One Nation Under Inflation

Ilana Mercer, December 2, 2011

The EU Commission president, a chap called Jose Manuel Barroso, told PBS’s Jeffrey Brown, on November 28, that the European suprastate is not quite up to American statist standards. Barroso lamented that the EU lacks America’s level of “convergence”: “We have a common currency, but not, for instance, a common treasury,” said this slick operator. Fiscal discipline (one wonders what our commissar means by that) can only come about with more “pooling of sovereignty.”

The Commission’s president certainly sees the US as a model “fiscal union,” with a high degree of “fiscal policy” “integration” throughout; and is almost envious of the fact that the US federal government possesses “the instruments” that have allowed it to accumulate enormous liabilities: Evidently, America’s debt-to-GDP ratio is larger than the European Union’s.

In a nutshell: Barroso longs for Brussels to be able to do the necessary tinkering to keep the PIIGS of the Eurozone —Portugal, Ireland, Italy, Greece, and Spain—living at the expense of their more industrious, austere neighbors to the north. (Presiding European bureaucrats like himself live-it-up no matter where they reside.) The EU, complained its Capo di tutti capi, needs to create those “instruments.”

When it comes to Newspeak, Barroso still beats Obama.

In any event, when it grows up, the EU wants to be just like the US. That was Jose Manuel Barroso’s message to his host at the US Public Broadcasting Service. So successfully has the Unites States government submerged the sovereignty of its states that a top European technocrat longs to be like us. We must be in worse shape than we imagined.

Barroso’s aim is for Europe to fuse more completely together so that a central government and bank can manipulate compliant countries with ease. Alas, in his assessment, Europe has a long way to go if it wishes to approximate the degree of economic and legal harmonization accomplished by Uncle Sam, and to become one nation under inflation.

Aping America’s Federal Reserve Bank, the European Central Bank’s goal is to monetize the debt of the moocher member-states. Standing in its way—and in the way of just about any American president and Federal Reserve Bank chair—is Germany.

Germany poses the only serious opposition to the issuance by the ECB of euro bonds which, in contravention of European-Union treaties, would rope the Germans into working to keep the borrowing costs of the PIIGS down. For its part, the US is pushing Germany to bail out the PIIGS.

German Chancellor Angela Merkel has resolutely opposed Obama’s monetary putsch. Her arguments are foolproof: she’d like to avoid the hyperinflation and the moral hazard inherent in enabling spenders and slackers. Just how badly do Barack and his banker want to cow Germany into servicing the rest’s debt?

On her way to the bank something embarrassing and unexpected happened to Chancellor Merkel. Mrs. Merkel’s country, which enjoys an AAA credit rating, and is expected to underwrite the Eurozone’s debt, failed last week to raise funds in a government bond auction.

The workhorse of Europe is an industrial dynamo whose highly-skilled workforce produces technology in the first rank. Germans have already exported more than a €1 trillion worth of goods this year. At 5.9 percent, unemployment there is low.

Asked columnist Paul Craig Roberts: “Why would Germany, the only member of the EU with financial rectitude, not be able to sell 35 percent of its offerings of 10-year bonds? Germany has no debt problems, and its economy is expected by EU and US authorities to bear the lion’s share of the bailout of the EU member countries that do lack financial rectitude.”

And Roberts replied: “I suspect that the answer to this question is that the failure of the German government’s bond auction was orchestrated by the US, by EU authorities, especially the European Central Bank, and private banks in order to punish Germany for obstructing the purchase of EU member countries’ sovereign debt by the European Central Bank.”

Roberts published his column before the disclosure of the latest scandal involving the Empire’s bank. According to information obtained by Bloomberg News, under the Freedom of Information Act, the Fed issued $7.7 trillion in secret loans between August of 2007 and April 2010. One of the beneficiaries was America’s Big Six Bank cartel.

I hazard that the failure of the German government to “raise funds in a government bond auction last week” is probably the doing of Barack Obama and Ben Bernanke. The boss of all bosses at 1600 Pennsylvania Avenue promised Europeans that he would stand ready to do his part to help them weather the Eurozone crisis. Although White House Press Secretary Jay Carney has denied that there would be any “bail out of foreign governments,” even CNN’s Erin Burnett knows better: Bernanke has been given the authority to buy the debt of foreign governments, confirmed Burnett. “The U.S. Treasury could be out there buying bonds to keep Europe from crashing,” and we’d be none the wiser.

December 2

CATEGORIES: Debt, Economy, EU, Federal Reserve Bank, Foreign Policy, Inflation, Political Economy, States' Rights