Just because they haven’t done it yet,
doesn’t mean to say they won’t.
The Slog: Well, here we are on Bank Holiday Monday afternoon, and so far the
Eunatics haven’t introduced capital controls. This must surely be the
signal for pgfpowell the reluctant Slogger to write in and say yah-boo
sucks, you got it wrong again. But this is because Patrick doesn’t grasp
the difference between a journalist and an analyst.Return to my piece of Friday, and you will see that I called CCs ‘a strong possibility’, listed some signs of obvious preparation for it, and concluded that ‘we have a four-day weekend here, when all the fingers are away from all of the buttons’. As I said at the outset of the post, ‘what else would you try to effect during a bank holiday?’
The ECB/Troika spectrum of Eunatics chose not to do it…by the looks of things. And my analysis now would be that they’ve blown it – thus condemning the euro to death. Here’s why.
French sources are dubbing Italian bank Monte dei Paschi di Siena “two fingers away from bankruptcy”, and a German contact confirms this with the news that its position has worsened in recent weeks by “over a billion euros”. If you needed any signs of the first Tsunami wave coming in, it’d be hard to find a better one than this. “But that’s a special case” the Eunatics say. Bollocks: it’s a portent of things to come. Want some more?
Panos Kostopoulos of AMP Gold Bullion Merchants Ltd. in Nicosia says that before the bailin, everyone in Cyprus argued against buying gold bullion. Now he gets kilos per day of enquiries for the shiny yellow metal. He thinks the government will close down gold selling to the public within a few days.
Remember: the clowns did nothing for six days while Big Smart Money emptied the Cyprus banks. The result is that depositors now face three times the
Here’s another: a Greek Slogger alerts me to the fact that Deutsche Bank has issued a press release saying that it is ‘Disappointed with the EU policy response in Cyprus [which] has been very counter-productive.’ The release is genuine, and represents a quasi-official declaration of war on Merkel by the Bankfurters. They too must know that the eurobanks are haemorrhaging money.
And if one needed any more preconditions for the start of JCB buckets being lowered from the crane into our bank accounts, there’s a good article in the New York Times today by David Stockman. The NYT is not exactly my news medium of choice, but this piece contains the following chilling paragraphs:
‘….So the Main Street economy is failing while Washington is piling a soaring debt burden on our descendants, unable to rein in either the warfare state or the welfare state or raise the taxes needed to pay the nation’s bills. By default, the Fed has resorted to a radical, uncharted spree of money printing. But the flood of liquidity, instead of spurring banks to lend and corporations to spend, has stayed trapped in the canyons of Wall Street, where it is inflating yet another unsustainable bubble.
When it bursts, there will be no new round of bailouts like the ones the banks got in 2008. Instead, America will descend into an era of zero-sum austerity and virulent political conflict, extinguishing even today’s feeble remnants of economic growth. …’
The phrase ‘the warfare state or the welfare state‘ gets my vote as the outstanding encapsulation of 2013 so far.
One can critique opinion columns forever and a day, but ultimately if the empirical output points overwhelmingly West, than the chances are that things are going West. So perhaps the most convincing evidence of all is that the Germans remain triumphant. Buoyed by solid finances, roaring exports and low unemployment, Germany (it seems) increasingly sees itself as the only grown-up in Europe, responsible for bringing wayward children into line to hold the family together. The Germans apparently think that some, such as the Cypriots and Greeks and many Italians and Spaniards, are openly resentful of “Mutti”, as Berlin officials privately call Chancellor Angela Merkel. Others, such as the French, they think are sulking. So opined Reuters today; and Simon Tilford, chief economist at the Centre for European Reform, said in the latest edition of the London-based think-tank’s bulletin that “German policymakers have taken to their new found status with something close to gusto. They routinely tell other euro zone countries how to run their economies, citing Germany as a model for the currency union as a whole.”
Thus even as German citizens tell opinion pollsters they don’t trust Merkel to keep her hands off their money, that is a fiscal issue. When it comes to running the economics of the EU, the self-image remains one of the Master Race explaining things to the kiddies. There are many things that can be done for the good of children who know no better. One of them is to take their pocket money away.
You have been warned.
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