European Union Is Again Close To A Meltdown As Eurozone Economy Collapses

The European Union was in big trouble long before Britain voted to leave in 2016 (and finally left in 2021), the financial strain of a basketload of economic basket case nations relying on Germany's industrial powerhouse economy to support them was starting to fray the threads of unity that held the then 28 member - state together which the loonytoons green energy poicies and politically correct approach to immigration and other social issues imposed by the technocrats in Brussels were dividing nations internally as well as against each other. But somehow the Brussels elite and their loyal supporters in member state governments managed by a mixture of bullying and manipulation to hold thins together.

But they cannot continue business as usual for much longer it seems. The Russia -Ukraine conflict is taking a toll on the Euro-zone and it could result in finally pushing the Union into the abyss. Every problem emanating from Russia's invasion of Ukraine is amplified for the region which was already struggling economically and politically. Soaring energy prices and out-of-control cost of living increases combined with stagnate growth and a growing trade imbalance with China and India you have the recipe for disaster. And then there is the inevitable runaway inflation that is the inevitable result of the insane money - printing exercise formally known as the COVID pandemic response.

A report publishd by Reuters this month shows the Euro-zone year - on - year inflation rate surged to yet another record high in May to to 8.1% in May from 7.4% in April. Energy costs due to the sanctions imposed on Russia in retaliation for the incursion into Ukraine are no longer the only factor pushing up the figure. Excluding food and energy prices, inflation rose to 4.4% year-on-year from 3.9%. This pressures the European Central Bank to bump up interest rates further. Unfortunately with Germany and several other EU nations being forced to ration domestic fuel, while transport costs have led to problems with food distribution and empty shop shelves, such a move ought to be unthinkable. Europe's economic war with Russia has highlighted just how weak Europe is.

Should Ukraine conflict drag on, as it may with EU and NATO member states supplying the suicidal nutcases in Kiev with high tech military hardware thus enabling them to prolong the war, Russia could completely cut off gas to Europe. Currently it appears Russia intends to keep Europe from restocking its storage facilities, which will cause widespread hardship substantially increase Russia’s leverage in the winter months. In the past three months Russia has cut off gas supply to several European countries that refused to pay for gas in rubles and has also substantially reduced the flow through the Nord Stream. This has cut off supplies to France and reduced flows to Germany by some 60 percent.

With inflation at 4 times the ECB's 2% target, policymakers face the toxic mix of raising rates and a shrinking economy. Trapped between galloping inflation, and political instability due to economic chaos and hoping to tame inflation, ECB President Christine Lagarde is moving to raise rates. Some policymakers and economists doubt small moves will be enough, especially since underlying inflation is showing no signs of abating.

Due to supply chain problems in the wake of the pandemic, then as a result of Russia's war in Ukraine, prices have been soaring across Europe. This suggests the years of of ultra-low inflation are at an end. What many economists tried to blow off as a transitory blip prices has now become embedded in the economy. The fear is that once high energy prices filter through into the general economy, inflation will get entrenched and eventually perpetuate a price-wage spiral.

Data from the European Union's statistics agency, Eurostat shows the euro zone's trading account swung to a record deficit in January from a surplus a year earlier as the cost of imported energy increased. The euro-zone's trade deficit in goods, the difference between exports and imports, was 27.2 billion euros ($30.17 billion) in January, compared with a EUR10.7 billion surplus the same month a year earlier.

Euro-zone governments are already facing all these problems, the last thing they need is another refugee crisis on a par with the influx of illegal migrants in 2015. This time the invasion is caused by food insecurity across Africa the Middle East and South East Asia and the threat of an energy-scarce winter as 2022 comes to a close. The EU abandoned all structural reforms in 2014 when the ECB started its quantitative easing program (QE) and expanded the balance sheet to record levels. Considering the above, it is difficult to remain optimistic that The European Union is on the right track. Member nations are aware of this and are becoming more inclined to ignore Brussels imposed policies and go their own way.

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September 2021

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War On Cash Gathers Momentum - Germany Unveils Cash Controls

by Ian R Thorpe

Money laubdering: big business or a sign of bankers' paranoia

On Monday (1 February, 2016) just two days ago, Bloomberg called on the central banks of the world to “bring on a cashless future” in an Op-Ed that calls notes and coins "dirty, dangerous, unwieldy, and expensive."

We can imagine it would be quite easy to harm someone by firing large coins at them from a gun and terrorists could probably stuff an improvised explosive device with small coins rather than nails or nuts and bolts. And if somebody tried hard enough they could probably choke on a bank note. But cash dirty? No more so than the hundreds of things we must touch in public areas in the course of our daily lives. Unwieldy? Not compared to the lead boxes we will have to carry to ensure our contactless cards don't debit our accounts every time we go near a suitable reader. And expensive? Not to us, we buy an item for £$€1 and that's exactly what we pay for it.

So like me and my colleagues, you probably never thought of your cash in any of those ways, but increasingly, authorities and the powers that be seem determined to lay the groundwork for the abolition of what Bloomberg calls “antiquated” physical money.

We’ve documented the cash ban calls and moves on a number of occasions including, most recently, the one from DNB, Norway’s largest bank where executive Trond Bentestuen complained that although "there is approximately 50 billion kroner in circulation, the Norges Bank (Norway's Central Bank) can only account for 40 percent of its use."

That mean, Bentestuen says, that 60 percent of money usage is outside of any control." "We believe," he continues, "that is due to under-the-table money and laundering." He really does have limited imagination if he seriously thinks that is all people use cash for.

DNB backed up its executive by claiming that after identifying “many dangers and disadvantages” associated with cash, the bank has concluded 'it should be phased out'.

On Tuesday we got more evidence that the thieving banks around the world are preparing to create a cashless “utopia” in which systems will be implemented to enable them to plunder our hard earned to cover the disasters their reckless gamblings incurs. German finance magizine Handelsblatt reported (in a piece called "The Death of Cash) that the Social Democrats - the junior partner in Angela Merkel’s coalition government - have proposed a €5,000 limit on cash transactions and the elimination of the €500 note.

“Limits on cash transactions would discourage foreign criminals from coming here to launder money,” says a study published by the Social Democrats. "If sums over €5,000 have to pass through traceable bank transactions, laundering would be severely hampered," it adds.

Today (3 Feb, 2016), we learned via the news feeds that German Deputy Finance Minister Michael Meister had confirmed the government's support for the idea when he told reporters that Germany is proposing a pan - European ban on cash transactions over €5,000 to combat terrorism financing and money laundering.

“Since money laundering and terrorism financing are cross-border threats,” it makes sense to adopt a bloc-wide “solution”, but “if a European solution isn’t possible, Germany will move ahead on its own,” he added. Really Herr Meister. Why not just close your borders and stop criminals entering the country.

This sudden outbreak of money laundering comes at a rather convenient time for policy makers in Europe. Interest base rates are already sitting at -0.30% and are likely to be cut by an additional 10bps (one hundredths of one per cent) in March. But that’s not likely to halt the disinflationary impulse. European Central Bank chief Mario Draghi isn’t anywhere close to his inflation target and efforts to stimulate European economies have been totally ineffective.

What is needed is a revival of consumer spending and the gradual phasing out of cash is seen as a way of stripping the public of its economic autonomy. At present Central banks can only control interest rates down to a certain "lower bound". Once negative rates are passed on to depositors - as Swiss and Japanese banks have already done, for different reasons - people will have to pull their money out of the banks and spend it rather than pay the banks for gambling with it. The more negative rates go, the faster those withdrawals will be.

Ban cash and this problem is eliminated. In a cashless society with a government-managed digital currency there is no effective lower limit. If the economy isn’t doing what bureaucrats want it to do, they can simply make interest rates deeply negative, forcing would-be savers to become consumers by making them choose between spending or watching as the bank simply confiscates their money in negative interest.

As for that money laundering bollocks, if you want to know who is really behind it: US Department Of Justice helped cover up Big Banks money laundering for drug cartels


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