Wednesday, November 30, 2011

Europe's Solution to Debt Crisis is to Steal

This article is a sequel to:
Europe's "Stealing from Children" goes into Overdrive
Politicians and economists say that the European Central Bank (ECB) must be the lender of last resort to solve the European debt crisis.  According to this article:
"[Nouriel Roubini] argued the only way to avoid a breakup of the euro zone would be for the ECB to become a lender of last resort, for a fall in the euro's value in line with the dollar and for fiscal stimulus for the "core" euro zone and austerity in the periphery to take place."
The way the ECB lends money is by buying the European government bonds, that nobody else wants to buy.  How does a central bank lend money to anybody?  Where do they get their money from?  By printing it.

Politicians and economists are pushing Germany to allow the ECB to print money.  According to this article:
"Is Merkel ready to switch the ECB printing presses on? print trillions of euros in an attempt to save the single currency"
This is probably a way to prevent defaults.

However, whenever anybody prints or creates money out of thin air, it creates inflation.  Inflation devalues the money you are holding and makes you poorer.  As an example, if a criminal uses a photocopier to counterfeit a $1 million, did he create $1 million of additional wealth for his country?  No.  The country's money supply increased by $1 million, but the quantity of goods and services did not increase.  Therefore, the prices for the goods and services will increase, which creates inflation.  The amount of goods and services that you can buy, decreases.  Effectively, the criminal stole $1 million of wealth from you and the population.

Some people say that printing money is a way for the government to tax the population.  However, a tax is when the government tells you exactly how much wealth they are going to take from you.  When they print money, the government does not tell you that.

When the U.S. Federal Reserve conducted Quantitative Easing 1 and Quantitative Easing 2, they did not tell you that they will take wealth from you.  They told the public that they will boost the economy.  However, there is no evidence of that.  In fact, GDP growth dropped after QE2.  There is a lot of evidence that it created inflation and enlarged the U.S. debt, essentially enabling the government to take wealth from the population and spend it.

In addition to stealing from children through deficits and debts, printing money is simply another way the government steals wealth.  However, if and when the ECB starts printing money, the European politicians will tell you that they found a "solution" by getting the ECB to buy bonds.  They will not tell you that the "solution" is to steal wealth from you and give it to the European governments and banks.

In fact, the ECB has already been printing money to buy government bonds (source), because there is insufficient demand from other lenders.  According to this article:
"...ECB had been quietly buying bonds anyway."
According to this article:
"...analysts say the ECB may quietly increase its purchases of Italian bonds..."
The free-market, where the sane people are, are not willing to lend to the European governments or banks at a low interest rate.  This is because they expect that there is a probability that the borrowers may not repay the loan.  In fact, lenders are losing 50% on the money they lent to Greece.  These European borrowers are essentially "subprime", low-income, risky borrowers.  In the U.S., lenders lost a lot of money to subprime borrowers.  Therefore, there is a probability that the borrowers will not repay every Euro to the ECB.

According to this article on November 30th, 2011, central banks of the U.S., Canada, England, Japan and Switzerland, through the printing of U.S. dollars, will lend to the ECB, who in turn will lend to their "subprime" borrowers (European banks) at a lower interest rate than what the borrowers can get on the open market.  Your central banks are now stealing wealth from you and getting into the subprime lending business.

You are helping profligate Europeans borrow like crazy, enjoy 6 weeks of vacation per year and not pay back their debts.

Hence, you are forced into the subprime lending business.  You are now part of the European "solution".

Free-market capitalism is a myth.  The governments created housing bubbles and debt problems in Europe, U.S., Canada, Australia, China, etc.  Now, they are either kicking the can down the road or forcing you to pay for it.

Whenever the government screws around with the economy with socialist policies, they always bring prosperity to a pocket of the population in the short term.  Without fail, they always make the country poorer in the long run.  This record is unbroken in earth's history.

Read more:
Europe's "Stealing from Children" goes into Overdrive 
Stealing from Children 
Socialism vs Capitalism 
Fake Economy 
Fake Wealth
Housing, the most manipulated market in the world


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