DEFLATION – not HYPERINFLATION Rocks Europe
The assumption of the hyperinflationists has been that governments will just print to meet their obligations. That theory is based upon revolutionary government who CANNOT SELL debt to anyone. In the case of the West, we issue debt and because of that, the first effort is to meet the demands of bond-holders. That is only deflationary as government seeks to extract greater and great amounts of money from the economy to pay the bond-holders.
The Spanish government is indeed doing just that squeezing money out of the society to pay its debts to Brussels and Berlin. Spain has shut down any real free vote of the people because they know they would vote to get out of the Europe.
Spain became a serial defaulter beginning in 1557 followed by 1570, 1575, 1596, 1607, and 1647 ending in a 3rd world status. It appears that history will repeat as well in Spain. Their economic model was one of conquest and plunder, rather than developing domestic industry and a viable economy. The mere accumulation of wealth without developing a domestic economy destroyed Spain. It was like handing kids a bunch of money so they never had to work. As the economy turned down, they restored to the Spanish Inquisition. Even the Pope came out against what they were doing for its was to raise money from Jews and Arabs.
Spain is making a very similar mistake sacrificing its domestic economy to pay Brussels. Spain is handing its national wealth to Brussels and in the process, nobody will dare start a business and invest to create jobs, which is needed to get out of the downward spiral. Ironically, this is the conquest model that Spain inflicted upon the Americas that is now being inflicted upon them by Brussels.
The lesson to be learned from Spain is precisely what Adam Smith wrote in his 1776 Wealth of Nations: “Like an improvident spendthrift, whose pressing occasions will not allow him to wait for the regular payment of his revenue, the state is in the constant practice of borrowing of its own factors and agents, and of paying interest for the use of its own money.”Smith based that observation on the spectacular fall of Spain from the richest country in Europe to the poorest.
This Spanish government is squeezing money out of anywhere it cutting spending in health, education and scientific research. Thousands of Spaniards having poured into the streets across the country to voice anger at the government’s spending cuts, higher university tuition fees and other education reforms. The chanting protesters have been holding demonstrations in Madrid as well as 16 other cities this past week marking the last day of a three-day strike by university students.
According to the national Students’ Union, which organized the rallies and strike, the government has slashed spending on public education by around 7 billion euros (9 billion USD) and dismissed around 32,000 teachers. This has turned the trend in Spain where fewer people are going to higher education.
The government of Prime Minister Mariano Rajoy has also increased taxes, frozen public salaries and limited spending on services such as education and healthcare as parts of his austerity measures. All of this, plus eliminating any right to vote on separatist movements, is a toxic mix. When the ECM turns down, it will only get much worst after 2015.75.
Putin Throws Down the Gauntlet
Vladimir Putin has effectively accused the Obama Administration and the United States on Friday of endangering global security by imposing a “unilateral diktat”upon the rest of the world. Putin also denied trying to rebuild the Soviet empire at the expense of Russia’s neighbors and has stated bluntly: “We did not start this.”
On this score, Putin is correct. The US moved NATO forward and Obama’s policy has been to impose sanctions on Russia in hopes that he would be overthrown by his own people. This is amazing audacity on the part of Obama that is just shy of what the CIA use to do – just assassinate people – but honorably since they world for government. Putin has boldly warned that the Obama Administration in Washington is trying to “remake the whole world” based on its own self-interests. Hard to actually deny that one.
Putin has also denied “Statements that Russia is trying to reinstate some sort of empire, that it is encroaching on the sovereignty of its neighbors, are groundless.” Not sure about that. It would be great if Putin woke up and realized that the way to the future is not grabbing territory, but economically.
Communism collapsed because central planning failed. The economic system in the West is also collapsing for the very same reason plus a massive debt burden. My advice to Putin – be patient. Russia collapsed NOT because of a CIA plot, but because of Marxism. The West had nothing to do with that. Cheer up! The same disease is at work and the West will collapse in the blink of an eye the same as Communism collapsed suddenly overnight. This is how such changes take place. The CIA could have figure that out if I wrong the book on the subject. The same goes in reverse. Cheep up! Be Happy! As the song goes – your day is coming. Probably faster than anyone thinks.
Almost 50% Increase in Americans Renouncing Citizenship Because FATCA
There was nearly a 50% jump in the number of Americans rushing to renounce their citizenship. It is more than just not paying taxes, the FATCA rules are so outrageous, Americans have been thrown out of everywhere from Asia to Europe. Plain and simple, FATCA is destroying the American capability to deal internationally. People who even had one parent who was American makes them American and they are unable to have a bank account in their own country even though they next lived in America.
FATCA is the worst law I have every seen for its impact is wiping out international commerce and I dare say it is a leading cause of the collapse in global liquidity. This law PRESUMES and American doing anything outside the USA must be fraud and is only doing so to hide taxes. Wait til Hillary comes in – OMG! What havoc she will wrought upon the world economy with her anti-business idea that only government creates jobs. This is like PRESUMING everyone in government should just be entitled to the lofty address HONORABLE. That’s why they are exempt from the same laws for they are above the rest of us.