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ECONOMICS AND ESOTERICA FOR A NEW PARADIGM

Posts Tagged ‘Finland

What happens when a nation goes bankrupt?

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by Simon Black
of Sovereign Man
Posted Sept 14, 2011

THREE YEARS AGO TODAY, MY BEST FRIEND CALLED ME and told me to turn on my television. I remember the way he described it– “Lehman is finished.”  The TV showed guys packing up their desks on Sunday afternoon, moving out of their offices forever. That was the precipice from which financial markets plunged the following day, taking the global economy along for the next three years.

We appear to be at that moment once more. Greece is out of cash. Again. The Greek Deputy Finance Minister said on Monday that his country only has enough cash to operate for a few more weeks.

As I write this note, French, German, and Greek politicians are all on a conference call, feverishly trying to figure out a way to avoid default.  Everyone seems to understand the consequences at stake… given the chain of derivatives out there, a Greek default will completely dwarf the Lehman collapse. Unfortunately for the bureaucrats, dissent against the Greek bailout plan is spreading across Europe… and leaders can no longer ignore the growing wave of opposition in Finland, the Netherlands, Austria, and Germany.

It’s no wonder, when you think about it. Why should a German hairdresser who retires at age 65 stick his neck out so that a Greek hairdresser can retire at age 50? This, from a continent that was perpetually at war with itself for over a thousand years. Europe’s great benefactor over the last several months has been China, whose treasury has been buying up worthless European sovereign debt to ensure that Greece doesn’t default. It’s a testament to the absurdity of our failed financial system when the highly indebted rich countries of the world have to go to China, a nation of peasants, for a bailout.

Speaking at the World Economic Forum this morning, Chinese premier Wen Jiabao delivered a stern message: there is a limit to Chinese generosity, and it will come at a price. The Chinese will undoubtedly use any further investment in European bonds as leverage to influence western politicians. They already bought Tim Geithner. The US government refuses to label China a ‘currency manipulator’. Similarly, European politicians will now be forced to acknowledge China as a ‘market economy’.

Ultimately, this charade will fail. It’s a simple matter of arithmetic. China could buy every single penny of Greek debt and it still wouldn’t solve the underlying problem: Greece would still be in debt! And more, still hemorrhaging billions of euros each month. Throwing more money at the problem only makes it worse.

Then there are those Greek assets for sale… like state-owned Hellenic Railways Group. It lost a cool billion euros last year. Or the notoriously inefficient, highly unionized, traditionally lossmaking Greek postal service, Hellenic Post. Any takers? These are not exactly high quality assets… nor can Greece expect to get top dollar in what’s clearly a distress sale.

Over 200 years ago, Napoleon was forced to sell France’s claim to 828,000 square miles of land in the New World in order to cover his war expenses. US President Thomas Jefferson happily obliged, paying the modern equivalent of around $315 million (based on the gold price), roughly 59 cents per acre in today’s money.

According to US census records, there were around 90,000 people living within the territory during that time who literally woke up the next day to a different world. This is the sort of thing that happens when governments go bankrupt. With the Lehman collapse, a lot of people got hurt… but it was mostly a financial and economic issue. When an entire nation goes bust, the pain is felt much deeper: the most basic systems and institutions that people have come to depend on simply disappear.

Argentina’s millennial debt crisis is a great example of this… suddenly the power failed, the police stopped working, the gas stations closed, the grocery stores ran out of food, the retirement checks stopped coming, and the banks went under (taking people’s life savings with them).

European leaders (with Chinese help) can postpone the endgame for a short time, but they’re really just taking an umbrella into a hurricane. It would be foolish to not expect a Greek default, and it would be even more foolish to not expect significant consequences. The only question is– how are you prepared to deal with what happens?

The imminent failure of the Eurozone

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by Econophile
Posted  September 2, 2011
This article originally appeared on the Daily Capitalist.

YOU KNOW THOSE MOVIES WITH THE BOMB SET TO A TIMER ticking down to 00.00 where the sweaty hero nervously cuts one wire at a time while holding his breath and then at 00.01 he stops the bomb? Well, Europe is like that except that the bomb goes off and kills everyone.

Our planet has a problem. Its leading economies, the U.S., Japan, and the E.U. are declining. That is, about one-sixth of the world’s population is losing ground.

These big economies are the ones that lead the rest of the world, including China. Countries like China, India, and Brazil, depend on the health of the big economies to keep buying their products and commodities so they can grow and generate wealth for their citizens.

What is especially concerning is the blow-up that is about to happen in Europe. It is not something that is happening “over there.” In a world that is so interconnected financially and by trade, a sinking Europe is everyone’s concern.

Their problems are much the same as ours with a twist. Their governments and central banks have also pursued reckless monetary and fiscal policies and now, effect is following cause. They have more or less followed the same policies as has the U.S., much to the same end. They spent large, engaged in Keynesian fiscal stimulus in a bailout attempt, ran up huge debts and deficits, and their economies are in decline.

The twist is the European Monetary Union (EMU), known as the eurozone. It is as if here in the U.S. there was no federal government and each state was truly sovereign, but there was a Federal Reserve Bank. Some states spend more than others, funding deficits by borrowing huge sums to support programs their citizens wanted. The profligate states want the Fed to buy their debt and float them loans created out of thin air, or otherwise they will go belly up and they will take down many states’ banks. The responsible states know they will be stuck with the bill.

The EMU started on the idea that it would bind the EU closer. In essence it was a political decision rather than an economic decision. They passed a stern rule that said no state could run of deficits of more than 3% of their GDP. Except for Estonia, Finland, and Luxembourg, all countries, including Germany, now exceed the limit. Thus their politicians sacrificed fiscal probity for political gains.

They have hit the wall: Greece will soon default on their sovereign debt. On Tuesday, yields on one year Greek bills  reached 60%.  It is a sign that investors have no faith in the Greek government’s ability to repay their debt.

The EU, ECB, and the IMF are trying to establish a European Financial Stability Facility (EFSB) in order to further bail Greece out. They have already pledged €110 billion and they are trying to put another package together of €109 billion. But Finland insists that Greece puts up additional collateral, which is not possible. Since the collateral would be part of the bailout money, it would be, in essence, Germany and France guaranteeing Finland’s contribution.

Greece has missed every fiscal target it or its saviors has had. They are trying to get their deficit down to 7.6% of GDP through more austerity measures, but it looks like they will miss again (est. 8.5+%). Basically they are asking the Greeks to do something they don’t want to do, and they will no doubt take to the streets again in protest.

If they default, then that opens a can of worms. European banks, other than Greek banks, hold €46 billion of Greek sovereign debt. Belgium’s Dexia hold Greek sovereign debt equal to 39% of its equity; for Germany’s Commerzbank, it’s about 27%. On top of that, EU banks are into private Greek companies for about €94B (France, €40B; Germany €24B). According to the Wall Street Journal, the total market cap of all EU banks was just €240. The same article also points out additional unknown liabilities to insurers and investment banks.

The International Accounting Standards Board (IASB) has warned banks they need to write down, or mark-to-market, the Greek debt they hold. Whether they do or don’t doesn’t matter. The fact is that these banks are undercapitalized and in trouble. Their “stress tests” are a fiction. Liquidity is starting to shrink in their banking system because of these jitters. Rabobank, for example, said it is growing cautious about interbank lending – now limited to overnight loans. More banks are stepping up to the ECB window for funds. Overall, credit is starting to tighten. Nervous Greek depositors are withdrawing funds from their banks. Rich Greeks never trusted their banks.

In other words the Europeans have created a problem that they can’t solve, easily at least.

Here are their alternatives:

1. Keep bailing out Greece, with the specter of Italy and Spain being the next target of market forces as EU economies cool off. This is not appealing to Germany and France who know their taxpayers will have to put up most of the money.

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Europhrenia

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by Gonzalo Lira
Posted originally June 1, 2011

http://gonzalolira.blogspot.com/2011/06/europhrenia.html

ACCORDING TO THE DICTIONARY, SCHIZOPHRENIA IS “A LONG-TERM MENTAL DISORDER of a type involving a breakdown in the relation between thought, emotion, and behavior, leading to faulty perception, inappropriate actions and feelings, withdrawal from reality and personal relationships into fantasy and delusion, and a sense of mental fragmentation.”

In Europe, they’re having the same thing—only writ large: It’s not that the political/financial leadership of Europe is at odds with the people—it’s that they’re two minds locked in a single body, struggling for control. In the one hemisphere of this divided brain, the political/financial leadership is convinced the European union is something devoutly to be wished—no matter what the costs, no matter what fortune and the people throw up in opposition.

In the other hemisphere of the europhrenic brain, the people of Europe overwhelmingly do not want integretation “at all costs”. In some parts (a lot of parts) of Europe, they don’t want integration at all.

Now, like a lot of schizophrenics, europhrenia has been latent over the past dozen years—since the 1999 monetary union, as a matter of fact—because everything’s been going great guns. This is natural—and completely predictable: You ever see a schizophrenic have a break-down when he’s happy, high, and just got laid? No, you do not—he only has his little “episode” when he’s stressed. Same with europhrenia: Everything was copacetic between 1999 and 2008—though there were signs of the disease. In fact, lots of unmistakable signs of europhrenia:

• No country ever voted for monetary union—ever. European monetary integration only ever happened by either government diktat or the legislature overriding the will of the people.

• Switzerland is not a eurozone member because, although the political leadership rather desperately wanted in on the union, legally the only way to do such a monetary union is through a Swiss-wide referendum—and the Swiss political leadership knew that they would lose any such referendum.

• In the nations where the European Constitution was put to a vote in 2005—Spain, France, Holland, Luxembourg—the results were so embarrassing that the other countries retreated on a referendum. In Spain, the Yes vote won—but in the lowest voter turn-out in Spain ever—while in France and Holland, the Constitution lost by resounding margins. And this was back in 2005, when everything was booming. In the end, rather than face the electorate, the European Constitution was superceded by the Treaty of Lisbon—a work-around that short-circuited the democratic process, and got the European leadership what it wanted. These examples are to emphasize one and the same thing: The people of Europe never wanted total European integration, not even in the best of times—whereas the European leadership adamantly insisted upon it.

Now, we are no longer basking in the golden glow of good times: On the contrary, Europe is facing a nasty solvency crisis. So naturally, we’re heading into the manic phase of europhrenia.

The basic problem of the current crisis is, countries of the European periphery—Greece, Ireland, Portugal, Spain, Italy—took on too much cheap debt from banks in the core eurozone countries—France, Germany and Holland—and now are unable to pay for it. It’s not more complicated than that.

(One could argue that the reason the European nations overspent was that the leaders were basically bribing the people with a false sense of affluence, bought and paid for via debt, so that they would acquiesce to the European Union and the eurozone. But that’s for another post.)

There are five ways to get over an unpayable sovereign debt:

1. Default on the debt.

2. Restructure the debt, with both sides making sacrifices.

3. Inflate the currency, as the United States is currently doing.

4. Lend more money in the form of “bailouts”, which is essentially kicking the can down the road.

5. Or squeeze blood from a stone—i.e., impose austerity measures.

Option #1—default—helps no one, and wrecks economies in the short term. Option #3—inflating the currency—is a bad idea for the euro, as it is too young a currency—if the ECB starts really inflating, there might well be a panic out of the euro. Option #4—lending more money—is just postponing the day of reckoning, while adding more to the debt burden. And Option #5—austerity measures—cripples an economy by leaving it too weak to grow its way out of the solvency jam that it’s in.

The sensible thing, of course, would be Option #2: Restructure the debts of these countries, much like during the Latin American debt crisis in the early ‘80s, whereby everyone shares the pain, equally. Banks and other creditors take haircuts, countries are put on a fixed payment schedule and reduced credit availability: Everybody takes a hit, but nobody gets killed. Everybody moves on—bruised but otherwise okay.

Has the political and economic leadership of Europe chosen the sensible approach?

Can PIIGS fly?

The political and economic leadership of Europe has collectively chosen Options #4 and #5: They are lending more money to the insolvent nations—Portugal, Italy, Ireland, Greece and Spain—thereby adding more debt to their burden. And they are imposing austerity measures on the politically weaker countries, specifically Greece and Ireland now—but Spain, Portugal and Italy soon enough.

More loans via bailouts are of no help—they just kick the can down the road, while simultaneously making that can bigger.

Austerity measures naturally hurt an economy by slowing it down—and a slowing economy creates a whole host of problems: Unemployment, poverty among the elderly and the young, generalized discontent, all the rest of it.

But the leadership of Europe seems unperturbed: They’re going hell-bent-for-leather in the direction of bailouts and austerity—which seems strange: It would be a bit like giving an addict both more heroin and insisting he go cold turkey—I mean, make up your mind, right?

So why is the political and economic leadership of Europe insisting on both more loans and more austerity? Why, simplicity itself:

In the current eurozone crisis, the leadership class in Europe has identified the well-being of the banks with their own well-being—to the detriment of the well-being of the Continent, and of the people of Europe.

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Death Spiral of EU Crisis?

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from The Daily Bell
Posted Tuesday, May 24, 2011

Crisis-talk in Brussels is hardly new. What’s different today is the palpable sense of failure and confusion communicated, even by the most fervent advocates of the EU. It is easy to dismiss this reaction as merely a symptom of the bitter conflict and rivalry unleashed by the crisis of the Eurozone, with Greece, Ireland and Portugal having to be bailed out with huge injections of cash to keep their governments solvent. However, the current problems confronting the integrity of the EU are not confined to the domain of economics; the organisation is also threatened by a political and cultural crisis. – Spiked

Dominant Social Theme:
Just give us a little more time. Say, can we ban these nasty bond markets? Why do they exist anyway?

Free-Market Analysis:
Frank Furedi of the alternative web newspaper Spiked has written an insightful article on the breakdown of confidence among the EU’s chattering classes. He has the idea that Eurocrats are so out of touch with average Europeans that they have run out of ideas of how to protect the union from its onrushing Armageddon. His larger point, though he doesn’t use our vocabulary, is that a fundamental dominant social theme (internationalism forever) is beginning to crumble.

This is a cause for happiness in our view. Let the EU crumble and the Anglo-American elites will have received a significant setback. Combine a failure of the EU with failure in Afghanistan (see other story, this issue) and it becomes clear that Money Power is less dominant in this century than in the last. Of course, we have been arguing this possibility for years.

This group of authoritarian socialists IS out of touch. They would disdainfully require countries to vote again and again when the votes were not in the best interest of the EU Leviathan. They would gladly hold whole populations hostage for the sins of a handful of elites, while ignoring the EU’s own fiscal lapses, ones that are so bad an auditor has refused to sign off on EU finances for a decade or more.

Lately, there seems to have been a pullback in EU elite ambitions, a cessation of confidence in the idea that Eurocrats could slam their collective, Orwellian boot endlessly in the face of a resentful populace. Talk of massive abrogation of civil rights has seemingly been muted for the moment. Putting all EU citizens into one large one database in order to spy on them more effectively has seemingly been shelved for the time being. Building an EU Army to help NATO with its job of oppression around the world has quieted.

Generally, we’re getting the sense that the Eurocrats are beginning to believe that the financial crisis is a bridge too far. Gone are the proclamations of confidence issuing from the lips of Sarkozy, Merkel and Trichet. The Camp of Confidence seems to have fallen mute. Furedi captures it well.

The new buzzword in Brussels: ‘Crisis’ The EU is beset with problems, but it is so cut off from the electorate that it lacks the popular legitimacy to solve them. During a recent visit to Brussels, I was struck by the uninhibited use of the word ‘crisis’ by people who closely watch or inhabit the institutions of the European Union.

With the Greek economy in a state of disintegration, European leaders know that there is no alternative but to restructure Greece’s debt. They may use the euphemism of ‘re-profiling debt’ to avoid acknowledging the scale of the problem, but the spectre of insolvent nations haunts Europe. Just a few weeks after pouring billions of euros into bailing out Portugal, it is evident that the medicine is not working and that the Eurozone is in big trouble. Inevitably, there is talk of reorganising Europe’s monetary union as more and more people have lost faith in the existing bailout strategy.

Opposition to this strategy has led to the growth of euroscepticism throughout the more prosperous regions of Europe. A recent opinion poll in Germany showed that 30 per cent of the respondents wanted an ‘independent Germany’, without the euro. That is why last week, the German chancellor, Angela Merkel, stated that people in countries like Greece, Portugal and Spain should not have more holidays, work less or retire earlier than Germans. One Portuguese journalist described this gesture as ‘feeding the populist monster that is growing in the Europe of the euro’. But this monster is not about to disappear.

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Germany looks to Justin Bieber to solve the crisis

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From Simon Black of Sovereign Man
Posted May 23, 2011

THE WORLD IS NOW DIVIDED INTO ESSENTIALLY THREE CATEGORIES:
 (1) those nations that can effectively sidestep catastrophic meltdown;
 (2) those nations that cannot avoid meltdown, but can afford to kick the can down the road
 (3) those nations that must face their grim, unavoidable meltdown reality now…

The United States, for better or worse, is in category 2. Politicians can keep pretending that the wheels on the bus go ’round and ’round because, at present, there are too many other countries in category 3… namely, much of Europe.

Greece is on the brink of official insolvency… yet in an exceedingly bizarre interview with German news magazine Der Spiegel published today, Jean-Claude Junker insists that (a) Greece is not broke, (b) if Greece doesn’t make its debt payments, this is not the same as ‘default,’ and (c) it’s OK for politicians to lie because people don’t understand capital markets.

(*Note, suspension of disbelief IS required to read this interview; Junker caps it off with a metaphoric riddle, “If the donkey were a cat it could climb a tree. But it is not a cat,” which has about as much insight as “Confucius say: Man who go to bed with itchy butt wake up with smelly finger….”)

As the Prime Minister of Luxembourg and president of the Euro Group, Junker is a very important figure in European finance… and in the interview, he makes it quite clear where his priorities lie: with the bankers. As Junker states, “If Greece were to declare a national bankruptcy tomorrow, the country would have no access to the international financial market for years to come, and its most important creditors, the banks in Germany and Europe, would have an enormous problem…”

Well, certainly no one should expect Europe’s banks to suffer their own losses after making idiotic loans to corrupt governments. It’s much easier to stick the people with the bill by establishing a trillion dollar bailout fund with taxpayer money.

Problem is, people in Europe are starting to wake up and get it.

The anti-euro “True Finn” party in Finland recently surged in the polls to become the country’s third-largest political party and a major obstacle for any European bailout. This weekend, Spain’s ruling Socialist party was hammered with losses as voters voiced their utter disgust with the current government’s handling of the economy. In Germany, this year’s state election results are showing that voters are sick and tired of shouldering the financial burden for the rest of Europe. Chancellor Angela Merkel’s ruling party is losing miserably, though in a pathetically desperate move, some local governments are changing suffrage limits and allowing 16-year olds to vote.

This is the strongest indicator yet of how bad the situation in Europe has become: German banks are so over-exposed to the PIIGS sovereign debt that, in the face of political revolt all across Europe, German politicians have resorted to recruiting the Justin Bieber crowd to maintain the status quo.

Simply put, if Greece fails, the banks will collapse, and European financial markets will tank. Politicians will stop at nothing to prevent this from happening… including sticking every man, woman, and child with the bailout bill, as well as pulling socialist-minded teenagers into the voting booths to ensure they stay in power.

Eventually, though, these efforts will prove fruitless. Greece has two months of cash left… and a default by any other name is still a default. The ‘have’ nations in Europe don’t want to foot the bailout bill any more than the ‘have not’ nations in Europe want to accept deep austerity measures. This is going to cause a lot of turmoil in Europe in the short-term… and as the US government has successfully kicked its can down the road through late summer thanks to the Treasury Department plundering public pension money, investors are free to get their worry on in Europe.

I would suspect gold and silver in euro terms to do quite well as the market looks around, once and for all and realizes that there are truly no good major currency alternatives. This could be the start of a chain reaction.

Why I don’t support Europe’s Bailouts

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by Timo Soini
Posted Monday, May 16, 2011

Our political leaders borrow ever more money to pay off the banks, which return the favor by lending ever more money back to our governments.

WHEN I HAD THE HONOUR OF LEADING THE TRUE FINN PARTY to electoral victory in April, we made a solemn promise to oppose the bailouts of euro-zone member states. Europe is suffering from the economic gangrene of insolvency – both public and private. Unless we amputate that which cannot be saved, we risk poisoning the whole body. To understand the real nature and purpose of the bailouts, we first have to understand who really benefits from them.

At the risk of being accused of populism, we’ll begin with the obvious: It is not the little guy who benefits. He is being milked and lied to in order to keep the insolvent system running. He is paid less and taxed more to provide the money needed to keep this Ponzi scheme going.

Meanwhile, a symbiosis has developed between politicians and banks: Our political leaders borrow ever more money to pay off the banks, which return the favor by lending ever more money back to our governments. In a true market economy, bad choices get penalized. Instead of accepting losses on unsound investments – which would have led to the probable collapse of some banks – it was decided to transfer the losses to taxpayers via loans, guarantees and opaque constructs such as the European Financial Stability Fund.

The money did not go to help indebted economies. It flowed through the European Central Bank and recipient states to the coffers of big banks and investment funds. Further contrary to the official wisdom, the recipient states did not want such “help,” not this way. The natural option for them was to admit insolvency and let failed private lenders, wherever they were based, eat their losses.

That was not to be. Ireland was forced to take the money. The same happened to Portugal.

Why did the Brussels-Frankfurt extortion racket force these countries to accept the money along with “recovery” plans that would inevitably fail? Because they needed to please the tax-guzzling banks, which might otherwise refuse to turn up at the next Spanish, Belgian, Italian or even French bond auction.

Unfortunately for this financial and political cartel, their plan isn’t working. Already under this scheme, Greece, Ireland and Portugal are ruined. They will never be able to save and grow fast enough to pay back the debts with which Brussels has saddled them in the name of saving them.

Setting up the European Stability Mechanism is no solution. It would institutionalize the system of wealth transfers from private citizens to compromised politicians and failed bankers, creating a huge moral hazard and destroying what remains of Europe’s competitive banking landscape.

Fortunately, it is not too late to stop the rot. For the banks, we need honest, serious stress tests. Stop the current politically inspired farce. Instead, have parallel assessments done by regulators and independent groups including stakeholders and academics. Trust, but verify.

Insolvent banks and financial institutions must be shut down, purging insolvency from the system. We must restore the market principle of freedom to fail.

If some banks are recapitalized with taxpayer money, taxpayers should get ownership stakes in return, and the entire board should be kicked out. But before any such taxpayer participation can be contemplated, it is essential to first apply big haircuts to bondholders.

For sovereign debt, the freedom to fail is again key. Significant restructuring is needed for genuine recovery. Yes, markets will punish defaulting states, but they are also quick to forgive. Current plans are destroying the real economies of Europe through elevated taxes and transfers of wealth from ordinary families to the coffers of insolvent states and banks. A restructuring that left a country’s debt burden at a manageable level and encouraged a return to growth-oriented policies could lead to a swift return to international debt markets.

This is not just about economics. People feel betrayed. In Ireland, the incoming parties to the new government promised to hold senior bondholders responsible, but under pressure they succumbed, leaving their voters with a sense of disenfranchisement. The elites in Brussels have said that Finland must honor its commitments to its European partners, but Brussels is silent on whether national politicians should honor their commitments to their own voters.

I was raised to know that genocidal war must never again be visited on our continent and I came to understand the values and principles that originally motivated the establishment of what became the European Union. This Europe, this vision, was one that offered the people of Finland and all of Europe the gift of peace founded on democracy, freedom and justice. This is a Europe worth having, so it is with great distress that I see this project being put in jeopardy by a political elite who would sacrifice the interests of Europe’s ordinary people in order to protect certain corporate interests.

The BBC offers a useful info graphic, comparing the PIG with the rest of Europe. It is not a rosy picture at all, considering that deficits in the EU have been growing similar to the development in Russia before its collapse in 1998.

More Nails in EU Coffin?

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from The Daily Bell
Posted Monday, April 18, 2011

Massive gains for a massive man – the nationalist True Finns’ shock election result in the 2011 Finnish general election befits the burly figure of their leader, Timo Soini. And there is much brain to go with the brawn, according to journalists who have followed his party’s advance from the margins of politics – from just 4.1% of the vote in 2007 to about 19% four years later.

Brain, wit and charisma applied to a Euro-sceptic and nationalistic agenda – a potent mix worrying EU strategists who are mindful that Finland, unlike other eurozone states, has reserved the option of vetoing financial bail-outs. – BBC

Dominant Social Theme:
The EU shall overcome. The union is not to be trifled with.

Free-Market Analysis:
There is yet a hammering sound surrounding the EU. Some say it comes from those who are busy building a box in which to contain the region’s endless sovereign debt crisis. Others might be persuaded the box is the EU’s coffin. The distinction is important not only to the EU but to the Anglo-American power elite that is running as hard as it can to refine plans for one-world government before the Internet and the rolling worldwide inflationary recession generates a critical mass of opposition to such plans.

Of course there IS no power elite with plans for a New World Order according to mainstream Western media. Never mind that in an interview with the website Infowars over the weekend one of America’s pre-eminent television broadcasters went on record as saying that indeed there was. “Lou Dobbs: Elites Are Setting up a One World Order,” read the Infowars headline. And Dobbs’ perspective is shared at least in part by other prominent US officials, including Congressman Ron Paul (R-Tex) who may once again be a leading candidate for US president in upcoming Republican primaries.

Yes it’s fairly obvious what is going on, given the massive global regulatory infrastructure that’s being put in place. The Internet by now has shredded any pretense of that such plans are not being pursued and the result has been a change in elite tactics from what we can tell. The elites have decided to strike back by substituting intimidation for secrecy.

As we report in today’s other article, such a strategy carries risk. By increasingly attempting to promote its policies through via brute political, economic and military force, the Anglo-American power elites make each individual battle into an entire war. Lose just one contest and the inevitability of global governance begins to drain away. This is why even the smallest battles such as who will be president of the Ivory Coast take on massive resonance and are reported in detail by the mainstream press for days and weeks.

It is a kind of dominant social theme itself: The new world order is a global juggernaut that will mow down all that stands before it; the instrumentalities of global government are here to stay and will only get stronger. This invests every mechanism of global power with a resonance that the elites may not have intended to project. Surely, it adds inordinate significance to each battle; yet in a most difficult financial era there are many such skirmishes going on almost every day.

There is an alternative perspective, one we have advanced many times, which is that the Anglosphere elites seek to enhance and encourage the military, economic and political chaos that has gradually been descending on the world over the past few years. Despite their protests to the contrary, this argument holds that the elites are actively working at various kinds of destabilization in the hopes of building up a single fiat-currency system that will further cement an global Order.

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