Tuesday, June 26, 2012

Moody's approaches reality in Spain

Anybody looking at Spain, its housing bust, its unemployment, its membership of a potentially tyrannical and certainly dis-functional trading block called the EU, would immediately realize that unless all those basic facts are reversed there is no hope for the country nor the economic welfare of its people.

Yet last night's multiple downgrade of its banks by Moody's, rated only the bonds of Bankia as junk. Read here

Mr. de Guindos, however , yesterday accepted the suicidal interdependence of the Spanish banks and Spanish state, read an earlier comment on that aspect from last April from hereaptly titled Hazardous Tango.

Here lie the real political risks that makes all such banks unsuitable for investment. Banks domiciled in Spain, even those having strong overseas assets, are subject to the demands of the Spanish State and soon perhaps an authoritarian, anonymously EU controlled, non-democratically accountable Regulator, who could sequestrate assets at will, or upon a mere whim or unsubstantiated market rumour.

If Britain stays within the EU and goes along with such activities and practices within the Euro Zone, then the suspicion will grow that such financial tyranny could eventually extend to London, that then would be the greatest danger for the Corporation of the City, putting the risks of giving the people a say in their country's future by means of an EU referendum (see my tweet of last evening, on this,) into utter insignificance! 

If Cameron goes along with whatever occurs in Brussels from this Thursday and on into next weekend, that is when a capital flight could begin from London, then Britain truly will be tied to Europe forever and Europe will be a tyranny as defined by Karl Popper, where the rulers may only be replaced by bloodshed.

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