Why Do They Call It The Eurozone Debt Crisis?
82The European Central Bank
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I think they should call it the Eurozone lending crisis. It seems a bit ironic to me how the pundits and the politicos keep calling it the 'Eurozone debt crisis'. It takes two to tango and it's debatable who are most to blame, whether it’s the dodgy lenders or the feckless borrowers.
Anyway, we now know that they're not proper moneylenders; they haven't been lending their own money at all. They've been lending us money that doesn't exist until they lend it to us. With a scam like that going for them, it beats me how they still keep ending up in the red.
Now they want the money, plus interest, back for the money they never lent because it didn't exist until they lent what they didn't have to lend until they lent it. And now they're after raiding the pension funds of the hoi polloi, and forcing young people who want an education to borrow money that doesn't exist until they borrow with interest, the money that doesn‘t exist until they borrow it from the moneylenders who aren‘t really moneylenders on account of the fact that they have no money until someone borrows it - excepting, of course, the personal stashes that they keep in their tax havens. My Uncle Tam had a gambling addiction and that's the sort of story my Auntie Jean heard often, when a “sure thing” had turned out to be a three-legged donkey.
Mind you, now that the bankers' have overreached themselves with their licentious exuberance of the ancient dark art of money-creation, and have now revealed their secret to all and sundry and even to an economic numpty such as I, we might at least be thankful - that we can now partake with their inspirational logic. It'll come in handy, now that "we're all in this together", when we have to pay our utility and food bills which have hiked considerably recently, not least because of the 20% vat hike.
The next time we spend a joyous day on the telephone wrangling over the best deal out of 600 plus gas and electricity tariffs that we now know will cold-bloodedly double in price under a smokescreen of small print 12 months down the line, unless we start with the entire exasperating process again - we can bring our newly acquired banking logic into play. When they ask for our credit card details, we can offer to loan them the money that doesn’t exist until they borrow it with 100% interest (that’s legal in the UK and compared to some payday loans, quite modest in fact). Then, when we’re unable to pay the bill because we’ve spent all our money bailing out the banks, we can just let them keep the interest that they owe us. Every one's a winner.
Anyway, apparently they came to some sort of agreement about the Eurozone lending crisis in Brussels in the wee small hours of last night and it seems to me that one good thing might come out of the entire sorry saga because I heard a fleeting murmur on the BBC (UK, TV) news this morning that part of the settlement involved tighter banking regulations.
However, I've two problems with that: Firstly, you can't get tighter regulation, where none exists. That's like offering someone 25% of zero - which, incidentally, is precisely how much interest we'd all pay if we ever managed to get together and elect a government with enough gumption to nationalise the banks.
Secondly, I did say that it was just a fleeting murmur. I was busy getting ready for work (someone has to; we can't leave it all to the Chinese). I thought I'd check it out when I come home, and I've heard nothing more of it since. You'll just have to take my word that I actually heard such a thing - although I'm beginning to doubt it myself now.
Anyway, 'haircuts’ were on the agenda too. Apparently, that's what the banks have to have when people can't pay back the money that they lent them, which didn't exist until they lent them it - with interest...
An interesting thing that struck me this morning too was that there's been much less use in the media, and by the politicos of the erstwhile ubiquitous expression, 'austerity measures' recently. I haven't had much chance to listen to the news, but it seems that that expression has been shelved a bit lately, and my theory is that it’s a direct result of what’s been happening on the streets. It makes me wonder if banking 'haircuts’ would be quite so much in vogue if it wasn't for the Wall Street protesters and various other uprisings around the World.
I suggest that the World elite and their politico minions are getting a wee bit jittery about 'we, the people'. They know they've been rumbled, and it's time to back-peddle awhile. They're not likely to admit it, but it does raise the question in my mind. What if there were no street protests and everyone slavishly accepted the austerity measures handed down by the illustrious ones in their tax havens - does anyone think that 'haircuts’ would've been any part of the settlement at all last night?
Just supposing we all gave up our pensions and worked till we dropped and bequeathed our children, and their children with the sorts of lives these one-percenters seem to suggest we're due - how long would it be before these banksters and their ilk were back looking for more swag? That shower would steal the sugar out your tea and make you pay for the chemistry set, if you let them.
The trouble is that then, to be able to afford to equip yourselves for the job, you’d have to borrow the money that doesn’t exist until you borrow it from moneylenders who don’t really exist, because they aren’t really moneylenders, because they can’t lend something they don’t have to lend until you borrow it - even although it boosts the GDP sustaining the state-corporate nexus which keeps all our noses to the grindstone and too busy to ask awkward questions about what’s really going on in the World.
Should we call it the lending crisis?
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Hello Mr Happy,
I think haircuts for that ilk might be best done as close to the neck as possible.
I’ve been reading a lot recently about the history of ‘fractional reserve banking’, and the debt based economy. I also read David Harvey’s The Enigma of Capital, and even with my limited mental capacity, it’s frightening to think how little they teach of these things at the school. But, it’s much more frightening by far, to consider why they don’t invest us with such enlightenment.
Thanks for dropping by. More power to your fingertips.
Hi Jed,
Thanks for visiting. I bow to your superior knowledge of such things, and I’ll follow the link.
The Problem with Bank hair cuts is...The Damn Hair Keeps Growing Back!
Seems Like a Better option would be a Bikini Wax since that area is closer to their moral apparatus,Hmmm
Dean
Ha ha - that's true Mr Cheaptrick. There was a famous/infamous quote from a previous Governor of the Bank of England. "The bankers own the earth. Take it away from them, but leave them the power to create money, and with the flick of the pen they will create enough deposits to buy it back again."
As you suggest, regular waxing of "their moral apparatus" would be good for the common weal.
I hope that you will be responsible for millions of keyboards being sprayed with morning tea and coffee...like mine!
The banks are in trouble now, because they killed everything that they should have been investing in. They are stuck with too much money and the "spread" is now the "squeeze"! May they one day find themselves panhandling on the streets.
Hi Xenolit,
I had to Google up "panhandling" just now - yes, I see what you mean; I won't weep for them. They thought nothing beggaring the rest of us. And they've b*ggard up our pensions, and our young people's education too.
The almighty invisible world banker. I imagine these old wealthy guys sitting somewhere in a dark room smoking cigars dividing up the world. But it would be great to see their actual names and faces, you know?
Hi festersporling1 - I'm not very good with names and faces, but I suspect your imagined view of the World cartel is about right. The trouble is they make a point of secrecy. I hope they choke on these cigars.
It'a all predicated on a very simple principle which allows some very few people to feel good about doing some very despicable things. "If God likes you, likes what you're doing, He gives you money..."
I understand that the medieval law of 'trial by combat' had a similar, though questionable, simple logic: Those who prevailed in combat did so because it was God's will. Similarly, witches and various other accused, had to face 'trial by ordeal', which, if they survived, would prove their innocence.
You might think that those who study the ‘Good Book’ would at least have some sense of irony, Jed. But "The more things change, the more they stay the same".
Hi Amillar, I've been watching events unfold across the sea in Euroland, and I'm finding it harder and harder to comprehend. Surely if you and I know that all this money doesn't actually exist, then Merkel, Sarkozy and Papandreou etc., must also know it? Or am I just deluding myself? Personally I think Greece should file for bankrupcy, and just wave the notice under their creditors noses whilst starting again with the Drachma. I imagine life went on for people in Iceland after they went bankrupt, and life would go on for the Greeks too.
Did you see that the new Libyan government is implementing Sharia Law BTW? Apparently under Sharia Law, Banks are forbidden to charge interest. They earn their profits by charging for transactions instead. I imagine that must mean that those who do the most banking pay the most charges. Sounds fair to me!
You make a very good point there Amanda. They teach us many things at the school; some pick stuff up quicker than others (I'm usually at the cow's tail) but I don't remember them teaching us anything about fractional reserve banking. Only recently did I realise that something was missing from the story, when I thought it through and realised how vulnerable we might be if the whole thing collapsed. We don't even know how to grow our own food anymore, and neighbourliness is a thing of the past. We'd have to relearn all that. Maybe our PM was trying to tell us something when he talked about the Big Society.
I'm not sure I want to dig too deeply either, there's so much scary info out there about the Illuminati and such ilk. Some say that the whole thing is intended - a sort of World domination by an elite bunch of megalomaniacs. It's either that or complete ineptitude embroiled with old-fashioned greed.
Apparently, the Muslim faith is against usury. I can see why ('never a lender or borrower be'), but we humans are such that if we weren't squabbling about that, we'd no doubt squabble about something else. Bring back Mr Mainwaring, that's what I say.
I am going to use this hub as a reference source. The EU acted like a greedy bank giving credit cards to college freshmen, but the freshmen knew that they would be bailed out if they got over extended. Surprise, surprise!
Well done.
Yes, that's how I understand it Xenolit, and then they just parcel all the junk up in pretty packages with fancy names and pass the risk on down the line. Who's at the end of the line?
Anyway, I think that the EU is just a cosy little club run by the corporations, for the corporations. I thought I was dreaming when I heard Papandreou mention the word referendum, it’s normally profanity in EU speak. Then I realised I’d been dreaming right enough.
The Greeks invented democracy, apparently. They've had some great ideas over the years. Sadly, joining the Euro hasn't turned out to be one of them!
I get the impression, from some of the information available, that when a country borrows form these bond markets etc, it's a bit like borrowing from a payday loan shark - or these sub-prime lenders. They encourage you to take a loan; they give the impression that everything's OK, no worries. Then, when the excrement hits the extractor, they have your house off you. In the case of the nation state, it's your house, your pensions, your NHS, your young people's futures and Uncle Tom Cobbley's and all. Even individuals, who've never borrowed a penny in their lives, have to share the debt - sweet as a nut.
That shower of politicians we've been voting for in recent decades are either wicked or stupid; either way, we've all been done up like kippers. We’re probably looking at the biggest heist in history Amanda. Medieval tyrants would be green with envy. The worrying thing is that Greece and Italy are probably just the start of a worldwide process. If they get away with it there, the process will just snowball.
I saw Mervyn King on the TV last night, and immediately thought of this hub! I see that Mr King is urging the banks to hang on to their spare cash and any potential bonuses, just in case the Euro collapses. Reading between the lines, I'm guessing that this scenario is seen as all but inevitable, and may actually be fairly imminent. There was also a hint that one or more banks in Europe are in very deep trouble. I'm wondering if 'too big to fail' will apply this time around, or whether they'll just be allowed to crumble?
Well, I might suggest putting it under the mattress, Amanda but the banksters have us that way too, because ‘we, the people’, can't even afford a police force to protect us against burglary now.
It looks like it's time to start hoarding food. We could hoard a lot of porridge in the attic - that’s the only way we’ll get these scoundrels (both of the 1% and 99% varieties) to swallow their just deserts when they come on the pillage. Put your money into porridge!
As for Mervyn, I've heard no serious discussion from the establishment about future banking reforms - but there's plenty of hoo-hah going on about the unsustainable nature of public sector pensions and such.
It reminds me of your 'synergy' hub. (I call it Amanda's Synergy Hub; you call it - http://amanda-severn.hubpages.com/hub/How-percenta - where I learned about two things: a new word for my lexicon, and your aptitude for diplomacy.) Anyway, we're not likely to make much progress until there's bit more of all that kind of stuff - (aptitude, diplomacy synergy etc).
I'm quite fond of porridge, possibly because of my Celtic roots? Not sure how well it would keep in the attic, however, although I'm seriously contemplating stocking up on beans and lentils! I read somewhere that the word 'salary' comes from the Latin word for 'salt', and that the first Roman soldiers were paid in salt. That's probably where we get the expression, 'worth their salt'. Maybe that's a way forward, though I'm not sure how it would work at the till in Tescos!
I feel that we're living in interesting times, and not necessarily in a good way. Perhaps we really should allow any tottering banks to simply collapse. The current levels of debt are unsustainable, and even the banks are wary of lending to each other. It might just be time to call a halt to the fiasco, and apply a red pen to the debts, since they're mostly comprised of invisible money in the first place.
I think they call it ‘Stockholm Syndrome’ Amanda. Apparently, if we let them go over the cliff, they’ll drag everyone else with them - but they’ll be the ones with parachutes. They'll bankrupt our governments and all our savings and pensions will go too. I wouldn’t like that - I’m not that, principled - or daft even.
As for the future, I've yet to hear a convincing argument against nationalising the banks proper. I don't mean as they did with Northern Rock, where they nationalised its failure, and then recently, sold it back to the profiteers for a song, at a loss to the taxpayer - only now that it has started to show some profitability. It’s madness.
Some say that government can't run banks or business. Apparently, it’s best left to the experts. That would be fine if the experts would focus on the job they profess to do, but too often, the role of business becomes purely self-aggrandisement. That along with 'small government' and deregulation etc, simply means that you and I can't look forward to a comfortable old age - after spending our lives creating a surplus for these characters to capture.
And we wouldn't need to pay usurers interest if our banks were permanently in public ownership. It’s like having a close relative with a gambling addiction, the rest of the family always having to pick up the tab - for, the harder we work, the faster they’ll soak it away.
But there’s worse to come - because now the technocrats are moving in, unelected and handing down laws that’ll force people to work under the diktat of the corporations with no safety net for those who fail. Our working conditions will not be subject to laws made by our elected representatives; we’ll soon lose that right and society will harden still more - back biting one another instead of facing down the perpetrators. I hope I’m wrong.
We should take note too, of what happened in Italy and Greece recently. It reminds me of the Mussolini quote, “Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power”. He also said, “Democracy is beautiful in theory; in practice it is a fallacy”. Let’s hope he was wrong.
Mr. Happy Level 7 Commenter 7 months ago
LOL I was having a drink of my tea and almost sprayed the monitor with it when I read: "I think they should call it the Eurozone lending crisis." That is so true!
Nationalizing banks sounds like such a great idea too! Keeping banks to be used for their services and minus all the gambling with derivatives and such, would be a great improvement in the way our societies work.
Great blog Mr. Amillar. And although "banking haircuts" might sound nice, I do not think that the majority of people on the street will be fooled by such terminology. I think the propaganda machine of corporations and bankers is slowly crumbling to bits as many people are flooding social websites and independent media outlets for information.
All the best!