March 28, 2024

News Cymru

Two sides to every headline

Albert Einstein – “The EU, Vam Rumpuy, Barroso & Mario Draghi are insane”

Einstein said the definition of insanity is continuing to do the same thing and expecting a different result. If he were alive now I am sure he would calls EU banking reform and Barroso as insane.

And here we have the countries of Europe.

Take France for example, up to its eyeballs in public debt, simply massive unfunded pension liabilities and somehow the answer to this problem is to allow France to borrow even more money at a lower cost.

Spain is in the same boat. The Spanish government is on the hook for simply billions of Euros of pension obligations and yet the country spends more than it earns.

Governments have run up massive debts because the large banks have allowed them to. Large banks have leant government billions upon billions of Euros with an apparent complete disregard to how they would get the money back.

Politicians have used these loans from banks to drive and fuel their political popularity with promises that force the children and grandchildren of todays voters to pay for in the future.

And somehow, you have the EU, Barroso etc saying that the answer for Europe’s debt problems is for countries to be able to borrow at lower rates by forcing countries with surpluses to pick up the tab if things go pear-shaped.

It is utter lunacy.

The defining philosophy of the EU banking reform is consolidated control, centralised oversight and closer integration between countries.

Given the mess that individual governments have managed to get themselves into it is hard to imagine why anyone would think that creating an even bigger government ie an EU with more power, it is hard to imagine how anyone would think it would be a good idea and have even bigger state entities which are even less answerable to citizens and which make it harder for investors to judge risk.

The whole trend is very worrying. Do not get me wrong, I am not anti Europe. I think open borders is excellent and should be expanded worldwide. I think the common currency is an excellent idea as it forces countries to balance their books rather than robbing their citizens through the inflation tax.

But the fact is that even with the Euro, governments in Europe have shown spectacularly shown that even with this obvious limitation on their spending, ie they can’t print the currency, they have continued on the same reckless spending behaviour as they did before the Euro.

Give these simply huge mistakes, (personally I can no believe they were simple mistakes. The problems the governments were causing themselves further down the line were so obvious even a 5 year old would be able to  see) that have been made by governments it seems complete madness to me to put the economic health of an entire continent in the hands of even fewer people who make the system even more unstable and worst of all create huge opportunities for simply massive corruption and back room dealing.

EU banking reform. Everything Europeans know about spreading risking is wrong. Sayings like not putting all your eggs in one basket & 2 heads are better than one are nonsense, that is what Barroso is trying to tell Europeans. It is better for European to be completely dependent on one banking regulator than millions of banking regulators ie the customer

It astonishes me to hear supposed respectable economists saying how centralisation increase stability. Like having one head making decisions means it is less likely for mistakes to be made than a hundred heads making decisions. Which of course is utter nonsense.

Having one hundred heads making decision means that a single mistake made by a single head will have a massively lower effect on the decision-making process. Eggs in one basket and all that..

Honestly, I feel like I am trying to explain to children when I try to show the EU the error of their ways. What they are proposing is so obviously wrong and counter intuitive to everyone’s human experience, is make people who contradict their solutions sound like complete and utter morons.

I mean I feel like a complete and utter moron writing this article to be perfectly blunt. I am having to explain why something is so obviously stupid.

It is like I was trying top explain why putting your hand in the fire is a bad idea. It is hot, your skin is not flame resistant etc etc. It is utter nonsense. The problem of putting your hand in the fire is obvious.

But when the press come out and says something only slightly less stupid and it has the apparent support of politicians, all of a sudden people’s common sense leaves the room. People are actually trying to take on board this nonsense and work out ways of explaining it to themselves.

The mainstream media is like watching the opening of U2’s Zooropa “Everything you know is wrong”

 

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