EU Tumbles Toward Failure?
By Staff News & Analysis - May 11, 2010

Has Europe done the impossible and helped itself to a free lunch? That's certainly what it looks like, to judge by the performance of equity, currency and fixed income markets following the EU's €750 billion rescue plan. A relief rally sent shares rocketing across the world, led by an almost unbelievable 20% surge in European stocks. Rescued government bonds rallied as central banks threw themselves into quantitative easing. And the euro recovered much of the ground it lost when, during the past couple of weeks, investors thought the currency was heading towards extinction. Was Milton Friedman wrong? Or maybe this lunch isn't really free? The notion that these rescues are costless, which took hold following the wave of fiscal and monetary policy actions put in place following the credit crunch, looked to be fading recently. People started to realize private sector debt was merely being replaced by public sector borrowing, and didn't like it. Governments might have altered who would have to repay the borrowing and over what period – typically taxpayers or savers and over the long run – but the debt itself didn't disappear. There's nothing to suggest Friedman was wrong in the case of this European rescue either. So who's paying then? – WSJ/Source

Dominant Social Theme: Bold action has saved the euro.

Free-Market Analysis: Eurozone leaders are ready to defend the euro with the equivalent of US$1trillion if necessary. The American Fed and other central banks stand ready to help too. There are several conclusions to be reached from this – and the mainstream and alternative media is generously presenting at least seven scenarios (perhaps our readers can provide more?). Below, we use the article excerpt above as a jumping off point to unpack them for you, explain the significance of each and then choose the most obvious answer to what's going on. (Is it really that complicated?) Milton Friedman was right (on this point anyway). There IS no free lunch, in our opinion, and those in charge of Europe are not going to get one either.

Of course, just because we believe this exercise yields up the truth about what's happening in Europe, we are not necessarily in a position to postulate the OUTCOME. We're not fortune tellers! But we do understand the war between the elite's dominant social themes and the Internet itself, which is increasingly debunking these themes and making it far more difficult for the elite in the 21st century to manipulate markets and politics than in the 20th century. Anyway … here's the list. We're pretty much on board with the second alternative. But let's take these options one at a time.

1. The power elite has done what is necessary to stabilize the euro-zone.

2. The power elite has done what is necessary to stabilize the euro-zone but it may not work.

3. The euro-apparatchiks have salvaged the EU basically for banks and bank loans at risk.

4. The euro-zone has been destabilized so that further currency consolidation can be achieved.

5. The power elite and the bankers have destabilized the EU to loot its member states.

6. The power elite has struggled mightily to rescue a 50-year-old investment with mixed results.

7. Germany has received, by peaceful means, the empire that its citizens always wanted.

1. EU leaders have done what is necessary to stabilize the euro-zone. This seems to be the mainstream Western media's conclusion. The size of the bailout is huge, the actions are "definitive" and those in charge are seen finally as doing what they needed to do all along – send a message to the market's "woflpacks" that they cannot harass and ravish Europe's exposed southern flank any longer. The EU's most resolute leaders have crafted a plan that will surely stand up to whatever punishment the market can deal.

2. The power elite has done what is necessary to stabilize the euro-zone but it may not work. This is not a popular option for some reason, either with the alternative or mainstream media. But it's our favorite. We'll come back to this one. There are certainly plenty of reasons to wonder if even a bailout of this size is going to stick, and one ought to consider the various rationales behind it as well. As usual, all is not as it seems. More to come on this below.

3. The euro-apparatchiks have salvaged the EU basically for banks and bank loans at risk. This is definitely an alternative media hypothesis. But we have been shocked at how quickly this interpretation has made it into the mainstream. Of course, there's truth in it. And yet … it seems to us there might be ways to bail out banks without going through all the hubbub and Hamlet-like angst that the Eurocrats have put themselves through of late. There is likely something bigger going on, in our opinion. (It's not JUST about the banks.)

4. The euro-zone has been destabilized so that further currency consolidation can be achieved. This is a really cynical interpretation – though that doesn't make it false by any means. It's not an analysis you are likely to find in the mainstream media, but you will find these sentiments running like a low-grade fever through many alternative media commentaries on the Web. Our caveat: Why would the power elite believe it necessary to destroy the Eurozone to gain a global currency? Aren't there simpler ways of doing it? And why would the elite bother to set up the EU in the first place if it merely wanted to create a crisis and leapfrog into a global monetary union? Does it need the EU in order to have a viable crisis? Why not just have a dollar crisis and leverage the UN? Again, there's something bigger going on in our opinion.

5. The power elite and the bankers have destabilized the EU to loot its member states. There are simpler ways of destabilizing Europe and its member states aren't there? There are simpler ways of looting countries, as well. The elite did a pretty good job with Argentina, as we recall, and it wasn't necessary to set up a "union" of South American states to do so. Same thing with the Asian crisis. The IMF and its Anglo-American corporate constituency has been looting for decades, as we see it. Have you taken a real close look at America lately?

6. Leaders have struggled mightily to rescue a 50-year old investment with mixed results. This scenario would seem to hedge the whole idea of how all-powerful the powers-that-be really are. We think this is a mainstream-oriented take on the EU – and the analyses are all over the lot. Is US$1 trillion enough? Can synthetic shorts be developed that will overwhelm the trillion at ten-to-one? And how often do these attempts to defend currencies from the market really work, at least when the stakes are this high? Will central banks, and especially the Fed, be able to print enough money to deal with the crisis?

Usually such money printing, swaps, etc. are implemented with a good deal of secrecy. But these days everybody seems to know everything. Will this constrain the abilities of even the most powerful players (the America Fed, for instance) to do what needs to be done? Good luck! cry the mainstream media. Salvage the euro!

7. Germany has received, by peaceful means, the empire that its citizens always wanted. This is another alternative media option (one we've pointed out in the past). And while it's certainly an interesting idea, and can perhaps be justified at least in part historically (and, yes, we've read articles to this effect) we're not entirely on board with it from a German national-psyche perspective. We tend to believe that when Europe was flat on its backside, the Anglo-American axis could do pretty much what it wanted to. If America and Britain hadn't wanted to start an EU free-trade zone, there would have been no EU free-trade zone. Maybe German leaders (the ones who were left) wanted the same thing and had planned for it. Maybe France came to want it as well. But today more than ever, we don't think it's so simple.

We're not at all sure at this point that many Germans see the EU as anything but an albatross. Sure, it may have been a most positive development for a while, during the Euro-boom cycle. But now Germany is looking at indefinite bailouts of Southern Europe. Does Germany need an EU in order to sell BMWs and industrial technology? No. Then maybe Germany wants an EU because dominating Europe is its manifest destiny? No, again. We think the Germans are past the dominating part. Their small businesspeople simply want to make money. And they don't need the EU to do it. They just gave Frau Merkel a swift kick in the behind because she went ahead and spent a lot of German money on Greece. Maybe some of the German leadership is squarely behind the EU for reasons of German manifest destiny. But we don't really think that's the case either.

2.The power elite has done what is necessary to stabilize the euro-zone but it may not work. We wanted to return to number two again, because we think this best explains what's going on. We think the elite doesn't want to mislay (or discard) the EU. To us, anyway, this is abundantly and obviously clear. Are EU and America powers-that-be intent on once again bailing out their respective banking sectors? Of course – banks always get bailed out these days. Does the elite intend to loot and rape a bleeding Europe if it can? Probably. (That's the way they work.) Does the elite expect to use the unraveling of the EU to launch a campaign for a more global currency? Yes, indeed. But these two latter developments could have taken place without going to the trouble of building up a formal EU over the past 50 years – or defending it quite so hard.

We think the Anglo-American power elite (in league with France, especially, and European leaders generally) is most interested in retaining a viable EU. It's a promotion, for goodness' sake! It's a dominant social theme, and one of the most powerful centralizing metaphors that the elite has been able to summon. If one believes that the goal of elite manipulations is an "ever more perfect" global union, then one can understand the lengths to which the elite will go to defend it. The entire arc of history for the last several hundreds years has been one of determined centralization. And when one begins to scrutinize how history has operated in this regard (and the inevitable lies that seem to cover up deliberate attempts at this ongoing centralization, worldwide) then one begins to grant that the elite is serious about this ongoing attempt at developing global governance. And if that's the case, then what's going in the EU is Not Good.

And so we ask (again) does the alternative press have a kind of power-elite Stockholm Syndrome? There are few alternative media sites that seem willing to report when the power elite has apparently screwed up – and as regards the EU, the power elite may have taken yet another big-time fall. The demise of the global warming promotion is a problem for the elite, because it was apparently hooked into the water-scarcity promotion, into peak oil and a bunch of other planned fear-based manipulations. But the elite is having a great deal of difficulty moving global warming forward. People don't care about it. They're not scared of it any longer. Perhaps they don't believe it any more.

This is of course OUR meme – that the elite has run smack into the Internet in the 21st century and is having a helluva time as a result. Each promotion is seemingly questioned these days. Each fear-based promo is examined to see if it passes the smell test. Sure, we're aware that the elite has fairly unlimited funds and control of the Western political process. But we also have noticed that each one of the power elite's moves as regards the EU has been dissected – sliced and diced – by a thousand Anglo-American blog sites and news aggregators BEFORE these moves took place.

We ask again: How do elite manipulations, which depend on secrecy, and promotions (which need to inspire fear) work when the blogosphere is reporting on them daily, and anticipating them? The Bilderbergers can't even have a secret meeting anymore. Various central banking and other financial moves as regards the EU/Greek crisis were reported on in advance of their initiation.

From our point of view, there is nothing very nefarious about the EU and its unraveling. Nor about the unraveling of fiat money itself during this latest crisis. The elite has been scrambling ever since. But the moves have taken place under the Internet's glare and from our point of view this may have doomed the system. People all over America and Europe are increasingly angry about it. The amount of money that the elite creates and controls has been rubbed over and over in the faces and noses of struggling working class people throughout the West. That's never happened before, or not in modern history. The ramifications are just beginning.

After Thoughts

No, it's not going to be pretty, what's likely to occur in the West. And likely it's not going to be entirely what the power elite wanted or expected, either. Certainly it's not going to be very easy for savers and investors – those who will have to choose between ongoing elite influence and the truth-telling of the Internet, which is supporting and reinforcing the free-market day by day.