America Fights On While Europe Surrenders to Germany

Winston Churchill warned; “An appeaser is one who feeds a crocodile, hoping it will eat him last”. Churchill would understand the dynamics of the European and American sovereign debt crisis. Modern warfare is not about a blitzkrieg of panzers, dive-bombers, and storm-troopers swarming across borders to over-whelm patriotic defenders. Today’s world dominators sucker their prey into financially destroying themselves from within. Once the quarry is crippled; the invader walks in and takes control of the victim’s economy on the cheap.



Recently bureaucrats from Austria; Belgium; Cyprus; Estonia; Finland; France; Greece; Ireland; Italy; Luxembourg; Malta; Netherlands; Portugal; Slovakia; Slovenia; and Spain quietly surrendered their sovereignty to Germany. In contrast, Americans stand alone as the only nation on earth in full rebellion against their government’s dangerous addiction to deficit spending.

Hitler slyly wrote: “How fortunate for governments that the people they administer don't think.” Most Europeans did not question the too-good to-be-true claims of the euro when it was first introduced in 2002 as the continent’s common currency. Overnight, serial debt-defaulters were granted unlimited power to raise huge volumes of cheap capital in the untested euro-bond markets. Fans boasted the new currency created the largest economic trading group in the world; with 332 million direct users and another 175 million people worldwide who pegged their currency exchange rate to the euro.

Thomas Jefferson cautioned: “I believe that banking institutions are more dangerous to our liberties than standing armies”; but Europeans don’t study American history. Germans designed the euro to be dominated by the Frankfurt-based European Central Bank (ECB); who control all money printing and operate the eurozone electronic payment systems. Member central banks are allowed to sit on Eurosystem Board, but only as junior members. With their supremacy of ECB rule-making, Germans implemented banking regulations eliminating reserve requirements for loans to euro members; while increasing collateral requirements against loans to the private sector. Goldman Sachs and other camp followers gave the local banks access to derivatives; which allowed for astronomic leverage of euro member loans.

Otto von Bismarck, Germany’s first Chancellor, opined: “When a man says he approves of something in principle, it means he hasn't the slightest intention of carrying it out in practice.” The nations joining the euro were required to agree “in principal” to abide by strict rules against deficit spending. It now seems preposterous that after decades of deficit spending, politicians would find the discipline to stop steering money to cronies.

After a nine year binge of borrowing and spending; euro members began defaulting. Early in the European Sovereign Debt Crisis; euro states announced agreements in principal to solve isolated cases of small countries experiencing “temporary setbacks” with short term loans. First Greece; then Ireland; then Portugal; then Spain; then Italy; and now virtually every euro member except Germany is experiencing rising financial stress. The euro-debt burdens are so onerous; defaulting nations have no capacity to ever pay back their bondholding banks; making their banks also insolvent.

The supposed euro benefits allowed Germany to lure its neighbors into debt traps. Defaulting euro-members could then chose to either; start a new currency and suffer the same brutal inflationary consequences as Germany’s Weimar Republic after World War One; or surrender to Germany as the only power in Europe with the economic size and financial wealth to stabilize the euro-system. In the end, bureaucrats from all seventeen euro-members nations agreed to give control of future bailouts to the European Financial Stability Facility (EFSF), a secretive private bank managed and funded by Germany. The ESFS has authority to loan money and impose whatever financial conditions it would like on borrowers. Over the next two years ESFS will bailout Ireland, Portugal, Spain, and their banks. Austria; Belgium; and Italy will soon follow and France and her banks eventually flirt with insolvency. The European Sovereign Debt Crisis is over; Germany won.

Economist John Maynard Keynes advised: “The best way to destroy the capitalist system is to debauch the currency.” A recent poll conducted for CNN found Americans are so concerned that deficit spending will destroy their capitalist economic system; an overwhelming 74% percent now support hand-cuffing Congress to a Constitutional Balanced Budget Amendment. The public recognizes that Germany and China with low debt are at full employment; while America with huge debt suffers brutal unemployment. Germany is acquiring the New York Stock Exchange to increase its economic reach to our shores, while China builds an offensive navy to challenge America’s domination of the Pacific. The American voter’s hearts and minds have decisively turned against deficit spending; perhaps it is now Congressional crocodiles who should be worried about getting eaten.

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