From The Daily Bell, October 31, 2011 – by Staff Report
Merkel & Sarkozy
Will Europe Rescue China? ... All eyes will be on
China at this week's G-20 meeting in Cannes. The expectation—or at least
the hope—is that Beijing will contribute to Europe's bailout fund, the
European Financial Stability Facility. The Greece-rescue plan announced
on Thursday in Brussels calls for an increase in the size of the EFSF
from 440 billion to a trillion euros. At the press conference announcing
the deal, French President Nicolas Sarkozy said that the EU would like support from Beijing, and he called his Chinese counterpart, Hu Jintao, to ask for help. – Forbes
Dominant Social Theme: We've been trying hard and
look at all we've done. Don't blame us when it all goes to hell and we
have to create a global currency.
Free-Market Analysis: The latest Eurocrat deal to
salvage the euro (and perhaps the Union itself) is already falling apart
and, as a result, the entire process is ever more publicly suspect. Is
the idea to make the West so desperate that global governance becomes an attractive solution?
The dominant social theme
is, of course, one of hope. The EU's wise leaders have once again Saved
the World. But we have expressed the idea previously that the disaster
is being stage-managed to ensure that when Europe does fall apart, no
one shall be to blame. The Eurocrats will be able to spread their hands,
palms up, and say in unison, "Don't blame us."
Then, you see, the conversation shall turn to the IMF's SDR currency-in-waiting and how the IMF should serve as global central bank, dishing out its incomprehensible basket-fiat currency
to all and sundry. This is perhaps the REAL plan – or one of several
plans, as it looks more and more as if the euro is going the way of the
Dodo.
It is nonetheless an emphatic defeat for the Anglosphere
elites who are determined to create a one-world currency as part of a
new world order. Regional agglomerations of nation-states are supposed
to be stepping stones to this structure and they are in place around the
world – from South America to Asia to Africa. But the main ones that
count the most are (1) the European Union that is falling apart before
our eyes and (2) the North American Union, which is in such bad odor
that even Bilderberg Boy Rick Perry has to deny its evident and obvious reality.
Blame it on the Internet Reformation
that has informed residents of both Europe and America of the elite's
deeply laid plans and their determination to have their global
government no matter the cost. As predicted, the tribes of Europe are
fighting back. And for all the false-flag protests now taking place in
the US, there is a growing, stubborn antipathy to what the
powers-that-be are trying so hard to accomplish.
Eurocrats in aggregate do not even have the strength of their own
convictions. They voted for a trillion-dollar bailout package but then
refused to fully fund it. Instead, they have declared that the G20 and
China should think about coming to Europe's assistance.
Once the money has poured in, the fund is reportedly to be leveraged
up to US$5 trillion, as if borrowing more money ever helped anyone get
out of debt. The only salvation to be had is to allow the European Central Bank to print euros at will, as the US Federal Reserve prints dollars endlessly.
Of course, the US, having the world's reserve currency, can print
dollars fearlessly because it has forced the Middle East at the point of
a gun to exchange oil only for dollars. This is laughingly called the
"dollar reserve system." Europe doesn't have an army (yet) and even if
it did, the US has gotten there first. The petro-dollar is a US
invention and has allowed US leaders to be even more profligate than
European ones.
And thus the Eurocrats go begging. China is already making noises of
resistance, however, and the G20 is a rather unwieldy collection of
countries to count on when it comes to a half-trillion dollar bailout.
It may come down to the US printing money, or Eurocrats reaching down
further into the pockets of their constituents, but we'd be somewhat
surprised if either of these options are actually viable.
Here's the official word from the Xinhua News Agency: "Amid such an
unprecedented crisis in Europe, China can neither take up the role as a
savior to the Europeans, nor provide a 'cure' for the European malaise."
Doesn't sound very promising, though perhaps the ChiComs are merely
playing coy to sweeten the pot.
Forbes, in one of several articles on the deal, is even more dubious than Xinhua. Like the Telegraph, in an article over the weekend that claimed the deal with fall apart in weeks, Forbes'
commentators seem increasingly skeptical that this bailout will provide
a lasting solution. Here's some more from the article excerpted above:
There are many reasons for Beijing not to support Europe. First,
Thursday's plan is obviously just another temporary fix. There were
"comprehensive" and "final" plans announced this March and July, and it
may be only months before European leaders will need to come up with
still another one.
Second, the Europeans are not pledging their own resources. After
all, they merely said that the EFSF would be "leveraged," in other
words, eurozone leaders will be looking for others to chip in 560
billion euros. They refused to commit their own cash or even issue
sovereign guarantees.
Third, Europe does not need China's money. The continent is
capital-rich and a net exporter of capital. "The reason peripheral
European governments cannot get financing is not because there is a lack
of capital or liquidity," explains Peking University's Michael Pettis.
"They don't need Chinese capital. They need someone foolish enough to
lend money to countries that probably won't repay."
The Forbes article concludes that Chinese leaders are
looking for a way out but probably will eventually end up "buying
rubbish bonds" because China simply can't afford to let the EU unwind.
And why is that? Because the ChiComs "diversified" China's holdings over
the past few years and now hold nearly US$1 trillion in euros!
China holds $3.2 trillion in foreign exchange reserves – mostly in
euros and dollars and is therefore as much a party to the world's
failing fiat currencies as the West. Good job, China. We've written in
the past that China is the third leg of the stool. America is struggling
with its Greater Recession, Europe seems on the way to shattering and
thus only China is now propping up the world's economy.
We'll see how long that lasts. China's problems are manifold and
deep. They're just not being properly reported by an Anglosphere mainstream media that has its marching orders: Pretend all is well with the world until the entire system simply collapses.
Conclusion: It is perhaps a kind of "shock and awe"
strategy. The idea is that everything goes to hell at once and as people
panic the great central banking families step in with a new currency
and a new system waiting in the wings. So here is our question: Who is
to be the next John Maynard Keynes?
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