re: "DSK: "Monetary Union is like a Marriage" "

Andrew Stuttaford at The Corner ("The one and only.") pulled back a little of the wizard of EUz's curtain.

Money quote(s):

"the attempt by a large slice of the British establishment to bamboozle the UK into the euro"

The "project" has its adherents and proponents throughout Europe, in every nation, regardless of whether it will be of ultimate benefit to their particular nation. That's the nature of a transnationalist movement, after all.

(The British, for all their own economic and financial woes, now seem positively brilliant for retaining their own currency.)

"The question now is how much further the EU’s elite will try to go without that agreement."

The real question isn't how much further they'll try, but how far they'll get away with it.

9/24

re: "It's Still The Politics"

Andrew Stuttaford at The Corner ("The one and only.") looked at systemic and structural problems with the Euro.

Money quote(s):

"The notion of a “stand-alone” single currency was always an idiocy."

No, really, don't sugar-coat it. We can take it. No need to beat-around-the-bush: tell us what you really think.

"German voters never wanted the euro, and were never given the chance by their political class to say no. Adding injury to injury, the promises that were made to them about their new currency have been shown to be false."

9/23

re: "See No Evil"

Richard Fernandez at Belmont Club described some uncomfortable truths.

Money quote(s):

"When Admiral Mike Mullen told the Senate that Pakistan directed the attack on the US embassy in Kabul it probably surprised no one. And when the Spectator sadly concluded that the Euro has finally been proved a swindle, probably not many were shocked many either. America has been stabbed in the back by it’s allies; its ‘partners against terrorism’. And Europe has been misled by its leaders."

Pakistan is, like unto it's near-neighbor Iran, is not a monolithic unitary entity. Not just within its governmental structure, but even within its military and intelligence organs there are factions and competing power bases, each with their own sets of interests and agendas.

So yes, Pakistanis.

(As for Europe's leaders, well, that's what you get for electing prime ministers and the like through a parliamentary system rather than the way we do it here. Our accountability mechanism isn't so diffuse as theirs is.)

"Did anyone expect the US to reorient its position away from Afghanistan and confront Pakistan? Does anyone believe the EU will give up the Euro, even if it is manifestly ruining them? Policy is no longer the art of doing the right thing. It is the craft of carrying forward a narrative.

Mullen said that “with ISI support, Haqqani operatives planned and conducted that truck bomb attack, as well as the assault on our embassy,” and “we also have credible evidence that they were behind the June 28th attack against the Inter-Continental Hotel in Kabul and a host of other smaller but effective operations.” Most tellingly he added “the Haqqani network acts as a veritable arm of Pakistan’s Inter-Services Intelligence Agency.” Pakistan attacked the national territory of a country at which it was at peace, that had supported it in the past diplomatically and from which it receives billions of dollars in aid. It was an act as perfidious as the attack on Pearl Harbor on December 7, 1941. Nor is this the worst of it. It is not inconceivable to think that al-Qaeda was also a “veritable arm of Pakistan’s ISI, though perhaps with assistance from the Middle East."

Politics is the art of the possible. As long as we remain engaged in Afghanistan, we need Pakistan. So Pakistan, and its sub-entities, get cut a lot of slack.

That being said, anyone who thinks we're in Afghanistan for the long haul is much more optimistic (if that's the right word) than CAA has been since 9/11. So Pakistan should enjoy its "immunity" while it can.

(In a more civilized age, I'd be confident that somewhere, in a Quiet Room, someone is making a little list.)

"(J)ust as the appeasers have now about abolished the last remaining justification for national self defense and as the Left continued to operate on the Western side of the Berlin Wall in the guise of their transnational schemes, nothing in recent history indicates that being correct about an issue settles anything. Being right has nothing to do with politics. It’s what you can sell that counts."

Once the Berlin Wall came down (and after the Left completed a period of ritual mourning), the reds re-branded themselves as greens, social democrats, &tc. It wasn't, for them, a very far walk after all. (And continued their struggle against human liberty, &tc.)

"The market is writing down the value of the world economy. Right across the board. It is making a judgement on what they think the future is worth. By recent numbers, not much. Not just because policymakers have gotten it wrong about the “root cause” of terrorism, or the Euro; but also about “Too Big To Fail”, population policy, multiculturalism, a crippling environmentalism and Global Warming, to name a few. The financial, national security and educational systems of the world are in utter collapse because they are stuffed with lies, which even when they are shown to be obviously false suck up trillions of dollars in their pursuit. And nothing will turn the global elites from continuing their ruinous path until they have spent the last nickle and dime they can lay their hands on. Certainly not the media." (Bold typeface added for emphasis. - CAA.)

Garbage in, garbage out. And if you find enough ratholes to throw enough money down (e.g., "“Too Big To Fail”, population policy, multiculturalism, a crippling environmentalism and Global Warming"), you ought not be surprised that there's an economic cost.

"Neither the BBC nor any of the similar organizations which have jointly created our fantasy world will return to honesty. Not until it annihilates itself into bankruptcy along with all the other causes it touted and supported."

9/22

re: "Predictions, Predilictions UPDATED"

Dafydd at Big Lizards ("everything in this site is under construction, except for the blog") made some predictions that seem a lot less crazy than they would have even a year ago.

(DISCLAIMER: CAA is not any sort of economist by training, education, or inclination.)

Money quote(s):

"We all know that something is rotten in the state of the European Onion; but I'll be the boldest by staking out this prediction:

Within six years from today, by September 14th, 2017, the European Union as a political body will cease to exist except on paper. And the whole sorry farce of "United in Diversity" will be nothing more than a vivid and utopian opium dream."

Recall that there are/were a host of lesser-and-or-included international organizations still persisting in sort of a state of suspended relevence, such as the WEU and other various treaty-generated bodies.

The EU, which is only the latest phase of long string of existances which began as a steel and coal consortium, will likely continue some sort of legal existance, even if only as a collection of surviving components.

In a similar fashion, some portions of the former League of Nations survived to be incorporated into the U.N.

"The Euro will no longer be a semi-pan-European currency; each country will revert to its native currency -- lira, deutschmark, drachma, pound sterling (all right, all right, the last never actually disappeared) -- and the Euro will only be honored as trade-in on the local national currency."

Speculation on just how that would be implemented is already making the rounds of the blogosphere.

(I particularly like the notion of checking ones Euro currency and coinage and separating out the ones printed/minted in other EU countries, then exchanging them until you only have those from you own country. Although I kinda/sorta/really doubt that would make any practical difference in the end.)

Back in the real world, you can already see news reports of capital flight such as from Greece to the U.K.

"(T)he EU (pronounced eeew!) has never really existed except on paper in the first place. Nobody really believes that Greece, Portugal, France, Spain, Germany, Bulgaria, Latvia, and the UK (pronounced yuck!) are all contained within a single geopolitical unit. It's impossible and insane.

But I mean something stronger: Under my prediction, nearly all the political entities putatively absorbed into the EU, and all of those with functioning economies without exception, will have formally repudiated any supernational "sovereignty" of the European Union; if it exists at all, it will be only as a "free-trade zone." "

Oddly, the "free-trade zone" is the single most practical and useful part of the EU. I hope it survives.

"(I)it's already happening; and the trigger has been the looming debt defaults (often driven by bank failures) and proposed and actual bailouts of perpetual paupers Greece and Portugal; countries with serious deficit and debt problems, such as Italy, Ireland, and Spain; and even the very powerhouse economies that are called upon to bail out everyone else: Germany, France, and the United Kingdom. (Ireland and the UK are in trouble mostly because their banking systems are integrally tied into their federal budgets.)"

What goes unmentioned here is how much debt paper from the PIIGS is held by the major banks in the "powerhouse economies" (esp. France and Germany). The last thing those countries want is for the music to stop and for those "investments" to be written down (or off).

"Take Germany as one example; it doesn't want to bankrupt its relatively good economy with a succession of bailouts to the many countries in the EU that face imminent economic collapse. But on the other hand, I doubt Germany is anxious to be made into the scapegoat for the political implosion that might result from denying those bailout loans.

And there are likely legal consequences, too: By joining the EU, Germany and the other member states accepted the jurisdiction of the Court of Justice of the European Union. If the other strong economies (France, the UK, others) bought into the loan package, but Germany refused, the contributors might be able to go to the Court of Justice and try to force Germany to comply.

I have no idea whether the CoJ has either jurisdiction or authority to force a member state to join a bailout... but my guess is that neither does anyone else; I strongly suspect that the rules of that court are kept deliberately vague, allowing tremendous latitude for the court itself (and favored litigants), and tremendous risk for Germany, or any other member state thwarting the decisions reached at the upper reaches of the European Parliament. I wouldn't be surprised if there was some provision allowing Germany to be haled into the dock at Luxembourg and hit with fines and potentially political punishment.

Bottom line, I don't think it's feasible for Germany to refuse to lend the money, but still remain in the European Union. (Note that this same analysis applies to every other member state expected to pour its treasure into rescue packages for the basket cases.)"

How many divisions has the CoJ? Jurisdiction or authority notwithstanding, exactly how does Brussels expect to force Germany to do anything?

"In the end -- if not for this bailout, then for the next, or maybe the one after (that's why I gave my prediction a six-year time span) -- the rich states will not crucify themselves upon a cross of continentalization. Either the current government, or else the next, after that government falls, will run for election on the platform of withdrawing from the EU, notwithstanding the fact that there is no provision for unilateral withdrawal.

Once some nation, Germany or another, punches the first hole in the dike, the other EU member states who have a functioning economy will disassociate from the Union rapidly. If stable states are reluctant to bankrupt themselves propping up the perpetually collapsing states, think how much more reluctant they'll be when one of more of their fellows in stability opt out: "Why should we pay tens of billions to Greece and Portugal when Germany isn't paying a single deutschmark?", the next state will cry... and that argument is pretty unarguable." (Emphasis in original text. - CAA.)

For the moment, I expect more deckchair shuffling, and perhaps the morphing of the Eurozone into a two-tier arrangement.

On the other hand, as a consular officer I believe it's incumbent in my duties to thing-the-unthinkable and do some worst-case-scenario crystal ball reading in order to anticipate some worst-case contingencies. In the event the Eurozone were to come unglued, what happens to the tens of thousands of American travelers and tourists passing through when their bank cards stop working (or worse).

9/15

re: "Are These the Labour Pains of a New Renaissance?"

Seneca III had an essay posted at Gates of Vienna ("At the siege of Vienna in 1683 Islam seemed poised to overrun Christian Europe.We are in a new phase of a very old war.").

Money quote(s):

"(T)the giant Ponzi scheme that is European monetary union is on the verge of a well-deserved and long overdue collapse. It was always going to fail, of course, because it is a false construct designed not for the financial and fiscal benefit of the ordinary men and women of the Union but in order to enable the ushering in of a continent-wide socialist police state by means of subterfuge and stealth.

And, as is always thus with false constructs, it never did need to be destroyed from without, for the seeds of its destruction were sown in its very foundations by those political pornographers who created it. These legislative and executive elites, drunk on the dopamine of power, wallowing in hubris as they looted the coffers for their personal benefit — they exalted in the mutual masturbation of their own egos as the little people were left to go about their meaningless lives ignored or at best humoured, of no consequence to the peddlers of this embryonic New World Order.

Fatefully for the deconstructionists, they forgot about or refused to acknowledge the inherent power and utter ruthlessness of the desperate, of the people of whom for so long they had been so contemptuous, and who are now in the process of casting off their chains."

The "European Project" began with the most noble of aims, the prevention of future intra-European conflagrations such as the two world wars of the 20th century.

It can be argued that it's been successful, but it must also be admitted that it did not operate in a vacuum.

Little things like NATO, the United States, "containment," the Marshall Plan, nuclear weapons, and two generations of U.S. soldiery standing watch along the intra-German frontier (that sort of thing) had more than a little to do with it.

"(T)he great Global Warming scam (a revealed belief system built on nameless fear and used to justify and enable the transfer of the fruit of our labours into the pockets of Multinational Industrialists, third world kleptocrats and offshore bankers) is now in its third incarnation, and stumbling as more and more of its premises are exposed as creative wishful thinking rather than the rational analysis of a few and often contradictory physical facts."

For the millions who now get their news primarily from the internet rather than through the traditional major media outlets (primarily TV networks and daily newspapers), this will not come as a surprise. Still, like any ancient religion, the beliefs die out only when the believers (eventually) do.

I still cringe when I hear otherwise genuinely bright people talk about AGW, &tc., as if were "settled science." It's embarrassing. I'm embarrassed for them.

"(T)he collective atrocity that is Multiculturalism, asylum-seeking, and immigration — those seemingly innocuous categorisations of the deliberate, iniquitous process of our ethnic cleansing — is more and more being seen for what it is, and more and more of us have lost our fear of saying so in public and on public forums. For the vanguard and principal protagonist, Islam, events are moving in such a fashion that under cover of the coming storm it is quite likely a non-Westphalian solution will come to pass. They would be wise to leave now, whilst they still can."

Seneca III is clearly expecting another greater European war, and his "non-Westphalian solution" phrase puts me in mind of the differing viewpoints on the "Eurabia myth" discussion, as regards Ralph Peters, Mark Steyn, and Tom Kratman.

In other words, somewhere that Western Civilization would really rather not ever go again.

Not to say it won't or can't, given that Western Civilization remains stubbornly composed of hundreds of millions of individuals (perhaps even a billion or more) daily making their choices and decisions, on a planet where billions more of folks follow their own lights about things.

It's an ugly place where signposts are marked "internment," "ethnic cleansing," "displaced persons," "internal refugees," and ultimately "concentration camps" and "genocide."

So it would be well worth the effort to find some other alternate courses of action (so long as they aren't categorizable as either "surrender" or "civilizational suicide").

11/3

re: "The party's over"

Aaron at Eternity Road didn't exactly cheer me up.

Not that cheering me up is in his job description.

Money quote(s):

"Part of my message is driven by fear, for I know it is the young men my age that pay when the world begins to unravel. My voluntary attempt at military service a couple of years ago ended before it really took off, but I may be getting another crack at it, this time by draft, in a few short years. I don’t mean to scaremonger, but the nice, globalized world of the late 20th century will be giving way to something else entirely in the 21st.

America, protected by two oceans, always has the benefit of being able to choose its wars. The rest of the world is not so lucky."

"This time it will emanate from Europe, although it will also involve our financial system in a secondary role. The massive doses of fiscal stimulus applied to economies the world over managed to delay the inevitable by a year or two and even produced a nice little ramp job in the stock market, but the hour of reckoning is upon us."

"Even if the Eurozone manages to come to a consensus on the Greek bailout (still not a certain deal), I would set the odds at even that the Greek government will fall regardless and the new masters will repudiate Greece’s debt anyway."

"The EU bailout is also predicated on forcing non-Euro EU members like Great Britain and Sweden to pony up. Do you think they’re salivating at the possibility of shoveling money into the Greek tar pit to save a currency they don’t use?"

It's also predicated on the International Monetary Fund (IMF) loaning an unspeakable amount of money to the EU, at least a quarter of that money from the U.S. This is known in economic circles as "throwing good money after bad." We learned about this in my accounting classes, the term was "sunken costs."

The unspoken side of that is the calculus of how exactly you can put a price tag on measures to avert, or even delay, this sort of catastrophe. I'm sure some bright post-grad students (assuming either catastrophe is averted or that graduate schools survive it) will be able to attach dollar figures to just that, in the far by and by. But that means the time being bought has to be used for preparations to make national survival more likely should the coming disaster not be avoided.

"All of this means war in Europe, and soon. Maybe it will be contained to civil unrest/war within the worst-off countries like Portugal and Italy. Maybe it will be bigger than that. It is hard to say, but the crack up of the EU won’t be pretty."

&

"The truth is that our economic policy since the crash has been to cover up, lie about, and fraudulently trade based on worthless assets like underwater mortgages, just as we did during the housing bubble. Rather than break up the large banks, reinstate Glass-Steagall, and re-balance the economy by letting those who made bad bets fail, we have been playing make believe on everything from stock prices to consumer spending (read: handouts).

Europe’s troubles may let us get away with it awhile longer, or it may force recognition of enough bad assets on the nation’s collective balance sheet that we will get to replay 2008."

This is another reason to help the EU out of its present difficulties, if we can. After all, the house of cards falling over will be our own as well.

""

S&S - COLA jumps $150 in Germany, Italy

From my archive of press clippings:

Stars and Stripes

COLA jumps $150 in Germany, Italy


Stars and Stripes European edition, Friday, April 17, 2009


Troops in Germany and Italy got a $150 monthly bump in their cost-of-living allowance starting Wednesday, although for many in Germany, the increase could be short-lived.

Read the whole article here.

Snippet(s):

"No reason was given for the increase in COLA, though the dollar has lost some strength against the euro in recent weeks.

But, troops should temper any celebration of the extra money in their paycheck: Last month, the committee announced that servicemembers in Germany would see a $200 cut in their monthly COLA as a result of rising prices for goods in the U.S. "

_____

To calculate COLA, got to the committee’s Web site at: http://www.defensetravel.dod.mil/perdiem/ocform.html.