Gold, Communists, and the Consolidation of Power in Europe
Tweet Send to a Friend
Yesterday the street was buzzing as rumors of an interesting solution to the European crisis resurfaced. The solution I am referring to is the 'European Redemption Pac'. Under the plan, first discussed months ago, southern Europe's debtor states would pledge their gold reserves and national treasure as collateral for a €2.3 trillion stabilization plan and the creation of Eurobonds.
Germany and Chancellor Angela Merkle have been strictly opposed to the idea of creating Eurobonds, which would consolidate peripheral country debt with core European debt, ultimately reducing borrowing cost throughout the region. Many consider Eurobonds increasing necessary as Spanish and Italian yields reach unsustainable levels, and there is a very real risk that both countries will ultimately be shutout of the bond market. If that happens, and if Germany refuses to hand over their credit card, which they are extremely unlikely to do without very harsh terms, the EU would fracture.
As an alternative, the European Redemption Pac would create Eurobonds in exchange for southern countries' gold reserves. Italy's gold reserves, for example, are worth €98 billion, and other countries including Portugal and Spain have ample gold reserves.
But the Germans don't just want gold. Reports say that in exchange for the creation of Eurobonds, the Germans also want to consolidate power in the region. After all, Germany's own credit standing would be at stake and they simply will not risk it without a major power grab.
Assuming reports are correct and that Germany is indeed considering a gold & power for Eurobond swap with other EU countries, a new problem is seen - southern European countries dislike Germany.
In south states, opposition to austerity is also opposition to German itself, as many citizens secretly fear that Germany is once again trying to take over Europe.
The political schism is punctuated by recent elections in Greece, which were won by a former communist with extreme left political views, aka Alexis Tsipras. He is expected to make a strong showing in elections in Greece on Sunday. And while many want to think of Tsipras as a Greek phenomenon, recent election in France tell a much different story.
So the stage is set in Europe. Germany is on one end and Greece on the other, and Spain and Italy being crushed in the center. Ultimately, it might be up to these two countries, Italy and Spain, to decide the fate of Europe. Will they give up power to Germany or splinter like Greece? One thing is certain; the statuesque in Europe is coming to a quick end.
Join StreetInsider.com FREE and get immediately alerted when news breaks on your stocks and other market items - JOIN NOW
*NEW - Download StreetInsider's FREE iPhone and iPad App - Click Here
Germany and Chancellor Angela Merkle have been strictly opposed to the idea of creating Eurobonds, which would consolidate peripheral country debt with core European debt, ultimately reducing borrowing cost throughout the region. Many consider Eurobonds increasing necessary as Spanish and Italian yields reach unsustainable levels, and there is a very real risk that both countries will ultimately be shutout of the bond market. If that happens, and if Germany refuses to hand over their credit card, which they are extremely unlikely to do without very harsh terms, the EU would fracture.
As an alternative, the European Redemption Pac would create Eurobonds in exchange for southern countries' gold reserves. Italy's gold reserves, for example, are worth €98 billion, and other countries including Portugal and Spain have ample gold reserves.
But the Germans don't just want gold. Reports say that in exchange for the creation of Eurobonds, the Germans also want to consolidate power in the region. After all, Germany's own credit standing would be at stake and they simply will not risk it without a major power grab.
Assuming reports are correct and that Germany is indeed considering a gold & power for Eurobond swap with other EU countries, a new problem is seen - southern European countries dislike Germany.
In south states, opposition to austerity is also opposition to German itself, as many citizens secretly fear that Germany is once again trying to take over Europe.
The political schism is punctuated by recent elections in Greece, which were won by a former communist with extreme left political views, aka Alexis Tsipras. He is expected to make a strong showing in elections in Greece on Sunday. And while many want to think of Tsipras as a Greek phenomenon, recent election in France tell a much different story.
So the stage is set in Europe. Germany is on one end and Greece on the other, and Spain and Italy being crushed in the center. Ultimately, it might be up to these two countries, Italy and Spain, to decide the fate of Europe. Will they give up power to Germany or splinter like Greece? One thing is certain; the statuesque in Europe is coming to a quick end.
Join StreetInsider.com FREE and get immediately alerted when news breaks on your stocks and other market items - JOIN NOW
*NEW - Download StreetInsider's FREE iPhone and iPad App - Click Here
You May Also Be Interested In
- J.P. Morgan (JPM) CEO Dimon Might Have Enough Votes to Stay Chairman - NY Times
- AMD (AMD) Slips Two Spots in Global MPU Sales for 2012; Intel (INTC) Drops Share
- Intel (INTC) CEO Krzanich Moves to Create 'New Devices' Unit
Create E-mail Alert Related Categories
Commodities, Insiders' BlogComments
Login with Facebook
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
NEW MONEY SYSTEM
Bill R Otinger (OTTINGER in AUSTRIA) on Aug 2, 2012 08:29 PMMark as Spam | Reply to this comment
You cannot Fix a Problem with a Problem
You need a NEW WAY OF THINKING
I have DESIGNED a Money System that a 10 year Old Child up thru Geitner, Greenspan, Volker, Merkel, Rothschilds etc Could UNDERSTAND
You would not Half to worry about Fractional Reserve PONZI SCEME Banking again, Toxic Assests, Leveraging, Bonds etc It would DEAL NO ONE OUT the Present Major Players would half to Agree to a little Less of the PIE, Instead of being seen as War MONGERS they would been seen as Saviors with NO RISK.
I could put 30-50 Million People to Work in AMERICA within just a Few Months, it would last 40 years or more, Rest of the World Could Follow Suit, We would Have a NEW WORLD ORDER where everyone is LOVED, LIMIT 1-2 Children per couple etc
This System will only be Partially Tied together like 8 Cylinders in a Vehicle if they are all fireing it will Run Smooth WorldWide, However if a GREEDY TYRANT Causes one Cylinder to Foul out it will still continue to RUN
And it would NEVER COLLAPSE again