The Solution to Greece's Sovereign Debt Crisis

In the very first issue of the Intelligent Investor (June 2009), I discussed problems in Europe that became a reality several months later.

“It is likely that America will end up on the hook for the majority of the bailout funds needed for Eastern Europe via the IMF…In the end, I feel the long-term fate of the European Union (EU) will be threatened; not so much for economic reasons as for the continued destruction of each nation’s sovereignty.

Already, common laws of the union are causing social disruptions based upon cultural differences within each member nation. It is perhaps for this reason that the union has aggressively opened its doors to nations outside of the union as a way to dilute the cultural and racial identities of each nation. But we have already seen a glimpse of what this offers—mass riots, arson and destruction. No doubt, the tensions will worsen due to the severity of the global meltdown.

One thing is for certain. In order for the union to succeed, all nations must be provided with a somewhat equivalent infrastructural base. Otherwise, the disparities in commerce will present problems.

Let me give you a simple example of this. Arguably, Germany has the most modernized road system in Europe. This enables an efficient means of transportation for a vibrant consumer and business activity.

In contrast, Greece’s transportation infrastructure is horrendous. As a result, the cost structure for goods and many services is higher by necessity. This disparity leads to a relative difference in the strength of the Euro depending on which nation you are in. But there are other economic uncertainties, such as who will bail out troubled nations.

Given the economic, social and sovereignty issues, it is possible that by 2020, Germany will pull out of the union, most likely for economic reasons alone. If that happens, you can bet France will soon follow.

If both nations exit, the Euro will be pretty much finished. To be clear, I am not predicting the fall of the Euro, but rather raising this very real possibility. It is only by a full consideration of all scenarios that we can construct a comprehensive risk management strategy.”

A few months later weeks before problems in Greece emerged, in October 2010 German Chancellor Angela Merkel shocked EU officials and other globalists by proclaiming that multiculturalism in Germany has been a complete failure.

Those who understand the mechanisms by which Zionists have imposed multiculturalism throughout the western world (all while working towards a homogenous population in Israel) are not likely to be surprised by Merkel’s conclusions. What was surprising was that she openly admitted it.

Even if the EU were to commit towards equalizing the infrastructural base of member nations, it should be clear that this is no longer economically feasible. It should also be apparent that the EU ruling class would never place this as a goal because it would diminish the economic advantages obtained by advanced EU member nations, from less developed nations. Finally, the multicultural "time bomb" would remain unless EU leaders unanimously decided to cast away this policy which clearly creates societal dysfunction and diminished solidarity.

Resolving infrastructural disparities from within the EU would be analogous to Washington raising the minimum wage to its appropriate inflation-adjusted level of around $11 per hour. Washington would never permit this because it would diminish the economic benefit of allowing millions of illegal aliens to enter the U.S. This is something I pointed out in the 2006 version of America’s Financial Apocalypse.

Several years before the sovereign debt crisis escalated in Greece, and even before the global financial crisis had commenced, I had concluded that the European Monetary Union (EMU) would be much different by say 2022 due to both economic and societal tensions.

Although the IMF continues to push for bailouts for emerging nations from within the European Union, the IMF has publicly admitted (in a 2010 publication) perhaps by accident, that the demise of these now vulnerable nations has been primarily due to their membership within the EU.

According to official data from a variety of sources, the current accounts in seven nations within Southern Europe (i.e. Southern Euro Area, SEA) have imploded since the mid-1990s. For instance, in 1994, these nations maintained an overall average current account balance (which can be likened to an annual trade surplus) to an average deficit of 10% in 2008. [1]

When the current accounts of Northern Europe (the Northern Euro Area, NEA) are examined, eight nations have accumulated current account surpluses over the same period. [2]

How SEA Economies Collapsed

Numerous sources including the IMF and other economic organizations linked within the network of global powerbrokers have acknowledged that the decline in the current accounts of SEA countries coincided with their entry into the European Monetary Union (EMU). This trend continued after their subsequent adoption of the euro. 

For instance, according to economic data, during the period spanning 1994–2008, the deterioration in current accounts coincided with a large decrease in private saving rates and, to a lesser extent, with a rise in investment rates, while public saving actually improved.

Although the EU has been in existence for decades, the formation of the EMU (linking most of the members of the EU into a unified currency) has been a more recent development.

According to the IMF, it was the creation of the EMU and, especially the introduction of the euro that drove the declines in current accounts by allowing member nations to maintain their investment levels above what could be financed from lower domestic saving.

As stated by the IMF,

“…economic integration improved access to the international pool of saving, but it did not necessarily make it optimal or sustainable. Even in countries in which an increase in investment played a more important role in the current account deterioration (Spain and Slovenia), most of the increase took place in less productive nontradables sectors, such as construction.

Although the current global financial crisis has forced some reduction in current account deficits, they are expected to remain high in the medium run as a result of the countries’ low productivity and weak competitiveness.”

Thus, the unionization of Europe has largely been responsible for the current economic problems seen in Greece, Italy, Spain, and other nations. They were doomed from the beginning.

What Was the Impetus for the EMU?

Similar to U.S. trade policy over the past twenty years, which has gravitated towards the use of cheap labor from abroad by unconditional acceptance of globalization theory, the EU (and later the EMU) was engineered to exploit the cheap labor of southern Europe for the benefit of the more advanced northern European nations. However, these globalists failed to account for contingent liabilities associated with the unification of very different economies and societies, each with a unique and rich history.

The U.S. is facing a somewhat similar predicament, as millions of illegal aliens have flooded into the various social support services, making these vital resources less available for U.S. citizens.  Moreover, the various societal problems have become widespread.

Although the IMF acknowledges that the fiscal troubles seen in southern Europe have been primarily due to the numerous economic imbalances that developed upon their entry into the EU, the IMF’s official policy remains dedicated to providing financial assistance in order to keep these nations as members within the EU and the EMU. That should give you an idea exactly what is going on behind the scenes.

As you can imagine, Germany’s decision to help Greece has been a complete disaster for both Germany and Greece. Although Germany’s economy has rebounded well since the global recession, it has been dragged down by the weight of the financial woes of emerging Europe, while Greece is now locked into a global chess match.

Certainly, Greece faced many problems prior to entering the EMU. Specifically, the nation’s public pension system had been in deficit for years. However, these deficits accelerated after entering into the EMU.

Accordingly, the only way Greece will permanently emerge from its mess is to dump the European Union. Conditional financial assistance from the IMF will only delay the fundamental problems, at best. At worst (and most likely), mandatory austerity measures layered upon numerous policy changes and other actions will lead to a less desired fate for Greece over the longer-term period.  

Short-term fixes in the form of bailouts and other types of financial assistance from the IMF, Germany and other nations will not lead to a permanent fix for Greece or other nations in southern Europe. On the contrary, the economic landscape of Greece, like other nations under the grip of the IMF, will be reengineered at the expense of Greek citizens for the benefit of advanced nations within the EU.

How the IMF Exerts its Power

In the 1944 Bretton Woods Conference, the World Bank and IMF were created. The World Bank is typically led by Americans while the IMF is led by Europeans. However, the common link of leadership often places Jewish bankers and politicians at the helm. The emphasis on “Jewish” bankers and politicians is a very important distinction, as you can imagine. 

The World Bank is an international bank whose stated purpose is to assist developing nations in need of humanitarian relief, with the stated purpose of reducing poverty. This stated goal serves as a front for the bank's power-grab.

The current World Bank president is Robert B. Zoellick, a Jew and former Goldman Sachs managing director, PNAC and CFR member, former Deputy Secretary of State and US Trade Representative.  

Former World Bank Presidents

Paul Wolfowitz (2005–2007) - JEWISH; former Deputy Secretary of Defense, spearheaded Iraq War with PNAC.

James Wolfensohn (1995–2005) - JEWISH; former Solomon Brothers executive, founder of Wolfensohn & Co.

Lewis T. Preston (1991–1995) - JEWISH; former president and CEO of JP Morgan.

Barber Conable (1986–1991) - JEWISH; former congressman and U.S. senator.

Alden W. Clausen (1981–1986 - JEWISH; former president, chairman and CEO of Bank of America.