British retail sales dipped by 1.4% last month – and this time, there can be no excuses. As always, analysts were ‘surprised’. The sooner we swap the surprise artists for the realists, the better things will be for all of us.
In the US, economic confidence has suddenly plummeted – according to a new poll, the Gallup Index. With fieldwork ending last Sunday evening, American economic confidence averaged at -35, down 9 percentage points from just two weeks ago. Fully 7 out of 10 respondents said that the economy was “getting worse”; and within that number, just under half of those interviewed described the economy as “poor.” Not even Ed Miliband’s approval ratings can compare with this level of expected doom.
But tonight, the Crash 2 focus remains on the EU, where major European governments are embroiled in a fierce dispute over how to structure a second bailout of Greece to forestall the first sovereign default in the 17-country single currency zone. German daily paper Die Welt observes that, ‘The protests in Athens are sending a disastrous signal to the rest of Europe. They give the impression that many Greeks are still denying reality. And they are taxing the good will of European taxpayers. The rest of Europe, after all, can do much less about the misery in which Greece finds itself than the Greeks themselves….’
This is a piece of sanctimonious hypocrisy from the Germans, but it does represent what Fritz in der Strasse thinks.
There are two levels at which gigantic amounts of money are being wasted on the eurozone crisis: first, at the level of the EU itself, where good money is being thrown after bad like paper onto a fire; and second, at the UK level, where the Government is tossing away all the advantages of having stayed out of this mickey-mouse currency by spending billions to prop it up.
Along the Brussels/Berlin/Paris axis, why are these obscene amounts of money being wasted? For the Sprouts, it’s in order to save their barmy dream of a United States of Europe. But for the other two – and this is far and away the more important motive – it’s being done to save their banking systems from collapse.
Taxpayers across the Union (and British taxpayers not even in the eurozone) are having their services cut and pensions decimated in order to pay for past banking idiocies, and the future demands of credit suppliers….many of whom are connected in various ways to those very same banks. This is Alice in Wonderland stuff.
As to the second area, I have to believe – because it is simple logic – that Cameron should tell Brussels to go forth and multiply on eurozone bailouts – regardless of what the previous management signed. Were, for example, the French sabot or the German jackboot on the other foot, I have not the slightest doubt that they would say this – as indeed did Papandreou’s lot when they came to power in 2009.
Illustrating the lunacy of this ‘everyone must pay’ nonsense is easy enough even within the eurozone. What, for instance, will Merkel the Righteous do when Portugal goes up the pictures – demand that Greece pay its fair share to bail them out?
But to ask the UK to bail out a daft idea it quite deliberately stayed out of borders on demanding money with menaces. Had our Prime Minister the tiniest bit of bottle – even a half-empty miniature of Italian brandy – about his person, then he could say, “Sorry chaps – madmen were running the show before us”, and then take an ad in the Times eschewing all responsibility for the Madness of King Tony. What is the EU going to do – nuke us?
It is the paucity of ambition that marks the last two Governments out from all others before them. Even Blair – grubby little grinning British Berlusconi that he was – had some ideas. Hopelessly empty and misguided, I’ll grant you – but objectives if nothing else. Brown and Cameron? All they ever wanted was to survive.
All this said and noted, none of us should lose sight of the global wealth transfer taking place here – one that The Slog identified some time ago. This is not only from West to East, it is from sovereign State to globalist banking and business.
In the UK and US during 2008-9, the Treasuries effectively emptied their coffers to ‘bail out’ banks. Except that those banks used the money to do very lucrative business….and make both themselves and their multinational clients richer still. Goldman Sachs, JP Morgan, Santander, Barclays and HSBC in 2011 hold some three times greater net worth than they did in 2007. And multinational businesses have cash hoards at levels not seen since 1957.
In the EU as well now, tax and central bank monies are going out of the window forever…towards private or Bourse-owned bankers who specialise in sovereign lending. The IMF is dictating loan terms to most ClubMeds countries…but the IMF is an American construct consisting largely of….bankers.
This is no conspiracy, because the sovereigns’ position is largely self-inflicted. But anyone who has ever spent time marketing banks products – and I’ve spent nearly 27 years doing this – knows that Rule One is credit-score everyone and every organisation to whom you lend money. It is not an over-simplification to observe that after around 2002, almost every banking firm in the world threw this rule out of the window.
Rule Two was take deposits in at an interest level you can afford. This too was dismissed by the New Paradigm pillocks. Many of them are still today showing chart presentations lasting all afternoon about how this was entirely due to a small glitch in the forward-going critical path model at the upper end of the CDO sector. Terrifyingly, many of these clowns are still pulling in six and seven figure bonuses.
But conspiracy or not, the net effect is simple: everyone is being punished except the banks. And as the punishment is a monetary fine, while we’re all becoming worse off, investment banks, media conglomerates and multinational marketers are getting richer and richer. Only the ‘bad banks’ we own – like RBS and Northern Rock – are still costs centres. Over the next eighteen months, they too will cost us, the citizens, more and more.
Where things will come unstuck for the Masters of the Universe is when 93+% of every sovereign citzenry can’t afford to consume. Not only will this mean nobody buying their products or those of their clients, it could also mean every one of them being seen as a form of Bastille to be stormed – either physically, or by radical cyber outfits. The US is the closest of any nation to this situation right now: it is part of the reason why its economy can’t get going again, and a major explanation for cyber wars against Citibank and the CIA website.
Along the way, it is also just possible that the transfer of wealth will become a de facto transfer of governmental power. Closest to this scenario is Greece….whose People are quite obviously not going to take that lying down. Bankers don’t understand ordinary people: more than likely, they’d treat them the way they do Senate and Select Parliamentary Committees. If so, we really will see a bloodbath.
Stay tuned.
The Slog 