Europe at the abyss

Mish (always a good read) quotes another source who discusses the issues in Euroland but does so by spewing conventional wisdom which is totally incorrect (as conventional wisdom often is).  More specifically, the source quotes some bonehead economist (Desmond Lachman of the American Enterprise Institute): "The markets failed. All this would not have occurred if banks in Germany and France had not lent so much...It was like the U.S. housing market. Both American and European banks went overboard in relaxing credit standards."

Like Mish, I want to scream and pinch this guy's head off for making such comments.  "The market" might have failed but the free market did not fail because markets were not free.  They were held hostage by the con men at the federal reserve and by a fundamentally flawed (and purposefully so) global monetary system.  Chuck Prince said it best.  He said you have to dance while the music is playing.  This meant that if you were going to be a banker and if you were going to be accountable to shareholders then you had to do everything under the law (and then some) to make a profit.  Bankers make money by loaning money, lots of money even if you know damned well that you are making liar's loans that will never get paid back.  If you fail to do that then you are a failure and you are fired.  If you succeed then you are a hero and you are paid hundreds of millions of dollars of money without doing any real work for it.  The crony capitalism system demands that everyone be a shifty con man or become poor on a relative basis.  Clearly the majority of Americans are not shifty con men!

The other conventional wisdom foolishness from that article is the spew about the EU and the Euro: "Launched in 1999, it aimed to foster economic and political unity. For a while, it seemed to succeed.".  Again, what a load of CRAP that the EU and the Euro were launched for the good of the people or any sort of "political unity".  WHAT A STINKING LOAD OF PUTRID CRAP!  What a bold faced lie!  How's that unity working out for you, con men?  Is the lunch time unity special served with a Molotov cocktail these days?  Here is the real and actual truth: the Euro was launched for the benefit of the strong exporters in the region whose wanted to ramp up exports but who were tired of getting their debt inflated away by PIIGS who had control of their own money.  PERIOD.  They believed that if debt were denominated in a currency that the exporters had control over that said exporters could lend incredible amounts of money for the purpose of consumption and then stop the associated debt from being inflated away thus making debt slaves of anyone stupid enough to become indebted to them.

Those exporters would be Germany and France.  Unfortunately, you can't squeeze blood from a turnip and the con men running the show knew it.  But hey the plan sold tickets and, as the article says, it appeared to work for awhile.  But folks, any good scam has to look legit for awhile or insufficient numbers of suckers will not be found to fleece.  So of course it had to appear to work for awhile. German exports went up and the food being dumped into the PIIGS consumption trough got better.  But the whole thing was surreptitiously financed by a debt Ponzi scheme financed by German and French taxpayers.  They will never be repaid and they will never get the benefits they were promised.  They were conned right along with the PIIGS.

I have been saying this very thing for years.  Mish has written many times that the EU fiscal and economic policy is mainly set up for the big exporters (and he mainly singles out Germany).  That's why regarding EU fiscal policy he always writes "one size fits Germany".   Yes, people, the EU was and is a total scam that was set up for one reason only: so that German and French politicians and bankers could make huge short term gains on the back of fake, vendor financed exports that delivered short term and unsustainable prosperity.  Before this is over, all that fake prosperity will collapse and the situation will be worse than when it started.  The difference in prosperity levels after vs. before can be accounted for by emptying the pockets of bankers and politicians who cashed in on the fake prosperity while the debt Ponzi was spinning up.  That's where the delta in wealth will be found.

Yes, it's as simple as that. It was no accident.  Politicians and bankers are not stupid, foolish or whacky.  They are intelligent and experienced and clever in the ways of fleecing over-trusting people who are just living their lives, raising their families and attempting to do the right thing for themselves.  Politicians and bankers are wolves.  They work in packs.  Don't ever forget it or think of it any way except that lest you be rightfully considered a fool living among patsies.