Regionalization of the Eurozone is coming as a result of the unwinding of the Euro Yen currency carry trade, as well as by competitive currency devaluation.
Mike Mish Shedlock ask Sky Brightening? The US, Germany, China, Japan, UK, Spain, Italy, and in fact every country wants to be a net exporter to create jobs. Mathematically it’s impossible. There is no significant rebalancing, only Illusions of Stabilization. Moreover, in the non-news of the day on Thursday ECB president Mario Draghi went out of his way to sink the euro with his statement “Risks to Downside”. In that article I took a look at the Nascent Recovery in Spain, pointing out Two Things Spain Needs (and Won’t Get).
Rebalancing the Wrong Way. It’s clear that Draghi wants to sink the euro to help exports. But what needs to happen is for Spanish, French, and Italian exports to soar. Instead exports from Germany have soared (primarily based on renewed unsustainable growth in China). A sinking euro may help net European exports a bit, but it will not help Spain and Italy in relation to Germany
As long as all countries remain committed to the eurozone, European rebalancing improvement must come from rising unemployment and/or still lower wages in the rest of Europe relative to Germany.
I agree with Mr Shedlock that European rebalancing improvement must come through internal devaluation and relate that there will never be any exit or ejection from the EU, as no kind of structural reform, nor any amount of wage reduction can restore economic production in Italy, France or Spain.
Germany is an exporting economic powerhouse similar to South Korea, Japan, and China; it simply has the best in class manufacturing capability, a disciplined and adaptable workforce, with long global supply chains firmly in place; its exporting capability cannot be matched or caught up with in a thousand years by the periphery nations, all of which are die hard socialist countries.
While Italy does have economic production capability, it still is no match for the German powerhouse. It would be hard to imagine that Diversified Equipment Manufacturer, Siemens, SI, would relocate any production to Italy, just to obtain a break on a lower wage structure.
Numerous articles communicate that France lacks an innovative spirit as evidenced by the lack of any stock to the French Stock Market in years. And its president François Hollande desires to take European Socialism to an all new level, as the Economist writes Europe à l’ Hollandaise. “The future of the euro zone, Mr Hollande suggests, will not be the Germanic notion of euro-zone members bearing individual responsibility for their economic policies, within rigid rules imposed by the centre. Instead integration must include common projects on, say, infrastructure and renewable energy, paid for by “new financial instruments”. And integration must be accompanied by greater “solidarity”, including guaranteed jobs and training for young people and, yes, Eurobonds.”
Spain is now the labyrinth of speculative real estate investment supported by the Catholic Cajas, that is the Spanish Regional Banks. The Nordic Latin historical, cultural, and economic divide is as great as the Grand Canyon chasm. Germany will be the hub of all economic production in Europe for ever. The PIIIGS will be desolate, hollow-moons, revolving around Planet Germany existing as colonies of Brussels and Berlin technocratic government.
Greece is simply a relic of nation state treasury debt, that is sovereign debt, investing. To think that tourism and shipping could support participation in a currency union was propaganda of Goldman Sachs Bankers and CIA operatives who desired a Fortress Europa. Greece is the most extreme form of Socialism which the Economist Magazine reported as being characterized by pork and patronage. Greece is a beggar thy neighbor clumsy toe, existing as part of an emerging German headed up minotaur known as the Troika.
Two factors will bring forth a Financial Apocalypse, and will introduce Authoritarianism’s Beast Regime’s regional governance, totalitarian collectivism and debt servitude
The Mario Draghi Carry Trade, that is the Euro Yen Carry Trade, the EUR/JPY, which was the funding source for Liberalism’s final risk-on toxic credit based rally, is going to unwind, and will be the first of two factors for a soon coming Financial Apocalypse, that is a credit bust and financial system breakdown, as foretold in Revelation 13:3.
Liberalism featured paper money issued by nation states and their central bankers, which gave rise to Inflationism through monetary policies of ZIRP and Quantitative Easing, which were supplemented by currency carry trade investment, in particular the Euro Yen Carry Trade, that is the EUR/JPY. Nation state monetary systems, supplemented by FX currency traders, provided investment liquidity for Liberalism’s Banker Regime.
Red State Electric provides the David Schlichter, Paper Money Collapse, pages 200 to-201, quote Money injection always leads to economic dislocation. “The ongoing moderate inflationism that Monetarism prescribes is far from benign. By sanctioning the ongoing injection of new money into the economy, a Monetarist policy will lead to the accumulation of dislocations that make a crisis at a later stage unavoidable.”
Inflationism no more.
Competitive currency devaluation, which began with the anticipation of Unlimited Quantitative Easing by the Bank of Japan, as well as by the devaluation of the Venezuelan Bolivar, will be the second of two factors in the Destructionism that will introduce Authoritarianism’s Beast Regime’s regional governance, totalitarian collectivism and debt servitude, seen in Revelation 13:1-4. After the soon coming Financial Apocalypse, Revelation 13:3, regional commodity exchanges and regional public private partnerships will support trade and economic activity in un-dollar, that is dollar-less, transactions, as leaders will meet in summits to renounce national sovereignty, and pool sovereignty regionally. Regional leaders and diktat, will replace sovereign nation states and investment choice. Paper money no more, will be Authoritarianism’s banner. The fiat money system will soon be replaced by the diktat money system, where diktat serves as currency, credit, power and wealth.
Bloomberg reports Euro-Area Debt Crisis Isn’t Over, Finland’s Urpilainen Says. Finnish Finance Minister Jutta Urpilainen said the economic situation in many Western countries remains “exceptionally challenging.” “Resolving the challenges requires an ability to see further; short-term solutions to quell panic won’t resolve the situation.” Europe is headed for a social crisis of high unemployment, Urpilainen said. “Finland won’t co-operate on any terms” in the EU. “It’s our job to defend Finnish taxpayers.”
Wikipedia relates Finland is highly integrated in the global economy, and international trade is a third of GDP. The European Union makes 60% of the total trade. The largest trade flows are with Germany, Russia, Sweden, United Kingdom, United States, Netherlands and China. Trade policy is managed by the European Union, where Finland has traditionally been among the free trade supporters, except for agriculture. Finland is the only Nordic country to have joined the Eurozone.With respect to foreign trade, the key economic sector is manufacturing. The largest industries are electronics (22%), machinery, vehicles and other engineered metal products (21.1%), forest industry (13%) and chemicals (11%).
Nation Investment in Finland, EFNL, topped out on January 28, 2013, as its chart shows an evening star candlestick pattern, and one of its major electronics industry components, Nokia, NOK, saw Euro Yen Currency Carry Trade leverage, but has recently sold off. Nokia is a has been company, that is it has been losing market share to Apple, AAPL, and Samsung, SAMS. Nevertheless Nokia, is still very much a hugely carry trade leveraged company as is seen, in its ongoing comparative chart Yahoo Finance Chart. Brian X Chen of the NYT reports Samsung is leading the way forward as Samsung emerges as a potent rival to Apple’s Cool.
There is nothing, literally nothing, that Finland’s Jutta Urpilainen can do, to defend its taxpayers. In Authoritarianism’s wildcat governance, which is about to ensue producing only the most fierce of governors to rule the Eurozone, Jutta Urpilainen, will be very much an underdog.
Germany will rise to be preeminent over vassal European sovereign nation states; yes, Germany will rise to be a type of authoritarian Revived Roman Empire, Daniel 7:7, heading up the EU, as the prime example of Regionalism.
Please consider reading Michael Avery Sutton of the NY Times’ article in Real Clear Religion Why The Antichrist Matters In Politics THE end is near, or so it seems to a segment of Christians aligned with the religious right. The global economic meltdown, numerous natural disasters and the threat of radical Islam have fueled a conviction among some evangelicals that these are the last days. While such beliefs might be dismissed as the rantings of a small but vocal minority, apocalyptic fears helped drive the anti government movements of the 1930s and ’40s and could help define the 2012 presidential campaign as well. Christian apocalypticism has a long and varied history for more read here. And please consider reading my article The beginning of the end.
There is waiting in Europe’s wings, the most capable of Sovereigns, the Little Horn, Daniel 7:8; this one of seemingly little authority, is thoroughly familiar with Authoritarianism’s schemes, Daniel 8:23; he will rise to be the first of ten regional kings, Daniel 8:21. Together with Europe’s Seignior, that is top dog banker who takes, a cut, they will will rule Euroland with the iron malet of diktat. Their word, will and way will be the law of the land, replacing all constitutional and historical precedent.
Liberalism featured Globalism; it was the dynamic that produced Globalization. In like manner, Regionalism is the life experience of Authoritarianism, that produces Regionalization.
There is coming a thorough rebalancing in the Eurozone. While Germans, cannot be Spaniards, Frenchmen, or Greeks, all will be one, unified in debt servitude and austerity, bonded together, yes yoked together, by Authoritarianism’s schemes, that is by regional framework agreements, which leaders will soon announce, as the dynamos of regional security, stability, and sustainability are winding up Regionalism, just as the dynamos of corporate profit and global trade, are winding Crony Capitalism, Greek Socialism, and European Socialism.
Regionalism and regional governance is based upon a tripart foundation:
1) A growing awareness that the region and the rule of its leaders is a common life experience.
2) Public private partnerships have a mission to manage the regions’ economic production.
3) Mandates of leaders provide economic security, stability and sustainability.
All “isms” have a head, that is a person who heads the experience up. For example Roman Catholicism has The Pope; and of note, Reuters reports Pope resigns saying no longer has strength to fulfill ministry. Please consider that the death of the money, as well the death of traditional moneyness, that is the death of seigniorage, is imminent. Crony Capitalism had its head in Milton Friedman who promoted the Free To Choose Floating Currency Banker Regime, whose seigniorage, that is moneyness, came from investing in sovereign nation states, EFA, and small cap nation states. As well as in Global Producers FXR, such as Southern Peru Copper Corporation, SCCO.
James Rickards writes in Silver Gold Worlds World currency system moving towards catastrophe.
Insolvent nations and their insolvent banks cannot provide seigniorage.
With current monetary authority and political sovereignty failing, Destiny, Revelation 1:1, is bringing forth the new head of Regionalism, possessing regional sovereignty, specifically the sovereignty of regional sovereign leaders and sovereignty of regional bodies; these will provide the seigniorage of diktat.
In Europe, the experience of Regionalism will be headed up by the Sovereign, Revelation 13:5-10, and his monetary, fiscal and economic pope, the Seignior, Revelation 13:11-18, as well as a whole host of monetary, fiscal and economic cardinals, working in regional public private partnerships for the region’s security, stability and sustainability
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