is at the core of the “welfare state” mentality that permeates
As a result of this, EU voters, who determine EU elections, don’t take action until what has promised to them comes under threat.
For this reason, EU political leaders will maintain their agendas regardless of whether said agendas go against financial or economic realities (or common sense for that matter) until these agendas begin to have real negative consequences for their political careers.
A perfect example of this paradigm in action is German Chancellor Angela Merkel who was relatively “pro-bailout” until German voters began to thrash her political party in Germany’s state elections (March 2011).
then altered her strategy to one of offering to provide bailout funds to
result of this decision to start playing “hardball,” Merkel’s political
approval ratings shot to their highest levels since her 2009 re-election. At
the same time, she was able to maintain her agenda of extending
then… German voters found out that she’s secretly been bailing out
German tempers boil over back-door euro rescues
Hans-Werner Sinn, head of Germany’s IFO Institute, said German taxpayers are
facing a dangerous rise in credit risk from a plethora of bail-out schemes. “The
euro-system is near explosion,” he told
Dr Sinn said
“It is a horror scenario,” he said, warning that the euro system is splitting friendly countries into blocs of mutually hostile creditors and debtors, exactly the opposite of what was hoped.
this week, the Foundation for Family Business in
direct result of this, Merkel’s CDU party is getting slammed again in state
elections. And remember, Merkel is up for re-election in 2013. In that context
as well as the recent elections in
Seeing in Crisis the Last Best
Chance to Unite
SCHÄUBLE said the German government would propose treaty changes at the summit
of European leaders in
“What we’re now doing with the fiscal union, what I’m describing here, is a short-term step for the currency,” Mr. Schäuble said. “In a larger context, naturally we need a political union.”
say the spending cuts German leaders have demanded from other countries are
hurting growth across the Continent, in the process making debts only harder to
repay. And his proposals to give the European Commission far-reaching powers to
enforce budgetary discipline have been likened by skeptics in
“There is a limited transition period where we have to manage the nervousness on the markets,” Mr. Schäuble said. “If it is clear that by the end of 2012 or the middle of 2013 that we have all the ingredients for new, strengthened and deepened political structures together, I think that will work.”
He sees the turmoil as not an obstacle but a necessity. “We can only achieve a political union if we have a crisis,” Mr. Schäuble said.
Note that Schauble repeatedly emphasizes the goal of a “political union,” NOT a “fiscal union” or “monetary union.” Indeed, his one reference to a “fiscal union” is in the “short-term,” while stressing that in a “larger context” the EU needs a “political union.”
message here is very, very clear:
True this would
have horrible consequences for the EU both politically AND financially. But the
that note, I fully believe the EU in its current form is in its final chapters.
Whether it’s through
With that in mind, I’m already positioning subscribers of Private Wealth Advisory for the upcoming EU collapse. Already we’ve seen gains of 6%, 9%, 10%, even 12% in less than two weeks by placing well-targeted shorts on a number of European financials.
And we’re just getting started. Indeed, we just closed our 50th straight winner last week: a 10% gain in one week’s time.
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