Quantum Pranx

ECONOMICS AND ESOTERICA FOR A NEW PARADIGM

Posts Tagged ‘racketeering

European Union – A flawed foundation, but a brilliant strategy?

with 2 comments

by Gordon T. Long
Posted originally May 31, 2011

IT WAS THE PERCEPTION OF GETTING SOMETHING OF VALUE WITHOUT ANY MEANINGFUL sacrifice that initially fostered the EU Monetary Union. Though the countries of Europe were fiercely nationalistic they were willing to surrender minor sovereign powers  only if it was going to prove advantageous to them. They were certainly  unwilling to relinquish sufficient sovereignty to create the requisite political union required for its success.

After a decade long trial period it is now time to pay the price for Monetary Union.  I suspect that the EU membership is unwilling to do so. Though they likely will see the price as too high to do so, the price to not do so has become even greater.  They have unwittingly been trapped by a well crafted strategy.

Never has a monetary union functioned without a political union with which to control Fiscal Policy. This was well understood by the strategists but not the salivating sovereign leaders looking for cheaper money to finance election candy and avoid unpopular, pressing economic realities. It was expected that the obstacle of political union would  inevitably give way when the pre-ordained and unavoidable political crisis forced the issue. We are presently at the cusp of this crisis in Europe.  As we just experienced the Arab Spring we are about the experience the European Summer on an unavoidable path to the American Autumn and World Winter in an unfolding “Age of Rage’.

The initial resolution of sovereign debt defaults by the bailouts of  Greece, Italy, Ireland, Portugal, Spain (GIIPS) will eventually be the creation of a Eurobond, in my measured opinion.  It is the next move on the strategic chessboard being carefully orchestrated. A Eurobond will allow the ECB to issue debt. With the ability to issue that debt, the obligatory abilities to pay for it will come. Paying for a Eurobond will mean giving up gradually increasing levels of sovereign taxation.

The current political impediment to political union is that never has a ruling political regime been willing to surrender the golden jewels, specifically public taxation. But this will happen because it is the hidden strategic goal now operating in Europe. To understand the real European Strategy you need to appreciate the history of Europe and its cultural diversity. Ever since the Roman Empire and Charlemagne, leaders have dreamed of a single Europe. No one in modern times from Napoleon to Hitler has been successful.

The one thing the European nations understand and for a time were successful at, was Mercantile Colonialism. They were the ones that invented it. When I say ‘they’, I refer to Kings and their financiers. The Kings may now be gone, but the financiers are even more powerful today than ever before. The colonies are no longer on the other side of foreign seas to be conquered, but rather part of the Euro zone.

The essence of Mercantile Colonialism is to create a need for debt, then finance that debt and eventually exchange that debt for the collateral assets that are the underlying wealth producing assets. In the Austrian School of Economics, this exchange of printed paper for real assets, is called the Indirect Exchange.  It is well understood and well documented but like usury is avoided in polite conversation. Eventually the colonies worked as slaves to pay the debt to their European masters.

Gold is the Money of Kings, Silver is the Money of Merchants and Debt is the Money of Slaves

The European banks are slowly but surely, through a tactic of Financial Arbitrage, moving more and more sovereign debt to the ECB and EU. Someone must pay for this debt and that will eventually be the entire European taxpayer base. That is the goal.In the initial stages of the Euro dream everyone was benefiting.  Like an initial user of drugs the early stage is euphoric before the issues associated with the addiction surface. This stage fostered tremendous growth in debt – never ending Corniche housing villas in Spain and Portugal, embarrassing pensions and social benefits in Greece, tax advantages for off shoring corporations in Ireland or unjustifiable and hidden local government spending in Italy. It has been a captive market for the Asian Mercantile Strategy and a financial retail market boon for US financial instruments created from the never ending supply of freshly minted US fiat paper. I was living in Europe during the debates on the viability of a European Union. I remember only too well what everyone eagerly wanted and fantasized gaining from a European Union.

The Citizens:
1. They saw and wanted employment. The EU meant they could  go anywhere the jobs were.
2. It meant cheaper goods because tariffs were to be removed,
3. It meant cheaper cost of financing because of a single currency with as Germany the ‘anchoring credit’.

None of which have turned out to be as advertised by those wanting the EMU (except cheap goods which they don’t have the jobs nor disposable income now to afford)

The Governments:
1. To the sovereign governments it meant cheaper debt since they effectively received German Mark backed debt.  Like free liquor to an alcoholic or free drugs to an addict, the politicians couldn’t sign up fast enough as long as they kept sovereignty over precious taxation.
2. To make the deal happen, countries were allowed to maintain fiscal sovereignty, though everyone quietly understood that separated Monetary and Fiscal Policy was a flawed concept and eventually would doom anyone attempting it.

Government spending and brazen consumption masquerading as GDP started exactly with the retail launch of the Euro.

Read the rest of this entry »

Ask a Stupid Question…

leave a comment »

by williambanzai7
Posted originally Zero Hedge, October 25, 2010

“The question isn’t who is going to let me, it is who is going to stop me?”–Ayn Rand

WITH THE SWIRLING FRAUDCLOSURE CRISIS HEATING UP literally by the trading hour, I thought I would take a look at Dr B’s speech this morning to see if I could glean how His Helicoptership sees the “big fraudclosure picture.” I am not a PhD in the art of Fed speak, so the first thing I did was run the speech through a visual word cloud generator. Here is the result:

Hmmm… the words mortgage and foreclosure figure prominently. Not surprising since the conference is titled: “Conference on Mortgage Foreclosures and the Future of Housing.” I see the word crisis, at least he will ackowledge that much. However, I don’t see the words “possible systemic fraud” anywhere, do you?  I don’t see the words “accountability,” “purge” or “confidence” either.

I then read the speech iself, which talks a lot about a FED program called “MORE” and a Treasury/Dept of Labor unemployment task force called “HOPE NOW.”

MORE… HOPE NOW, feel better?

Read the rest of this entry »

Extend and Pretend: It’s either RICO Act or Control Fraud

leave a comment »

by Gordon T. Long of Tipping Points
Posted originally May 27, 2010

http://www.bearmarketinvestments.com/guest-post-extend-pretend-its-either-rico-act-or-control-fraud

WE ARE ENTERING THE AGE OF RAGE. It is presently most visible in Europe as austerity programs that potentially could shred a half century of social entitlement advances are met with increasingly violent street demonstrations.  It is seen in the US Tea Party rallies with their fury that the very fabric which the US capitalist system is based on is being destroyed and discarded. Unfortunately these demonstrations of rage are focusing on the effects and not the cause. The cause is a systemic plaque of unenforced financial control fraud.

Americans witnessed CEOs arrested during the nightly news coverage of the S&L Crisis of the early 90’s. They were placated as they heard the details of over 1000 indictments of the perpetrators of fraud. In the aftermath of the tech bubble implosion ten years later, injured investors once again witnessed the most senior executives at Enron, WorldCom, Tyco, Qwest and others being led off in handcuffs and disgrace to waiting police cruisers. Retirees with decimated retirement plans felt that some level of restitution had been made when 25 year sentences were meted out to these formerly high-flying felons.

After nearly two years since the greatest financial malfeasants in history and ten years since the last public example of financial crime, the public haven’t seen a single CEO sentenced to hard time for the financial meltdown. They have not had their thirst for revenge quenched by a single high level court case. Instead, the public infuriatingly witnesses politically crafted theater in congressional hearings that go nowhere, read watered down legislation that is replete with even richer lobbyist-authored loopholes and only occasionally see small headlines of quiet settlements with insulting token amends payments. Why? Were there no crimes committed? No laws broken?

The public is forced to accept excuses that we have enforcement agencies not enforcing, regulators not regulating and legislators not equipped to legislate properly in our modern fast moving financial world.  The public is left with the gnawing concern of whether it is incompetence or something much deeper, more troubling, and more sinister.  Confidence and trust in government and our democratically elected politicians continue to worsen from already pathetic levels.

Read the rest of this entry »