– EURO ‘COLLAPSE‘ COULD DRAG EUROPE INTO CONFLICT (Express):
THE euro is on the verge of a collapse that could drag Europe into conflict, billionaire financier George Soros warned yesterday.
The veteran investor said massive budget cuts proposed by Germany could destabilise the European Union by dragging down its neighbours’ economies.
He said: “German policy is a danger for Europe. Unfortunately, a collapse of the euro and the European project cannot be ruled out.
“That would be tragic because then Europe would be threatened by the sort of conflicts between states that have shaped European history.”
And of course the Germans would be to blame for this!
So step up Germany and follow the plans of the elitists to loot the taxpayers (everywhere) until there is nothing left with unconstitutional bailouts and quantitative easing.
Legendary investor George Soros has called on Germany to leave the euro unless it is willing to embrace a growth strategy, describing Berlin’s austerity doctrine as a threat to democracy and political stability in Europe.
George Soros tells Germany to step up to its responsibilities, or leave EMU
“German policy is becoming a danger that could destroy the European Project. A collapse of the euro cannot be excluded,” he told the German weekly Die Zeit.
“Unless Germany changes policy, its withdrawal from the currency union would be helpful for the rest of Europe. At the moment Germany is pushing its neighbours into deflation: this threatens a long phase of stagnation, leading to nationalism, social unrest, and zenophobia. It endangers democracy,” he said.
Mr Soros saw the political effects of wage cuts first-hand during the Great Depression, and narrowly survived the Holocaust as a Jewish boy in Nazi-controlled Budapest. He has since dedicated much of his wealth to philanthropic works promoting freedom and pluralism (ROFL!) across the globe, mostly through Open Society institutes.
Philanthropic works: Top billionaire club in bid to curb overpopulation (Times)
His comments reflect growing alarm in influential circles on both sides of the Atlantic over the 1930s-style policies of wage cuts and debt-deflation being imposed up the Club Med bloc, Ireland, and parts of Eastern Europe by the EU authorities, at the behest of Berlin.
President Barack Obama clearly had Germany in mind when he wrote a letter to fellow leaders before the G20 summit in Canada this week that surplus countries should do more to shore up global demand. “Our highest priority must be to safeguard and strengthen the recovery: we cannot let it falter or lose strength now. Should confidence in the strength of our recoveries diminish, we should be prepared to respond again as quickly and as forcefully as needed,” he wrote.
China has deflected G20 criticism by starting to free the yuan, leaving Germany facing the full wrath of Washington. While the German economy is not in itself large enough to shape global events, US officials fear that Berlin’s dominant influence over the European Central Bank and the fiscal machinery of monetary union is dragging most of Europe into an economic swamp. Germany has raised the bar for every eurozone country by announcing €80bn of belt-tightening from next year.
Nobel laureate Paul Krugman told the German press earlier this week that the country was committing the same error as the United States in 1936-1937, or Japan in the 1990s, by withdrawing stimulus before recovery has taken root.
“I don’t have a problem with trying to balance the budget in five or 10 years. The question is whether one should start when the economy is at 7 or 8 percent below its normal capacity and interest rates are at zero. Now is not the time to be worried about deficits.”
Professor Krugman said there was a risk of a “domino effect” reaching Spain and Italy if Bundesbank chief Axel Weber takes over as head of the ECB and fails to offer enough monetary stimulus to keep these countries afloat.
One analyst said that Mr Weber faces an impossible task. “Either they do more QE (quantitative easing), in which case it will set off inflation in Germany and cause Germany to leave EMU: or they don’t do more QE, in which case it will lead to deflation in Southern Europe and force them out of EMU,” he said.
Mr Soros said Germany was treating the deeply-flawed Maastricht Treaty as it were a “sacred text”, warning that monetary union cannot endure for long as a narrow construct based on debt and deficit ceilings. He said wage rises in Germany are imperative to help lift the whole eurozone, allowing peripheral economies to claw their way out of trouble without fighting the extra headwinds of deflation.
“The truth is that what we have in Europe is not a currency or sovereign debt crisis as many people think, but a banking crisis,” he said. Mr Soros argued that the weaker states cannot easily fund their deficits any longer because some banks are purchasing fewer bonds as a result of damaged balance-sheets.
Investors are likely to pay close attention to the views of Mr Soros, whose Quantum fund played a key role in the crisis of the Exchange Rate Mechanism in 1992. He famously pounced on sterling and the Italian lira after a top Bundesbank official described both currencies as over-valued, an invitation for a speculative attack.
The crisis proved a blessing in disguise for Britain, which was liberated early from a destructive policy of job wastage. Mr Soros yet to receive a a knighthood for his services.
By Ambrose Evans-Pritchard, International Business Editor
Published: 6:31PM BST 23 Jun 2010
Source: The Telegraph
The bailout is unconstitutional no matter what any high court rules:
– Germany’s Federal Constitutional Court Considers Unconstitutional Euro Bailout
– Former Bundesbank Head Karl Otto Pöhl: Bailout Plan Is All About ‘Rescuing Banks and Rich Greeks’
– France’s Europe Minister Pierre Lellouche: Eurozone Bailout Violates EU Laws
– German Professors Challenge Greek Bailout Legislation, Declare it Unconstitutional
And quantitative easing (= printing money = creating money out of thin air = increasing the money supply = inflation = hidden tax on monetary assets = stealing):
– Germany, France May Hurt AAA Ratings in ‘Ponzi Game at The Highest Level’ (Bloomberg)
– Here Is Who Just Got Their A$$ Saved By The Huge Euro Bailout (Business Insider)
– Federal Reserve Opens Line Of Credit To Europe (AP)
– ECB Resorts to ‘Nuclear Option,’ Intervenes in Bond Market to Fight Euro Crisis (Bloomberg)