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The Frau, the Frappe and the Currency Scam
by Nikos Laios
2015-02-19 11:02:39
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As we speak, Greece is being blackmailed and treated like a petulant child into being forced to accept austerity measures that have thus far failed in the last several years; and this by nations who have also defaulted in the twentieth century: Netherlands, Denmark, UK, Italy - and the biggest debt transgressor of them all in the twentieth century - Germany.

Greece is now being blackmailed into a potential default all because it wants to cut its primary budget surplus to 1.5% from 4.5% of GDP, from the previously agreed to levels with the Troika to give its economy some breathing space.

The world's leading expert on the collapse of the Gold Standard in 1931 - Barry Eichengreen has stated that a Grexit would be impossible to control; “It would be Lehman Brothers squared."

German politicians had recently believed that the euro crisis was over and that EU had weathered the storm, but we now know that this was just another German miscalculation; where the German demands for austerity over the last six years since the GFC crisis -  that the belief that saving oneself out of a demand shortfall -  has been proven wrong.

In a shrinking economy, a country’s debt-to-GDP ratio rises rather than falls, where recession affected EU nations have saved themselves into a depression, resulting in nil hope, social dislocation and increased poverty and unemployment levels. Yet these same failed policies are still being rigidly insisted on by the IMF, ECB and Germany.

img_0661_400This Germanic insistence on frugality and austerity akin to a thrift Germanic housewife - which in their view is necessary for an economic recovery - is naive and has failed badly, all because of the Germanic fear of the inflation taboo, leaving Germany's reputation and austerity theories in tattered rags.

Tattered rags that were tied at the waist with the debt-soaked belts of austerity which harkened  dark days of cement and steel like in some scene from George Orwell's prophetic novel 1984;that came like a cracked egg yolk over broken backs, cracked rocks and crooked blocks. Cement veins that stretched like a web from the mountains to the sea.

Shinning like fake gold, yellow gold, cold steel that flows under the bitumen skin like an ancient brittle decay. These conditions of decay brought on by austerity have soaked Europe and its integrity to the core, and the election of Syriza in Greece was a yell, a scream of protest from the heart of humanity's soul.

The election of Syriza was a clarion call and warning for Europe that debt reduction and structural reforms simultaneously do not work and heavily taxes the political credibility of any democratically elected European government, for without growth there can be no structural reforms.

The deep-seated weakness in the EU is that any state can pursue its own interests firstly, whereby Italy and France for example, have both refused to comply with the rules of the growth and stability pact where strict limits are set on the percentage of deficit spending for each member. So when the EU commission was unwilling to discipline France and Italy, the credibility of the EU was destroyed, and it's calls now for Greece to play by the rules ring hollow.

A default in Greece would result in imposing capital controls, reintroducing the drachma, nationalizing the banks and leaving the Eurozone including initial high inflation.

But this short-term pain would eventually be tempered by the fact that Greece's central bank will then resume control over its own economy, have its own currency and floating exchange rate that would make its tourist, agricultural and shipping sectors more competitive and would attract investment in setting up base in Greece due to its cheaper labour costs and a devalued currency; where potentially Greece could become the 'Hong Kong' of the Mediterranean.

Then why do 80% of Greeks want to stay in the Eurozone currency union?

The reason is an insecurity and fear of the unknown - that better the devil one knows - but like all adolescent insecure teens, they eventually grow up and the initial fearful jump out of the family nest is then met with relief and joy at the newly found freedom of the outside world.

It is widely agreed by economists around the world that any nation with a debt to GDP of 100% is unsustainable, insolvent and therefore never, ever able to pay off its debt. Therefore, with at least several European nations in the very same insolvent position as Greece; the request by the EU that Greece continue with the failed austerity policy is simply 'kicking the can down the road.'

Then why do the Germans, Northern Europe and its minions the IMF and ECB insist on Greece paying the unpayable and implementing policies that have proven to have failed?

The answer is not that they are worried about the actual money that they'll lose via the debts, but in that the currency scam that Northern Europe is currently running will be exposed and destroyed.

Currency scams and price fixing by nations today is one of the biggest sources of friction affecting the relations between nations. Where the wealth of China has been built on one of the biggest currency scams, the artificial fixing of the Chinese currency by the Chinese government thereby making its currency cheaper in value, and its goods also cheaper; therefore out-pricing other international rivals, stealing their market share and destroying their market sectors.

Germany and Northern Europe are playing a charade with Southern Europe and dangling the debt sword over the Southern European nations as an existential instrument of fear; where in reality, Northern Europe needs Southern Europe more rather than the other way around because without the Southern Europeans, the value of the Euro would not be valued where it is at the moment, but would potentially increase by a great percentage.

That the reason for the Southern European presence in the currency union is that the Euro is pegged at a lower value because of them, and that if the Southern Europeans left the Euro currency and only the Northern Europeans were left; that the value of what would in effect be called the 'Euro-Mark' would skyrocket in value.

This would in turn make the products of Germany and other Northern European nations extremely uncompetitive, their markets would collapse, balance of payments would radically change and their debt to GDP would increase and approach 100%.

This is the reason for the games being played by the EU against Greece at the moment, because if Greece unravels this warped, uneven and undemocratic currency scam, then their own interests would collapse and unravel.

So while the Frau frets in Berlin, and Tsipras and Varoufakis sip their frappes thoughtfully by the azure blue Aegean Sea, surrounded by white bone cracked columns shinning in the yellow sun; no one should underestimate their resolve, for they have now recognised this European currency scam for what it is, and will not bring down this scam down just on the behalf of Greece, but also on behalf of the rest of the Europeans as well.

For Europe at the moment is long on cowardice and short on courage.

Bob Dylan once sang in his song 'Blowin' in the wind';

"Yes, how many years can a mountain exist
Before it's washed to the sea?
Yes, how many years can some people exist
Before they're allowed to be free?
Yes, how many times can a man turn his head
Pretending he just doesn't see?
The answer my friend is blowin' in the wind
The answer is blowin' in the wind."

Indeed, Mr Dylan was right, the answer is blowing in the wind.



With a digital drawing from Nikos Laios

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Emanuel Paparella2015-02-19 13:00:01
Indeed Nikos, the biggest scam of all, in my opinion, is that of privileging selfish economic interests by the leading EU nations while forgetting the humanistic ideals and the solidarity advocated by its founding fathers. I am afraid that the answer, my friend, is still blowing in the wind of history.

Leah Sellers2015-02-22 23:14:21
Brother Nikos,
Unfortunately, sir, Greece will be the proverbial Scape Goat (in the Year of the Sheep) along with many others as time goes by. Greece, and all of the Middle Class and Poor can (for the moment) but to hang on and try to survive the Scamma-Ramma Ride !

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