Thursday, July 08, 2010

The Euro has no clothes!

The following is quoted from here, on a report by ING warning of the consequences of a Euro currency collapse. Loose lips could sink entire economies if European policy makers continue to question publicly the survival of the euro zone, according to ING economists.

To show what is at stake, the Dutch bank has helpfully attempted to "quantify the unthinkable." Even an exit by Greece would hurt the whole currency bloc, they calculate. But a complete collapse would dwarf the impact of the Lehman bankruptcy: Output would drop by between 4% and 9% in the various states in the first year. German bond yields would head below 1%, while southern European rates would head for 7% to 12%, and the new Spanish peseta, Portuguese escudo and Irish pound would devalue by 50% against the new Deutschmark. Meanwhile, the rush into the U.S. dollar would likely cause a bout of deflation there. The euro zone may be far from an optimal currency area, but suboptimal is far from bad. overheard@wsj.com

Naturally the consequences of a Euro breakdown will be severe, that was always known, but they were deemed worth risking by the power-crazed federalists intent upon imposing "economic governance" namely totalitarian non-democratic rule across the whole of Europe! Which European leader will have the courage to voice the fact now recognised by ordinary citizens across the Continent, that like the Emperor in Hans Christian Anderson's tale, the end of which is quoted below, the euro currency is naked and worthless, extending its life will only bring greater misery than the ING report could begin to imagine. A child, however, who had no important job and could only see things as his eyes showed them to him, went up to the carriage.

"The Emperor is naked," he said.

"Fool!" his father reprimanded, running after him. "Don't talk nonsense!" He grabbed his child and took him away. But the boy's remark, which had been heard by the bystanders, was repeated over and over again until everyone cried:

"The boy is right! The Emperor is naked! It's true!"

The Emperor realized that the people were right but could not admit to that. He though it better to continue the procession under the illusion that anyone who couldn't see his clothes was either stupid or incompetent. And he stood stiffly on his carriage, while behind him a page held his imaginary mantle.

Remember it was EU Commission President Barroso, one of three such EU Presidents, who recently claimed that EU spending was superior to national expenditure and that the EU budget should remain exempt from austerity cuts. How many Germans facing yesterday's announced budget cuts this morning feel such sacrifices will continue to be worthwhile for their Spanish footballing conquistadors? How many in Britain, the second largest EU contributor, but outside the eurozone, will still feel the present economic sacrifices worthwhile when the corrupted mainstream medias' propaganda campaign is eventually exposed. Money spent on or by the EU is apparently only worthwhile when expanding the power and influence of those within the Brussels or possibly Belgian bubble, or elsewhere when receiving the EU's pay or pension, there the power hungry federalists feed off the fast dwindling wealth of Europe's former nation states. The EU is exactly like the Emperor in the fairy tale, indeed was it also not Barroso who recently claimed that the EU is now an Empire? Maybe so, but with three naked emperors at its head, can it long survive? We must all hope not, for no meaningful steps towards worldwide economic recovery will be possible as long as its inherent madness remains unrecognised by the world's elites.

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