What I expect to hear is more desperate ideas postured as solutions to our woes, both financial and social. The reality, however, is quite different to what our leaders are apparently perceiving. They may actually feel like they are giving critical life support to the patient…however, the reality is that all these fools are trying to do is resuscitate the addict by injecting more heroin. The inevitable result is that the patient will drown, overdose or simply fail to respond at all, given the very advanced progression of the addiction. We will hear about Sarkozy and Merkel coming up with something, the ECB another, the Fed yet another and the IMF something even more exotic. However, no treatment can really be effective for a dying addict under the supervision of his drug dealer. Especially, when the dealer is desperately trying to keep his addict alive only that he may extract the last bit of money and energy from him when he survives.
IT IS TOO LATE…any postive reactive pops to these harebrained schemes will be extremely short lived…as our fearless leaders are now the equivalent of people with sticks swiming with 20+ foot hungry sharks with very large teeth. They can make a lot of noise, but their shouts are hollow, their sticks are weak and their bones are brittle.
Germany can not get any more credit…it has already reduced itself to the equivalent of its patients by diving into well over 300% debt to GDP when you look past all their fuzzy accounting. Germany is broke, France is even more broke, England is broke - the biggest economic powers that were believed to be solvent have been destroyed from within by their catastrophic leadership. They are NOW finished. Completely finished. Things are bout to get VERY ugly for them…and THEY are supposed to bail out the ECB and weak members?
Anyone who wants to believe in the myth of China is free to do so to their own peril. Spain, Ireland, Belgium, Greece, Hungary, Yugoslavia, Ukraine, Poland and nearly all the remaining countries near the borders of continental Europe are TOTALLY insolvent and the whole system is supported by lies backed by accounting fraud. Yet we are certainly not told this in the news. Instead the mighty Germans, French and the European Council have been desperately struggling to convince anyone who will listen, not so much that they are solvent, but that their member banks are fine and in a manageable condition. They are telling the story much too often and much too loudly to be believed. All of this effort that has been forthcoming over the last years from France and Germany, not to mention the ECB, has been specifically designed to hide the absolutely horrid condition of their commercial banks and financial infrastructure and the failure of their regulation and policies.
It is the same everywhere, none of the leadership want to let their rich friends drown in their own waste. They are constantly trying to clean it up at the expense of their constituents and countries assets. This is also just what has been happening in the US as well, however, the US situation is far more managable. Leverage via direct money amplification, however, was not possible for the Europeans, so they imported vast amounts indirect money amplification via exotic products and financial engineering. They ate it up like Piranhas attacking their prey. The European banks did not even look at what they were eating…they just gorged themselves seeking the panacea of maximum money amplification.
Any further efforts by these idiot drug pushers are likely to continue with the same results. Giving Italy 600 billion Euros, at this point, after they have been forced to issue large amounts of debt at above 6 to 7% is simply ridiculous and will fix nothing. These guys are burning the money before it even hits the ground after being dropped from the helicopter. The more money they throw at the problem, the greater the greater panic they will create. Italy will still have to come up with 40 billion euros a year on the new heroin, in addition to all the very expensive heroin they previous bought. There is no masking that interest rates are going MUCH higher for nearly everything, with the likely exception of US Treasury bonds. There is NOTHING that Lagarde, Barosso, Van Rumpoy, BURNanke, Merkel, Sarkozy or anyone else can do about that. And that will imminently create the condition where the patient either dies from its overdose or resorts to methadone treatment and seeks out anti-leverage currency rather than credits.
To the Merkel, Sarkosy, Barosso, Van Rumpoy, Bernanke, Summers, Bush and Obama team, I complement you for your absolute professionalism and extreme skill with which you have been totally inept and destructive. I will not shed one tear or waste one sympathetic thought on you as you acquire your just place in the dustbin of history…which can not happen fast enough in my opinion.
Feeding the beast what has made him sick will satiate it for a moment and certainly kill it in another.