This
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).
She
then altered her strategy to one of offering to provide bailout funds to
As a
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
And
then… German voters found out that she’s secretly been bailing out
German tempers boil over back-door
euro rescues
Professor
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.
Earlier
this week, the Foundation for Family Business in
As a
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
MR.
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.”
Critics
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.”
The
message here is very, very clear:
True this would
have horrible consequences for the EU both politically AND financially. But the
alternative (implode
On
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.
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And
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