Holding the EU together by Money Printing and Force

By Greg Hunter’s USAWatchdog.com 

The European Union is frantically trying to come up with a plan to fix the debt crisis that is threatening to cause a worldwide financial calamity.  It seems every day there’s a new idea to save the union.  The latest is some sort of backdoor bailout through the International Monetary Fund (IMF).  Why doesn’t the European Central Bank (ECB) just take care of the bailout by itself?  It legally can’t according to the treaty that formed the European Union.  That hasn’t stopped the central bank from bailing out countries anyway.  But now, debt levels are reaching a critical stage as in a possible default, and the biggest problem is Italy.  Todayonline.com is reporting, “If Italy defaults on its debt of 1.9 trillion euros, the fallout could spell ruin for the euro zone and send shockwaves throughout the rest of the world. Yesterday, Italy’s borrowing rates skyrocketed to record highs in a 7.5 billion euro bond auction. The yield on its 3-year bonds surged to 7.89 per cent, 2.96 percentage points higher than last month, while yields on 10-year bonds spiked to 7.56 per cent, up 1.5 percentage points.”  (Click here for the complete Todayonline.com report.)

The key to saving the euro is Germany because it is the richest of the EU countries and can use its industrial might to help support a bailout fund.  But, Germany has been reluctant to bail out deeply indebted countries.  Now, calls to bend to pressure to save the day and keep the union together are reaching a fevered pitch.  The Guardian UK reported earlier this week, “The Polish foreign minister, Radoslaw Sikorski, urged Germany to save the EU from “a crisis of apocalyptic proportions.”  The Moody’s ratings agency predicted that a euro exit by any country would trigger a cascade of sovereign defaults across the eurozone. Jean Pisani-Ferry, director of the influential Bruegel think-tank in Brussels, said that “real businesses” as well as the financial markets were now “pricing in a break-up scenario … If disaster expectations build up and a growing number of players start positioning themselves to protect themselves from it, the consequences could become overwhelming.”  (Click here for the complete Guardian UK story.) 

So, “any country” that stops using the euro “would trigger a cascade of sovereign defaults across the eurozone.”  This reminds me of the verse from the song “Hotel California” that goes “You can check out anytime you like, but you can never leave.”  The EU sounded so good when it started, but now it has turned into a nightmare where democracy is smothered by bankers.  Defaults would, no doubt, cause the bankers to lose power and lots of money.  That is not going to happen without a knockdown, drag out fight.  Paul Craig Roberts, former Assistant Treasury Secretary in the Reagan Administration, wrote last week, “The private banks want to avoid any losses either by forcing the Greek, Italian, and Spanish governments to make good on the bonds by imposing extreme austerity on their citizens, or by having the European Central Bank print euros with which to buy the sovereign debt from the private banks. Printing money to make good on debt is contrary to the ECB’s charter and especially frightens Germans, because of the Weimar experience with hyperinflation.” 

Roberts points out that the Germans had a failed bond auction last week and thinks it was orchestrated by the IMF, ECB and private banks to put pressure on the Germans to go along with the EU bailout.  Roberts went on to say, “My opinion is based on the following facts. Goldman Sachs and US banks have guaranteed perhaps one trillion dollars or more of European sovereign debt by selling swaps or insurance against which they have not reserved. The fees the US banks received for guaranteeing the values of European sovereign debt instruments simply went into profits and executive bonuses. This, of course, is what ruined the American insurance giant, AIG, leading to the TARP bailout at US taxpayer expense and Goldman Sachs’ enormous profits.   

If any of the European sovereign debt fails, US financial institutions that issued swaps or unfunded guarantees against the debt are on the hook for large sums that they do not have. The reputation of the US financial system probably could not survive its default on the swaps it has issued. Therefore, the failure of European sovereign debt would renew the financial crisis in the US, requiring a new round of bailouts and/or a new round of Federal Reserve “quantitative easing,” that is, the printing of money in order to make good on irresponsible financial instruments, the issue of which enriched a tiny number of executives.”  (Click here for more from Mr. Roberts.) 

Now, there is talk of a new “Stability Pact” that would give a central power oversight of the budgets of individual countries.  If the countries agree to this “Stability Pact,” they would lose a certain amount of their sovereignty to unelected officials.   Former Goldman Sachs bankers have been put into power in Greece and Italy.  The new head of the ECB is also a former Goldman Sachs man.  The bankers are taking over Europe, and they come in the form of unelected technocrats.  The bankers are the ones responsible for creating this enormous global mess through greed and fraud.   Countries on both sides of the Atlantic are not only shielding these crooks but allowing them more power and bonuses to boot!!

Nigel Farage, a Member of the European Parliament for the UK, is an ardent critic of the EU.  He thinks this latest crisis is all about gaining control and says, “Democracy is deliberately and willfully being destroyed.”  This crisis is only going to be tamed with massive amounts of money printing and defaults of some big banks.  Expect the IMF, ECB and the Fed to pick the winners and losers.  You really want to know what is going on with the EU sovereign debt crisis?  Listen to Mr. Farage in the video below.  He was interviewed last week by the Italian media.  I only wish he could run for President.  

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  1. George Too

    welcome to the new Reich. the DEBT REICH! This will make the Third Reich look like armatures as they put the yoke of slavery on the middle class. What not the poor? How can the Debt Reich steal from the poor? They are buying the poor’s vote loyalty with benefits.
    Seig Heil.

    • Greg

      Good one George. This would all sound better in German!!!

  2. Eric

    This is a must watch video. 30 minutes to explain very simply and clearly why the current money as debt monetary system and exponential economic growth model are doomed to fail. And they will fail very soon due to their exponential nature.

    Chris Martenson Lecture On Why The Next 20 Years Will Be Marked By The Collapse Of The Exponential Function


    • Greg

      Chris Martenson is the real deal. Thank you.

  3. Art Barnes

    Greg, nice video, but I wanted to comment on your blog of the homeless yesterday. As you know I have been preaching that out here on the western front for quite sometime. Many of the unemployed homeless are no longer a bunch of misfits, drunks, or mental cases but simply without jobs. Its getting bad and I am so glad you wrote about and the MSM did the piece. This thing is getting worse and all you hear about is bailouts of one sort or another, and our politicians (Republicans) answer is to create jobs out of removing the taxes and regulations from the elite. What happens to the people after the corporations pay no taxes and have no regulations I wonder. Slave labor comes to mind, a giant step backwards in time, maybe go back to child labor as that was and answer for cheap labor not so long ago. I can remember conspiracy articles on the small banking elite many years ago and how they wanted to control the world. Maybe they weren’t so far off as we thought they were.

    • Art Barnes

      Greg, just in, CNN breaking news “Fed to the Rescue”. Here we go again, the news breaks almost hourly now, Dow’s pre-open futures up over 300 points. The elite got what they wanted, more easing and quick money stock rally profits and the people will get what? INFLATION, INFLATION & MORE INFLATION! Greg, you can’t make this stuff up, our FED is destroying our dollar as we speak to save itself and their bankers.

    • Greg

      Thank you Art for your participation in this site.

    • Will

      Art, it has never been an easy task to produce what you would like to consume. My father worked in the steel mill in Chicago when he was eleven. Life becomes difficult when what you produce becomes your income. We have seen so many middlemen step in, that produce nothing, that it has become unsustainable.

  4. Will

    Looks like the can is even getting too big to kick and surely wont’t go far. I’m afraid it will hit a wall and roll back over us.

  5. Stan H

    Suppose that Greece, Spain and Italy would leave the European Union and switch to Drachmas, Pesetas and Liras. What happens then to all those hundreds of billions of Euros that Greece owes and the trillions that the other two owe? How can it be done to convert bonds denominated in Euros into the new currencies? It may work well converting bonds from a weak denominated currency into a strong one. But the reverse is not tenable – as well as not legal. Making matters worse is that the countries leaving the European Union will not have any Euros; being that the revenue flowing into their treasuries will be Drachmas, Peseta and Liras. It therefore appears that any nation leaving the Euro would render its Euro denominated debts valueless.
    Now, why would anyone lend money – even at a higher interest rate – if there is a risk of losing it all? There doesn’t seem to be any other option except to print print and print.

    • George

      How about this scenario? Greece , Spain and Italy default on their Eurobonds or offer to pay when due in their currency at an exchange rate set by the 3 countries. The banker loose out for making loans that were stupid and by helping the countries commit fraud [use of exotic instruments to help Greece meet financial tests to enter EU when they were in fact unable to pass]. The bankers do not get big bonuses, some lose their jobs and if a Bank fails in the USA, we do not bail them out we just cover the depositors.
      I do not see a down side for the people. The citizens of Greece, Spain and Italy and their citizens are not under an obscene financial burden for the next ten generations.
      Everyone said Iceland would be destroyed if they did not agree to slavery for generations. Last time I looked, their economy was better than ours.
      Do you think the Fed Reserve is looking out for the citizens of the USA or their bankster buddies? Why would they put you and me on the hook to pay for Euro issues if the Europeans are unwilling to do it themselves?
      Let’s keep our money here and work on domestic issues instead of beggaring the American taxpayer. We could build factories here instead of Mexico and China. If you think about it, Germany has higher costs that China yet they are an exporting nation. If the government is going to gamble with my tax dollars, they need to gamble with them HERE!

      • Greg

        This sounds like a better plan for those three countries than what they are getting now.

  6. M SMITH

    Greg, Germany finally paid off the debts from WWII just a year or so ago. Who they were paying is my guess some cartel of bankers. The point is they were made to pay for WWII in a way that it took them over 50 years to pay this debt. Now we know what our debt is and there is no intention to pay it back, so what is next, inflate our way out of it, No. Default & wipe out trillions in pensions to all Americans?

    Just in, all the major central banks will flood the EU with cheap dollars, this will send PM’s soaring and the guys who bought themselves a free get of jail card will be working over time manipulating the PM’s markets.

    Well the USA is now a true police state.http://www.zerohedge.com/contributed/senate-passes-bill-allowing-indefinite-detention-americans-considers–bill-authorizing-more-torture. This is the final nail in our freedoms as a Republic where the Constitution has been trashed by the PE’s giant propaganda machine that operates out of the ESF. Most Americans does not have a clue of what this means to them, but I am sure they will find out soon enough.

    • Greg

      M SMITH
      Thank you for the comment and link.

  7. Brad

    The whole thing is like an inflatable raft with a tear in it. As soon as you inject it with air and begin to walk away, it immediately begins to deflate. Then you just repeat the the process knowing that if the raft was left to its own it would just go flat. The only problem is that over time the tear grows in size because it has not been fixed. The little that used to do it becomes more and more and faster and faster. Like I heard a guy say the other day, it’s reached the time to turn the monitors off and go outside and enjoy what you have.

  8. Bob

    Rev.6:5 And when they opened the third seal, I heard the third beast say, Come and see. And I beheld, and lo a black horse; and he that sat on him had a pair of balances in his hand.
    Rev. 6:6 And I heard a voice in the midst of the four beasts say, A measure of wheat for a penny, and three measures of barley for a penny; and see thou hurt not the oil and the wine.

    • Greg

      Could you please explain the meaning of this verse from the Bible. I would like to know and I am not giving you a hard time (at all.)

      • joe

        Bob’s term “penny” is a little loose on the interpretation side. It really means a day’s wages for a little wheat or barley. Oil and wine were basic needs in those days (like sugar and milk are today in a sense), so not “hurting” them means that there will be some necessities available. So, I think Bob’s point here is we are headed for famine, but not total famine.

        • Greg

          Thank you for the Bible lesson. It was a good one!!!!

  9. Sean

    I love Nigel. One of the good guys, for sure.

    Reality is that this thing doesn’t get better until the people move against the corporate controlled leadership in the west. Peacefully, I would hope. But I doubt peace would be allowed if that were to happen.

    Another piece of reality is that while media and blogs report a financial system in freefall and failing, the orchestrators of this mess are sitting back in their high-backed leather chairs, sipping brandy and smiling to themselves as events move forward as planned.

    One of the signs that this is mess is actually under control is that despite the economic “failures” (I like “deconstruction” better but we can call it failure to be consistent) and perceptiopns of collapse, the military wing of the establishment is moving full steam ahead. It’s game on. A US carrier group is currently facing off with a Russian carrier group in the Eastern Med. The newly empowered, NATO backed Libyan Al Qaeda is funneling arms to rebels in Syria. (Side note: It seems as though Al Qaeda is back on our side against the Russians – bringing us back full circle, in alignment with the Brzezinski doctrine against Russia). Pakistan just got backhanded and has essentially been presented with the proverbial gauntlet – over their position on Iran. Tensions with Iran have ramped up to the highest levels since 1979. And right now SoS Clinton is in Myanmar, right under China’s nose after a visit to NK, and one week after the US announced formal military operations staging from Down Under. This is a direct threat to ASEAN but more importantly, it’s an in-your-face threat to the entire SCO when you look at a map and recent activities.

    These aren’t coincidences. And they all revolve around the same set of corporatist actors. The economic “deconstruction” was orchestrated, just as we’ve been witnessing orchestration and justification for military domination of nations who aren’t submissive to regional economic integration under private western banking control.

    As I said at the beginning, it doesn’t stop until the divided people come back together and make a decision to end this insanity. We need to place real, normal, responsible leaders in power. Decent people who don’t have Lex Luthor daydreams that are resulting in real Orwellian nightmares.

    • Greg

      Thank you for your analysis.

  10. Art Barnes

    Greg, well the elite made a bunch of money today on Wall Street, what went much unnoticed was that oil settled above $100 per barrel again today and if I could bet I would bet its going higher and higher to keep up with the printing presses the FED announced today. Oh, that’s not what the FED did today you say, it was just a way to easy money loaning. The FED will loan money once its printed, do you see the catch 22 here. Make no mistake about it, finally the hyperinflation condition clearly is in play now. The MSM & the FED both used the world “collapse” today, meaning they had to do it or the world markets (economies) were going to collapse, bunch of non-sense bull-crap, and outright lies. The middle class now clearly will be the “late, great, U.S. middle class”.

    • Greg

      Yes, Art it make me sick. We will all pay for this sooner than you think!

  11. Sean S


    You stated:

    “The bankers are taking over Europe, and they come in the form of unelected technocrats. The bankers are the ones responsible for creating this enormous global mess through greed and fraud.”

    Sorry but I cannot agree that the “bankers” created the national debt crises in Europe.

    My perspective is this. It was the irresponsible politicians in the countries concerned who are soley and wholly responsible for the over-spending and over-borrowing (at artificially low rates) to sustain their unaffordable “Welfare States” and political popularity. It takes zero talent to spend and borrow. Anyone can do that.

    Well, now these countries cannot repay their debts. New borrowings on the open market are either difficult to secure or come with big interest charges given the ridiculous level of risk the lenders are taking.

    Government bonds and like Government securities issued by stable western economies have traditionally been seen as totally safe investments. If you personally invested in a 1 million unit Government bond you would not want the Government turning around and telling you – “oh sorry we borrowed too much and now we cannot repay you – tough luck”.
    In essence this is what Greece has done and it looks increasingly like some others could be going the same route. Greece is reportedly trying to get lenders to take at least a 75% loss on their loans to secure short term alleviation from the financial mess it created. So much for the 50% voluntary loss figure the EU came up with weeks ago as part of their “solution”.

    It’s hardly surprising that the lenders don’t want to see a default here. Neither does the ECB who has been actively buying up toxic bonds to keep the boat afloat. I know if I was holding these bonds I would not want to take a massive loss on my investment and nor would anyone.

    The bankers, money market funds and others loaned the cash and the European Governments spent it with wild abandon. The true cuprits here are the iresponsible Governments. Had they managed their spending and borrowing in a sustainable and fiscally prudent manner they would not be in trouble now. The worst you can say of the lenders is that they should have been more prudent before exposing themselves to what has now been revealed as overly excessive lending risk.

    As is typical of politicians worldwide, they are always looking to blame some other person, group, party, corporation, industry group or other country for the bad results of their actions. They never make mistakes- everybody else does.

    People out there with their nice 401Ks are exposed to this crisis directly. It’s most likely that your 401k has some exposure to Europe debt too as some of the Cash Funds a portion of your savings are probably invested in will likely include some European Government bonds.


    • Greg

      I am sorry you don’t think that but that is fact–the bankers cause the financial mess on both sides of the Atlantic. It is well documented here and elsewhere. You say, “I know if I was holding these bonds I would not want to take a massive loss on my investment and nor would anyone.” Of course, no one would want to take losses but that is the big risk in investing and banking? These banks paid fat bonuses and commissions on these loans. Why are the profits belong to the banks and the losses belong to the taxpayers? The system is fraudulent and the bankers are at the heart of the financial system, after all they are the ones who paid off our politicians.. It is well documented. Thank you for your comment.

      • Denarius

        Greg, we can thank Sean S for one thing. His well written case for
        Politicians blaming Bankers reveals a common assumption, that those
        “people” are motivated by the same fundamentals as we poor folks are.
        But judging them by our standards of conduct is as fraught with error as
        judging a soccer game by baseball rules. I call this the Great Disconnect.
        In my experience, those “people” are so different than we are they may
        as well have come from another planet.
        A case could be made that the present condition of society is not due to
        Bankers, Politicians, or even a combination of both, but to greedy power
        mongers run amok without adult supervision. My studies of politics and
        economics reveals more about aberrant human behavior than it reveals
        about laws or money.
        It’s all part of the Human Condition; “Power corrupts and absolute power
        corrupts absolutely.” It is what it is and any hope of tilting the spectrum
        of human behaviors one way or the other will be as successful today as it
        has been throughout history. Yet the indomitable human spirit fights on
        as it has for eons. That is all we can do, so that is what we do.

      • jay

        i dont have to own a bank building to controll the bank…if i have 99% of the money in it. when i walk in everyone knows i can close there jobs down,so if i say change this carpet to pink flowers today..the banker gets it done.or i take out my 99% and the bank closes.this is how a oilgarcgy rules..threw influence. mostly in secret to prevent assanation. i really believe our world is controlled by oligarchy.esp, usa.
        influence is greater then athority when it can buy it.

  12. norcar survivor

    Seems to me there was profit taking, dancing in the isles and bankers and politicians patting them selves on the back about 3 years ago at how masterfully they averted calamity with their magic show, and the bottom fell out and stayed there. Now we’re back over 12000 in the stock market and we’re supposed to be amazed at how proficient all these financial experts have controlled this crisis. This crisis has only begun. There is a saying that goes “Calm before the storm” and I think I feel it coming on. Let us take this as an opportunity to make one more attempt to prepare for the next shoe to fall. People are so gullible. It is amazing how quickly people forget the pains of histories lessons. Anyone thinking the EU condition has changed at all is living in a fantasy. All I see coming from the EU crisis is a scape-goat for politicians to use in the good ole USA.

    • Greg

      Love the comment NC!!

  13. Jan

    All of this makes me ill too. Everyone is blaming the Germans, but trust me the German people want to cut the PIGGS loose, not take over their government and force them into slavery. The Germans do not want to support the runaway spending of these countries either, let them go and learn to live within their means.

    This is a bankster plan that will fail, but not without terrible bloodshed and military action (U.N.?) to control civil unrest. There will be an underground resistence for years to come and in the end, the bankers will lose.

    I find is laughable we are establishing “democray in the Middle East” and cheer every election, while denying the citizens of Greece and Italy democratic elections.

    • Greg

      Here here!!

      • norcar survivor

        The election issue is a very notable point Greg and Jan.

  14. Craig

    I guess we now stand at the cliff. When people starve like the people in Germany prior to the rise of the German Reich, then subsequent Weimar republic. Their primary interest becomes food, water, and basics for SURVIVAL. It is the most important word in the world dictionary. This is the plan for all of us. He who holds the resources wins. He who wins the wars writes history. The US is certainly not “immune” from any of this. Debt serfdom for citizens. Big banks got the bailouts, not the people. Their “end game” plan is going forward. It is very pathetic, and the point in history for the United States occured in the meltdown. The Bankers chose the winners and losers. A company I worked for lost because Bear Stearns was not a “chosen survivor”. It exemplifies how “powers that be” can control the game. The gold/silver is a great idea, but a big problem with the market is the way big banking institutions can “short naked” the market with future tax payer dollars. Timing is centered around the options market. Sprott’s idea of telling the Miners to hold inventories of Gold/Silver in lieu of Bank supplied cash is a wonderful revelation and it should be watched closely. That certainly would remove the ability of Big Banks to manipulate the market. Watch closely, it is getting near the tipping point. The banks would certainly RETALIATE.

  15. M SMITH

    This will be heck of a weekly wrap up Greg, I sure you will have more than enough to cap off this week. Just remember, you have all of our support, let us have it with both barrels blazing & reload if you have to. If Obama wants to define his place in history, he will have to Veto the bill passed by congress that will change America forever from a broken Republic to a total Police State, the NNDA is congress fearing their past will be exposed to the world. All that had any support to pass this bill will find their Names posted all over the net, if they don’t shut it down 1st, because they are trying like hell to make it happen ASAP & if they fail, they will start again in 2012 behind close doors.

    I wish/hope you could get a interview with Judge Napolitano from Freedom Watch of Fox Business. He did a you tube bit that was the best I have watched about what the Constitution means to all of us & even goes into detail how Bush/Obama & congress has managed to pass unlawfull legislation & much more than I could go into. You carry a heavy burden to bring all of us such important content that helps all of us make sound decisions in our lives & for that you will always remain in my prayers and that GOD will Bless You & Your Family to keep you safe in the days/months/years of turmoil and uncertainty that we surely shall endure as we have no other choice.

    • Greg

      M Smith,
      Thank you. I hope I do not disappoint.

  16. Rachel Hauge

    I wonder if my iPod Touch will be worth as much money with the Euro Zone crisis?

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