The Solution to Greece’s Sovereign Debt Crisis
Politics / Global Debt Crisis Jun 18, 2011 - 06:24 AM GMTBy: Mike_Stathis
In the very first issue of the Intelligent Investor (June 2009), I discussed problems in Europe that became a reality several months later.
“It is likely that America will end up on the hook for the majority of the bailout funds needed for Eastern Europe via the IMF…In the end, I feel the long-term fate of the European Union (EU) will be threatened; not so much for economic reasons as for the continued destruction of each nation’s sovereignty.
Already, common laws of the union are causing social disruptions based upon cultural differences within each member nation. It is perhaps for this reason that the union has aggressively opened its doors to nations outside of the union as a way to dilute the cultural and racial identities of each nation. But we have already seen a glimpse of what this offers—mass riots, arson and destruction. No doubt, the tensions will worsen due to the severity of the global meltdown.
One thing is for certain. In order for the union to succeed, all nations must be provided with a somewhat equivalent infrastructural base. Otherwise, the disparities in commerce will present problems.
Let me give you a simple example of this. Arguably, Germany has the most modernized road system in Europe. This enables an efficient means of transportation for a vibrant consumer and business activity.
In contrast, Greece’s transportation infrastructure is horrendous. As a result, the cost structure for goods and many services is higher by necessity. This disparity leads to a relative difference in the strength of the Euro depending on which nation you are in. But there are other economic uncertainties, such as who will bail out troubled nations.
Given the economic, social and sovereignty issues, it is possible that by 2020, Germany will pull out of the union, most likely for economic reasons alone. If that happens, you can bet France will soon follow.
If both nations exit, the Euro will be pretty much finished. To be clear, I am not predicting the fall of the Euro, but rather raising this very real possibility. It is only by a full consideration of all scenarios that we can construct a comprehensive risk management strategy.”
A few months later weeks before problems in Greece emerged, in October 2010 German Chancellor Angela Merkel shocked EU officials and other globalists by proclaiming that multiculturalism in Germany has been a complete failure. http://www.csmonitor.com/World/Global-News/2010/1017/Germany-s-Angela-Merkel-Multiculturalism-has-utterly-failed
Those who understand the mechanisms by which Zionists have imposed multiculturalism throughout the western world (all while working towards a homogenous population in Israel) are not likely to be surprised by Merkel’s conclusions. What was surprising was that she openly admitted it.
Even if the EU were to commit towards equalizing the infrastructural base of member nations, it should be clear that this is no longer economically feasible. It should also be apparent that the EU ruling class would never place this as a goal because it would diminish the economic advantages obtained by advanced EU member nations, from less developed nations. Finally, the multicultural "time bomb" would remain unless EU leaders unanimously decided to cast away this policy which clearly creates societal dysfunction and diminished solidarity.
Resolving infrastructural disparities from within the EU would be analogous to Washington raising the minimum wage to its appropriate inflation-adjusted level of around $11 per hour. Washington would never permit this because it would diminish the economic benefit of allowing millions of illegal aliens to enter the U.S. This is something I pointed out in the 2006 version of America’s Financial Apocalypse.
Several years before the sovereign debt crisis escalated in Greece, and even before the global financial crisis had commenced, I had concluded that the European Monetary Union (EMU) would be much different by say 2022 due to both economic and societal tensions.
Although the IMF continues to push for bailouts for emerging nations from within the European Union, the IMF has publicly admitted (in a 2010 publication) perhaps by accident, that the demise of these now vulnerable nations has been primarily due to their membership within the EU.
According to official data from a variety of sources, the current accounts in seven nations within Southern Europe (i.e. Southern Euro Area, SEA) have imploded since the mid-1990s. For instance, in 1994, these nations maintained an overall average current account balance (which can be likened to an annual trade surplus) to an average deficit of 10% in 2008. [1]
When the current accounts of Northern Europe (the Northern Euro Area, NEA) are examined, eight nations have accumulated current account surpluses over the same period. [2]
How SEA Economies Collapsed
Numerous sources including the IMF and other economic organizations linked within the network of global powerbrokers have acknowledged that the decline in the current accounts of SEA countries coincided with their entry into the European Monetary Union (EMU). This trend continued after their subsequent adoption of the euro.
For instance, according to economic data, during the period spanning 1994–2008, the deterioration in current accounts coincided with a large decrease in private saving rates and, to a lesser extent, with a rise in investment rates, while public saving actually improved.
Although the EU has been in existence for decades, the formation of the EMU (linking most of the members of the EU into a unified currency) has been a more recent development. According to the IMF, it was the creation of the EMU and, especially the introduction of the euro that drove the declines in current accounts by allowing member nations to maintain their investment levels above what could be financed from lower domestic saving.
According to the IMF…
“…economic integration improved access to the international pool of saving, but it did not necessarily make it optimal or sustainable. Even in countries in which an increase in investment played a more important role in the current account deterioration (Spain and Slovenia), most of the increase took place in less productive nontradables sectors, such as construction.
Although the current global financial crisis has forced some reduction in current account deficits, they are expected to remain high in the medium run as a result of the countries’ low productivity and weak competitiveness.”
Thus, the unionization of Europe has largely been responsible for the current economic problems seen in Greece, Italy, Spain, and other nations. They were doomed from the beginning.
What Was the Impetus for the EMU?
Similar to U.S. trade policy over the past twenty years, which has gravitated towards the use of cheap labor from abroad by unconditional acceptance of globalization theory, the EU (and later the EMU) was engineered to exploit the cheap labor of southern Europe for the benefit of the more advanced northern European nations. However, these globalists failed to account for contingent liabilities associated with the unification of very different economies and societies, each with a unique and rich history.
The U.S. is facing a somewhat similar predicament, as millions of illegal aliens have flooded into the various social support services, making these vital resources less available for U.S. citizens. Moreover, the various societal problems have become widespread.
Although the IMF acknowledges that the fiscal troubles seen in southern Europe have been primarily due to the numerous economic imbalances that developed upon their entry into the EU, the IMF’s official policy remains dedicated to providing financial assistance in order to keep these nations as members within the EU and the EMU. That should give you an idea exactly what is going on behind the scenes.
As you can imagine, Germany’s decision to help Greece has been a complete disaster for both Germany and Greece. Although Germany’s economy has rebounded well since the global recession, it has been dragged down by the weight of the financial woes of emerging Europe, while Greece is now locked into a global chess match.
Accordingly, the only way Greece will permanently emerge from its mess is to dump the European Union. Conditional financial assistance from the IMF will only delay the fundamental problems, at best. At worst (and most likely), mandatory austerity measures layered upon numerous policy changes and other actions will lead to a less desired fate for Greece over the longer-term period. Certainly, Greece faced many problems prior to entering the EMU. Specifically, the nation’s public pension system had been in deficit for years. However, these deficits accelerated after entering into the EMU.
Short-term fixes in the form of bailouts and other types of financial assistance from the IMF, Germany and other nations will not lead to a permanent fix for Greece or other nations in southern Europe. On the contrary, the economic landscape of Greece, like other nations under the grip of the IMF, will be reengineered at the expense of Greek citizens for the benefit of advanced nations within the EU.
How the IMF Exerts its Power
In the 1944 Bretton Woods Conference, the World Bank and IMF were created. The World Bank is typically led by Americans while the IMF is led by Europeans. However, the common link of leadership often places Jewish bankers and politicians at the helm. The emphasis on “Jewish” bankers and politicians is a very important distinction, as you can imagine.
The World Bank is an international bank whose stated purpose is to assist developing nations in need of humanitarian relief, with the stated purpose of reducing poverty, although this serves as a front for its power-grab. The current World Bank president is Robert B. Zoellick, a Jew and former Goldman Sachs managing director, PNAC and CFR member, former Deputy Secretary of State and US Trade Representative.
Former World Bank Presidents
Paul Wolfowitz 2005–2007 (JEWISH; former Deputy Secretary of Defense, spearheaded Iraq War with PNAC)
James Wolfensohn 1995–2005 (JEWISH; former Solomon Brothers executive, founder of Wolfensohn & Co)
Lewis T. Preston 1991–1995 (JEWISH; former president and CEO of JP Morgan)
Barber Conable 1986–1991 (JEWISH; former congressman and US senator)
Alden W. Clausen 1981–1986 (JEWISH; former president, chairman and CEO of Bank of America)
Robert McNamara 1968–1981 (not Jewish)
George Woods 1963–1968 (JEWISH; former First Boston Bank Chairman)
Eugene R. Black, Sr. 1949–1963 (JEWISH; former Chairman of the Federal Reserve)
John J. McCloy 1947–1949 (not Jewish, but was very close to Paul Warburg and other Wall Street Jews)
Eugene Meyer 1946–1946 (JEWISH former owner of the Washington Post and Chairman of the Federal Reserve)
The International Monetary Fund (IMF) receives funding from nearly 200 member nations. In reality, the IMF is another international Jewish-run bank connected to the Federal Reserve and the Bank of England. The official goals of the IMF are to facilitate global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty.
However, the stated goals of the IMF serve merely as a front in order to seize control over nations for the benefit of the U.S. Once the IMF becomes involved with a nation, it takes over the political power and societal norms of nations in financial distress. Although it claims to be an international fund, it is really an extension of Washington DC. Currently, John Lipsky (Jewish) serves as the interim head of the IMF.
Former IMF Presidents
Dominique Strauss-Kahn 2007-2011 (JEWISH)
Rodrigo Rato 2004–2007
Horst Köhler 2000–2004
Michel Camdessus 1987–2000 (?)
Jacques de Larosière 1978–1987 (?)
Johannes Witteveen 1973–1978 (JEWISH)
Pierre-Paul Schweitzer 1963–1973 (JEWISH)
Per Jacobsson 1956–1963 (JEWISH)
Ivar Rooth 1951–1956 (JEWISH)
Camille Gutt 1946–1951 (JEWISH)
Similar the World Bank, the IMF is headquartered in Washington DC. There is a very good reason for this. Each of these organizations has been disguised as a financial United Nations of sorts. Similar to the World Bank, the IMF is under the control of the same crime syndicate that runs the Federal Reserve, Wall Street, corporate America, and Washington.
Once a nation accepts financing from the IMF, it loses a good part of its sovereignty. Both foreign and domestic policies are altered in a manner that satisfies the goals of the U.S. and the UK. Moreover, once under the grasp of the IMF, nations often become economically worse off than prior to the IMF's involvement. Yet, the western media always positions the IMF as some savior that seeks to restore economic conditions of distressed nations, much in the same manner that it uses the threat or terrorism, the spread or defense of democracy to justify wars by the U.S
The IMF gains control over developing nations and nations under temporary financial distress by camouflaging its power grab with financial assistance. Once the bait has been accepted, IMF and other officials from the crime syndicate attempt to alter the entire economic and social landscape of its subject nations. Rather than real assistance, the IMF ratchets down on indebted nations, altering their economic and societal policies in a manner that only benefits the underlying powers of the IMF, the U.S.
Although the IMF is a constituent of this crime syndicate, it acts as a very minor player. The primary arm of the syndicate works to defraud the people of more advanced nations using less conspicuous means which are always promoted as policies which are “for the good of the people,” such as globalization, global warming, and a surrender of their economic and financial system to corporate America and the Federal Reserve.
Finally, another major arm of the crime syndicate – Wall Street - steals more than $200 billion each year (based on my estimates) from investors through countless acts of securities fraud.
Brazil Might Rescue Portugal from the IMF
Brazil remembers its own struggles in the 1990s that led to financial assistance from the IMF. The nation paid off its IMF debt in advance because it did not want to remain in the grasp of the IMF. Thereafter, Brazil mounted a period of spectacular economic growth that continues today. Much of the credit for its rapid and impressive turn around has gone to Brazil's former President Lula da Silva.
Brazil also remembers its former colonial relationship with Portugal. Although Brazil is a multicultural nation, its ties with Portugal have persisted in many ways. Portuguese culture can be seen in Brazil everywhere you turn, from the food to the native language.
As Portugal faces the threat of an IMF-EU bailout, Brazil wants no part of this fate for its mother nation. In response, former Brazilian President Lula da Silva has warned Portugal to resist such a bailout. Da Silva recalls the adverse consequences of IMF assistance when his own nation faced economic problems a decade ago.
“The IMF will not solve Portugal's problems, like it did not solve Brazil's problems and like it did not solve other problems. Every time the IMF tried to help reduce debts, it created more problems for countries than solutions.”
Thus, it should be clear that the best economic solution for Greece is to exit from the EMU followed by the EU. I would also recommend this action for the remainder of southern Europe. Not only would this clear the path for improved economic conditions, it would also help maintain the sovereignty each nation has cherished for centuries.
In the end, the people of each nation will have the opportunity to determine the fate of their nation, not by voting, but through revolt. Thus far, it appears that the Greeks want no part of the EMU or the EU, much like in the past.
I don’t know about you, but I’m rooting for the Greeks.
What's truly encouraging is the fact that Europeans are fighting back. They refuse to go down without a fight; a real fight; not some token rallies with rock bands and Hollywood productions organized by puppets of controlled opposition like Glenn Beck and the tea party organizers from corporate America like Freedom Works and Americans for Prosperity.
http://www.avaresearch.com/article_details-555.html
The U.S. media is not showing much footage of the riots in Greece, Spain and elsewhere because they fear it will give Americans ideas of their own riots. But there really isn't much need for the oligarchs to worry, as Americans remain under the control of the media.
Apparently, Americans feel better after their organized chants of "End the Fed" and so forth. But this in no way alters the fact that their future is being stripped away each day.
There is much to be learned from our European friends. I hope you are watching closely.
Spend some time on YouTube if you want a better depiction of the riots in Europe.
[1] The SEA consists of Cyprus, Greece, Italy, Malta, Portugal, Slovenia, and Spain. SEA-4 denotes the four largest SEA countries: Greece, Italy, Portugal, and Spain; the latter three joined the EMU in 1994 and the euro area in 1999, and Greece joined the euro area in 2001. The remaining SEA countries, SEA-3 (Cyprus, Malta, and Slovenia) joined the EMU in 2004 and the euro area in 2007–08. Not included in this analysis is Slovakia, which joined the EMU in 2009.
[2] The NEA comprises Austria, Belgium, Finland, France, Germany, Ireland, Luxembourg, and the Netherlands.
By Mike Stathis
www.avaresearch.com
Copyright © 2011. All Rights Reserved. Mike Stathis.
Mike Stathis is the Managing Principal of Apex Venture Advisors , a business and investment intelligence firm serving the needs of venture firms, corporations and hedge funds on a variety of projects. Mike's work in the private markets includes valuation analysis, deal structuring, and business strategy. In the public markets he has assisted hedge funds with investment strategy, valuation analysis, market forecasting, risk management, and distressed securities analysis. Prior to Apex Advisors, Mike worked at UBS and Bear Stearns, focusing on asset management and merchant banking.
The accuracy of his predictions and insights detailed in the 2006 release of America's Financial Apocalypse and Cashing in on the Real Estate Bubble have positioned him as one of America's most insightful and creative financial minds. These books serve as proof that he remains well ahead of the curve, as he continues to position his clients with a unique competitive advantage. His first book, The Startup Company Bible for Entrepreneurs has become required reading for high-tech entrepreneurs, and is used in several business schools as a required text for completion of the MBA program.
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