great to allow to continue.

The Euro zone is nothing more than a form of control where member nations outsource their democratic and monetary sovereignty to enslavement by Germany, France, the IMF and unelected Euro and ECB bureaucrats. 

As we have noted many times, the people of Greece, Spain, Italy and other EU nations embroiled in serfdom would be best served to reclaim their democratic sovereignty (local economics) as Iceland has, slap on capital controls and leave behind the euro currency and the debt-economic slavery of other nations, banksters and unelected bureaucrats.

posted by TimingLogic at 1:11 PM

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