Merkels Last StandSlim Fairviews Predictions for the Upcoming Conclave of the EuroCrats.The EuroCrats are fed up. The European people are fed up.Every Solution concocted at every meeting is revealed to be temporary.Every attempt to resolve the cause of the problems--causes that are systemic--areimpeded by Chancellor Merkel.Chancellor Merkels strict demands for Austerity as a one pronged approached hasturned the one pronged approach into a weapon.Chancellor Merkel said, "Why should German taxpayers contribute to a fund to bail outa French bank that will compete with a German bank?"The argument could be made that it is the Chancellors job to act first in the interest ofGermany. However, as the crisis deepens, Germany will end up as nothing more thanlast in the line of dominoes to fall.http://slimviews.blogspot.com/2011/10/oops-euroglitch.htmlIf anyone has doubts, witness the most recent German bond sale.Austerity without Economic Development is no solution. Under the management ofChancellor Merkel, The EuroZone has kept Greece and Italy shackled to poverty bykeeping Greece and Italy shackled to poverty programmes. Their continued support forChancellor Merkel is supplication for continued bailout money.Tim Geithner went to Europe to declaim, "Austerity."Tim Geithner went on CNN news to declaim, "No country ever cut its way to prosperity."This is reminiscent of the declamation, "No country ever taxed its way to prosperity," inthe first two years of Bill Clintons first term. There are still those who claim Bill Clintonbalanced the budget. In the first two years?http://slimviews.blogspot.com/2011/11/political-math.html
You cannot cut pay, fire people, raise property taxes, and call it a solution. This isevidenced by the continued problems in Greece.Recently, Papademos said that he would propose legislation that will include austerityand growth. He proposed austerity and cutting taxes. The Press still has not reported onthe growth programmes proposed--if any.Merkels most recent proposals were:For investors to contribute to the bailout fund.For investors to take a 50% loss. Would you invest in anything if the broker guaranteedyou a 50% loss?The next idea floated was for "coupons" to limit investor losses to 20% - 30%. Investorsinvest to make a profit, not to mitigate losses.The next idea floated was to go to China for money, to Brazil for money, to thePetroStates for money. This is not a solution. This is a Ponzi Scheme.Merkels parsimoniously doling out Pfennige in exchange for an obeisance in exchangefor bailouts that continuously do not solve the problem.Only recently have I heard from Europe what Ive been saying.There is talk about Merkel not being electable with the current numbers.Privatisation.A larger bailout fund. (Though I did not put it that way.) This is not the answer, this is thequestion: http://sidestreetjournal.blogspot.com/2011/12/lender-of-first-resort.htmlThe path to the solution is simple:What have you done?Did things get better? No.Did things get worse? Yes.Dont do that!
Read Lender of First Resort. If you can have a lender of last resort, you can have alender of first resort.With the Crisis arriving at German shores, the panic will cause Merkel to shift strategy.The Chancellor will promise to consider alternatives. Translation: The Chancellor will sitquietly while others talk about alternatives. The Chancellor will concede they should belooked into. The Chancellor will succeed in delaying any serious change by sending anyideas, viable or not, to a committee.If anyone believes a committee is a good way to solve problems, I shall refute you withone word--Congress!Slim Fairviews Predictions--Probable and Possible.Probable:The EuroCrats will meet to discuss the EuroCrisis.Discussions may include a larger bailout fund--this will be challenged.The discussion will move to Economic Development and Growth. Conditions will beimposed:A strict oversight of indebted nationsAusterity before any capital investment in economic development and growthAn effort to keep the IMF at a distance to prevent Madame Lagarde from participation.Chancellor Merkels position on Austerity is analogous to refusing to allow the crew toplug the holes until they have bailed the water out of the boat. If you do not plug theholes, you will never bail the water out of the boat. If the heavily indebted nations haveno economic development, bailouts will never be a solution.Treaty modifications will be discussed. These modifications, understandably, will beintended to insulate Germany from what Chancellor Merkel believes to be the
impending collapse of the EuroZone Economy. They will also be intended to allow themicro-management of indebted nations.Possible:There will be a call for Chancellor Merkel to step down--from other Nations Parliaments,but preferably from the German Parliament.A Lender of First Resort agency will be established. This Agency will buy bonds at afavourable and affordable rate to, say, Greece and Italy, and recoup their investment byselling bonds at a favourable rate to investors. While the difference may cost theAgency, it will be more cost effective than continuing the failed bailout solution.China will pledge to buy €300 Billion worth of the Agency bonds.Turkey will pledge to buy the bonds.Brazil will pledge to buy the bonds.Russia will pledge to buy the bonds.Greece and Italy will agree to a privatisation plan that allows Greek & Italiangovernment workers to buy stock in many of the entities they work for. The stockpurchases will exceed 50% of the issue allowing Greek and Italian workers to retain amajority share.Foreign Investors will buy stock.The Greek and Italian Governments will generate revenue from the sale of the stocks,from the "Corporate" tax rate, from the capital gains tax, from income taxes.The workers have a choice: A government paycheck that may be smaller or, in theevent of being fired, non-existent or receiving a paycheck and a profit from theownership of the privatised company they work for. Benefits will include pensions andhealth care.In any event, many of the ideas included in the monographs Ive been posting over thelast several months, heretofore not discussed, will finally be discussed. The onlyquestion is, will they be discussed seriously, or will they merely be discussed to give the
appearance of attempting to solve the problems?Bon chance.Slimslimfairview@yahoo.comCopyright (c) 2011 Slim FairviewAll rights reserved.